More Judgements

1. Home
2. More Judgements

Central Excise - Deductibility of Post-Manufacturing Expenses (PME) – Appellant claimed deductions on account of PME such as additional sales tax, octroi, and cost of transportation on a weighted average basis while calculating the assessable value of goods cleared from its factory - Department denied these deductions, leading to issuance of show cause notices and adjudication orders against the appellant - Whether the appellant is entitled to claim deductions on account of PME like octroi, additional sales tax, etc. on a weighted average basis – HELD - The issue is no longer res integra and has been settled in favor o... [Read more]

Central Excise - Deductibility of Post-Manufacturing Expenses (PME) – Appellant claimed deductions on account of PME such as additional sales tax, octroi, and cost of transportation on a weighted average basis while calculating the assessable value of goods cleared from its factory - Department denied these deductions, leading to issuance of show cause notices and adjudication orders against the appellant - Whether the appellant is entitled to claim deductions on account of PME like octroi, additional sales tax, etc. on a weighted average basis – HELD - The issue is no longer res integra and has been settled in favor of the appellant by the Tribunal's own earlier decision in the appellant's case, wherein the Tribunal held that deductions on account of PME like octroi, additional sales tax, etc. are admissible to the appellant on a weighted average basis. The Department has not challenged the earlier Tribunal order, which means it has accepted the position on the merits - Besides this, the issue has also been decided by various benches of the Tribunal wherein it has been held that the assessee is entitled to deductions on account of octroi, sales tax, and additional sales tax on a weighted average basis. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

GST - Invocation of wrong provision - Validity of invocation of Section 74 of the CGST Act, 2017 to proceedings for Assessment Year 2025-26. The petitioner contended that the provisions of Sections 73 and 74 were omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply from the Financial years 2024-2025 onwards - Whether the respondent had the jurisdiction to issue the show cause notice and pass the assessment order under Section 74 of the CGST Act for the assessment year 2025-26 - HELD - The provisions of Sections 73 and 74 of the CGST Act were indeed omitted with effect from 01.04.2024, and... [Read more]

GST - Invocation of wrong provision - Validity of invocation of Section 74 of the CGST Act, 2017 to proceedings for Assessment Year 2025-26. The petitioner contended that the provisions of Sections 73 and 74 were omitted with effect from 01.04.2024, and only the provisions of Section 74A would apply from the Financial years 2024-2025 onwards - Whether the respondent had the jurisdiction to issue the show cause notice and pass the assessment order under Section 74 of the CGST Act for the assessment year 2025-26 - HELD - The provisions of Sections 73 and 74 of the CGST Act were indeed omitted with effect from 01.04.2024, and only the provisions of Section 74A of the Act would apply from the FYs 2024-2025 onwards. Therefore, the show cause notice and the assessment order passed by the respondent under Section 74 are without any jurisdiction - The petitioner to treat the impugned order as a notice issued under Section 74A of the GST Act and thereafter the matter can be decided on merits - The writ petition is disposed of [Read less]

GST - Composite Supply - Classification of supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis - Petitioner is awarded a contract by Oil India Limited for providing mud engineering services and supplying mud chemicals/additives for drilling operations. The petitioner approached the AAR seeking a ruling on whether the supply of mud engineering services along with supply of imported mud chemicals and additives qualifies as a composite supply under the GST Act. The AAR and the AAAR ruled that the supply of services and goods cannot be considered as a compo... [Read more]

GST - Composite Supply - Classification of supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis - Petitioner is awarded a contract by Oil India Limited for providing mud engineering services and supplying mud chemicals/additives for drilling operations. The petitioner approached the AAR seeking a ruling on whether the supply of mud engineering services along with supply of imported mud chemicals and additives qualifies as a composite supply under the GST Act. The AAR and the AAAR ruled that the supply of services and goods cannot be considered as a composite supply - Whether the supply of mud engineering services along with supply of mud chemicals and additives by the petitioner should be treated as a composite supply under the Section 2(30) of the CGST Act, 2017 – HELD - The contract between the parties was for the purposes of managing the drilling activities of Oil India Limited, which required the petitioner to monitor the drilling operations and inject the necessary materials as required. The supply of mud engineering services and the supply of chemicals/additives were naturally bundled and supplied in conjunction with each other in the ordinary course of business, as the supply of both services and goods were necessary for execution of the contract. The chemicals and additives supplied by the petitioner were not off-the-shelf goods, but were compounds prepared by the petitioner to suit the peculiar requirements of the drilling site. The fact that separate bills are being issued, against the supply of goods, would not make any difference for ascertaining the nature of the transaction. Some of the criteria for determining whether a contract is a composite supply, is to see whether supply of both services and goods are necessary for execution of the contract and whether they are in conjunction with each other. The supply of mud engineering services and the supply of chemicals/additives by the petitioner to Oil India Limited should be treated as a composite supply – The Authority for Advance Ruling as well as the Appellate Authority for Advance Ruling have erred in holding that the supply of services and goods by the petitioner is not a composite supply - The orders of the AAR and AAAR are set aside and the supply of mud engineering services and supply of mud chemicals/additives is held to be a composite supply under the GST Act - The petitioner is given liberty to approach the appropriate authority for fixation of the applicable rate of tax – The writ petition is allowed [Read less]

GST - Denial of Input Tax Credit to bona fide purchasing dealer, Non-payment of tax by supplier - Whether the petitioner, being a bona fide purchasing dealer, can be denied ITC on the ground that the supplier failed to deposit the taxes collected from the petitioner – HELD – In the case of M/s Sahil Enterprises v. Union of India & others, the Court held that the Legislature has failed to make a distinction between purchasing dealers who have bona fide transacted with the selling dealer and those who did not, while enacting Section 16(2)(c) of the CGST Act, 2017. It would be extremely difficult for a purchasing dealer t... [Read more]

GST - Denial of Input Tax Credit to bona fide purchasing dealer, Non-payment of tax by supplier - Whether the petitioner, being a bona fide purchasing dealer, can be denied ITC on the ground that the supplier failed to deposit the taxes collected from the petitioner – HELD – In the case of M/s Sahil Enterprises v. Union of India & others, the Court held that the Legislature has failed to make a distinction between purchasing dealers who have bona fide transacted with the selling dealer and those who did not, while enacting Section 16(2)(c) of the CGST Act, 2017. It would be extremely difficult for a purchasing dealer to ensure that the selling dealer deposits the GST collected from him with the Government, and thus Section 16(2)(c) places an onerous burden on a bona fide purchasing dealer - In the present case, the show cause notice and the order passed by the respondent do not contain any findings that the transaction between the petitioner and the supplier was not bona fide, or was a collusive or fraudulent transaction to defraud the revenue. Therefore, the ratio of the judgment in M/s Sahil Enterprises is clearly applicable, and the transaction has to be held as a bona fide transaction. Consequently, the petitioner cannot be punished by applying Section 16(2)(c) of the CGST Act for the failure of the supplier to deposit the taxes collected from the petitioner – The impugned order is set aside and the petition is allowed [Read less]

GST – Manner of refund, Refund of IGST collected on Ocean Freight under invalid Notification – Revenue appeal against the judgment of the High Court allowing refund of tax collected by the respondent-company from its consumers towards IGST - Whether the High Court was justified in coming up with a procedure, not contemplated by the statute, for refund of such amounts to the class of consumers who bore the burden of the tax collected under invalid Notification – HELD - The High Court's procedure was not sustainable on facts and law. The CGST Act under Section 54(5) provides that upon receipt of a refund application, t... [Read more]

GST – Manner of refund, Refund of IGST collected on Ocean Freight under invalid Notification – Revenue appeal against the judgment of the High Court allowing refund of tax collected by the respondent-company from its consumers towards IGST - Whether the High Court was justified in coming up with a procedure, not contemplated by the statute, for refund of such amounts to the class of consumers who bore the burden of the tax collected under invalid Notification – HELD - The High Court's procedure was not sustainable on facts and law. The CGST Act under Section 54(5) provides that upon receipt of a refund application, the officer is required to credit the refundable amount to the Consumer Welfare Fund referred to in Section 57. The exception under Section 54(8)(e) to pay the refund directly to the applicant applies only if the applicant had not passed on the tax incidence to any other person, which was not the case here as the respondent-company had admittedly passed on the tax to the consumers - In the present case, since the incidence of the tax that was collected was passed on by the respondent-company to the consumers, the exception envisaged by Section 54(8)(e) did not even apply - The procedure suggested by the respondent-company and accepted by the High Court, where the respondent-company would open a separate designated bank account and offer the refunded amount as revenue for tariff determination is not contemplated by Section 54 of the CGST Act and the Rules framed therein. Further, it would involve a gargantuan exercise to verify whether the actual consumers who bore the tax burden would be the beneficiaries of the refund, which would be impractical - The High Court judgment is set aside and the respondent-company is directed to transfer the refund amount to the authorities concerned to be credited to the Consumer Welfare Fund - The appeal is allowed [Read less]

GST - Provisional Attachment Order - Whether the provisional attachment orders, which were issued more than a year ago, continued to have effect or had ceased as per the provisions of Section 83 of the CGST Act, 2017 – HELD - As per Section 83(2) of the GST Act, every provisional attachment order ceases to have effect after the expiry of a period of one year from the date of the order. The Supreme Court in the case of Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax had also held that the statute does not recognize any extension of the one-year period, and the executive cannot overreach the statute t... [Read more]

GST - Provisional Attachment Order - Whether the provisional attachment orders, which were issued more than a year ago, continued to have effect or had ceased as per the provisions of Section 83 of the CGST Act, 2017 – HELD - As per Section 83(2) of the GST Act, every provisional attachment order ceases to have effect after the expiry of a period of one year from the date of the order. The Supreme Court in the case of Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax had also held that the statute does not recognize any extension of the one-year period, and the executive cannot overreach the statute to do so - Given that the provisional attachment orders in the present cases were issued on 3rd January 2025 and the one-year period had already expired, the orders can no longer be continued. Neither the Commissioner nor the petitioners' bankers could maintain the freezing of the petitioners' property and bank accounts based on these orders, as they had ceased to have effect by operation of law - The writ petitions are partly allowed [Read less]

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

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

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

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

GST - Requirement of a valid Show Cause Notice under Section 73 of the CGST Act, 2017 - Petitioner was issued a Summary of the Show Cause Notice in Form GST DRC-01, which mentioned that a Show Cause Notice was attached. However, the attachment only contained a determination of tax, and not a proper Show Cause Notice - Whether the attachment to the Summary of the Show Cause Notice in Form GST DRC-01 can be considered a valid Show Cause Notice under Section 73 of the CGST Act, 2017 – HELD - The Summary of the Show Cause Notice in Form GST DRC-01 cannot be a substitute for the actual Show Cause Notice required to be issued ... [Read more]

GST - Requirement of a valid Show Cause Notice under Section 73 of the CGST Act, 2017 - Petitioner was issued a Summary of the Show Cause Notice in Form GST DRC-01, which mentioned that a Show Cause Notice was attached. However, the attachment only contained a determination of tax, and not a proper Show Cause Notice - Whether the attachment to the Summary of the Show Cause Notice in Form GST DRC-01 can be considered a valid Show Cause Notice under Section 73 of the CGST Act, 2017 – HELD - The Summary of the Show Cause Notice in Form GST DRC-01 cannot be a substitute for the actual Show Cause Notice required to be issued under Section 73(1) of the Act. The Section 73 clearly distinguishes between the Show Cause Notice and the Statement of determination of tax under Section 73(3), and the latter cannot replace the former - Under Rule 142(1) of the CGST Rules, 2017, the issuance of the Summary of the Show Cause Notice in Form GST DRC-01 is in addition to the requirement of issuing a proper Show Cause Notice under Section 73(1). The Summary of the Show Cause Notice cannot substitute the requirement of a proper Show Cause Notice – Further, the attachments to both the Summary of the Show Cause Notice and the Summary of the Order were not properly authenticated by the Proper Officer as required under Rule 26(3) of the CGST Rules, 2017. The authentication by the Proper Officer is a statutory mandate, and the failure to do so renders the Show Cause Notice and the Order ineffective - The impugned order is quashed and the respondents are granted liberty to initiate de novo proceedings under Section 73, if deemed fit. The Bank Accounts of the petitioner, which are frozen, are ordered to be defreezed – The writ petition stands disposed of [Read less]

Central Excise - Eligibility of Cenvat Credit on Inputs and Input Services availed for setting up of factory. In relation to the factory setup, appellant had fabricated certain machineries, parts, and supporting structures – Denial of Cenvat Credit on certain inputs like HR Coils, MS Beams, HR Plates, and input services – HELD - The issue of denial of Cenvat Credit on inputs had come up before the Tribunal earlier for different periods, and the factual matrix was quite similar. The Adjudicating Authority had examined the eligibility of the inputs based on various judgments and the Chartered Accountant's certificate cer... [Read more]

Central Excise - Eligibility of Cenvat Credit on Inputs and Input Services availed for setting up of factory. In relation to the factory setup, appellant had fabricated certain machineries, parts, and supporting structures – Denial of Cenvat Credit on certain inputs like HR Coils, MS Beams, HR Plates, and input services – HELD - The issue of denial of Cenvat Credit on inputs had come up before the Tribunal earlier for different periods, and the factual matrix was quite similar. The Adjudicating Authority had examined the eligibility of the inputs based on various judgments and the Chartered Accountant's certificate certifying the use of the items in the fabrication of capital goods. The similar issues for a different period were remanded back by the Tribunal for re-computation of the demand based on the decisions in the Appellant's own case. The matter is remanded back to the Adjudicating Authority for re-computation of the demand, keeping in view the decisions in the Appellant's own case – The appeals are allowed by remand - Eligibility of Cenvat Credit on Input Services: The Department disputed the admissibility of Cenvat Credit of Service Tax taken by the Appellant under the category of input services used for making civil structures like boundary wall, civil and structural work, helipad, etc., which are immovable property – HELD - The issue of eligibility of Cenvat Credit on input services had also been decided in the Appellant's own case, where the Tribunal had observed that the credit on the input services availed by the Appellant prior to April 1, 2011, when the definition of input services had a wide ambit, was justified and allowed the credit. The matter is remanded back to the Adjudicating Authority for re-determination. [Read less]

Service Tax - Invocation of extended period of limitation for non-payment of service tax by a sub-contractor – Non-payment of service on the ground that the principal contractors had discharged the service tax liability - Whether the invocation of extended period of limitation against the appellant for non-payment of service tax is justified – HELD - After the issuance of the Master Circular No. 96/7/2007-S.T. dated 23.08.2007 by the Board, which clarified that even when the principal contractor discharges the service tax liability, the sub-contractor shall be liable to pay service tax, there were conflicting decisions... [Read more]

Service Tax - Invocation of extended period of limitation for non-payment of service tax by a sub-contractor – Non-payment of service on the ground that the principal contractors had discharged the service tax liability - Whether the invocation of extended period of limitation against the appellant for non-payment of service tax is justified – HELD - After the issuance of the Master Circular No. 96/7/2007-S.T. dated 23.08.2007 by the Board, which clarified that even when the principal contractor discharges the service tax liability, the sub-contractor shall be liable to pay service tax, there were conflicting decisions by various Benches of the Tribunal on the issue of liability of a sub-contractor to pay service tax - When there are divergent views of Courts/Tribunals on a particular issue, the assessee may have a bona fide belief that service tax is not payable, and in such situations, the extended period of limitation cannot be invoked by the Department - The issue of liability of a sub-contractor to pay service tax was finally settled by the Larger Bench of the Tribunal in the case of CST, New Delhi v. Melange Developers Pvt. Ltd. on 23rd May, 2019, whereas the show cause notice in the present case was issued on 07.01.2014, i.e., during the period when there were conflicting decisions on the issue - In view of the above, the extended period of limitation was not invocable in the present case. The impugned order is set aside, allowing the appeal by the appellant [Read less]

Service Tax on Overseas Commission Agents - Appellant engaged overseas commission agents to act as non-exclusive sales representatives. The services provided by the overseas commission agents included market research, procuring RFQs, making presentations, price negotiations, and providing sales and after-sales services. The Department raised a demand of service tax on the commission paid to the overseas agents – HELD - For the Period: 1.4.2011-30.6.2012, as per the Board's Circular and the Tribunal order in Genom Biotech case, the services have to be received in India for the same to be taxable under Section 66A. Since t... [Read more]

Service Tax on Overseas Commission Agents - Appellant engaged overseas commission agents to act as non-exclusive sales representatives. The services provided by the overseas commission agents included market research, procuring RFQs, making presentations, price negotiations, and providing sales and after-sales services. The Department raised a demand of service tax on the commission paid to the overseas agents – HELD - For the Period: 1.4.2011-30.6.2012, as per the Board's Circular and the Tribunal order in Genom Biotech case, the services have to be received in India for the same to be taxable under Section 66A. Since the services were clearly received in abroad and not in India, the services are not liable to service tax - For the Period: 1.7.2012-30.9.2014, the service tax is liable to be paid only when service has been received and consideration has been paid. In the instant case, no service was rendered and no consideration was paid. Hence, the liability of service tax does not arise. However, the fact of reversal of such provision in the subsequent year needs to be verified – For the Period: 1.10.2014-31.3.2016, the definition of "intermediary" was amended w.e.f. 1.10.2014 to cover services of arranging or facilitating supply of goods between two or more persons, such as a commission agent. Consequently, the place of provision of services would be the location of the service provider, i.e., the overseas commission agent. Since the commission agent was located abroad, the liability of service tax would not arise - As regards the liability on the two invoices, it has been submitted that no payment was made even though the invoices had been raised. This fact would also have to be verified. It is settled legal provision that the liability to pay service tax arises only when the service is provided. In the instant case, it has been categorically submitted that the service was not provided by the overseas Commissioner Agent. Consequently, the liability of service tax does not arise - The impugned order is set aside and matter is remanded to the original adjudicating authority to hear the appellant and consider the relevant documents to substantiate their contentions - The appeal is allowed by way of remand [Read less]

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

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

Service Tax - Demand of Service Tax on TDS - The appellant entered into a contract with M/s National Highway Authority of India (NHAI) for rendering Consulting Engineering Services. NHAI paid TDS on behalf of the appellant, but the appellant did not include the TDS amounts while arriving at the taxable value - Whether the Department was correct in demanding service tax on the TDS portion – HELD – The TDS being paid by NHAI to the Government is as per the provisions of the Income Tax Act, 1961. Tax Deducted at Source is a way of collection of income tax under the provision of Chapter XVII of the Income Tax Act - In the ... [Read more]

Service Tax - Demand of Service Tax on TDS - The appellant entered into a contract with M/s National Highway Authority of India (NHAI) for rendering Consulting Engineering Services. NHAI paid TDS on behalf of the appellant, but the appellant did not include the TDS amounts while arriving at the taxable value - Whether the Department was correct in demanding service tax on the TDS portion – HELD – The TDS being paid by NHAI to the Government is as per the provisions of the Income Tax Act, 1961. Tax Deducted at Source is a way of collection of income tax under the provision of Chapter XVII of the Income Tax Act - In the instant case, TDS has not been deducted from the amount invoiced. NHAI has paid income tax, over and above the agreed contract value. Service tax liability is only on the gross amount charged for such services. Therefore, it cannot be said that appellant had charged NHAI for TDS - Since NHAI paid the income tax (TDS) over and above the agreed contract value, and the appellant had already paid service tax on the invoiced amount, the TDS portion cannot be added to the taxable value - The demand of service tax on the TDS portion is set aside and the appeal is allowed [Read less]

Service Tax – SEZ Unit, Exemption from Service Tax on rent-a-cab services provided to SEZ unit - Appellant provided rent-a-cab services to a SEZ unit and claimed exemption under Notification No.04/2004-ST dated 31.03.2004 - Department denied the exemption on the ground that the condition of 'used within SEZ area' was not fulfilled as the pick-up and drop of staff of the SEZ unit was not consumed or used within the SEZ area as required by the notification – HELD – The Section 26(1)(e) of the Special Economic Zones Act, 2005 provides exemption from service tax on taxable services provided to a Developer or Unit to carr... [Read more]

Service Tax – SEZ Unit, Exemption from Service Tax on rent-a-cab services provided to SEZ unit - Appellant provided rent-a-cab services to a SEZ unit and claimed exemption under Notification No.04/2004-ST dated 31.03.2004 - Department denied the exemption on the ground that the condition of 'used within SEZ area' was not fulfilled as the pick-up and drop of staff of the SEZ unit was not consumed or used within the SEZ area as required by the notification – HELD – The Section 26(1)(e) of the Special Economic Zones Act, 2005 provides exemption from service tax on taxable services provided to a Developer or Unit to carry on the authorized operations in a SEZ. Further, Section 51 of the SEZ Act declares that the provisions of the SEZ Act shall have overriding effect over any other law. The condition prescribed in the Notification No.04/2004-ST is not applicable in the instant case as the exemption is available under the specific provisions of the SEZ Act. Therefore, the exemption cannot be denied on the ground of the condition prescribed in the said notification. Since the demand is not sustainable on merits, the question of invocation of extended period of limitation does not arise – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Expenditure in foreign currency, Demand under RCM - Service tax liability under Reverse Charge Mechanism on foreign currency expenses for film shooting and related activities - During the period 2010-11 to 2013-14, the appellant incurred certain expenses in foreign currency for shooting of films outside India and other allied activities - Whether the appellant is liable to pay service tax under RCM on the expenses incurred in foreign currency towards shooting of films and other related expenses - HELD - The Department failed to specify the nature of the taxable service and the relevant provision under which... [Read more]

Service Tax – Expenditure in foreign currency, Demand under RCM - Service tax liability under Reverse Charge Mechanism on foreign currency expenses for film shooting and related activities - During the period 2010-11 to 2013-14, the appellant incurred certain expenses in foreign currency for shooting of films outside India and other allied activities - Whether the appellant is liable to pay service tax under RCM on the expenses incurred in foreign currency towards shooting of films and other related expenses - HELD - The Department failed to specify the nature of the taxable service and the relevant provision under which the services are liable to tax. Merely relying on the difference in figures between the balance sheet and ST-3 returns without identifying the category of underlying service is not sufficient to raise the demand - For the period prior to July 1, 2012, the onus is on the Department to establish the taxability and classification of the services under the relevant provisions of the Finance Act, 1994, which the department failed to discharge - For the period post July 1, 2012, the demand cannot be sustained as the department has invoked Rule 3 of the Place of Provision of Services Rules, 2012 without ascertaining the nature of services received by the appellant. The expenses incurred by the appellant are in the nature of services relating to immovable property situated outside India or for the organisation of film shooting event, which are not liable to service tax under RCM as per the provisions of the Place of Provision of Services Rules, 2012 - The demand of service tax under reverse charge mechanism on the expenses incurred by the appellant in foreign currency towards shooting of films and other related activities is set aside - There is no evidence brought on record by the department to establish that the appellant had availed CENVAT credit by way of fraud, collusion, or willful misstatement or suppression of facts with an intent to evade payment of service tax. In the absence of such evidence, penalties under Section 78 cannot be imposed - the impugned order is set aside and the appeal is allowed - Short reversal of CENVAT credit on common input services - Whether credit is required to be reversed on account of alleged short reversal of CENVAT credit on input services used commonly for making both taxable and exempt supplies – HELD - The appellant had pro rata reversed the CENVAT credit of the input services used in relation to its film division by computing the value of exempted and output services on an entity basis as a whole. The Department's demand by considering only the revenues of the film division is not correct, as the CENVAT credit registration was centralized at the corporate level. As per Rule 6(3A) of the CENVAT Credit Rules, 2004, the value of the services provided during the financial year is required to be considered, which the appellant has done - The demand for short reversal of CENVAT credit is set aside - Whether the appellant is required to reverse CENVAT credit used on input services received from RIMT Pvt. Ltd. used for providing both taxable and exempt supplies – HELD - The input services received from RIMT Pvt. Ltd. were exclusively used by the appellant for rendering taxable output services. The Tribunal observed that the department failed to prove that the services received from RIMT Pvt. Ltd. were used for providing exempt services. Based on the invoices produced by the appellant, the Tribunal found that the services received from RIMT Pvt. Ltd. were for digital cinema mastering, which were used by the appellant for providing taxable "video tape production services" - The demand for reversal of CENVAT credit on input services received from RIMT Pvt. Ltd is set aside - CENVAT credit on projectors and maintenance services - Department sought to deny CENVAT credit availed on projectors and their maintenance services, on the ground that these capital goods were used exclusively for providing exempt services – HELD - The capital goods (projectors) and the related maintenance services were used by the appellant for providing both taxable and exempt services. If the capital goods are not used exclusively for manufacturing exempt goods, the provisions of Rule 6(4) of the CENVAT Credit Rules would not apply, and the CENVAT credit cannot be denied – The demand for reversal of CENVAT credit on projectors and maintenance services is set aside. [Read less]

Central Excise - MRP-based valuation, Invocation of Extended Period of Limitation – Respondent-assessee assessed duty by adopting transaction value under Section 4, instead of MRP-based valuation under Section 4A of CEA, 1944. The Department issued a show cause notice proposing to re-determine the assessable value under Section 4A and demand differential duty for the extended period. The adjudicating authority dropped the demand for the extended period, holding that the extended period was not invokable in the absence of willful suppression – HELD - The non-adoption of MRP-based valuation under Section 4A by the respon... [Read more]

Central Excise - MRP-based valuation, Invocation of Extended Period of Limitation – Respondent-assessee assessed duty by adopting transaction value under Section 4, instead of MRP-based valuation under Section 4A of CEA, 1944. The Department issued a show cause notice proposing to re-determine the assessable value under Section 4A and demand differential duty for the extended period. The adjudicating authority dropped the demand for the extended period, holding that the extended period was not invokable in the absence of willful suppression – HELD - The non-adoption of MRP-based valuation under Section 4A by the respondent did not constitute willful suppression warranting invocation of the extended period of limitation under Section 11A. The respondent had consistently declared the classification, turnover, and nature of clearances, and the returns were duly filed and scrutinized by the Department. When material particulars are disclosed in the statutory returns and the Department does not object for a prolonged period, the extended limitation cannot be invoked merely because the valuation method was later found to be incorrect during audit. The dropping of the demand for the extended period is legal and proper - The order of the adjudicating authority is upheld and the Revenue appeal is dismissed [Read less]

Customs - Valuation of imported networking equipment - Appellant declared the imports by bifurcating the transaction value into hardware, classified under CTH 8473, and software, classified separately under CTH 85238020/85238090, and discharged customs duty accordingly - Department issued notice alleging that the Appellant had undervalued the goods by splitting the value, on the premise that the software was embedded/etched firmware, forming an integral part of the hardware, thereby constituting a single ready-to-use product classifiable entirely under CTH 8473 - Whether the value of the software is includable in the value... [Read more]

Customs - Valuation of imported networking equipment - Appellant declared the imports by bifurcating the transaction value into hardware, classified under CTH 8473, and software, classified separately under CTH 85238020/85238090, and discharged customs duty accordingly - Department issued notice alleging that the Appellant had undervalued the goods by splitting the value, on the premise that the software was embedded/etched firmware, forming an integral part of the hardware, thereby constituting a single ready-to-use product classifiable entirely under CTH 8473 - Whether the value of the software is includable in the value of the hardware imported - HELD - Based on the ratio laid down in the case of Commissioner of Customs (Airport), Chennai v. M/s. ITI Ltd., the value of the software is includable in the value of the hardware imported. The issue was interpretative in nature, and there was no misstatement or suppression of facts, but rather a bonafide belief of the Appellant that the classification and valuation of the software done separate from the hardware was correct. Therefore, the extended period of limitation cannot be invoked – The demand for the normal period of limitation is upheld and interest liability on such short-paid duty is payable - Extended period of limitation under Section 28 of the Customs Act, 1962 and the penalties imposed are set-aside [Read less]

Service Tax - Reimbursable expenses - Appellant is a General Sales Agency (GSA) for Sri Lankan Airlines Private Limited (SAPL) - Whether the expenses reimbursed by SAPL to the appellant are to be included in the gross value as per Section 67 of the Finance Act – HELD - The issue on levy of service tax on reimbursable expenses is no more res-integra in view of the decision of the Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, wherein the Supreme Court affirmed the decision of the Delhi High Court and struck down Rule 5(1) of the Service Tax Valuation Rules, 2006 as ultra vires Sec... [Read more]

Service Tax - Reimbursable expenses - Appellant is a General Sales Agency (GSA) for Sri Lankan Airlines Private Limited (SAPL) - Whether the expenses reimbursed by SAPL to the appellant are to be included in the gross value as per Section 67 of the Finance Act – HELD - The issue on levy of service tax on reimbursable expenses is no more res-integra in view of the decision of the Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, wherein the Supreme Court affirmed the decision of the Delhi High Court and struck down Rule 5(1) of the Service Tax Valuation Rules, 2006 as ultra vires Sections 66 and 67 of the Act. Since the demand in the present case was premised on Rule 5, the Tribunal held that the demand of service tax is untenable. Further, the CBEC Circular and Trade Notice prevalent during the disputed period had clarified that the amount incurred by the manpower recruitment agency on behalf of the client towards expenses, which are reimbursed on actual basis, shall be excluded from the value of taxable service. The Department could not have alleged suppression as the appellant had been issued multiple SCNs earlier demanding service tax on various counts, all of which stood adjudicated subsequently - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Export valuation - Authorities stopped the consignments from being exported on the ground that the value adopted per piece of the leather wallet was higher than the market price, resulting in overvaluation - During adjudication, the value was modified and the goods were confiscated, with an option to the exporter to redeem on payment of redemption fine - Vide impugned order, the Commissioner (Appeals) set aside the Order-in-Original and allowed the appeals filed by the exporter - Whether the rejection of the declared FOB value by the customs authorities and the redetermination of the value was legally valid – H... [Read more]

Customs - Export valuation - Authorities stopped the consignments from being exported on the ground that the value adopted per piece of the leather wallet was higher than the market price, resulting in overvaluation - During adjudication, the value was modified and the goods were confiscated, with an option to the exporter to redeem on payment of redemption fine - Vide impugned order, the Commissioner (Appeals) set aside the Order-in-Original and allowed the appeals filed by the exporter - Whether the rejection of the declared FOB value by the customs authorities and the redetermination of the value was legally valid – HELD - The Customs authorities did not follow the proper procedure specified under Section 14 of the Customs Act and the Customs Valuation Rules, 2007 for determining the export value. The transaction value declared by the appellant in the Shipping Bills should have been accepted as the primary method, unless the revenue proved that the value was influenced by extraneous considerations or that the price was not the sole consideration for sale. However, the revenue failed to discharge this burden. The market survey conducted was also legally invalid as it compared entirely dissimilar products without any analysis of the actual export costs - Since the declared value was found to be valid, the goods were not liable for confiscation under Sections 113(i), 113(ia) and 113(ja) of the Customs Act. The attempt to equate a mere valuation dispute with material misdeclaration is erroneous. As no discrepancy was found in the quality, quantity or characteristics of the goods, the confiscation and penalties imposed are not justified – The revenue appeals are dismissed [Read less]

Service Tax - Taxability of intermediary services provided by consultancy firms to foreign universities/colleges - Whether the services provided by the appellants to the foreign universities/colleges amount to "intermediary services" under Rule 2(f) of the Place of Provision of Service Rules, 2012 and are hence liable to service tax – HELD - The services provided by the appellants do not fall under the definition of "intermediary services" as per Rule 2(f) of the Place of Provision of Service Rules, 2012. The appellant was providing Business Auxiliary Services to its clients located outside India, which amounts to export... [Read more]

Service Tax - Taxability of intermediary services provided by consultancy firms to foreign universities/colleges - Whether the services provided by the appellants to the foreign universities/colleges amount to "intermediary services" under Rule 2(f) of the Place of Provision of Service Rules, 2012 and are hence liable to service tax – HELD - The services provided by the appellants do not fall under the definition of "intermediary services" as per Rule 2(f) of the Place of Provision of Service Rules, 2012. The appellant was providing Business Auxiliary Services to its clients located outside India, which amounts to export of service and not intermediary service. As per the definition, an intermediary is a person who arranges or facilitates the provision of a service between two or more persons, but the appellants were providing services directly to the foreign universities/colleges and receiving commissions, and were not acting as an intermediary between two parties. Therefore, the services provided by the appellants do not qualify as "intermediary services" and are not liable to service tax - The services provided by the appellants to the foreign universities/colleges do not amount to "intermediary services" and are hence not liable to service tax – The appeal is allowed [Read less]

Service Tax - Taxability of adda-fees collected by the appellant from bus operators for using the bus terminal - Under the agreement, the appellant was allowed to collect adda-fees from the bus operators using the terminal. Department issued service tax demands on the appellant claiming that the adda-fees collected are taxable under the "Business Support Services" category - Whether the adda-fees collected by the appellant from the bus operators are taxable under the "business support services" category - HELD - The services provided by the appellant are to the Punjab Infrastructure Development Board (‘PIDB/Authority’)... [Read more]

Service Tax - Taxability of adda-fees collected by the appellant from bus operators for using the bus terminal - Under the agreement, the appellant was allowed to collect adda-fees from the bus operators using the terminal. Department issued service tax demands on the appellant claiming that the adda-fees collected are taxable under the "Business Support Services" category - Whether the adda-fees collected by the appellant from the bus operators are taxable under the "business support services" category - HELD - The services provided by the appellant are to the Punjab Infrastructure Development Board (‘PIDB/Authority’) and not to the bus operators, as there is no privity of contract between the appellant and the bus operators. The agreement between the appellant and PIDB clearly shows that the appellant was reimbursed the costs of the project by permitting it to collect the adda-fees, which is in lieu of the consideration payable by PIDB for the construction and development of the project. The determination of the adda-fees was solely at the discretion of the PIDB, and the appellant had no role in it – Appellant do not come under the ‘business support services’ because the BSS cover those services which are outsourced by the service recipient, and it is highly fallacious to hold that bus operators outsourced the construction of bus-terminal on build operate and transfer basis to the Appellant; therefore, it is beyond doubt that the Appellant has not rendered any BSS to bus operators - Further, the adda-fees are in the nature of parking fees, which are exempt under the "renting of immovable property services". The extended period of limitation is not applicable as the appellant had submitted all the relevant information to the department in time, and there was no evidence of suppression, fraud, or misstatement on the part of the appellant – The impugned order is set aside and the appeal is allowed [Read less]

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

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

GST - The assessment order had confirmed the demand for 5% GST on the supply of fish meal. The petitioner had earlier filed a writ petition challenging the original assessment order, and the High Court had directed the petitioner to file an appeal. Pursuant to that order, the petitioner filed the appeal, but it was rejected by the second respondent on the ground of non-payment of the 10% statutory pre-deposit - Whether the appellate authority is liable to accept the appeal filed by the petitioner against the assessment order without the pre-deposit – HELD - In a similar matter, the High Court had specifically directed th... [Read more]

GST - The assessment order had confirmed the demand for 5% GST on the supply of fish meal. The petitioner had earlier filed a writ petition challenging the original assessment order, and the High Court had directed the petitioner to file an appeal. Pursuant to that order, the petitioner filed the appeal, but it was rejected by the second respondent on the ground of non-payment of the 10% statutory pre-deposit - Whether the appellate authority is liable to accept the appeal filed by the petitioner against the assessment order without the pre-deposit – HELD - In a similar matter, the High Court had specifically directed the petitioner to pay 10% of the statutory pre-deposit for all items except fish meal while filing the appeal. However, the petitioner had filed the appeal without making the pre-deposit, and the appeal was rejected on that ground - An appeal has to be preferred after payment of the 10% statutory pre-deposit as per the GST law. The issue regarding the levy of tax on fish meal was still pending before the Supreme Court, and hence the payment of the pre-deposit cannot be dispensed with. Therefore, the petitioner is directed to make the 10% statutory pre-deposit and thereafter re-present the appeal before the second respondent, either by uploading it on the portal or by filing it physically. The appellate authority to take the appeal on record and keep it pending until the verdict of the Supreme Court in the similar matter - The writ petition is disposed of [Read less]

Central Excise - Cenvat Credit on the input services distributed by the head office as an input service distributor (ISD) - Appellant availed Cenvat credit on input services of 'advertisement agency services' provided by its head office. However, the expenditure for such services was not booked in the books of account of the appellant's branch but in the books of the head office. The Revenue denied the Cenvat credit on the ground that it was not booked in the appellant's books - Whether the Cenvat credit on the input services distributed by the head office as an ISD can be denied to the appellant's branch on the ground tha... [Read more]

Central Excise - Cenvat Credit on the input services distributed by the head office as an input service distributor (ISD) - Appellant availed Cenvat credit on input services of 'advertisement agency services' provided by its head office. However, the expenditure for such services was not booked in the books of account of the appellant's branch but in the books of the head office. The Revenue denied the Cenvat credit on the ground that it was not booked in the appellant's books - Whether the Cenvat credit on the input services distributed by the head office as an ISD can be denied to the appellant's branch on the ground that the expenditure was not booked in its books of account – HELD - The eligibility of Cenvat credit should be checked at the ISD level and not at the level of the manufacturing unit. The Cenvat credit cannot be denied to the recipient unit which has merely availed the credit based on the invoices issued by the ISD. The CBEC had clarified that the ISD can distribute the Cenvat credit to its manufacturing units or units providing output service, and it is left to the assessee to decide the manner of distribution, ensuring that the total credit allowed does not exceed the eligible credit amount - The provisions of Rule 7 of the Cenvat Credit Rules, which prescribe the manner of distribution by the ISD, did not require the expenses to be booked in the books of account of the recipient unit during the relevant period. Accordingly, the Cenvat credit on the input services distributed by the head office as an ISD cannot be denied to the appellant's branch on the ground that the expenditure was not booked in its books of account - The impugned order is set aside and the appeals are allowed [Read less]

Service Tax - Retrospective application of amended definition of "specified services" in Notification No. 41/2012-ST - Whether the term "specified services" in Notification No. 41/2012-ST, as amended by Notification No. 1/2016-ST, includes input services used at the head office/corporate office for the export of goods, and therefore whether services used at the head office qualify for refund - HELD - The definition of "specified services" in Notification No. 41/2012-ST was retrospectively widened by Notification No. 1/2016-ST to include services used "beyond the factory or any other place or premises of production or manuf... [Read more]

Service Tax - Retrospective application of amended definition of "specified services" in Notification No. 41/2012-ST - Whether the term "specified services" in Notification No. 41/2012-ST, as amended by Notification No. 1/2016-ST, includes input services used at the head office/corporate office for the export of goods, and therefore whether services used at the head office qualify for refund - HELD - The definition of "specified services" in Notification No. 41/2012-ST was retrospectively widened by Notification No. 1/2016-ST to include services used "beyond the factory or any other place or premises of production or manufacture" for the export of goods. This amendment is expressly given retrospective effect from 01.07.2012 and is, therefore, clarificatory and applicable to the period of dispute. The rejection based on the old phrase "beyond the place of removal" is legally untenable. The test is simply whether the service is used beyond the place of manufacture and for export, irrespective of whether it is pre-export or post-export. The services used at the head office, such as renting of premises, telecommunication, security, professional/IT consultancy, C&F support, repair & maintenance etc., are integral to the export process and qualify as "specified services" – The matter is remanded for limited verification of invoice authenticity, nexus with export of goods, and filing within one year of the relevant exports - The impugned orders are set aside to the extent they rejected the refunds based on the pre-2016 interpretation of Notification No. 41/2012-ST or on quarter mismatch/time-bar grounds – The appeal is allowed by remand - Whether the lower authorities were justified in rejecting portions of the claim on the ground of time-bar (i.e., filed after one year from the date of export) or because certain invoice amounts belonged to quarters other than the quarter for which refund was sought - HELD - The Notification No. 41/2012-ST imposes only one condition, i.e., the claim must be filed within one year from the date of export, and there is no quarter-wise restriction (unlike Notification 27/2012-CE). Therefore, an invoice pertaining to another quarter cannot be rejected if the claim is filed within one year of export and the nexus is shown. The lower authorities erred by importing the procedural framework of Notification No. 27/2012-CE and the absence of specific invoice/shipping bill-wise reasons in the impugned order strengthens the appellant's case. Accordingly, the findings on time-bar and quarter-wise mismatch are unsustainable - The impugned orders are set aside to the extent they rejected the refunds on the basis of time-bar or quarter mismatch, and remanded the matter to the lower authorities for limited verification and fresh orders. [Read less]

Customs - Cancellation of duty credit scrips/licenses obtained by fraud, Duty-free import by bonafide transferee - Whether the goods imported by the appellants, as bonafide transferees of the valid and subsisting duty credit scrips/licenses, would be liable for denial of duty exemption on the ground that the original license holder had obtained the scrips/licenses fraudulently – HELD - Even if the scrips/licenses were obtained by the original licensees through fraud or forged documents, as long as they were valid and subsisting at the time of import by the appellants, the subsequent cancellation of the scrips/licenses wo... [Read more]

Customs - Cancellation of duty credit scrips/licenses obtained by fraud, Duty-free import by bonafide transferee - Whether the goods imported by the appellants, as bonafide transferees of the valid and subsisting duty credit scrips/licenses, would be liable for denial of duty exemption on the ground that the original license holder had obtained the scrips/licenses fraudulently – HELD - Even if the scrips/licenses were obtained by the original licensees through fraud or forged documents, as long as they were valid and subsisting at the time of import by the appellants, the subsequent cancellation of the scrips/licenses would not affect the prior import activity of the bonafide transferees - A license/scrip obtained by fraud is not void ab-initio but merely voidable. If the license/scrip was obtained for valuable consideration by the transferee without any notice of fraud, the concept of "fraud vitiating everything" would not apply. The cancellation of the scrips after the imports had been made would not have any impact, as at the time of import, the scrips were valid - In the case in hand, the appellants had purchased the scrips/licenses from the persons, who were recognized by the licensing authorities as the exporter of the goods and upon subjective verification, the same were issued in their favour by the competent authorities. Thus, under such circumstances, even if the said documents were obtained by the main beneficiary by adopting to the fraudulent means or practices, it cannot be questioned at the stage of the ultimate beneficiary, who had purchased such document duly issued by the competent authority and utilized the same for duty free importation of goods - the impugned orders are set aside and the appeals are allowed in favour of the appellants [Read less]

Central Excise - Refund of Central Excise Duty, Interest on Delayed Refund - A fire accident took place in their factory resulting in destruction of 'semi-finished goods in process' and the 'finished good' available in the factory. The appellant reversed the CENVAT credit and filed an application for remission of duty involved in the goods destroyed in fire. The application for remission was rejected by the Department and the appellant's appeal against the order was allowed by the Commissioner (Appeals), allowing refund along with interest at the rate prescribed under Section 11BB of the Central Excise Act, 1944 - Whether ... [Read more]

Central Excise - Refund of Central Excise Duty, Interest on Delayed Refund - A fire accident took place in their factory resulting in destruction of 'semi-finished goods in process' and the 'finished good' available in the factory. The appellant reversed the CENVAT credit and filed an application for remission of duty involved in the goods destroyed in fire. The application for remission was rejected by the Department and the appellant's appeal against the order was allowed by the Commissioner (Appeals), allowing refund along with interest at the rate prescribed under Section 11BB of the Central Excise Act, 1944 - Whether the appellant is entitled to interest at the rate of 12% per annum on the refund amount or the interest rate prescribed under Section 11BB of the Central Excise Act, 1944 is applicable – HELD – The refund of the amount claimed by the appellant is nothing but Central Excise Duty, and the refund of the same will be governed by the provisions of Section 11B and Section 11BB of the CEA, 1944. The decisions relied upon by the appellant which were in respect of the amounts deposited by the appellant during course of investigation are distinguishable and cannot be relied upon for granting them interest @ 12% as claimed by them – As per the Supreme Court decision in Mafatlal Industries case, all the refunds which are filed under the Central Excise Act, 1944 are governed by the provision of Section 11B of the Act. The interest thus gets governed by the provisions of Section 11BB as held by the Supreme Court in the case of Ranbaxy Laboratories Ltd. - The interest rate prescribed under Section 11BB of the CEA, 1944 is applicable in the present case and the appellant is not entitled to interest @ 12% per annum as claimed – The appeal is rejected [Read less]

GST - Detention of vehicle goods transported for exhibition/display purpose - Petitioner had sent one car for exhibition/display at its branch, which was accompanied by a delivery challan and an e-way bill. The vehicle was detained and an order of detention in Form GST MOV-6 was issued on the ground that the goods (car) were not covered by valid documents as the transaction was an inter-State stock transfer within related parties without a proper invoice - The petitioner challenged the order in Form GST MOV-09 – HELD – in the instant case, petitioner deposited the amount in question vide form GST DRC-03 under protest w... [Read more]

GST - Detention of vehicle goods transported for exhibition/display purpose - Petitioner had sent one car for exhibition/display at its branch, which was accompanied by a delivery challan and an e-way bill. The vehicle was detained and an order of detention in Form GST MOV-6 was issued on the ground that the goods (car) were not covered by valid documents as the transaction was an inter-State stock transfer within related parties without a proper invoice - The petitioner challenged the order in Form GST MOV-09 – HELD – in the instant case, petitioner deposited the amount in question vide form GST DRC-03 under protest with a view to have the vehicle released at the earliest without prejudice to its right to contest the proceedings, and therefore, it cannot be said that the petitioner had agreed to the proposed penalty or accepted it. The impugned order was passed under Section 129(3) of HGST Act alongwith the observation that no objection has been filed by the noticee and penalty proposed has been agreed to. In view of the fact that it is specifically mentioned in DRC-03 that payment was being made under protest, there was no occasion for Proper Officer to have passed the impugned order with the observations as above - The Proper Officer was duty-bound to pass a formal order in Form GST MOV-09 and upload a summary thereof in Form GST DRT 07, even if the amount was paid, to safeguard the petitioner's right to appeal under Section 107 of the CGST Act – The impugned order is set aside and the matter is remanded to the Proper Officer to decide the issue afresh after considering the reply/objection filed by the petitioner and providing an opportunity of hearing in accordance with the law - The writ petition is disposed of [Read less]

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

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

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

Service Tax - Supply of Tangible Goods for Use Service - Whether the supply of site analyser machines by the appellant to its clients on payment of VAT would amount to a "Supply of Tangible Goods for Use Service" and liable to service tax - HELD - When the possession and effective control of the goods supplied is with the customer, and the customer is paying VAT on the transaction, it would amount to a deemed sale under Article 366(29A)(d) of the Constitution and not a "Supply of Tangible Goods for Use Service" - In the present case, the appellant had supplied the site analyser machines to its clients on payment of VAT, an... [Read more]

Service Tax - Supply of Tangible Goods for Use Service - Whether the supply of site analyser machines by the appellant to its clients on payment of VAT would amount to a "Supply of Tangible Goods for Use Service" and liable to service tax - HELD - When the possession and effective control of the goods supplied is with the customer, and the customer is paying VAT on the transaction, it would amount to a deemed sale under Article 366(29A)(d) of the Constitution and not a "Supply of Tangible Goods for Use Service" - In the present case, the appellant had supplied the site analyser machines to its clients on payment of VAT, and the clients had the possession and effective control over the machines. Therefore, the transaction would not qualify as a "Supply of Tangible Goods for Use Service" and the appellant would not be liable to pay service tax – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Availment of CENVAT credit on capital goods - Date of start of production vs date of receipt of capital goods - Appellant availed CENVAT credit on transit mixers and chassis purchased prior to 16.05.2008, when the service of 'supply of tangible goods for use' became taxable. Revenue denied the credit on the ground that the capital goods were purchased during the period when the service was non-taxable - Whether the appellant is entitled to avail the CENVAT credit on the capital goods purchased prior to the service becoming taxable - HELD - The chassis and concrete transit mixers had no independent or standalo... [Read more]

Service Tax - Availment of CENVAT credit on capital goods - Date of start of production vs date of receipt of capital goods - Appellant availed CENVAT credit on transit mixers and chassis purchased prior to 16.05.2008, when the service of 'supply of tangible goods for use' became taxable. Revenue denied the credit on the ground that the capital goods were purchased during the period when the service was non-taxable - Whether the appellant is entitled to avail the CENVAT credit on the capital goods purchased prior to the service becoming taxable - HELD - The chassis and concrete transit mixers had no independent or standalone utility for the appellant until they were mounted, balanced, calibrated, and certified by the vendor. The fully finished vehicle ready for use came into existence only after the commissioning of the capital goods, which happened after 16.05.2008 when the service became taxable. The eligibility of credit on capital goods has to be taken as on the date of start of production, and not the date of receipt of the capital goods - It is on record that the appellant has supplied the tangible goods, for use, after the same were fully commissioned by the appropriate authority. Therefore, the CENVAT Credit on capital goods was availed by the appellant only after ‘supply of tangible goods for use’ came into existence as a taxable service. The appellant has rightly availed credit on capital goods after 16.05.2008, when ‘supply of tangible goods for use’ became taxable - The impugned order is set aside and the appeal is allowed [Read less]

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

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

GST – Tamil Nadu AAR - Taxability of Battery Energy Storage System (BESS) - Applicant is engaged in the activity of developing and operating Battery Energy Storage System (BESS) for or on behalf of various transmission, distribution and trading agencies in India - The applicant charges a fixed tariff every month based on the contracted capacity made available to the customer during the period of the Battery Energy Storage Purchase Agreement (BESPA) - Whether the activity of development and operation of standalone BESS would amount to supply of electrical energy and be exempt from GST under Notification No. 02/2017-CT(Rat... [Read more]

GST – Tamil Nadu AAR - Taxability of Battery Energy Storage System (BESS) - Applicant is engaged in the activity of developing and operating Battery Energy Storage System (BESS) for or on behalf of various transmission, distribution and trading agencies in India - The applicant charges a fixed tariff every month based on the contracted capacity made available to the customer during the period of the Battery Energy Storage Purchase Agreement (BESPA) - Whether the activity of development and operation of standalone BESS would amount to supply of electrical energy and be exempt from GST under Notification No. 02/2017-CT(Rate) dated 28-06-2017 – HELD - The essence of the agreement is to store the electrical energy during the peak generation period for use during demand. The applicant is not generating electrical energy from any of the sources either conventional or non-conventional. Hence, the applicant shall not be considered as a generating company - The standalone BESS shall only be treated as a storage unit for storing electricity in the form of chemical energy and selling/giving back to the buyer/customer. As the activity is not treated as generation of electricity, the applicant is not eligible for the exemption provided under Notification No. 02/2017-CT(Rate) dated 28-06-2017 - The activity of the applicant can be rightly classified as "support services to electricity transmission and distribution" under HSN code 998631 and are liable to pay GST at the rate of 18%. The applicant is required to obtain GST registration in the state of Tamil Nadu for discharging their GST liability if the BESS is established in the State – Ordered accordingly - Whether the activity of development and operation of co-located BESS would amount to supply of electricity and be exempt from GST under Notification No. 02/2017-CT(Rate) dated 28-06-2017 or be exigible to nil rate of duty under Notification No. 12/2017-CT(Rate) dated 28-06-2017 – HELD - The standalone as well as co-located BESS perform the same function, with the difference being in the ownership. As the development and operation of BESS, whether standalone or co-located, are not considered as a generation/transmission/distribution utility, the exemptions provided under Notification No. 02/2017-CT(Rate) dated 28-06-2017 and Notification No. 12/2017-CT(Rate) dated 28-06-2017 are not available to the applicant. [Read less]

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

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

Central Excise - Limitation period for show-cause - Appellant transferred certain vehicle parts from its Ahmednagar plant to its Koregaon and Pithampur plants on a stock transfer basis and paid duty - Department determined the value of the excisable goods based on the comparable price at which the same goods were sold to independent buyers, which was higher than the price at which the goods were stock-transferred. The department confirmed the differential duty liability on the appellant - Whether the show-cause proceedings initiated by the department were barred by the limitation of time – HELD - The show-cause notice wa... [Read more]

Central Excise - Limitation period for show-cause - Appellant transferred certain vehicle parts from its Ahmednagar plant to its Koregaon and Pithampur plants on a stock transfer basis and paid duty - Department determined the value of the excisable goods based on the comparable price at which the same goods were sold to independent buyers, which was higher than the price at which the goods were stock-transferred. The department confirmed the differential duty liability on the appellant - Whether the show-cause proceedings initiated by the department were barred by the limitation of time – HELD - The show-cause notice was issued based on the price lists submitted by the appellant, and therefore, the proceedings should have been confined to the normal period of one year as per the provisions of Section 11A of the Central Excise Act, 1944. The extended period of limitation was invoked without any element of suppression, misstatement, or fraud with an intent to evade payment of central excise duty. The initiation of the show-cause proceedings within the normal period is the rule, which should be strictly adhered to – Further, there were judgments by different judicial forums holding that the stock transfer to the appellant's own units and the sale of goods to independent buyers involve two separate classes of buyers, and therefore, the sell value to the independent buyers cannot be automatically adopted for confirming the demand on the goods stock-transferred to the appellant's other units - The impugned order is set aside and appeal is allowed in favour of the appellants on the ground of limitation [Read less]

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

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

Customs - Duty Free Import Authorization (DFIA) Scheme - Appellant, a transferee of DFIA entitlement, claimed exemption from basic Customs duty on import of dried cranberry under the scheme - Whether the appellant, as a transferee of the DFIA, is required to demonstrate 'actual use' of the imported goods (dried cranberry) in the manufacture of exported products to avail the exemption from BCD – HELD - The requirement of 'actual use' of the imported goods is not applicable to a transferee of the DFIA scheme, which is a post-export scheme. The DFIA scheme, being a transferable authorization, does not have an 'actual user' ... [Read more]

Customs - Duty Free Import Authorization (DFIA) Scheme - Appellant, a transferee of DFIA entitlement, claimed exemption from basic Customs duty on import of dried cranberry under the scheme - Whether the appellant, as a transferee of the DFIA, is required to demonstrate 'actual use' of the imported goods (dried cranberry) in the manufacture of exported products to avail the exemption from BCD – HELD - The requirement of 'actual use' of the imported goods is not applicable to a transferee of the DFIA scheme, which is a post-export scheme. The DFIA scheme, being a transferable authorization, does not have an 'actual user' condition attached to it. The rationale behind the 'actual use' condition in pre-export schemes is to prevent misuse, which is not applicable to a post-export scheme like DFIA where the export obligation has already been fulfilled by the original holder. The denial of exemption on the ground of 'actual use' was without any legal basis - The jurisdictional Commissioner is directed to request the licencing authorities for restoration of the validity of the DFIA licenses for the unexpired period, considering the fault was not of the appellant but the authorities. The appellant is entitled to the exemption from basic customs duty on the import of dried cranberry under the DFIA scheme – The appeal is allowed - Whether the cap on the CIF value of the imported goods, as incorporated through a public notice, is valid and enforceable against the appellant – HELD - The cap on the CIF value of the imported goods, as incorporated through a public notice, is not valid and enforceable. Relying on the decision of the Hon'ble Supreme Court in Viraj Impex Pvt. Ltd. vs. Union of India & Anr., the Tribunal held that any condition or restriction on the DFIA scheme has to be notified in the Official Gazette and cannot be introduced through a mere public notice, which lacks the force of law. [Read less]

Central Excise – 100% EOU, Limitation Period for Refund claim – Appellant-EOU supplied goods to another 100% EOU and claimed refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules for the quarter from October to December 2009. The refund claim for this quarter was disallowed as being filed beyond the limitation period under Section 11B of the Central Excise Act, 1944 - Whether the refund claim was barred by limitation – HELD - The relevant date for the purpose of limitation under Section 11B would be the last day of the quarter for which refund is claimed, which in this case was 31.12.2009. The pr... [Read more]

Central Excise – 100% EOU, Limitation Period for Refund claim – Appellant-EOU supplied goods to another 100% EOU and claimed refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules for the quarter from October to December 2009. The refund claim for this quarter was disallowed as being filed beyond the limitation period under Section 11B of the Central Excise Act, 1944 - Whether the refund claim was barred by limitation – HELD - The relevant date for the purpose of limitation under Section 11B would be the last day of the quarter for which refund is claimed, which in this case was 31.12.2009. The procedure existing at the relevant time allowed the EOU to claim refund for each calendar month, and the latest it could have been claimed was within one month from the end of the quarter, i.e. by 31.01.2010 - The extended period for filing refund as stipulated in Section 11B of the Act of 1944 will have to be considered on the touchstone of notification prescribing procedure for claiming refund. In that sense, the relevant date for the purpose of Section 11B will be the last day of period for which refund is claimed. The extended period of one year under Section 11B would then end on 31.12.2010. Since the refund claim was filed in March 2011, it was clearly barred by limitation – The appellate Tribunal has correctly held that refund claimed on cenvat credit pertaining to deemed export of goods under Rule 5 of the Credit Rules for the quarter October to December, 2009 is hit by bar of limitation under Section 11B of the Act of 1944 – The appeal is dismissed [Read less]

Central Excise - Assessable value of Naphtha, Place of removal – Appellant cleared Naphtha on provisional assessment from their refinery to an intermediate storage location. A portion of the Naphtha was later sold to NTPC at a lower transaction value of Rs.34,134/- PMT, and remaining quantity was lost in transit. The department sought to recover the differential duty by adopting the provisional clearance price of Rs.53,360/- PMT, instead of the actual transaction values - Assessable value of Naphtha sold to NTPC: The issue is whether the appellant was correct in adopting the transaction value of Rs.34,134/- PMT as the as... [Read more]

Central Excise - Assessable value of Naphtha, Place of removal – Appellant cleared Naphtha on provisional assessment from their refinery to an intermediate storage location. A portion of the Naphtha was later sold to NTPC at a lower transaction value of Rs.34,134/- PMT, and remaining quantity was lost in transit. The department sought to recover the differential duty by adopting the provisional clearance price of Rs.53,360/- PMT, instead of the actual transaction values - Assessable value of Naphtha sold to NTPC: The issue is whether the appellant was correct in adopting the transaction value of Rs.34,134/- PMT as the assessable value for the Naphtha sold to NTPC, instead of the provisional clearance price of Rs.53,360/- PMT – HELD - The appellant had resorted to provisional assessment as the actual price of the Naphtha could not be determined at the time of clearance from the refinery, and the actual price could be ascertained only when the goods were cleared/sold from the intermediate storage location. Therefore, the transaction value at which the goods were actually sold to NTPC from the intermediate storage location should be considered as the assessable value, and not the provisional clearance price from the refinery – The impugned order is set aside and the appeal is allowed - Assessable value of Naphtha lost in transit - Whether the appellant was correct in adopting the transaction value of Rs.45,470/- PMT as the assessable value for the Naphtha lost in transit, instead of the provisional clearance price of Rs.53,360/- PMT - HELD - The appellant had discharged the duty based on the transaction value at which the remaining Naphtha was cleared to the fertilizer unit, and this was a reasonable approach. The appellant was correct in adopting the transaction value of Rs.45,470/- PMT as the assessable value for the Naphtha lost in transit. [Read less]

Customs - Jurisdiction of Customs Authorities over Foreign Currency Transactions – Confiscation of foreign currency from employee who was carrying the foreign currency on behalf of company to handle the travel, stay etc - Whether the Customs Authorities had the jurisdiction to confiscate the foreign currency and impose penalties under the Customs Act, 1962, or whether the proceedings should have been initiated under the Foreign Exchange Management Act (FEMA), 1999 – HELD - The historical evolution of the laws regulating foreign exchange transactions, from the Foreign Exchange Regulation Act (FERA), 1947 to the Foreign ... [Read more]

Customs - Jurisdiction of Customs Authorities over Foreign Currency Transactions – Confiscation of foreign currency from employee who was carrying the foreign currency on behalf of company to handle the travel, stay etc - Whether the Customs Authorities had the jurisdiction to confiscate the foreign currency and impose penalties under the Customs Act, 1962, or whether the proceedings should have been initiated under the Foreign Exchange Management Act (FEMA), 1999 – HELD - The historical evolution of the laws regulating foreign exchange transactions, from the Foreign Exchange Regulation Act (FERA), 1947 to the Foreign Exchange Management Act (FEMA), 1999. It was observed that under the FERA, 1947, the Customs authorities were empowered to deal with certain contraventions related to foreign exchange transactions by virtue of the deeming provision in Section 23A, which deemed the restrictions under FERA to be prohibitions under the Customs Act, 1962. However, this deeming provision was not carried forward in the FEMA, 1999, which was enacted as a comprehensive and self-sufficient legislation to regulate foreign exchange transactions - The deliberate omission of the deeming provision in the FEMA, 1999 indicated the legislative intent to rescind the dual machinery of the Customs authorities and the Enforcement Directorate in dealing with foreign exchange transactions. The FEMA, 1999 did not empower the Customs authorities to confiscate foreign currency or impose penalties for contraventions of the FEMA. The impugned proceedings are beyond the jurisdiction of the Customs authorities and were required to be initiated under the FEMA, 1999 - The confiscation of the foreign currency and the penalties imposed under the Customs Act, 1962, are set aside as the customs authorities lacked the jurisdiction to initiate such proceedings – The appeals are allowed [Read less]

Customs – Rule 4(3) of Customs Valuation Rules, 2007 – Valuation of goods – Demand of duty – Appellant is engaged in manufacture of moulds and machinery for tooth brush industry – Appellant’s related supplier purchased goods and supplied them to Appellant – Lower authorities rejected transaction value declared by Appellant and confirmed demand of differential duty – Whether demand confirmed against Appellant is sustainable – HELD – As per Rule 4(3) of the Rules, transaction value between related parties shall be accepted, provided that examination of circumstances of sale of imported goods indicate that... [Read more]

Customs – Rule 4(3) of Customs Valuation Rules, 2007 – Valuation of goods – Demand of duty – Appellant is engaged in manufacture of moulds and machinery for tooth brush industry – Appellant’s related supplier purchased goods and supplied them to Appellant – Lower authorities rejected transaction value declared by Appellant and confirmed demand of differential duty – Whether demand confirmed against Appellant is sustainable – HELD – As per Rule 4(3) of the Rules, transaction value between related parties shall be accepted, provided that examination of circumstances of sale of imported goods indicate that relationship did not influence the price. Related supplier procures goods and supplies same to Appellant with a markup of 65% and a 20% discount given on same. Appellant was not able to show that after giving 20% discount the supplier was able to recover the cost of goods. Discount is given to Appellant only because of relationship. Impugned order is either demonstratively perverse based on no evidence or on a misreading of evidence. Impugned order cannot be faulted and is therefore uphold – Appeal dismissed [Read less]

Customs – Import of goods – Rejection of declared classification – Demand of differential duty – Appellant had imported goods declared as Interactive Flat Panel by classifying same under CTI 8471 – After following due process of law, Commissioner classified imported goods under CTI 8528 and demanded differential duty with applicable interest – Whether imported goods merits classification under CTI 8471 as claimed by Appellant or under CTI 8528 as held by Commissioner in impugned order – HELD – Interactive Flat Panel under reference have inbuilt CPUs having internal storage capacity capable of storing data a... [Read more]

Customs – Import of goods – Rejection of declared classification – Demand of differential duty – Appellant had imported goods declared as Interactive Flat Panel by classifying same under CTI 8471 – After following due process of law, Commissioner classified imported goods under CTI 8528 and demanded differential duty with applicable interest – Whether imported goods merits classification under CTI 8471 as claimed by Appellant or under CTI 8528 as held by Commissioner in impugned order – HELD – Interactive Flat Panel under reference have inbuilt CPUs having internal storage capacity capable of storing data and they are not composite machines consisting of two or more machines. Impugned goods being automatic data processing machines albeit with very large screens are not classifiable as monitors and projectors under CTH 8528. Revenue had not succeeded in discharging its burden of demonstrating that impugned goods are taxable in manner claimed by them. Imported goods merits classification under CTI 8471 as claimed by Appellant. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Central Excise - Time limitation for refund claim under Section 11B of the Central Excise Act, 1944 of Central Excise duty paid through reversal of CENVAT credit - Appellant availed the benefit of full exemption from payment of central excise duty on their final products by reversing the CENVAT credit, in compliance with the condition prescribed under Notification No. 30/2004-C.E. dated 09.07.2004. The appellants later filed a refund claim relying on the Tribunal's decisions in certain other cases which held that the amendment to Rule 11(3) of the CENVAT Credit Rules, 2004 requiring reversal of CENVAT credit was prospectiv... [Read more]

Central Excise - Time limitation for refund claim under Section 11B of the Central Excise Act, 1944 of Central Excise duty paid through reversal of CENVAT credit - Appellant availed the benefit of full exemption from payment of central excise duty on their final products by reversing the CENVAT credit, in compliance with the condition prescribed under Notification No. 30/2004-C.E. dated 09.07.2004. The appellants later filed a refund claim relying on the Tribunal's decisions in certain other cases which held that the amendment to Rule 11(3) of the CENVAT Credit Rules, 2004 requiring reversal of CENVAT credit was prospective and not retrospective. The refund claim was rejected by the lower authorities on the ground of limitation under Section 11B of the Central Excise Act, 1944 - Whether the refund claim filed by the appellants on 02.06.2017 for the central excise duty paid by them on 17.07.2004 by way of reversal of CENVAT credit is maintainable and within the limitation period prescribed under Section 11B of the Central Excise Act, 1944 – HELD - The payment of central excise duty by the appellants through reversal of CENVAT credit was not under a "mistake of law", but was a conscious decision taken by them to avail the full exemption from payment of central excise duty on their final products under Notification No. 30/2004-C.E. dated 09.07.2004. The refund claims can be made only under and in accordance with the provisions of the Act, and not by way of a suit or writ petition on the ground of "mistake of law". The theory of "mistake of law" and the consequent period of limitation of three years from the date of discovery of such mistake cannot be invoked by an assessee taking advantage of the decision in another assessee's case - In the present case, since the final products are admittedly excisable goods, on which there is a levy of central excise duty payable on its clearance and the reversal/payment of input credit also relates to duty of excise on inputs, there is no case of any levy without authority of law to claim refund by the appellants on the grounds of ‘illegal/unconstitutional levy’ or payment of duty under ‘mistake of law’. The refund claim filed by the appellants after a lapse of almost 13 years from the date of payment of duty is clearly barred by limitation under Section 11B of the CEA, 1944 - The impugned order rejecting the refund claim is upheld and the appeal is dismissed [Read less]

Customs - Duty exemption under Advance Authorization Scheme - Appellant imported raw materials under the 'Advance Authorisation' scheme of the Foreign Trade Policy (FTP) and availed import duty/IGST exemption benefit under Notification No. 18/2015-Customs dated 01.04.2015. The Department alleged that there was no one-to-one correlation between the import of raw materials and its usage in the final products exported, and the appellants had not fulfilled the 'pre-import condition' as per the amended Notification No. 79/2017-Customs dated 13.10.2017 - Whether the appellants are eligible for duty-free import of raw materials/i... [Read more]

Customs - Duty exemption under Advance Authorization Scheme - Appellant imported raw materials under the 'Advance Authorisation' scheme of the Foreign Trade Policy (FTP) and availed import duty/IGST exemption benefit under Notification No. 18/2015-Customs dated 01.04.2015. The Department alleged that there was no one-to-one correlation between the import of raw materials and its usage in the final products exported, and the appellants had not fulfilled the 'pre-import condition' as per the amended Notification No. 79/2017-Customs dated 13.10.2017 - Whether the appellants are eligible for duty-free import of raw materials/inputs under the Advance Authorization Scheme and whether the demand of IGST, interest, redemption fine, and penalties are sustainable – HELD - The appellants had fulfilled the export obligation in respect of all 19 Advance Authorizations, and obtained the Export Obligation Discharge Certificates (EODCs) from the DGFT authorities, which were duly accepted by the jurisdictional Customs authorities and the bonds executed by the appellants were cancelled. The Tribunal observed that the fulfilment of the notification conditions for duty-free importation of raw materials under Notification No. 18/2015-Customs dated 01.04.2015 comes to an end with the process of submitting the EODCs by the appellants and cancellation of the bonds by the Customs authorities - The present case is distinguished from the Supreme Court judgment in Cosmo Films Limited, as in the present case, the exports were completed prior to the imports, whereas in Cosmo Films, the exports were made after the imports - Further, the levy of interest, redemption fine, and penalty on the IGST demand are not legally sustainable, as the relevant provisions for the same were introduced in the Customs Tariff Act, 1975 only from 16.08.2024, which is after the disputed period - The impugned order is set aside and appeal is allowed [Read less]

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

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

Central Excise - Valuation of excisable goods cleared by 100% EOU to DTA - Appellant, an 100% EOU had initially cleared goods to its holding company in DTA by paying Basic Customs Duty (BCD) and Countervailing Duty (CVD) based on the MRP of the goods less abatement. However, from February 2012, the appellant changed the method of assessment by discharging BCD on the transaction value at which the goods were sold to its holding company and continued to adopt the MRP-based assessment for calculation of CVD - Department objected to the change in the method of valuation and demanded differential duty by adopting the MRP less a... [Read more]

Central Excise - Valuation of excisable goods cleared by 100% EOU to DTA - Appellant, an 100% EOU had initially cleared goods to its holding company in DTA by paying Basic Customs Duty (BCD) and Countervailing Duty (CVD) based on the MRP of the goods less abatement. However, from February 2012, the appellant changed the method of assessment by discharging BCD on the transaction value at which the goods were sold to its holding company and continued to adopt the MRP-based assessment for calculation of CVD - Department objected to the change in the method of valuation and demanded differential duty by adopting the MRP less abatement as the value for assessment of BCD - Whether the assessable value for DTA clearance for computing Basic Customs Duty should be determined taking into consideration the MRP less abatement or the transaction value at which the manufactured goods are sold by the appellant to their holding company – HELD - The MRP less abatement cannot be the basis for determination of assessable value for the purpose of computation of BCD, as held in several earlier judgments. However, the claim of the appellant that the comparable price be that of the FOB value of same or similar goods cleared for export cannot be adopted in view of the judgment of the Supreme Court in the case of CCE, Nagpur Vs. Morarjee Brembana Ltd. wherein it was held that in cases where excisable goods are produced or manufactured by a 100% EOU and allowed to be sold in India, the value of such excisable goods shall be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 - In the present case, the determination of assessable value applying the MRP less abatement cannot be acceptable; however, the assessable value be determined by applying Rule 4 to 8 of Customs Valuation Rules, 2007 in absence of evidence to show the transaction value is the genuine one in view of the relationship between the appellant and the purchasers - The appeals are disposed of by way of remand [Read less]

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

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

Customs - Exemption Notification under ASEAN India Free Trade Agreement (AIFTA) – Appellant imported 'antimony trioxide' from Thailand, claiming exemption under Notification No. 46/2011-Customs dated 1st June 2011 issued pursuant to the ASEAN-India Free Trade Agreement (AIFTA). The authorities found that one of the 'certificates of origin' was revoked by the exporter in Thailand, and consequently denied the exemption benefit to all the 32 consignments, imposing duty liability, interest, and penalties. The appellant contended that the 'antimony oxide' used in the manufacture of the goods originated in Myanmar, another sig... [Read more]

Customs - Exemption Notification under ASEAN India Free Trade Agreement (AIFTA) – Appellant imported 'antimony trioxide' from Thailand, claiming exemption under Notification No. 46/2011-Customs dated 1st June 2011 issued pursuant to the ASEAN-India Free Trade Agreement (AIFTA). The authorities found that one of the 'certificates of origin' was revoked by the exporter in Thailand, and consequently denied the exemption benefit to all the 32 consignments, imposing duty liability, interest, and penalties. The appellant contended that the 'antimony oxide' used in the manufacture of the goods originated in Myanmar, another signatory to the AIFTA, and hence the goods qualified for cumulative rules of origin under the agreement – HELD - The revocation of the single certificate of origin by the exporter in Thailand was not in accordance with the provisions of the Operational Certification Procedures under the AIFTA, and the authorities should have followed the due process under Article 23 of the Procedures. Further, the movement of 'antimony oxide' from Myanmar to Thailand, even if not in the prescribed Form AI, would still qualify for the cumulative rules of origin under the agreement. The authorities has not followed the due process under Section 28DA of the Customs Act, 1962 before denying the exemption benefit to the other consignments - It would be inappropriate to deprive the benefit of exemption notification to imports where the connected certificate of origin had not been scrutinised and without following the process of placing the importer on notice for invalidation of eligibility. Accordingly, impugned order is set aside and the appeal is allowed [Read less]

Central Sales Tax Act, 1956 – Submission of Manual C-forms - Cancellation of concessional tax availed by the petitioner based on the C-forms in respect of the inter-State sale of arecanut - The assessing authority had initially accepted the C-forms and granted the concessional rate of tax. However, the Dy. Commissioner later issued a notice proposing to reopen the assessment on the grounds that some of the C-forms furnished by the petitioner were manual, and their details could not be verified from the TINXSYS system. Additionally, a difference was found between the conceded interstate sales and the check post details - ... [Read more]

Central Sales Tax Act, 1956 – Submission of Manual C-forms - Cancellation of concessional tax availed by the petitioner based on the C-forms in respect of the inter-State sale of arecanut - The assessing authority had initially accepted the C-forms and granted the concessional rate of tax. However, the Dy. Commissioner later issued a notice proposing to reopen the assessment on the grounds that some of the C-forms furnished by the petitioner were manual, and their details could not be verified from the TINXSYS system. Additionally, a difference was found between the conceded interstate sales and the check post details - Whether the cancellation of the assessment on the sole ground that the C-forms were manual and their details were not available in the TINXSYS system is valid – HELD - The mere fact that the details of the manual C-forms were not available in the TINXSYS system cannot be a valid ground to cancel the assessment, as long as the C-forms were accepted by the competent officer at the time of assessment. Once a competent authority has accepted the C-forms as genuine and granted the benefits, the petitioner cannot be asked to prove the same again. The burden to establish that the C-forms are bogus would be on the authority seeking to cancel the assessment, and this would require cross-verification with the authorities in the respective states that issued the C-forms. Merely because the details are not available in the TINXSYS system is not sufficient to hold the C-forms as bogus - The order canceling the assessment is set aside and the matter is remitted to respondent to reconsider the matter, after giving the petitioner an opportunity to be heard – The petition is disposed of - Whether the difference found between the conceded interstate sales and the check post details is a valid ground for cancellation of the assessment – HELD - The difference in the conceded interstate sales and the check post details might be due to duplication of entries in the check post details. This aspect also needs to be examined by the 3rd respondent while reconsidering the matter. [Read less]

Customs - Classification of imported Goods - The appellant imported goods declared as "Polyethylene Fiber Product Name HB26 A" and classified them under CTH 39201099 - Department alleged that the goods were correctly classifiable under CTH 540730 as "Woven fabrics of synthetic filament yarn" and raised a demand for differential duty - Whether the imported goods were correctly classified under CTH 39201099 as plastic articles or should be classified under CTH 540730 as textile materials – HELD - The Tariff entries under Chapters 39 and 54 of the Customs Tariff clearly distinguish between plastic articles and textile mater... [Read more]

Customs - Classification of imported Goods - The appellant imported goods declared as "Polyethylene Fiber Product Name HB26 A" and classified them under CTH 39201099 - Department alleged that the goods were correctly classifiable under CTH 540730 as "Woven fabrics of synthetic filament yarn" and raised a demand for differential duty - Whether the imported goods were correctly classified under CTH 39201099 as plastic articles or should be classified under CTH 540730 as textile materials – HELD - The Tariff entries under Chapters 39 and 54 of the Customs Tariff clearly distinguish between plastic articles and textile materials. Relying on the Chapter Notes and explanatory notes, the Tribunal found that the imported goods, being a composite material made of ultra-high molecular weight polyethylene (UHMWPE) fibers, were correctly classifiable under CTH 540730 as woven fabrics of synthetic filament yarn, and not under CTH 39201099 as plastic articles. The classification of the goods under CTH 540730 and the consequential demand of differential duty is upheld - The appeal was partly allowed, upholding the classification and demand of differential duty, but setting aside the confiscation and penalty - Confiscation of Goods and Penalty - The mere difference in the classification of goods by the importer and the department during assessment does not render the goods liable to confiscation under Section 111(m) of the Customs Act. Since the appellant was a public undertaking and there was no evidence of any mala fide intent, the finding that the goods were liable to confiscation, is set aside. Consequently, the penalty imposed under Section 112 is also set aside. [Read less]

GST - Levy of GST on fees received by State Electricity Regulatory Commission - The Punjab State Electricity Regulatory Commission (PSERC) filed a writ petition challenging the show cause notice issued by the respondents levying GST on the fees received by PSERC for discharging its functions under Section 86 of the Electricity Act, 2003, which are of a judicial, quasi-judicial and inherently statutory nature - Whether the fees received by PSERC for discharging its regulatory functions can be subjected to GST - HELD - The Delhi High Court in the case of Central Electricity Regulatory Commission v. The Additional Director Di... [Read more]

GST - Levy of GST on fees received by State Electricity Regulatory Commission - The Punjab State Electricity Regulatory Commission (PSERC) filed a writ petition challenging the show cause notice issued by the respondents levying GST on the fees received by PSERC for discharging its functions under Section 86 of the Electricity Act, 2003, which are of a judicial, quasi-judicial and inherently statutory nature - Whether the fees received by PSERC for discharging its regulatory functions can be subjected to GST - HELD - The Delhi High Court in the case of Central Electricity Regulatory Commission v. The Additional Director Directorate General of GST Intelligence, held that the regulatory functions discharged by Commissions such as tariff regulation, inter-State transmission of electricity, and issuance of licenses cannot be construed as activities undertaken or functions discharged in furtherance of business. The Electricity Act makes no distinction between the regulatory and adjudicatory functions vested in the Commission, and these functions are performed by a quasi-judicial body. The fees received by the Commission are not in the course or furtherance of business. The services rendered by the Commission are excluded from the levy of GST as they are services rendered by a Tribunal established under the law. The show cause notice levying GST on the fees received by the PSERC is set aside - The writ petition is allowed [Read less]

Service Tax demand based on the data received from the Income Tax Department – Demand of differential service tax along with interest and penalty – HELD - The demand confirmed solely on the basis of the data received from the Income Tax Department, without any independent corroborative evidence, is not sustainable in law. There are various judicial precedents which have held that a demand based merely on Income Tax records is unsustainable – Further, the demand was confirmed without determining the taxable value in accordance with Section 67 of the Finance Act, 1994, and without examining the applicability of exempti... [Read more]

Service Tax demand based on the data received from the Income Tax Department – Demand of differential service tax along with interest and penalty – HELD - The demand confirmed solely on the basis of the data received from the Income Tax Department, without any independent corroborative evidence, is not sustainable in law. There are various judicial precedents which have held that a demand based merely on Income Tax records is unsustainable – Further, the demand was confirmed without determining the taxable value in accordance with Section 67 of the Finance Act, 1994, and without examining the applicability of exemptions and abatements claimed by the appellant. The determination of taxable value is a sine qua non for confirming any demand, and in the absence thereof, the demand is unsustainable - The demand has been raised without disclosing any clear methodology, computation sheet, or correlation with invoices or transactions. It is a settled position of law that a vague and unsubstantiated demand violates principles of natural justice - The demand confirmed over and above the self-assessed service tax paid by the appellant during the relevant period, is set aside – Further, the invocation of the extended period of limitation under Section 73(4) is wholly unjustified and unsustainable in this case, as the entire basis of the demand was drawn from the appellant's declared and audited Income Tax data, which were available in the public domain. It is a settled position of law that extended period of limitation cannot be invoked where the facts are within the knowledge of the Department or derived from statutory records. The penalty imposed under Section 77 of the Finance Act, 1994 for non-filing of returns is upheld - The appellant is eligible for the refund of the amount deposited 'under protest' during the course of investigation, subject to the appellant following the prescribed procedure for claiming the refund – The appeal is disposed of [Read less]

Central Excise - Liability to pay excise duty on scrap generated at job worker's premises - The waste or scrap generated at the job worker's premises is not received back by the appellant, and the appellant did not discharge the excise duty on such scrap. Department issued show cause notices alleging non-payment of excise duty on the scrap - Whether the appellant is liable to pay excise duty on the scrap generated at the job worker's premises - HELD - The issue is no more res integra and followed the ratio laid down in the decision of Rocket Engineering Corporation v. CCE, which was upheld by the Bombay High Court. The Cen... [Read more]

Central Excise - Liability to pay excise duty on scrap generated at job worker's premises - The waste or scrap generated at the job worker's premises is not received back by the appellant, and the appellant did not discharge the excise duty on such scrap. Department issued show cause notices alleging non-payment of excise duty on the scrap - Whether the appellant is liable to pay excise duty on the scrap generated at the job worker's premises - HELD - The issue is no more res integra and followed the ratio laid down in the decision of Rocket Engineering Corporation v. CCE, which was upheld by the Bombay High Court. The Central Excise duty cannot be demanded from the appellant as the job worker is the manufacturer of the scrap, which is retained by him and sold in the market. There is no provision in the Cenvat Credit Rules to compel the principal manufacturer to bring back the scrap generated at the job worker's end or to pay the Central Excise duty on the said scrap. The appellant is not liable to pay excise duty on the scrap generated at the job worker's premises - The impugned order is set aside and the appeal is allowed [Read less]

GST – Andhra Pradesh AAR - Classification of spent bleaching earth and applicable GST rate - Manufacture of edible oils, including extraction and refining of rice bran oil – Classification and applicable GST rates for 'spent earth' generated during the edible oil refining process – HELD - The spent earth is a mineral-based, chemically activated, and supplied as an exhausted adsorbent, which directly aligns with the description under HSN 3802 90 19 - In accordance with the General Rules for Interpretation, the classification of goods for GST and Customs purposes must be based on the nature and condition of the goods a... [Read more]

GST – Andhra Pradesh AAR - Classification of spent bleaching earth and applicable GST rate - Manufacture of edible oils, including extraction and refining of rice bran oil – Classification and applicable GST rates for 'spent earth' generated during the edible oil refining process – HELD - The spent earth is a mineral-based, chemically activated, and supplied as an exhausted adsorbent, which directly aligns with the description under HSN 3802 90 19 - In accordance with the General Rules for Interpretation, the classification of goods for GST and Customs purposes must be based on the nature and condition of the goods at the time of supply. HSN 2508, which relates to clays, kaolin, bentonite, and other earths, covers raw or processed non-activated clays used for industrial purposes. However, since the spent bleaching earth has been chemically or thermally activated and used as an adsorbent, classification under HSN 2508 would ignore the functional and chemical characteristics of the product and is therefore not legally or technically appropriate - On the other hand, HSN 3802 under Chapter 38 specifically covers activated carbon, activated natural mineral products, and animal black, including spent animal black. Subheading 3802 90 19—"activated natural mineral products – Other"—is a residual category that includes activated natural mineral products even when spent or exhausted - The correct HSN code for the 'spent earth' is 3802 90 19 - "activated natural mineral products: other", with applicable GST rate of 18% - Ordered accordingly [Read less]

GST – Tamil Nadu AAR - Classification of transportation services of goods exclusively by road to customers purchasing such goods from various e-commerce operator (ECO) portals - Whenever goods are purchased by customers through the ECO portal, the seller would deliver the goods to the applicant's nearest warehouse (Source Mother Hub), and the applicant would then issue a consignment note and transport the goods by road to the customer's delivery address - Whether the services provided would qualify as "Goods Transport Agency" (GTA) services – HELD - As per the definition of "goods transport agency" under the GST law, f... [Read more]

GST – Tamil Nadu AAR - Classification of transportation services of goods exclusively by road to customers purchasing such goods from various e-commerce operator (ECO) portals - Whenever goods are purchased by customers through the ECO portal, the seller would deliver the goods to the applicant's nearest warehouse (Source Mother Hub), and the applicant would then issue a consignment note and transport the goods by road to the customer's delivery address - Whether the services provided would qualify as "Goods Transport Agency" (GTA) services – HELD - As per the definition of "goods transport agency" under the GST law, for any person to be termed as a GTA, two conditions must be cumulatively satisfied: (a) there must be provision of service in relation to transportation of goods by road, and (b) the service provider must issue a consignment note. The applicant is providing the service of transporting goods by road to the customers and issuing a consignment note, thereby fulfilling both the conditions. The issuance of a consignment note signifies that the responsibility of the goods lies with the GTA until delivery, and it acts as legal evidence of receipt of goods for transportation and transfer of custody from the consignor to the transporter. Accordingly, the applicant's activity of transporting the goods ordered through the e-commerce portal to the customer by road, upon issuance of a consignment note, would qualify as "Goods Transport Agency (GTA) services" – Ordered accordingly - Whether the services provided to unregistered customers through the ECO's portal would be eligible for exemption under Sl. No. 21A of Notification No. 12/2017 - Central Tax (Rate) - HELD – The Sl. No. 21A of Notification No. 12/2017 - Central Tax (Rate) provides exemption from GST for services provided by a GTA to an unregistered person, including an unregistered casual taxable person, subject to certain exclusions. Any person ordering goods through an e-commerce portal, if not registered under GST, would be eligible for this exemption on the GTA services provided to them. Accordingly, the services provided by the applicant to unregistered customers who order goods through the electronic commerce operator's portal are eligible for exemption in terms of entry Sl. No. 21A of Notification No. 12/2017 - Central Tax (Rate). [Read less]

GST – Odisha AAAR - Government Authority/Entity – Appellant is a Government company with the objective of procurement of quality medicines, surgical and medical equipment, managing central drug warehouses, monitoring drug distribution counters, and procurement and maintenance of medical equipment across health facilities – Whether the appellant qualifies as a "Government Authority" or "Government Entity" under the GST law and the services provided by it are pure services eligible for exemption under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – HELD – The appellant was incorporated under the Comp... [Read more]

GST – Odisha AAAR - Government Authority/Entity – Appellant is a Government company with the objective of procurement of quality medicines, surgical and medical equipment, managing central drug warehouses, monitoring drug distribution counters, and procurement and maintenance of medical equipment across health facilities – Whether the appellant qualifies as a "Government Authority" or "Government Entity" under the GST law and the services provided by it are pure services eligible for exemption under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – HELD – The appellant was incorporated under the Companies Act with 100% equity and control of the Government of Odisha to carry out the specific functions entrusted to it by the State Government, such as procurement of medicines and medical equipment, management of drug warehouses, and monitoring of drug distribution centers, which are intrinsically linked to the public health functions entrusted to Panchayats and Municipalities under the Constitution - the appellant-Corporation is a Government Entity in terms of the explanation in Para 2(zfa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - The services provided by appellant are "pure services" as it does not engage in any commercial or profit-making activities, and the service charges received by it are solely for meeting its recurring administrative and operational costs. The services provided by appellant are eligible for exemption under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as the services are in relation to the functions entrusted to Panchayats and Municipalities under the Constitution - The appeal is allowed [Read less]

GST – Odisha AAAR - Place of Business, Fixed Establishment - Appellant is a service provider engaged in trading of analytical and laboratory equipment and provides repair and maintenance services under Annual Maintenance Contract (AMC) and Comprehensive Maintenance Contract (CMC) plans. The services are provided through Field Service Engineers (FSEs) deployed in Odisha, while all contracts, invoicing, and inventory management are handled by the appellant's Head Office (HO) in Maharashtra - Whether the repair and maintenance services provided by the Head Office through Field Service Engineer under Annual Maintenance Contr... [Read more]

GST – Odisha AAAR - Place of Business, Fixed Establishment - Appellant is a service provider engaged in trading of analytical and laboratory equipment and provides repair and maintenance services under Annual Maintenance Contract (AMC) and Comprehensive Maintenance Contract (CMC) plans. The services are provided through Field Service Engineers (FSEs) deployed in Odisha, while all contracts, invoicing, and inventory management are handled by the appellant's Head Office (HO) in Maharashtra - Whether the repair and maintenance services provided by the Head Office through Field Service Engineer under Annual Maintenance Contract or Comprehensive Maintenance Contracts with the Customers in Odisha constitute a ‘Place of Business’ in Odisha under Section 2(85) of the CGST Act, 2017 – HELD - The location of supplier from where it runs the business is vital while determining ‘Place of Business’ of an entity under Section 2(85) of CGST Act - From a combined reading of the definition of “location of Services” under Section 2(71) of the CGST Act and “Place of Business” Section 2(85) of the CGST Act, it can be inferred that location of services means the location of such place of business or fixed establishment from where the supply is made - The location of the supplier, which is the HO in Maharashtra, is the relevant factor in determining the 'place of business' under the GST law. All the agreements, invoicing, and financial transactions are carried out by the HO, and the presence of FSEs in Odisha is merely for operational efficiency and does not create a separate place of business in Odisha - Further, the FSEs of the Appellant Company provide service to the customers on the direction of the HO and there is no separate administrative set up of the Appellant Company in Odisha. Thus, the location of the supplier, in this case is in Maharashtra and not in Odisha – Ordered accordingly - Whether the temporary storage of spare parts and tool kits at the appellant's location in Odisha constitute a 'place of business' under Section 2(85) or a 'fixed establishment' under Section 2(50) of the CGST Act – HELD - The storage of spare parts and tool kits by the FSEs in Odisha is temporary and incidental in nature, and not indicative of the appellant 'ordinarily carrying on business' or maintaining a warehouse or godown in Odisha - The appellant is a supplier of service and provides post sale service to their clients. The stock which is referred to by the Appellant are the leftover spare parts retained by the FSEs after service visit, more specifically the leftover spare parts under CMC plan. Therefore, the goods retained by the FSE of the appellant are not trading rather incidental in nature. This arrangement is solely to ensure timely service to customers and does not qualify as a 'fixed establishment' under Section 2(50) of the CGST Act - Whether the appellant is required to obtain a separate GST registration in Odisha solely on account of the activities performed in Odisha – HELD - All transactions of the Appellant are made from their Head Office located in Maharashtra. No separate transactions are made from the Appellant Odisha. All invoices are issued from their HO of the Appellant. The services provided by the Appellant Company to the Customers of Odisha are made through their FSEs placed in Odisha. In view of above, the Appellant does not require any separate registration in Odisha under the provisions of Section 22 or 24 of CGST Act, 2017. [Read less]

Delhi Value Added Tax Act, 2004 - Entitlement to interest on delayed refund – The Petitioners approached the High Court challenging the assessment orders, and the Court directed them to file appeals. The appeals were allowed by the Commissioner, who remanded the matters back to the assessing authority. The assessing authority then passed orders allowing the refunds - Whether the petitioners are entitled to interest on the refunds from the date of filing return under Sections 38(3)(a)(ii) and 42 of the DVAT Act - HELD - As per the statutory mandate under Section 38(3)(a)(ii) of the DVAT Act, the refunds were due to the pe... [Read more]

Delhi Value Added Tax Act, 2004 - Entitlement to interest on delayed refund – The Petitioners approached the High Court challenging the assessment orders, and the Court directed them to file appeals. The appeals were allowed by the Commissioner, who remanded the matters back to the assessing authority. The assessing authority then passed orders allowing the refunds - Whether the petitioners are entitled to interest on the refunds from the date of filing return under Sections 38(3)(a)(ii) and 42 of the DVAT Act - HELD - As per the statutory mandate under Section 38(3)(a)(ii) of the DVAT Act, the refunds were due to the petitioners within 60 days of filing the returns. However, due to the respondents' failure to serve the assessment orders rejecting the refund claims and upload the same on the petitioners' portal, the petitioners were not made aware of the orders and were delayed in seeking appellate remedy. The appellate authority had specifically observed that the petitioners were not at fault and had the relevant documents to substantiate their refund claims. In view of the above, the delay in processing the refunds was not attributable to the petitioners, and they are entitled to interest on the refunds from the due date under the DVAT Act - The respondents are directed to calculate the interest at the rate of 6% per annum on the refund amounts from the due date and pay the same to the petitioners within 12 weeks – The writ petition is allowed [Read less]

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

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

GST – Condonation of delay in filing appeals beyond statutory limitation under Section 107 of the CGST Act, 2017 - Petitioner filed an appeal against the cancellation order but with a delay of 160 days, beyond the prescribed 3+1 months limitation period under the CGST Act. The appellate authority dismissed the appeal as being time-barred - Whether the High Court, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution, is precluded from granting relief merely because the statutory period of limitation prescribed under Section 107 of the CGST Act has expired – HELD - The statutory right of ap... [Read more]

GST – Condonation of delay in filing appeals beyond statutory limitation under Section 107 of the CGST Act, 2017 - Petitioner filed an appeal against the cancellation order but with a delay of 160 days, beyond the prescribed 3+1 months limitation period under the CGST Act. The appellate authority dismissed the appeal as being time-barred - Whether the High Court, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution, is precluded from granting relief merely because the statutory period of limitation prescribed under Section 107 of the CGST Act has expired – HELD - The statutory right of appeal is a valuable right, and denial of such right on account of procedural lapses, without examining whether such denial leads to manifest injustice or disproportionate consequences, would be contrary to settled principles of law. The CGST Act, being a comprehensive fiscal reform statute, intends to facilitate trade and business continuity, and hence the provisions under Section 107 cannot be frustrated on mere technicalities – Though the appellate authority under the CGST Act is not empowered to condone delay beyond the outer limit of one month prescribed in Section 107(4), however, the High Court, in exercise of its wide powers under Article 226, can condone delays in appropriate cases to prevent a taxpayer from being rendered remediless and to uphold the inclusive and facilitative objective of the GST regime - The impugned appellate order is set aside and the delay of 160 days in filing the appeal is condoned. The matter is remanded to the appellate authority for adjudication on merits – The writ petition is allowed [Read less]

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

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

GST – Secondment of employees, Taxability of Remuneration Paid to Foreign National – Demand of IGST on the remuneration paid to its foreign national employees, on the ground that the payment of such remuneration amounts to "Import of Manpower Recruitment and Supply Services" from the foreign employees - Whether the remuneration paid by the petitioner to its foreign national employees is subject to IGST under the GST law – HELD – The present case is not one of secondment of employees from other entities in the group; in fact, there exists a direct employer-employee relationship between the Petitioner and the foreign... [Read more]

GST – Secondment of employees, Taxability of Remuneration Paid to Foreign National – Demand of IGST on the remuneration paid to its foreign national employees, on the ground that the payment of such remuneration amounts to "Import of Manpower Recruitment and Supply Services" from the foreign employees - Whether the remuneration paid by the petitioner to its foreign national employees is subject to IGST under the GST law – HELD – The present case is not one of secondment of employees from other entities in the group; in fact, there exists a direct employer-employee relationship between the Petitioner and the foreign nationals/ employees - The payment of salary to the foreign national employees by the petitioner does not attract IGST, as the transaction is covered under Entry 1 of Schedule III of the CGST Act, 2017 - There exists a valid employer-employee relationship between the petitioner and the foreign nationals, as evidenced by the employment contracts, the payment of salaries and other benefits, and the deduction of applicable income tax. When the foreign nationals are treated at par with the Indian employees of the petitioner, the respondents cannot treat them differently – Further, the foreign national employees do not qualify as "Non-resident Taxable Persons" in terms of Section 2(77) of the CGST Act, as they have a fixed place of business and residence in India and are not making occasional supplies, particularly when the location of supplier is in India and consequently, the conditions under Section 2(11) of the IGST Act also not being fulfilled, thereby meaning that the subject transaction is not that of import – The issue involved in the present petition is completely settled by virtue of CBIC Circular No. 210/4/2024-GST dated 26.06.2024, clarifies that in cases where the supply is between related parties and the recipient is eligible for full input tax credit, the taxable value shall be deemed to be 'Nil' if no invoice is raised - The petitioner is not liable to pay IGST on the remuneration paid to its foreign national employees. The impugned show cause notice and all further proceedings pursuant thereto are quashed and the writ petition is allowed [Read less]

GST – Andhra Pradesh AAR - Taxability of transfer of leasehold rights and cost of land development - Following NCLT-approved scheme of amalgamation, the leasehold rights, along with the superstructure and improvements vested in Transferor were transferred to the applicant - Whether the transaction of acquiring long-term leasehold rights for land for a one-time upfront premium is a "supply of service" taxable under GST or a "sale of land" which is excluded from GST under Schedule III of the CGST Act, 2017 - HELD - The assignment or transfer of rights of leasehold land should be seen as transfer of leasehold rights of immo... [Read more]

GST – Andhra Pradesh AAR - Taxability of transfer of leasehold rights and cost of land development - Following NCLT-approved scheme of amalgamation, the leasehold rights, along with the superstructure and improvements vested in Transferor were transferred to the applicant - Whether the transaction of acquiring long-term leasehold rights for land for a one-time upfront premium is a "supply of service" taxable under GST or a "sale of land" which is excluded from GST under Schedule III of the CGST Act, 2017 - HELD - The assignment or transfer of rights of leasehold land should be seen as transfer of leasehold rights of immovable property, which deems to be "Sale of Land". Therefore, it is exempt from GST under Schedule - III of CGST Act 2017. The Gujarat High Court in Gujarat Chamber of Commerce and Industry & Ors. v. Union of India & Ors. has held that the assignment of leasehold rights in the land constitutes a transfer of immovable property, thus falling outside the purview of GST - the assignment or transfer of rights of leasehold land should be seen as transfer of leasehold rights of immovable property, which deems to be "Sale of Land" and is exempt from GST. However, the Authority did not address the issue of taxability of the cost of land development, as the transaction had already been fully executed prior to the filing of the application – Ordered accordingly [Read less]

GST - Andhra Pradesh AAR - Taxability of services supplied by State Government to Excess Royalty Collection Contractor (ERCC) and GST liability on royalty/seigniorage fees collected from mining lease holders - Applicant intends to participate in a tender floated by the Directorate of Mines & Geology, Government of Andhra Pradesh, for collection of seigniorage fee, District Mineral Foundation (DMF), Mineral Exploration and Research & Innovation Trust (MERIT) and other statutory mineral levies from quarry lease holders, under the Excess Royalty Collection Contract (ERCC) model - Whether SIPL/Contractor is liable to pay GST u... [Read more]

GST - Andhra Pradesh AAR - Taxability of services supplied by State Government to Excess Royalty Collection Contractor (ERCC) and GST liability on royalty/seigniorage fees collected from mining lease holders - Applicant intends to participate in a tender floated by the Directorate of Mines & Geology, Government of Andhra Pradesh, for collection of seigniorage fee, District Mineral Foundation (DMF), Mineral Exploration and Research & Innovation Trust (MERIT) and other statutory mineral levies from quarry lease holders, under the Excess Royalty Collection Contract (ERCC) model - Whether SIPL/Contractor is liable to pay GST under forward charge on amount of seigniorage fee, consideration amount collected from the quarry/Mining lease holders or whether the Quarry/Mining Lease holders pay the GST under RCM on such seigniorage fee etc. – HELD - The activity of granting mining rights is a supply of service by the State Government to the quarry/mining lease holders, and GST on royalty/seigniorage, DMF, MERIT or any similar statutory levy is liable to be discharged by the mining lease holders under Reverse Charge Mechanism in terms of Notification No. 13/2017-CT (Rate). The applicant, as the ERCC contractor, is not liable to pay GST under forward charge on the amounts collected from lease holders - the GST liability of the applicant as the ERCC contractor shall be limited to the differential GST, if any, between the GST paid by mining lease holders on royalty under RCM and the GST applicable on the consideration (knocked-down amount) paid by the applicant to the State Government – Ordered accordingly - Taxability of the revenues book adjusted to the Contractor /SIPL by the Director of Mines & Geology on monthly basis – HELD - The book adjustments are merely settlement mechanisms under the ERCC contract and do not constitute a separate supply by applicant. The GST, where applicable, is already discharged at the appropriate stage by the relevant parties - Whether services supplied by a State Government to Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty is liable to GST – HELD - The services supplied by the State Government to an Excess Royalty Collection Contractor (ERCC) i.e. the applicant, by way of assigning the right to collect royalty on behalf of the State Government, is specifically covered under Entry 65B of Notification No. 12/2017-CT (Rate), inserted by Notification No. 14/2018-CT (Rate) dated 26.07.2018, and is exempt from GST subject to the condition that the ERCC maintains proper records and certification at the end of the contract period as stipulated in the said notification. [Read less]

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

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

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

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

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

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

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

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

GST – Tamil Nadu AAR - Applicant is engaged in the business of retail, wholesale and providing services. They purchase goods from vendors located outside India and sell them to customers located both in India and outside India - Applicant sought advance ruling on the classification of the goods and services, the category under which their business falls, the time and value of supply, refund of input tax credit, and whether they are required to be registered under GST – HELD - The specific details of the goods and services dealt with by the applicant were not furnished, and hence, the classification under HSN and rate o... [Read more]

GST – Tamil Nadu AAR - Applicant is engaged in the business of retail, wholesale and providing services. They purchase goods from vendors located outside India and sell them to customers located both in India and outside India - Applicant sought advance ruling on the classification of the goods and services, the category under which their business falls, the time and value of supply, refund of input tax credit, and whether they are required to be registered under GST – HELD - The specific details of the goods and services dealt with by the applicant were not furnished, and hence, the classification under HSN and rate of GST could not be done. The determination of time and value of supply of goods or services is to be done by the applicant based on the provisions of Sections 12, 13 and 15 of the CGST Act, 2017 - The issue of refund of input tax credit is not covered under the provisions for seeking Advance Ruling and is liable for rejection - The applicant's transactions involve the supply of goods between two persons located in India, even though the movement of goods takes place outside India. Since the supply is between two units within the taxable territory, GST is applicable as per Para 1(a) of Schedule II of the CGST Act, 2017, and hence, registration under GST is required to be carried out by the applicant – Ordered accordingly [Read less]

GST – Andhra Pradesh AAR - Taxability of Processed and Frozen Shrimps packed in individual laminated and printed pouches/boxes and then placed in master cartons weighing up to 20 kilograms for export – Applicable rate of GST on export of processed and frozen shrimps packed in individual laminated and printed pouches/boxes containing the design, label, and other particulars – HELD - The inner packaging of the frozen shrimps, ranging from 340 grams to 5 kilograms, would be considered as "pre-packaged and labelled" as per the definition under the Legal Metrology Act, 2009 and the related rules, irrespective of whether t... [Read more]

GST – Andhra Pradesh AAR - Taxability of Processed and Frozen Shrimps packed in individual laminated and printed pouches/boxes and then placed in master cartons weighing up to 20 kilograms for export – Applicable rate of GST on export of processed and frozen shrimps packed in individual laminated and printed pouches/boxes containing the design, label, and other particulars – HELD - The inner packaging of the frozen shrimps, ranging from 340 grams to 5 kilograms, would be considered as "pre-packaged and labelled" as per the definition under the Legal Metrology Act, 2009 and the related rules, irrespective of whether the outer packaging is printed or not. The FAQs issued by the CBIC clarified that if the individual packages are intended for retail sale to the ultimate consumer, even if sold in a larger pack, the supply would be covered under the "pre-packaged and labelled" category attracting GST. Neither the GST notifications nor the Legal Metrology Act made any distinction between exports and domestic supplies in this regard. Accordingly, the export of such pre-packaged and labelled frozen shrimps, up to 25 kilograms, would be liable to 5% GST, as per the relevant GST notification – Ordered according [Read less]