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Central Excise - Supply and installation of Retail Visual Identity (RVI) Elements at retail outlets - Aluminium doors/frames/shutter/lockers, Marketability – Appellant is engaged in fabrication and installation of RVI Elements for IOCL at their retail outlets. The Appellant also manufactured aluminium doors, windows, frames for various customers. The Department issued a show cause notice alleging that the Appellant was not paying the full excise duty on the entire contract value of the RVI Elements and aluminium products supplied - Whether the RVI Elements and aluminium doors/frames/shutter/lockers installed by the Appel... [Read more]

Central Excise - Supply and installation of Retail Visual Identity (RVI) Elements at retail outlets - Aluminium doors/frames/shutter/lockers, Marketability – Appellant is engaged in fabrication and installation of RVI Elements for IOCL at their retail outlets. The Appellant also manufactured aluminium doors, windows, frames for various customers. The Department issued a show cause notice alleging that the Appellant was not paying the full excise duty on the entire contract value of the RVI Elements and aluminium products supplied - Whether the RVI Elements and aluminium doors/frames/shutter/lockers installed by the Appellant at the sites of its vendors are liable to central excise duty – HELD - The RVI Elements are not cleared from the factory in fully manufactured condition, rather they come into existence as a part of permanent structure at the retail outlets of IOCL. Once installed, the RVI Elements cannot be dismantled or re-installed at alternate locations. Further, the RVI Elements are not resold/marketed by IOCL, and the parts in the form cleared from the factory are not capable of being used for any other purpose - In the case of RVI Elements, the Test of Marketability has also not been satisfied because these parts, in the form that they are cleared, are not capable of being used for any other purpose than the fabrication and installation of RVI Elements at the retail outlets of IOCL only. The parts of the RVI Elements are not capable of being bought and sold for a consideration in the form that they exist when they are cleared from the factory, and thus they cannot be deemed to be marketable. Therefore, the test of marketability is not satisfied, and the RVI Elements cannot be considered as "excisable goods" liable to excise duty - Similarly, for the aluminium doors, windows, frames, etc., the issue was already settled in favour of the Appellant in a previous order, which attained finality as it was not challenged by the Department. The final products are "immovable property" and hence not chargeable to excise duty - The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation is justified in this case – HELD - The Appellant has been regularly filing returns and paying excise duty on the goods manufactured, without any suppression of facts, fraud or misstatement. The Appellant was under a bona fide belief that the RVI Elements are "immovable property" and not subject to excise duty. Further, the issue was settled in favour of assessees in similar cases. Therefore, the invocation of extended period of limitation is not justified, and the entire demand is barred by limitation. [Read less]

GST – Bail in connection with the offence punishable under Section 132(l)(b) of the CGST Act, 2017 – HELD - Without undermine the gravity of the alleged offence, we should not overlook the fact that the petitioner is in judicial custody as an under-trial prisoner past 8 months. The Trial Court is yet to commence. Charge is yet to be framed. Even if the trial commences in near future, it would not conclude within next one year. The offences are triable by Magistrate. The maximum punishment that the trial court may be in a position to impose upon the petitioner if held guilty would be upto 5 years - In such circumstances... [Read more]

GST – Bail in connection with the offence punishable under Section 132(l)(b) of the CGST Act, 2017 – HELD - Without undermine the gravity of the alleged offence, we should not overlook the fact that the petitioner is in judicial custody as an under-trial prisoner past 8 months. The Trial Court is yet to commence. Charge is yet to be framed. Even if the trial commences in near future, it would not conclude within next one year. The offences are triable by Magistrate. The maximum punishment that the trial court may be in a position to impose upon the petitioner if held guilty would be upto 5 years - In such circumstances, the petitioner is ordered to be released on bail, subject to terms and conditions that the Trial Court may deem fit to impose - If the department wants a particular condition to be imposed upon the petitioner to safeguard its interest, it may make a request to the Trial Court. If any such request is made by the department, the Trial Court shall consider it in accordance with law - The Special Leave Petition is disposed of [Read less]

Central Excise - Clandestine transportation - Levy of penalty under Rule 29 of the Central Excise Rules, 2017 read with Section 11AC of the Central Excise Act, 1944 for alleged clandestine transportation of Pan Masala/Zafrani Zarda - Whether the penalty imposed on the appellant and its operator can be sustained when the demand and penalties against the manufacturer have been set aside – HELD - As the allegation of clandestine removal of goods has been set aside, the imposition of penalty upon the appellant and the Operator has to be set aside for this reason alone. The case against the appellant and the Operator was base... [Read more]

Central Excise - Clandestine transportation - Levy of penalty under Rule 29 of the Central Excise Rules, 2017 read with Section 11AC of the Central Excise Act, 1944 for alleged clandestine transportation of Pan Masala/Zafrani Zarda - Whether the penalty imposed on the appellant and its operator can be sustained when the demand and penalties against the manufacturer have been set aside – HELD - As the allegation of clandestine removal of goods has been set aside, the imposition of penalty upon the appellant and the Operator has to be set aside for this reason alone. The case against the appellant and the Operator was based on the private documents seized from the premises, which did not link them to the clandestine activities of manufacturer. Therefore, the penalty under Rule 29 of the 2017 Rules read with Section 11AC of the Central Excise Act cannot be sustained and is set aside – Further, the penalty under Section 11AC of the Central Excise Act can be imposed only on the person who is liable to pay duty, and in the present case no duty demand has been confirmed against the appellant. Therefore, the penalty imposed on the appellant under Section 11AC cannot be sustained - The impugned order imposing penalties is set aside and the appeal is allowed [Read less]

Customs - Mis-declaration of goods, Rejection of declared value and re-determination of value, Confiscation of goods -Appellant filed a B/E declaring the goods as Plain PU Coated Fabric of 0.62 mm thickness. However, on physical examination, the goods were found to be of 0.74 mm to 0.81 mm thickness - Appellant admitted the mistake and agreed to pay the differential duty. Accordingly, the Commissioner rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007 and re-determined the value under Rule 4 based on contemporaneous imports - Whether the proper officer was justified in rejecting the declared val... [Read more]

Customs - Mis-declaration of goods, Rejection of declared value and re-determination of value, Confiscation of goods -Appellant filed a B/E declaring the goods as Plain PU Coated Fabric of 0.62 mm thickness. However, on physical examination, the goods were found to be of 0.74 mm to 0.81 mm thickness - Appellant admitted the mistake and agreed to pay the differential duty. Accordingly, the Commissioner rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007 and re-determined the value under Rule 4 based on contemporaneous imports - Whether the proper officer was justified in rejecting the declared value and re-determining the value under Rule 4 of the Customs Valuation Rules - HELD - The proper officer was justified in rejecting the declared value under Rule 12 as there was a clear mis-declaration of the thickness of the fabric, which gave the proper officer a reasonable doubt about the accuracy of the declared value. Once the declared value was rejected, the proper officer was correct in re-determining the value under Rule 4 based on the contemporaneous imports of identical goods - As the goods imported did not correspond with the description provided in the B/E, the confiscation of the goods under Section 111(m) is upheld - As per Rule 4, the transaction value of identical goods shall be the assessable value and not the value re-determined by the officer for the contemporaneous Bills of Entry. To this extent, the re-determination of value is not correct. The assessable value and the differential customs duty and the equivalent amount of penalty under section 114A on the appellant need to be re-determined - the Commissioner is directed to re-determine the assessable value by considering the lower transaction value of the contemporaneous imports under Rule 4, instead of the enhanced value. Accordingly, the duty payable and the penalty under Section 114A on the appellant are also to be re-determined – the appeal is partly allowed by remand [Read less]

Service Tax - Refund orders sanctioned, Show cause notices issued subsequently - Appellant filed refund claims under Rule 5 of the CCR read with Notification No. 27/2012, which were sanctioned by the Revenue. Subsequently, the Revenue issued show cause notices invoking the extended period of limitation, alleging that the services rendered by the appellant were in the nature of intermediary services and therefore, cannot be considered as 'export' - Whether the Revenue can question the CENVAT credit availed by the appellant without challenging the refund orders that were already sanctioned in favor of the appellant - HELD - ... [Read more]

Service Tax - Refund orders sanctioned, Show cause notices issued subsequently - Appellant filed refund claims under Rule 5 of the CCR read with Notification No. 27/2012, which were sanctioned by the Revenue. Subsequently, the Revenue issued show cause notices invoking the extended period of limitation, alleging that the services rendered by the appellant were in the nature of intermediary services and therefore, cannot be considered as 'export' - Whether the Revenue can question the CENVAT credit availed by the appellant without challenging the refund orders that were already sanctioned in favor of the appellant - HELD - Once the refund orders were sanctioned in favor of the appellant, the Revenue cannot be allowed to say in a collateral proceeding that the refund was erroneous. Relying on the judgments of the Madras High Court in Eveready Industries India Ltd. and the Supreme Court in ITC Ltd., the Tribunal observed that the Revenue cannot be permitted to take an inconsistent stand after sanctioning the refunds. The Revenue cannot question the CENVAT credit availed by the appellant without challenging the refund orders – Further, the Revenue has been aware of the nature of services rendered by the appellant and the fact of availment of CENVAT credit. No suppression, mis-statement, mis-representation, fraud, collusion etc. has been established by the Revenue with cogent evidence. In the absence of any such evidence, the Revenue has not made out a case for invoking the extended period of limitation - The impugned orders are set aside and the appeals are allowed [Read less]

GST - Applicability of Section 54 of the CGST Act, 2017 to refund of pre-deposit made for maintaining an appeal – HELD - The refund in relation to the statutory pre-deposit made by it for maintaining the appeal, in which the assessee succeeded thereafter, would be governed by the provisions of Section 107(6) read with Section 115 of the CGST/JGST Act, 2017 and not under Section 54 of the Act. The High Court erred in interpreting Section 54 thereof in that context - The subject refund was relatable to Section 107(6) read with Section 115 of the Act, and to that extent, the exercise undertaken by the High Court with regard... [Read more]

GST - Applicability of Section 54 of the CGST Act, 2017 to refund of pre-deposit made for maintaining an appeal – HELD - The refund in relation to the statutory pre-deposit made by it for maintaining the appeal, in which the assessee succeeded thereafter, would be governed by the provisions of Section 107(6) read with Section 115 of the CGST/JGST Act, 2017 and not under Section 54 of the Act. The High Court erred in interpreting Section 54 thereof in that context - The subject refund was relatable to Section 107(6) read with Section 115 of the Act, and to that extent, the exercise undertaken by the High Court with regard to Section 54 thereof was unnecessary – By setting aside the exercise of interpretation of Section 54 of the Act undertaken in that context, the appeal stands disposed of [Read less]

Central Excise – Deman of duty on waste mud, spent earth - During the bleaching operation using bleaching earth (fuller earth), the appellant generates a 'waste mud' or 'spent earth' as a by-product. The department sought to levy excise duty on the sale of this waste mud, relying on a Circular dated 28.10.2009 which had treated such waste/by-products as excisable goods - Whether the waste mud (spent earth) generated during the bleaching process is chargeable to excise duty – HELD - Department has mainly relied on the circular dated 28.10.2009 to treat the waste mud as excisable goods, whereas the Board itself had later... [Read more]

Central Excise – Deman of duty on waste mud, spent earth - During the bleaching operation using bleaching earth (fuller earth), the appellant generates a 'waste mud' or 'spent earth' as a by-product. The department sought to levy excise duty on the sale of this waste mud, relying on a Circular dated 28.10.2009 which had treated such waste/by-products as excisable goods - Whether the waste mud (spent earth) generated during the bleaching process is chargeable to excise duty – HELD - Department has mainly relied on the circular dated 28.10.2009 to treat the waste mud as excisable goods, whereas the Board itself had later withdrawn and rescinded the directions contained in that Circular through a subsequent circular dated 25.04.2016. The spent fuller earth had emerged involuntarily in the process of bleaching the crude palm oil, and not as a result of any conscious effort - Furthermore, the spent fuller earth was specifically exempted under Notification No.89/1995-CE dated 18.05.1995, which exempts all waste, parings and scrap arising in the course of manufacture of exempted goods. Therefore, the waste mud (spent earth) was not chargeable to excise duty - The impugned order is set aside and the appeal is allowed [Read less]

GST – Taxability of Transfer of Leasehold Rights – Petitioner held a 95-year leasehold right over a plot of land allotted by MIDC. The petitioner assigned these leasehold rights to a third party – Demand of GST treating Leasehold Rights transfer as a "supply of services" under Section 7(1) of the CGST Act, 2017 read with clause 2(b) of Schedule II - Whether the assignment/transfer of leasehold rights over an immovable property by the petitioner to a third party would constitute a "supply of services" under the GST law, and hence be subject to GST – HELD - The High Court relied on the judgment of the Gujarat High Co... [Read more]

GST – Taxability of Transfer of Leasehold Rights – Petitioner held a 95-year leasehold right over a plot of land allotted by MIDC. The petitioner assigned these leasehold rights to a third party – Demand of GST treating Leasehold Rights transfer as a "supply of services" under Section 7(1) of the CGST Act, 2017 read with clause 2(b) of Schedule II - Whether the assignment/transfer of leasehold rights over an immovable property by the petitioner to a third party would constitute a "supply of services" under the GST law, and hence be subject to GST – HELD - The High Court relied on the judgment of the Gujarat High Court in the case of Gujarat Chamber of Commerce and Industry v. Union of India, which held that the assignment/transfer of leasehold rights over an immovable property does not constitute a "supply of services" under the GST law. The High Court agreed with the Gujarat High Court's reasoning that such a transaction is merely a transfer of benefits arising out of an immovable property, and does not have any nexus with the business of the petitioner company. Hence, the essential element of "supply of service in the course of business or in furtherance of business" is absent – The impugned show cause notice demanding GST on the assignment of leasehold rights is quashed and set aside – The writ petition is allowed [Read less]

Central Excise - CENVAT credit on outward transportation, Free on Road (FOR) destination basis, Place of removal - The goods were sold on a Free on Road (FOR) destination basis and the cost of transportation was included in the assessable value on which duty was paid. The Principal Commissioner upheld the respondent's claim for CENVAT credit, relying on the inclusion of transportation cost in the assessable value and a Board Circular dated 08.06.2018 - Whether the respondent is entitled to CENVAT credit of service tax paid on outward transportation of goods when the sales are on an FOR destination basis and the transportat... [Read more]

Central Excise - CENVAT credit on outward transportation, Free on Road (FOR) destination basis, Place of removal - The goods were sold on a Free on Road (FOR) destination basis and the cost of transportation was included in the assessable value on which duty was paid. The Principal Commissioner upheld the respondent's claim for CENVAT credit, relying on the inclusion of transportation cost in the assessable value and a Board Circular dated 08.06.2018 - Whether the respondent is entitled to CENVAT credit of service tax paid on outward transportation of goods when the sales are on an FOR destination basis and the transportation cost is included in the assessable value – HELD - Where goods are sold on an FOR destination basis, the place of removal is considered to be the buyer's doorstep, as the seller remains responsible for delivery and bears the risk until the goods reach the customer, and property in the goods passes at the customer's location. The inclusion of transportation costs in the assessable value, upon which duty was paid, further supports the contention that the transfer of goods effectively occurs at the buyer's premises. CENVAT credit on service tax paid for goods transport agency services for outward transportation of finished goods up to the buyer's place is admissible under Rule 2(l) of the CENVAT Credit Rules, 2004. The similar matters involving the same principle had previously been decided in favor of assessees and even upheld by High Courts – The Respondent is entitlement to CENVAT credit of the service tax paid on the outward transportation of goods - The Department's appeal is dismissed [Read less]

Customs - Classification of “Actuator Assy. Clutch” and “Tube Connector Assy.-Clutch”, Clutch assembly and parts, Accessories vs. Parts - Appellant imported goods declared as "Actuator Assy. Clutch" and "Tube Connector Assy.-Clutch" - Department contended that these items are classifiable under CTI 8708 9300 as "Clutch and parts thereof", while the Assessee argued that they are not "parts of clutch" but rather "accessories to the clutch assembly system" - Whether the subject items - Actuator Assembly and Tube Connector Assembly - are classifiable under CTI 8708 9300 as "Clutch and parts thereof" or under the residu... [Read more]

Customs - Classification of “Actuator Assy. Clutch” and “Tube Connector Assy.-Clutch”, Clutch assembly and parts, Accessories vs. Parts - Appellant imported goods declared as "Actuator Assy. Clutch" and "Tube Connector Assy.-Clutch" - Department contended that these items are classifiable under CTI 8708 9300 as "Clutch and parts thereof", while the Assessee argued that they are not "parts of clutch" but rather "accessories to the clutch assembly system" - Whether the subject items - Actuator Assembly and Tube Connector Assembly - are classifiable under CTI 8708 9300 as "Clutch and parts thereof" or under the residual entry 8708 9900 as "other parts and accessories" – HELD - The Actuator Assembly and Tube Connector Assembly, though helping in the engagement and disengagement of the clutch plate, cannot be considered as "parts of clutch" as they only enhance the function and ease the effort of the driver in shifting the gear. The term "Clutch and parts thereof" under CTI 8708 9300 covers only the clutch itself, its casing, levers and mounted linings, and does not extend to accessories like the Actuator and Tube Connector - The Heading 8708 differentiates between "parts" and "accessories", and where the legislature intended to cover accessories, it has expressly used the term "accessories" in the Tariff, as in the case of 8708 7000 "Road wheels and parts and accessories". Since the entry 8708 9300 does not use the term "accessories", it cannot be interpreted to cover the subject items, which are accessories to the clutch assembly system – Further, the principle of res-judicata and estoppel do not apply in taxation matters, and the classification has to be determined based on the merit of the case, irrespective of any previous classification adopted by the Assessee - An ‘accessory of a clutch’ cannot be classified as ‘part of clutch’ under CTI 8708 9300. Subject items being ‘accessory of clutch’ and ‘gear shifting mechanism’ are not at all classifiable under CTI 8708 9300. Accordingly, the Actuator Assembly and Tube Connector Assembly are rightly classifiable under the residual entry 8708 9900 as "other parts and accessories" of motor vehicles, and not under 8708 9300 "Clutch and parts thereof" - When the goods are rightly classifiable under CTI 8708 9900 as ordered in the respective original order, the consequent issues of confiscation, fine and penalty cannot stand. The appeal of the Department is rejected, and the appeal of the assessee is allowed [Read less]

Central Excise - Cenvat Credit on Input Services used for setting up of Factory, Extended Period – Appellants were constructing a plant and availing certain Cenvat credits in respect of various input services - Dept raised two demands- one for credit being the irregularly availed on input services used for initial setting up of the unit, and another for irregular credit availed on various counts - Whether Cenvat credit is eligible on input services used for initial setting up of factory – HELD - The definition of 'input service' in the CCR, 2004 underwent changes before and after April 1, 2011, whereby the term 'settin... [Read more]

Central Excise - Cenvat Credit on Input Services used for setting up of Factory, Extended Period – Appellants were constructing a plant and availing certain Cenvat credits in respect of various input services - Dept raised two demands- one for credit being the irregularly availed on input services used for initial setting up of the unit, and another for irregular credit availed on various counts - Whether Cenvat credit is eligible on input services used for initial setting up of factory – HELD - The definition of 'input service' in the CCR, 2004 underwent changes before and after April 1, 2011, whereby the term 'setting up' was excluded from the inclusive part of the definition. While certain specified services like architectural services, construction services etc. used for setting up of the factory were ineligible for Cenvat credit, the credit on other input services used during the setting up stage, which were not specifically excluded, should be allowed - The matter back is remanded back to the original adjudicating authority to re-examine the invoices and allow the benefit of Cenvat credit on those input services which were clearly not covered under the excluded category of services – The appellant had itself reversed the entire amount of irregular credit along with interest before the issuance of the show cause notice. Merely because the appellant had made good the amount, it did not absolve them of the statutory violations, and the Department was justified in invoking the extended period of limitation and imposing the penalty - The appeal is partly allowed by way of remand to the original adjudicating authority to re-examine the invoices and allow the Cenvat credit on those input services which were not specifically excluded under the definition of 'input service'. The demand and penalty in respect of the irregular credit availed is upheld – The appeal is partly allowed [Read less]

Service Tax - Intermediary Services or Export of Services - Mismatch between the income declared in the Income Tax Returns – The Respondent undertook activities of finding the potential students willing to study abroad and provided services to their client i.e. universities / colleges who paid commission to them - The ld. Adjudicating Authority held that the services rendered by the respondents are not export of services and are “Intermediary Services” as per Rule 2(f) read with 9(c) of Place of Provision of Service Rules, 2012 - the ld. Commissioner (Appeals) vide Orders-in-Appeal held that services rendered by the ... [Read more]

Service Tax - Intermediary Services or Export of Services - Mismatch between the income declared in the Income Tax Returns – The Respondent undertook activities of finding the potential students willing to study abroad and provided services to their client i.e. universities / colleges who paid commission to them - The ld. Adjudicating Authority held that the services rendered by the respondents are not export of services and are “Intermediary Services” as per Rule 2(f) read with 9(c) of Place of Provision of Service Rules, 2012 - the ld. Commissioner (Appeals) vide Orders-in-Appeal held that services rendered by the respondent, are export of service as per Rule 6A of Service Tax Rules, 1994 - Whether the services provided by the respondents are "Intermediary Services" under the Place of Provision of Service Rules, 2012, and hence liable to service tax – HELD - For a person to be considered an "intermediary", there must be a tripartite agreement and the person must not actually perform the main service intended to be received by the service recipient. In the present case, the respondents were providing services directly to their clients, i.e., the universities and colleges located outside India, and there was no tripartite agreement. The respondents were not acting as an intermediary but rather as a sub-contractor or sub-agent of the foreign universities - The respondent provided services to their client ie. universities / colleges who paid commission to them. The main service is the education that starts after completion of services rendered by the respondents. Therefore, the services provided by the respondents cannot be considered as "Intermediary Services" - The orders of the Commissioner (Appeals) is upheld and the appeal filed by Revenue is dismissed [Read less]

Service Tax - Transmission of electricity, Exemption to various charges - Appellant had collected various charges such as estimated cost of materials, erection charges, contingency charges, supervision charges, development charges, pro-rata charges, revenue loss charges and other charges, on which they were not paying service tax - Whether the various charges collected by the appellant are exempt from service tax – HELD - The material cost, which is the reimbursement of actual cost of materials, is not liable to service tax. Regarding contingency charges, these charges are collected from consumers considering future vari... [Read more]

Service Tax - Transmission of electricity, Exemption to various charges - Appellant had collected various charges such as estimated cost of materials, erection charges, contingency charges, supervision charges, development charges, pro-rata charges, revenue loss charges and other charges, on which they were not paying service tax - Whether the various charges collected by the appellant are exempt from service tax – HELD - The material cost, which is the reimbursement of actual cost of materials, is not liable to service tax. Regarding contingency charges, these charges are collected from consumers considering future variations in the cost of labour and material, and if there is no fluctuation, the charges are paid back to the consumers. Therefore, the Adjudicating Authority is directed to re-compute the service tax liability after getting the requisite details/data from the appellant on material cost and contingency charges - The pro-rata charges and development charges are collected by the appellant for the development of an efficient, coordinated, and economical system of intra-state transmission lines, which is its responsibility as a transmission utility. Considering the exemptions and Circulars issued by the CBIC, these charges are not liable to service tax - Regarding the erection charges, these are recovered from the consumers for shifting of overhead cables/wires, which is exempt from service tax as per the CBIC Circular No.123/5/2010-TRU dated 24.05.2010 - The pro-rata charges, development charges, and erection charges are not liable to service tax, and the demand, if any, shall be limited to the normal period of limitation - The appeal is allowed by way of remand - Whether the demand of service tax is barred by limitation – HELD - The entire facts were in the knowledge of the department, as it had issued similar show cause notices to other units of the appellant. Therefore, invoking the extended period of limitation is not justified, and the demand, if any, arising out of re-computation, shall be limited to the normal period. [Read less]

Customs - Import of 'Fire Extinguishers and their parts', Aircraft parts - Appellant availed the benefit of Sr.No.545 of Notification No.50/2017-Cus dated 30.06.2017 on the import of 'Fire Extinguishers and their parts', by claiming them as "parts of aircraft" – Revenue of the view that 'Fire Extinguishers' are not parts of aircraft and appellant has short-paid the duty including IGST - Whether the imported fire extinguishers and their parts are eligible for the concessional rate of customs duty under Sr.No.545 of Notification No.50/2017-Cus as "parts of aircraft" – HELD - The declarations issued by the Ministry of Def... [Read more]

Customs - Import of 'Fire Extinguishers and their parts', Aircraft parts - Appellant availed the benefit of Sr.No.545 of Notification No.50/2017-Cus dated 30.06.2017 on the import of 'Fire Extinguishers and their parts', by claiming them as "parts of aircraft" – Revenue of the view that 'Fire Extinguishers' are not parts of aircraft and appellant has short-paid the duty including IGST - Whether the imported fire extinguishers and their parts are eligible for the concessional rate of customs duty under Sr.No.545 of Notification No.50/2017-Cus as "parts of aircraft" – HELD - The declarations issued by the Ministry of Defence clearly state that the fire extinguishers are mandatory for the issuance of certificate of safety of flight and that they are specifically designed for aircrafts, which shows that the fire extinguisher is an integral part of the aircraft without which the aircraft will not be able to be airborne. A component or sub-system that is specifically designed and exclusively used in the aircraft, and without which the aircraft cannot function, should be considered as a "part of aircraft" for the purpose of customs duty exemption. Once the relevant Ministry has clarified that the goods are parts of a particular machine, the Customs authorities cannot negate this - The Adjudicating Authority should consider the declarations and other documents provided by the Appellant and decide the issue afresh in light of the cited judicial precedents - The appeal is allowed by way of remand [Read less]

Customs - Related party transaction, Payment of differential duty before issue of SCN - Appellant imported goods from its parent company. The appellant paid customs duty and SVB charges based on the invoice value excluding the C&F charges. However, the appellant later realized that the full value of the imported goods was not declared in the B/E. The appellant immediately deposited the differential duty along with interest before the issuance of the Show Cause Notice. The Department initiated investigation and imposed demands, penalties and confiscation of goods on the appellants - Whether the demand, confiscation and pena... [Read more]

Customs - Related party transaction, Payment of differential duty before issue of SCN - Appellant imported goods from its parent company. The appellant paid customs duty and SVB charges based on the invoice value excluding the C&F charges. However, the appellant later realized that the full value of the imported goods was not declared in the B/E. The appellant immediately deposited the differential duty along with interest before the issuance of the Show Cause Notice. The Department initiated investigation and imposed demands, penalties and confiscation of goods on the appellants - Whether the demand, confiscation and penalties are sustainable against the appellants when the differential duty was paid before the issuance of the SCN – HELD - Since the appellants had deposited the differential duty along with interest even before the issuance of the show cause notice, the demand, confiscation and penalties are not sustainable. Once the differential duty is paid before the issuance of the show cause notice, no show cause notice can be issued. The appellants had voluntarily disclosed the short payment of duty and there was no malafide intention on their part. The information regarding non-payment of duty on two invoices was provided by the appellants himself and if there had been any malafide intention, he would not have disclosed this information - In such fact & circumstances, the demand, confiscation and penalties is not sustainable. The impugned order is set aside and the appeal is allowed [Read less]

Customs - Valuation, Rejection of declared value, Confiscation of goods, redemption fine, penalty - Appellant voluntarily accepted that the declared value was liable for rejection under the Customs Valuation Rules, 2007 and agreed to an enhanced value - Department passed a spot adjudication order rejecting the declared value and re-determining the value. The goods were also confiscated under Section 111(m) of the Customs Act, 1962, and redemption fine and penalty were imposed - Whether the appellant's acceptance of the enhanced value was a coerced acceptance or a voluntary one – HELD - In order to reject the transaction ... [Read more]

Customs - Valuation, Rejection of declared value, Confiscation of goods, redemption fine, penalty - Appellant voluntarily accepted that the declared value was liable for rejection under the Customs Valuation Rules, 2007 and agreed to an enhanced value - Department passed a spot adjudication order rejecting the declared value and re-determining the value. The goods were also confiscated under Section 111(m) of the Customs Act, 1962, and redemption fine and penalty were imposed - Whether the appellant's acceptance of the enhanced value was a coerced acceptance or a voluntary one – HELD - In order to reject the transaction value, the proper officer should, in the first place have some reason to doubt. If he has such reason, he can call for additional information from the importer and on receiving such information or if no information is provided, if the proper officer still has a reasonable doubt about the transaction value, it shall be deemed that the assessable value cannot be the transaction value - In this case, since the declared values were far lower than the contemporaneous values, the proper officer had reason to doubt the transaction value. When asked, the appellant agreed that the declared values may be rejected and the goods may be assessed at contemporaneous values of imports. The appellant had responded to the department's query online, sitting in his office, and could have easily disagreed with the enhancement. The proper officer had reasonable doubt about the truth and accuracy of the transaction value, and hence, was justified in rejecting the declared value. The appellant's acceptance of the enhanced value was not a coerced acceptance - Since the appellant had correctly declared the transaction value in the B/E, the goods are not liable for confiscation under Section 111(m). It is impossible for the appellant to anticipate if the proper officer would reject the transaction value and what value would be fixed - The re-determination of the value is upheld but set aside the confiscation, redemption fine, and penalty imposed under the impugned order - The appeal is partly allowed [Read less]

Service Tax – Providing of services for Lump-sum work, Demand under Manpower Recruitment or Supply Agency Service - Appellants were providing "quality works" such as washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area, godowns and surroundings in the manufacturing unit – Dept viewed the services rendered by the appellants as supply of manpower service - Whether the services rendered by the appellants are classifiable under the "Manpower Recruitment and Supply Agency" category – HELD - The activity agreed under the contract was for providing 'quality work' using the manpower... [Read more]

Service Tax – Providing of services for Lump-sum work, Demand under Manpower Recruitment or Supply Agency Service - Appellants were providing "quality works" such as washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area, godowns and surroundings in the manufacturing unit – Dept viewed the services rendered by the appellants as supply of manpower service - Whether the services rendered by the appellants are classifiable under the "Manpower Recruitment and Supply Agency" category – HELD - The activity agreed under the contract was for providing 'quality work' using the manpower of the contractor employed by the appellants, and not for supply of manpower as such. The payment was based on the work carried out by the contractor and not on the number of persons employed, which was a clear indication that the activity under the contract was not for 'supply of manpower' at all. The Tribunal in S.S. Associates, Bhagyashree Enterprises, and Shivshakti Enterprises, cases has held that such lump-sum work contracts cannot be considered as contracts for supply of manpower and are not covered under the 'Manpower Recruitment or Supply Agency Services'. Therefore, the demand based on the classification of the services provided by the appellants as supply of manpower service is not sustainable as per law. Accordingly, the impugned orders are set aside and the appeals are allowed [Read less]

Service Tax - Exclusion of value of goods deemed to be sold from taxable service value, Eligibility for Notification No. 12/2003-ST - Appellant claimed the benefit of Notification No. 12/2003-ST, dated 20.06.2003 and reflected the same in the invoices raised during the disputed period. The appellant filed ST-3 Returns, disclosing the total value of Service Tax payable and paid by claiming the benefit of Notification 12/2003-ST. The value of goods sold or deemed to have been sold was required to be excluded for the purpose of computing the value of service rendered by the appellant - Whether the appellant is entitled to cla... [Read more]

Service Tax - Exclusion of value of goods deemed to be sold from taxable service value, Eligibility for Notification No. 12/2003-ST - Appellant claimed the benefit of Notification No. 12/2003-ST, dated 20.06.2003 and reflected the same in the invoices raised during the disputed period. The appellant filed ST-3 Returns, disclosing the total value of Service Tax payable and paid by claiming the benefit of Notification 12/2003-ST. The value of goods sold or deemed to have been sold was required to be excluded for the purpose of computing the value of service rendered by the appellant - Whether the appellant is entitled to claim exclusion of the value of the goods and raw materials claimed to have been sold to the recipient of the service as part of their repair and maintenance service – HELD - The appellant is entitled to claim exclusion of the value of the goods and raw materials claimed to have been sold to the recipient of the service as part of the repair and maintenance service. The Tribunal in G.D. Builders & Others Vs Union of India, has held that wherever there are complex transactions including components of service and sale of goods (actual or deemed), the taxable value for levy of Service Tax would be only the component of service but excluding the component of sale of goods. The provisions of Notification No. 12/2003 merely explicate the inherent intent of Section 67 of the Act - The reversal of Cenvat credit amounts to non-taking of credit on inputs, and the benefit of exemption notification cannot be denied - The reversal of Cenvat credit is sufficient compliance with the condition of non-availment of Cenvat credit for the purpose of availing the exemption notification - The appeal is allowed by way of remand only for the limited purpose of recalculating the demand accordingly for the normal period - Whether the Adjudicating Authority has gone beyond the scope of the remand order by the Tribunal – HELD - The Adjudicating Authority has gone beyond the scope of the remand order by the Tribunal. It was not open for the Adjudicating Authority to pass an order ignoring the remand direction and confirm the demand on the same grounds as taken in the first Order-in-Original, which was set aside by the Tribunal - Whether the extended period of limitation can be invoked in the present case – HELD - The extended period of limitation cannot be invoked in the present case, as the claim of benefit of exemption notification cannot be considered as suppression of fact with intent to evade payment of Tax. [Read less]

GST – Uploading of Notices and orders under "Additional Notices/Orders" Tab – Respondents issued a Demand-cum-Show Cause Notice alleging discrepancy between the tax liability reported in the GSTR-3B returns and the E-Way Bill report. The petitioner was not served the notice and order, as they were uploaded under the "Additional Notices/Orders" tab on the portal. Consequently, the petitioner could not participate in the proceedings and an ex parte order was passed - Whether uploading of notices and orders under the "Additional Notices/Orders" tab and thereby denying the petitioner a reasonable opportunity to participate... [Read more]

GST – Uploading of Notices and orders under "Additional Notices/Orders" Tab – Respondents issued a Demand-cum-Show Cause Notice alleging discrepancy between the tax liability reported in the GSTR-3B returns and the E-Way Bill report. The petitioner was not served the notice and order, as they were uploaded under the "Additional Notices/Orders" tab on the portal. Consequently, the petitioner could not participate in the proceedings and an ex parte order was passed - Whether uploading of notices and orders under the "Additional Notices/Orders" tab and thereby denying the petitioner a reasonable opportunity to participate in the proceedings, is a violation of the principles of natural justice – HELD - Mere uploading the notice under heading “Additional Notices/Orders” is not sufficient service in accordance with the law. The tab “Additional notices/orders” is easily accessible and located with ordinary prudence - The action of the adjudicating authority in uploading the notices and orders under the "Additional Notices/Orders" tab, which was not easily accessible, is a violation of the principles of natural justice. The consistent view of various High Courts is that uploading of notices and orders under the "Additional Notices/Orders" tab does not amount to valid service under Section 169 of the CGST Act, 2017 - The petitioner remained unaware of the notices and orders, and consequently could not respond to the show cause notice or participate in the proceedings. Mere non-appearance would not entail passing of adverse orders by the Assessing Officer, rather the statutory authority should have examined the material and data available in the portal which were uploaded by the petitioner. Since the impugned order rejecting the application under Section 161 of the CGST Act is not a speaking order, said order cannot be held to be tenable - The ex parte order and the order rejecting the application for rectification are held to be vitiated for non-compliance with the principles of natural justice and set aside – The matter is remanded back to the State Tax Officer with a direction to provide the petitioner an opportunity to be heard and consider the petitioner's explanation along with the records available on the portal – The writ petition stands disposed of [Read less]

The exemption benefit of individual insurance policies is not applicable to petitioners as the policy availed has all the characteristics of a group policy, as it covers large number of persons and benefits obtained through collective bargain.

Central Excise - CENVAT credit on Additional Duty of Customs (CVD) – Import of steam coal - The imported steam coal attracted Nil Basic Customs Duty and Additional Duty of Customs (CVD) at the concessional rates of 1% and 2% under Customs Notification No. 12/2012-Cus and No. 12/2013-Cus, respectively. The appellant availed CENVAT credit of the said CVD under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty rates on domestic steam coal were subject to the condition of non-availment of CENVAT credit, and the same condition should apply to the CVD pa... [Read more]

Central Excise - CENVAT credit on Additional Duty of Customs (CVD) – Import of steam coal - The imported steam coal attracted Nil Basic Customs Duty and Additional Duty of Customs (CVD) at the concessional rates of 1% and 2% under Customs Notification No. 12/2012-Cus and No. 12/2013-Cus, respectively. The appellant availed CENVAT credit of the said CVD under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty rates on domestic steam coal were subject to the condition of non-availment of CENVAT credit, and the same condition should apply to the CVD paid on imported steam coal as well - Whether CENVAT credit of 1% / 2% CVD paid on imported steam coal is admissible under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 - HELD - The CENVAT credit of 1% / 2% CVD paid on imported steam coal is admissible under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004. The Rule 3(1)(vii) clearly allows credit of "the additional duty leviable under Section 3 of the Customs Tariff Act", and there is no qualification in the Rule that credit is admissible only if CVD is paid at the tariff rate and not at a concessional rate. The proviso to Rule 3(1)(i), which restricts availment of credit in cases where the benefit of certain central excise exemption notifications is availed, expressly refers only to duties of excise paid under the Central Excise Act and notifications issued thereunder, and does not extend its scope to additional duty of customs paid under the Customs Tariff Act or incorporate customs exemption notifications within its ambit - The CENVAT credit on 1% / 2% CVD paid on imported steam coal under Customs Notification is legally admissible. The denial of CENVAT credit in the impugned Orders-in-Original is set aside and the appeal is allowed [Read less]

Service Tax - Construction of residential complex, management and maintenance services, Renting of immovable property, interest and penalties – HELD - The demand of service tax on 'Construction of Residential Complex Service' is upheld as the appellant had rendered such service. The obligation to pay service tax arises irrespective of whether the assessee had collected it from the clients, and interest must be paid for the delayed payment - The demand of service tax on 'Management, Maintenance and Repair Services' is set aside as the appellant had not received any consideration for such services. The appellant had collec... [Read more]

Service Tax - Construction of residential complex, management and maintenance services, Renting of immovable property, interest and penalties – HELD - The demand of service tax on 'Construction of Residential Complex Service' is upheld as the appellant had rendered such service. The obligation to pay service tax arises irrespective of whether the assessee had collected it from the clients, and interest must be paid for the delayed payment - The demand of service tax on 'Management, Maintenance and Repair Services' is set aside as the appellant had not received any consideration for such services. The appellant had collected the maintenance charges from the house buyers and handed them over to the Resident Welfare Association (RWA), and had not retained any amount for itself - The demand of service tax on 'Renting of Immovable Property Service' is also set aside as the appellant, being a Government organization, had not leased out any immovable property to the house owners. The appellant had collected the lease rent from the house owners and paid it to the Government of Madhya Pradesh, as the land on which the houses were built was on a leasehold basis - The demand of service tax on 'Construction of Residential Complex Service' is upheld along with the applicable interest. The demands under 'Management, Maintenance and Repair Services' and 'Renting of Immovable Property Service' are set aside. The penalties imposed on the appellant are also set aside, considering that the appellant, being a Government entity, could have reasonably assumed that the service tax had to be paid only when collected from the clients - The appeal is partly allowed [Read less]

Service Tax - Export proceeds, Payment of bank charges, Demand under Banking and Other Financial Services - Demand alleging that the bank charges deducted by foreign banks from the appellant's export proceeds were taxable as "Banking and Other Financial Services" under Section 66A of the Finance Act, 1994 - Whether the bank charges deducted by the foreign banks from the appellant's export proceeds are exigible to service tax under "Banking and Other Financial Services" – HELD - The appellant had engaged the State Bank of India for realizing the export sale proceeds, and the foreign banks had only deducted their charges w... [Read more]

Service Tax - Export proceeds, Payment of bank charges, Demand under Banking and Other Financial Services - Demand alleging that the bank charges deducted by foreign banks from the appellant's export proceeds were taxable as "Banking and Other Financial Services" under Section 66A of the Finance Act, 1994 - Whether the bank charges deducted by the foreign banks from the appellant's export proceeds are exigible to service tax under "Banking and Other Financial Services" – HELD - The appellant had engaged the State Bank of India for realizing the export sale proceeds, and the foreign banks had only deducted their charges while remitting the export sale proceeds to SBI. There was no evidence that the appellant had any direct dealings with the foreign banks or received any services from them - When the Indian bank pays the charges to the foreign bank, the exporter cannot be treated as the service recipient, and no service tax can be charged - The demand of service tax is set aside and the appeal is allowed [Read less]

Service Tax - Trading activity or not, Supply of Gift vouchers, CENVAT credit - Appellant is engaged in providing loyalty management and customer relationship services to its clients. As part of this, the appellant procures and supplies gifts and gift vouchers to customers upon redemption of loyalty points - Department of the view that the procurement and supply of goods and gift vouchers constitute a trading activity, which is either a non-taxable activity prior to 01.04.2011 or an exempted service thereafter – Department alleged that the appellant had wrongly availed and utilized CENVAT credit on common input services ... [Read more]

Service Tax - Trading activity or not, Supply of Gift vouchers, CENVAT credit - Appellant is engaged in providing loyalty management and customer relationship services to its clients. As part of this, the appellant procures and supplies gifts and gift vouchers to customers upon redemption of loyalty points - Department of the view that the procurement and supply of goods and gift vouchers constitute a trading activity, which is either a non-taxable activity prior to 01.04.2011 or an exempted service thereafter – Department alleged that the appellant had wrongly availed and utilized CENVAT credit on common input services attributable to such trading activity, in contravention of Rule 6 of the CENVAT Credit Rules, 2004 - Whether the procurement and supply of goods and gift vouchers by the appellant constitute "trading activity" under the CENVAT Credit Rules, 2004 – HELD - The undisputed facts is that the appellant procures goods and vouchers independently, recovers the cost separately, and discharges VAT/CST on such supplies. These facts clearly demonstrate that the appellant is engaged in buying and selling of goods/vouchers, which squarely falls within the ordinary and commercial understanding of trading - The procurement and supply of goods and gift vouchers constitute trading activity which is a non-taxable activity prior to 01.04.2011, and an exempted service thereafter - The appellant is not entitled to avail CENVAT credit on inputs and input services attributable to such trading activity: prior to 01.04.2011, and subsequent thereto, in the absence of strict compliance with Rule 6 of the CENVAT Credit Rules, 2004, the demands for reversal/recovery of inadmissible CENVAT credit, as confirmed in the impugned Orders-in-Original and Orders-in-Appeal, are upheld – The appeals are disposed of - Whether gift vouchers are actionable claims or goods-in-lieu, and whether their supply can escape the ambit of Rule 6 of the CENVAT Credit Rules – HELD - The gift vouchers are not actionable claims but represent goods-in-lieu, with assured redemption value, and their trading attracts the consequences under Rule 6 of the CENVAT Credit Rules - Whether CENVAT credit attributable to trading activity is admissible prior to 01.04.2011 under the CENVAT Credit Rules, 2004 – HELD - Even prior to 01.04.2011, when trading was neither a taxable service nor an exempted service, credit attributable to trading activity was not admissible, as trading is neither manufacture nor provision of a taxable service, and therefore, credit was not eligible under Rule 3(1) of the CENVAT Credit Rules - Whether, for the period from 01.04.2011 to 31.03.2016, the appellant is entitled to avail CENVAT credit on common input services attributable to trading activity, and whether compliance with Rule 6 of the CENVAT Credit Rules, 2004 is mandatory – HELD – The argument of the appellant that Rule 6 is optional is misplaced. The period from 01.04.2011 onwards, when trading was expressly included as an "exempted service" under Rule 2(e) of the CENVAT Credit Rules, the appellant was required to strictly comply with the requirements of Rule 6, which mandates reversal or payment of an amount proportionate to the value of exempted services. Since the appellant failed to maintain separate accounts or follow the prescribed reversal mechanism, the denial of credit is legally sustainable - Whether, after the amendments to the CENVAT Credit Rules post-2016, the appellant is entitled to avail CENVAT credit, and whether the demands for the post-2016 period are sustainable – HELD - Even after the post-2016 amendments to the CENVAT Credit Rules, trading continued to be treated as an exempted service, and the core eligibility condition for availment of credit under Rule 6 remained unchanged. The appellant's failure to maintain separate accounts or comply with the reversal mechanism under Rule 6(3A) renders the demands for the post-2016 period also sustainable. [Read less]

Central Excise – Denial of cenvat credit – Sustainability – Department issued show cause notice to Appellants for denial of Cenvat Credit on certain quantities of raw materials on assumption that Appellants have availed and utilized Cenvat Credit on basis of paper transactions without receiving goods in factory of production – Adjudicating authority confirmed demand of credit – Whether department has established charge of non-receipt of raw materials against Appellants with sufficient evidence – HELD – Merely on basis of enquiries conducted on basis of VAHAN portal and statement of vehicles owners cannot cons... [Read more]

Central Excise – Denial of cenvat credit – Sustainability – Department issued show cause notice to Appellants for denial of Cenvat Credit on certain quantities of raw materials on assumption that Appellants have availed and utilized Cenvat Credit on basis of paper transactions without receiving goods in factory of production – Adjudicating authority confirmed demand of credit – Whether department has established charge of non-receipt of raw materials against Appellants with sufficient evidence – HELD – Merely on basis of enquiries conducted on basis of VAHAN portal and statement of vehicles owners cannot constitute a conclusive inference to allege non-receipt of goods. Transactions are substantiated through bank transactions and not an iota of doubt is cast upon their veracity. Revenue had not disputed receipt of payment by suppliers for raw-material allegedly supplied and also the transportation charges made by recipient of raw material. Assumption cannot be the underlying basis to sustain a grievous charge of non-receipt of raw material, on which Cenvat Credit had been availed. Claims of revenue are completely unfounded and baseless and therefore fail on touchstone of legality of evidence relied upon. There is lack of legal merit in order of lower authority denying the cenvat credit availed and same is therefore set aside – Appeals allowed [Read less]

Central Excise – Section 11B(2)(c) of Central Excise Act, 1944 – Rule 5 of Cenvat Credit Rules, 2004 – Unutilized credit – Rejection of refund claim – Appellants manufactured diapers on behalf of Kimberly Clark Lever Ltd by installing a separate machinery – On expiry of contract, Appellants have discontinued the manufacturing activity and filed an application for refund of Cenvat Credit lying as balance in their books – Original authority rejected refund claim on ground that there was no provision available for such refund – First appellate authority upheld such rejection – Whether Appellants are entitled... [Read more]

Central Excise – Section 11B(2)(c) of Central Excise Act, 1944 – Rule 5 of Cenvat Credit Rules, 2004 – Unutilized credit – Rejection of refund claim – Appellants manufactured diapers on behalf of Kimberly Clark Lever Ltd by installing a separate machinery – On expiry of contract, Appellants have discontinued the manufacturing activity and filed an application for refund of Cenvat Credit lying as balance in their books – Original authority rejected refund claim on ground that there was no provision available for such refund – First appellate authority upheld such rejection – Whether Appellants are entitled to receive refund of unutilized credit on account of closure of manufacturing unit – HELD – Appellants rely on provisions of Section 11B(2)(c) of the Act. Said provision prescribes that refund shall be subjected to the Rules and Notifications issued there under. Rule governing refund of CENVAT credit is Rule 5 of the Rules. Refund of Cenvat credit is admissible under Rule 5 of the Rules, if the factory is closed, however, this rule has been amended w.e.f. 1-4-2012. After amendment, there is no provision for refund of Cenvat credit which has not been utilized at time of closure of factory. Appellants are not eligible for refund of CENVAT credit on account of closure of factory. Order under challenge is affirmed – Appeal dismissed [Read less]

GST – Anti-Profiteering, Commensurate Reduction in Prices - DGAP report alleged that Respondents contravened Section 171 of the CGST Act by not passing on the benefit of reduction in GST rates on cinema tickets from 01.01.2019 - Whether the Respondent profiteered by not reducing ticket prices commensurately after the GST rate cut – HELD - The Respondent increased or maintained the base prices instead of reducing the gross ticket prices, thereby retaining the tax benefit - The Respondent's arguments that ticket prices were regulated under the Telangana Cinemas Act and Government Orders, and that the profiteering should ... [Read more]

GST – Anti-Profiteering, Commensurate Reduction in Prices - DGAP report alleged that Respondents contravened Section 171 of the CGST Act by not passing on the benefit of reduction in GST rates on cinema tickets from 01.01.2019 - Whether the Respondent profiteered by not reducing ticket prices commensurately after the GST rate cut – HELD - The Respondent increased or maintained the base prices instead of reducing the gross ticket prices, thereby retaining the tax benefit - The Respondent's arguments that ticket prices were regulated under the Telangana Cinemas Act and Government Orders, and that the profiteering should be computed movie-wise, and GST component should be excluded as it was remitted to the Government, are rejected - The DGAP's methodology of comparing the pre-reduction all-inclusive price with the post-reduction base price to be rational and workable - the Respondent had the statutory option under Section 34 of CGST Act to issue credit notes for retrospective price adjustment and pass-through the benefit, but failed to do so; mere remittance of GST does not extinguish the supplier's liability to disgorge the total excess collection to identifiable recipients or, in their absence, the Consumer Welfare Fund - The Respondent is directed to deposit the profiteered amount in the Central and State Consumer Welfare Funds within 30 days. No interest was payable for the period prior to 28.06.2019 when the interest provision was introduced prospectively. No penalty under Section 171(3A) was applicable as it post-dated the contravention period – Ordered accordingly [Read less]

GST - Prohibition on parallel proceedings under Section 6(2)(b) of CGST Act, 2017 – Issue of summons and show cause notices by the Central GST (CGST) and State GST authorities on the same subject matter. The petitioner contended that the initiation of parallel proceedings by the CGST and State GST authorities on the same subject matter is barred under Section 6(2)(b) of the CGST Act - Whether the summons and show cause notices issued by the CGST and State GST authorities are overlapping the same subject matter, thereby initiating 'parallel proceedings' which are barred by Section 6(2)(b) of the CGST Act – HELD - Applyi... [Read more]

GST - Prohibition on parallel proceedings under Section 6(2)(b) of CGST Act, 2017 – Issue of summons and show cause notices by the Central GST (CGST) and State GST authorities on the same subject matter. The petitioner contended that the initiation of parallel proceedings by the CGST and State GST authorities on the same subject matter is barred under Section 6(2)(b) of the CGST Act - Whether the summons and show cause notices issued by the CGST and State GST authorities are overlapping the same subject matter, thereby initiating 'parallel proceedings' which are barred by Section 6(2)(b) of the CGST Act – HELD - Applying the principles laid down by the Supreme Court in the Armour Security (India) Ltd. case, once one authority (Central or State) has initiated proceedings first in point of time, the other authority is barred from commencing parallel adjudicatory proceedings on the same subject matter under Section 6(2)(b) of the CGST Act. However, bona fide steps for investigation, such as issuance of summons under Section 70, are permissible unless they amount to initiation of a parallel proceeding - The petitioner is directed to appear before the Central Authority, file the response to the show cause notice, and raise the contentions along with relevant documents. The State Authority is directed to communicate with the Central Authority to verify the claim of the petitioner and coordinate to ensure that the petitioner is not subjected to multiple adjudicatory processes on the same subject matter - The petition is disposed of [Read less]

Customs – Import of gold dore bars – Demand of duty – Sustainability – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner c... [Read more]

Customs – Import of gold dore bars – Demand of duty – Sustainability – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner confirmed demand of duty – Whether Appellant could claim benefit of 2008 Exemption Notification for import of gold dore bars when Import License issued to Appellant mentioned that import of gold bars is subject to 2012 Notification – HELD – Gold dore bars are restricted items under Foreign Trade Policy and can be imported under a License issued by DGFT. Appellant was issued a License by DGFT permitting Appellant to import gold dore bars. License contained a condition that import of gold dore bars is subject to 2012 Notification. Appellant was required to pay concessional basic customs duty under 2012 Notification, but under 2008 Exemption Notification, Appellant was required to pay NIL basic customs duty. 2012 Notification does not provide that benefit of any other Notification, which otherwise would be available to Appellant, cannot be availed of by Appellant. Appellant may have had to discharge customs duty provided under 2012 Notification, but if there is a Notification which exempts payment of customs duty, then there is no bar in Appellant availing benefit of said Notification. Finding recorded by Principal Commissioner that the Conditions of License can be fulfilled only if customs duty is paid in terms of 2012 Notification is, not borne out from Conditions of License. In this view of matter, demand of customs duty from Appellant cannot be sustained. Impugned order is set aside – Appeal allowed [Read less]

Customs – Import of chilly seeds – Classification – Appellant had imported 32 consignments of Chilly Seeds through various Bills of Entry by classifying them under CTI 1209 99 90 and availed exemption from payment of Special Additional Duty under Exemption Notification – Department issued show cause notice proposing classification of goods imported by Appellant under CTI 0904 22 12 and demand of duty – Additional Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Chilly Seeds imported by Appellant merit classification under CTI 12... [Read more]

Customs – Import of chilly seeds – Classification – Appellant had imported 32 consignments of Chilly Seeds through various Bills of Entry by classifying them under CTI 1209 99 90 and availed exemption from payment of Special Additional Duty under Exemption Notification – Department issued show cause notice proposing classification of goods imported by Appellant under CTI 0904 22 12 and demand of duty – Additional Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Chilly Seeds imported by Appellant merit classification under CTI 1209 99 90 as claimed by Appellant or under CTI 0904 20 12 as claimed by department – HELD – Scope of CTI 0904 20 is limited to fruits of genus Capsicum. Chilly Seeds are not ‘fruits’, but rather ‘seeds’ of genus Capsicum. Chilly Seeds are not mainly used as a condiment in contrast with mustard seeds or pepper seeds. Subject goods are neither edible nor fit for human consumption. CTH 1204 covers all seeds, fruits, spores for sowing purposes. Subject goods are solely used for sowing purposes. Board Circular dated 8-1-2002 clarifies that Chilly Seeds that are seeds of fruits of genus Capsicum are classified under CTH 1209 and are not covered under CTI 0904. Chilly Seeds imported by Appellant are covered under Heading 1209 99 90 as claimed by Appellant. Impugned order passed by Commissioner (Appeals) cannot be sustained and is set aside – Appeal allowed [Read less]

GST - Overlapping proceedings between State and Central Tax Authorities, Parallel proceedings - Whether the show cause notice issued by the Central Tax Authorities is violative of Section 16(2)(b) of the CGST Act, as the State Tax Authorities had already adjudicated the demand in respect of the same transaction by an order-in-original, against which the petitioner had preferred an appeal - HELD - Since the penalty proceedings by the State Tax Authorities had concluded and the petitioner had preferred an appeal, and the proceedings before the Central Tax Authorities were yet to be concluded, the show cause notice issued by ... [Read more]

GST - Overlapping proceedings between State and Central Tax Authorities, Parallel proceedings - Whether the show cause notice issued by the Central Tax Authorities is violative of Section 16(2)(b) of the CGST Act, as the State Tax Authorities had already adjudicated the demand in respect of the same transaction by an order-in-original, against which the petitioner had preferred an appeal - HELD - Since the penalty proceedings by the State Tax Authorities had concluded and the petitioner had preferred an appeal, and the proceedings before the Central Tax Authorities were yet to be concluded, the show cause notice issued by the Central Tax Authorities should be kept in abeyance until the appeal preferred by the petitioner is decided by the Appellate Authority of the State Tax Department - Once the appeal proceedings before the Appellate Authority of the State Tax Department are concluded, the Central Tax Authorities should proceed with the show cause notice, considering the petitioner's reply and the findings of the Appellate Authority. The petitioner is at liberty to raise all available points of law and fact, including the question of overlap and reference to the CBIC circular dated 06.07.2022, in its reply before the Central Tax Authorities – The writ petition is disposed of [Read less]

Service Tax – Section 68(1) of Finance Act, 1994 – Providing of security services – Demand of tax – Sustainability – Appellant is engaged in providing security services to various entities including Delhi International Airport Limited (DIAL) – Department issued show cause notice to Appellant by proposing demand of Service Tax – Principal Commissioner confirmed demand proposed in show cause notice – Whether Appellant is liable to pay any service tax on services rendered to DIAL – HELD – As per Section 68(1) of the Act, service provider has to pay service tax, but if Central Government issues a notificati... [Read more]

Service Tax – Section 68(1) of Finance Act, 1994 – Providing of security services – Demand of tax – Sustainability – Appellant is engaged in providing security services to various entities including Delhi International Airport Limited (DIAL) – Department issued show cause notice to Appellant by proposing demand of Service Tax – Principal Commissioner confirmed demand proposed in show cause notice – Whether Appellant is liable to pay any service tax on services rendered to DIAL – HELD – As per Section 68(1) of the Act, service provider has to pay service tax, but if Central Government issues a notification shifting part or whole of liability to pay service tax to service recipient, liability shifts to that extent to service recipient. Service provided by Appellant to DIAL was clearly covered by S.No.6 of Notification No.30/2012-ST, according to which, 100% of service tax must be paid by service recipient and not by service provider, therefore, DIAL had to pay service tax. Appellant was not liable to pay any service tax at all on services which it had rendered to DIAL. Demand of service tax confirmed against Appellant cannot be sustained. Impugned order is set aside – Appeal allowed [Read less]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing various taxable services – Department issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Principal Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of tour operator service – HELD – Appellant operates stage carriage buses between various cities/town/villages, which service is not exigible to service tax. In addition to stage carriage buses, Appellant had entered into an agreement with Rajasthan To... [Read more]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing various taxable services – Department issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Principal Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of tour operator service – HELD – Appellant operates stage carriage buses between various cities/town/villages, which service is not exigible to service tax. In addition to stage carriage buses, Appellant had entered into an agreement with Rajasthan Tourism Development Corporation (RTDC), according to which, in order to promote tourism within Rajasthan, Appellant operates buses. If a vehicle merely transports passengers from one place to another and charges each passenger a fare, it is more akin to transportation of passengers than a tour operation. In view of above, demand of service tax under category of tour operator service cannot be sustained and is set aside – Appeal disposed of - Denial of credit – Whether denial of CENVAT credit on third party insurance on bus services is sustainable – HELD – Appellant runs stage carriage buses, which service is exempted from payment of service tax. Case of department is that Appellant was not entitled to CENVAT credit, as services rendered by Appellant were exempted. No CENVAT credit can be availed on inputs and input services used in manufacture of exempted goods. Service provided by buses is undisputedly not taxable, therefore, service tax paid on third party insurance of buses which are used for carrying passengers cannot be taken by Appellant. Denial of CENVAT credit on this count needs to be upheld - Invoking of extended period of limitation – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Appellant is a Governmental Organization and it could have entertained a belief that it was entitled to take CENVAT credit which it was not actually entitled to. Once ST-3 returns are filed, it is for Range officer to scrutinize return, call for any additional information or accounts required. Department cannot say that it was not aware about the activities of Appellant and claim suppression of facts or mis-statement to invoke extended period of limitation. Invoking of extended period of limitation is not justified. Denial of CENVAT credit with interest for extended period of limitation is set aside. Denial of CENVAT credit on third party insurance on bus services is upheld within normal period of limitation. Matter is remanded to Commissioner only for limited purpose of computation. [Read less]

GST - Quasi-Judicial Nature of Regulatory Functions – Petitioner is a statutory body constituted under the Electricity Regulatory Commissions Act, 1998 - Notice seeking to levy GST on the fees and charges collected by the petitioner-HPERC for discharging its regulatory and quasi-judicial functions under the Electricity Act, 2003 - Whether the regulatory and quasi-judicial functions of the HPERC, including issuing licenses, fixing tariffs, and processing annual revenue requirement, fell within the ambit of "supply of goods or services" under the CGST Act, 2017 – HELD - Relying on the judgments of the Delhi High Court an... [Read more]

GST - Quasi-Judicial Nature of Regulatory Functions – Petitioner is a statutory body constituted under the Electricity Regulatory Commissions Act, 1998 - Notice seeking to levy GST on the fees and charges collected by the petitioner-HPERC for discharging its regulatory and quasi-judicial functions under the Electricity Act, 2003 - Whether the regulatory and quasi-judicial functions of the HPERC, including issuing licenses, fixing tariffs, and processing annual revenue requirement, fell within the ambit of "supply of goods or services" under the CGST Act, 2017 – HELD - Relying on the judgments of the Delhi High Court and the Karnataka High Court, which were upheld by the Supreme Court, it is held that the regulatory and quasi-judicial functions performed by the HPERC are not amenable to GST. The HPERC, being a quasi-judicial body, is akin to a Court or Tribunal, and the services rendered by it are excluded from the definition of "supply of goods or services" under the CGST Act – The fees and charges collected by the HPERC are not in the course or furtherance of any business, as defined under the CGST Act, but are rather in the nature of regulatory and quasi-judicial functions - The show cause notice issued by the tax authorities are quashed and the petition is allowed [Read less]

GST - Refund claim under GST on export of services – Petitioner is an India entity engaged in the business of providing taxable services under the category "Information Technology Software Services" which are exported mainly to its associated enterprises located outside India. The petitioner filed GST-RFD-01 along with supporting documents claiming refund on account of services for different periods. The refund sanctioning authority allowed the refund in some periods but rejected the refund in other periods - Whether the petitioner's supplies qualify as "export of services" under Section 2(6) of the IGST Act, 2017 – HE... [Read more]

GST - Refund claim under GST on export of services – Petitioner is an India entity engaged in the business of providing taxable services under the category "Information Technology Software Services" which are exported mainly to its associated enterprises located outside India. The petitioner filed GST-RFD-01 along with supporting documents claiming refund on account of services for different periods. The refund sanctioning authority allowed the refund in some periods but rejected the refund in other periods - Whether the petitioner's supplies qualify as "export of services" under Section 2(6) of the IGST Act, 2017 – HELD - The appellate authority and the refund sanctioning authority relied on clause (C) of the agreement between the petitioner and its overseas client which provided that the petitioner may enter into contract with third parties. Merely on this basis, the authorities held that the petitioner is providing "intermediary services" and therefore the place of provision of services is in India, which does not qualify as "export of services" under Section 2(6) of the IGST Act - The authorities failed to record any finding as to the existence of a third party in the transaction or how the supplies made by the petitioner are not between two principals or by the petitioner not on its own account, despite the petitioner submitting all relevant documents. The authorities also failed to analyze the requirements under Section 13(2) defining "intermediary", Section 2(6) defining "export of services" and Section 13 providing for "place of supplier services". The findings of the authorities are cryptic and suffered from non-application of mind to the materials on record - The impugned orders are set aside and matter is remanded to the appellate authority and the refund sanctioning authority to re-examine the issue afresh in light of the relevant provisions and the principles laid down in the CBIC Circular on intermediary services – The petitions are allowed by remand [Read less]

GST – Issuance of composite intimation of tax liability as well as a composite show cause notice issued - Whether the authorities can issue a composite notice/intimation by clubbing demands for multiple financial year – HELD - Since the subject matters involved in the various financial years were different, issuing a composite intimation and show cause notice is not maintainable. Separate intimations and show cause notices should have been issued for each financial year, as the "tax period" under the CGST Act refers to the period for which a return is required to be furnished, which is on a yearly basis – Further, th... [Read more]

GST – Issuance of composite intimation of tax liability as well as a composite show cause notice issued - Whether the authorities can issue a composite notice/intimation by clubbing demands for multiple financial year – HELD - Since the subject matters involved in the various financial years were different, issuing a composite intimation and show cause notice is not maintainable. Separate intimations and show cause notices should have been issued for each financial year, as the "tax period" under the CGST Act refers to the period for which a return is required to be furnished, which is on a yearly basis – Further, the authorities did not consider the petitioner's reply to the intimation before issuing the show cause notice, which was a violation of the principles of natural justice - The composite intimation and show cause notice are quashed and granting liberty to the respondent authorities to take appropriate action in accordance with law by issuing separate intimations and show cause notices – The petition is disposed of [Read less]

The Section 20 of the CGST Act is intended to ensure seamless flow and equitable distribution of ITC. The Rule 39(1)(a) of the CGST Rules, to the extent it mandates distribution of ITC within the same month, is ultra vires Section 20 and struck down.

GST - Legality of Show-Cause Notice, Amendment to Section 17(5)(d) of the OGST Act, 2017 - Petitioners argued that the SCN was not sustainable due to amendments made to Section 17(5)(d) of the OGST Act, 2017 which came into force after the issuance of the SCN. The Petitioners also contended that the SCN was issued based on an audit report submitted under Section 65 of the OGST Act, which was not completed within the stipulated time period of three months as per Section 65(4) - Retrospective application of amendments to Section 17(5)(d) of the OGST Act – HELD - The amendments to Section 17(5)(d) of the OGST Act were made ... [Read more]

GST - Legality of Show-Cause Notice, Amendment to Section 17(5)(d) of the OGST Act, 2017 - Petitioners argued that the SCN was not sustainable due to amendments made to Section 17(5)(d) of the OGST Act, 2017 which came into force after the issuance of the SCN. The Petitioners also contended that the SCN was issued based on an audit report submitted under Section 65 of the OGST Act, which was not completed within the stipulated time period of three months as per Section 65(4) - Retrospective application of amendments to Section 17(5)(d) of the OGST Act – HELD - The amendments to Section 17(5)(d) of the OGST Act were made by the Odisha Goods and Services Tax (Amendment) Act, 2025, which came into force after the issuance of the SCN. The transactions pertaining to April 2021 to March 2022 could not be questioned by issuing the SCN dated 8th August 2025 in order to apply the amendments, as the amendments were not in force at the time of issuance of the SCN. The issue of retrospectivity of the amendments raised by the Petitioners is a pertinent question that needs to be considered – The respondents are restrained from proceeding to recover the demand raised in the order passed under Section 73 of the OGST Act until the next date – Ordered accordingly - Compliance with time limit for completion of audit under Section 65 of the OGST Act – HELD - The audit was commenced on 27th January 2025 and completed on 2nd July 2025, which was beyond the stipulated period of three months from the date of commencement of the audit as per Section 65(4) of the OGST Act. This is a pertinent aspect to be considered, as the adjudication proceeding may be vitiated if the audit was not completed within the prescribed time limit. [Read less]

Customs - Import of coral goods, undervaluation, misdeclaration - Department enhanced the value of the goods, alleging undervaluation and misdeclaration - Whether the department was justified in confirming the demand for differential duty based on investigations carried out for a different consignment – HELD - Department cannot confirm a demand solely on the basis of extrapolation from investigations carried out for a different consignment or on the presumption that the same modus operandi would have been followed for all imports. Each import is an assessment by itself and the transaction value cannot be rejected merely ... [Read more]

Customs - Import of coral goods, undervaluation, misdeclaration - Department enhanced the value of the goods, alleging undervaluation and misdeclaration - Whether the department was justified in confirming the demand for differential duty based on investigations carried out for a different consignment – HELD - Department cannot confirm a demand solely on the basis of extrapolation from investigations carried out for a different consignment or on the presumption that the same modus operandi would have been followed for all imports. Each import is an assessment by itself and the transaction value cannot be rejected merely by projections and extrapolations - The department had failed to provide any direct or material evidence to substantiate the allegations of misdeclaration and undervaluation with respect to the subject bill of entry – Further, the department had not adequately rebutted the documentary evidence, including the invoice and declarations provided by the appellant. The impugned order is set aside and the appeal is allowed [Read less]

Customs – Rejection of assessable value and invocation of extended period of limitation under Section 28(1) of the Customs Act, 1962 - The goods were cleared by the proper officer after examination and accepting the value declared by the appellant. After around three years Dept issued show cause notice proposing to reject the assessable value and enhance it under the Customs Valuation Rules - Whether the extended period of limitation could have been invoked by the department in the present case – HELD - Mere undervaluation of goods cannot be a ground to invoke the extended period of limitation unless the Department bri... [Read more]

Customs – Rejection of assessable value and invocation of extended period of limitation under Section 28(1) of the Customs Act, 1962 - The goods were cleared by the proper officer after examination and accepting the value declared by the appellant. After around three years Dept issued show cause notice proposing to reject the assessable value and enhance it under the Customs Valuation Rules - Whether the extended period of limitation could have been invoked by the department in the present case – HELD - Mere undervaluation of goods cannot be a ground to invoke the extended period of limitation unless the Department brings on record relevant material to show that the undervaluation was with an intent to evade payment of duty - The finding recorded by the Commissioner to the effect that the appellant after having made up his mind of paying duty backed off is based to the statement made by the appellant under section 108 of the Customs Act. This statement of the appellant cannot be considered as relevant in view of the decision of this Tribunal in the case of Surya Wires Pvt. Ltd. Vs. Principal Commissioner of CGST, Raipur - The extended period of limitation could not have been invoked by the department in the present case as the department failed to establish that the appellant had any intention to evade payment of duty – the impugned order is set aside and the appeal is allowed [Read less]

U.P. Value Added Tax Act, 2008 - Input Tax Credit on goods purchased outside the State using DEPB Scrips - Whether the Tribunal was legally justified in allowing the ITC claim of the dealer-Respondent on the usage of DEPB Scrips license while making Custom duty payments on the imported goods – HELD - The ITC claim of the Respondent cannot be allowed as the goods purchased using the DEPB Scrips license were not used within the State of Uttar Pradesh. Under Section 13(1)(a) of the UPVAT Act, the benefit of ITC can only be granted if the goods are purchased within the State of Uttar Pradesh and used within the State – Fur... [Read more]

U.P. Value Added Tax Act, 2008 - Input Tax Credit on goods purchased outside the State using DEPB Scrips - Whether the Tribunal was legally justified in allowing the ITC claim of the dealer-Respondent on the usage of DEPB Scrips license while making Custom duty payments on the imported goods – HELD - The ITC claim of the Respondent cannot be allowed as the goods purchased using the DEPB Scrips license were not used within the State of Uttar Pradesh. Under Section 13(1)(a) of the UPVAT Act, the benefit of ITC can only be granted if the goods are purchased within the State of Uttar Pradesh and used within the State – Further, the provisions of the Delhi VAT Act, relied upon by the Tribunal, are different from those of Uttar Pradesh, and hence the judgment of the Delhi High Court is not applicable to the present case. The benefit of ITC can be granted only when the goods are manufactured, purchased, and used within the State of Uttar Pradesh, which was not the case here - The impugned order of the Tribunal is quashed and the revision filed by the Dept is allowed [Read less]

Service Tax – Applicable rate of tax on Dredging services, eligibility to Cenvat credit on the inputs used for repair of dredgers - Department sought to apply the higher service tax rate of 12% from 18.04.2006 even though the services were rendered prior to that date - Whether the applicable service tax rate should be 10% or 12% for services rendered prior to 18.04.2006 – HELD - The taxable event for service tax is the rendition of service, not the date of invoice or payment receipt. Since the services were rendered prior to 18.04.2006, the applicable rate should be 10% and not 12% - the appellants are required to pay ... [Read more]

Service Tax – Applicable rate of tax on Dredging services, eligibility to Cenvat credit on the inputs used for repair of dredgers - Department sought to apply the higher service tax rate of 12% from 18.04.2006 even though the services were rendered prior to that date - Whether the applicable service tax rate should be 10% or 12% for services rendered prior to 18.04.2006 – HELD - The taxable event for service tax is the rendition of service, not the date of invoice or payment receipt. Since the services were rendered prior to 18.04.2006, the applicable rate should be 10% and not 12% - the appellants are required to pay only @ 10% and not @ 12% in as much as the taxable event has occurred prior to the date of enhancement of rate – As for Cenvat credit, goods used for the efficient functioning of a capital goods (here, the dredgers) can be considered as inputs eligible for Cenvat credit, even though they may also be capital goods. Therefore, the appellant is eligible for Cenvat credit on the inputs used for dredger repairs - Since the goods are treated as inputs and not capital goods, the restriction on 50% credit in the first year would not apply. The appellant was eligible for 100% Cenvat credit on these goods - The appeal is partially allowed by setting aside the demand related to service tax rate and Cenvat credit eligibility, but upholding the demand for interest on credit reversal – The appeal is partly allowed [Read less]

Andhra Pradesh VAT Act, 2005 – Levy of penalty under Section 55(2) of AP VAT Act for the period June 2014 to June 2016 on the ground of bill trading by producing false tax invoices and way bills – HELD - The authorities have thoroughly verified the transactions of the petitioner from the concerned territorial authorities and found that the petitioner is involved in bill trading by issuing false invoices to enable its purchasers to claim Input Tax Credit. The petitioner failed to offer any explanation regarding the use of the same vehicle by another firm for transportation of goods, which clearly indicates that there wa... [Read more]

Andhra Pradesh VAT Act, 2005 – Levy of penalty under Section 55(2) of AP VAT Act for the period June 2014 to June 2016 on the ground of bill trading by producing false tax invoices and way bills – HELD - The authorities have thoroughly verified the transactions of the petitioner from the concerned territorial authorities and found that the petitioner is involved in bill trading by issuing false invoices to enable its purchasers to claim Input Tax Credit. The petitioner failed to offer any explanation regarding the use of the same vehicle by another firm for transportation of goods, which clearly indicates that there was no actual movement of goods. Further, the petitioner camouflaged with the authorities by involving in bill trading, without actual movement of goods. The cross-verification reports sent by the respective territorial authorities also revealed that the transactions of the petitioner were bogus. Hence, the penalty order invoking Section 55(2) of APVAT Act is legal and valid - The writ petition is dismissed [Read less]

Service Tax - Demand on the basis of difference in the figures as shown in the ST-3 returns and the data received from the Income Tax Department on the basis of Form-26AS / TDS Statements - Whether the extended period of limitation could be invoked to raise the service tax demand – HELD - under the self-assessment regime, the primary responsibility to ensure correct payment of service tax rests on the department's officers, who are required to scrutinize the returns and make a best judgment assessment if necessary. If the officer fails to do so and any tax escapes assessment, the responsibility lies with the officer, not... [Read more]

Service Tax - Demand on the basis of difference in the figures as shown in the ST-3 returns and the data received from the Income Tax Department on the basis of Form-26AS / TDS Statements - Whether the extended period of limitation could be invoked to raise the service tax demand – HELD - under the self-assessment regime, the primary responsibility to ensure correct payment of service tax rests on the department's officers, who are required to scrutinize the returns and make a best judgment assessment if necessary. If the officer fails to do so and any tax escapes assessment, the responsibility lies with the officer, not the assessee. Intentional and willful suppression of facts cannot be presumed merely because the assessee was operating under self-assessment or did not agree with the audit findings. The Tribunal concluded that the demand of service tax could not have been raised by invoking the extended period of limitation - As the demand itself is being set aside, the penalties imposed under Section 78 as well as under Section 77 are also set aside – The appeal is allowed [Read less]

Service Tax - Transfer of land development rights, Exclusion from definition of 'service' - Appellants are land owning companies who entered into memorandums of understanding (MOUs) with M/s Omax Limited. Under the MOUs, the appellants acquired land in their own names for and on behalf of Omax, and Omax was granted the rights to develop, construct, and market the projects - Demanding service tax on the transfer of land development rights, treating it as a 'deemed service' under the Finance Act, 1994 - Whether the appellant is liable to service of transfer of land development rights – HELD - The transfer of land developme... [Read more]

Service Tax - Transfer of land development rights, Exclusion from definition of 'service' - Appellants are land owning companies who entered into memorandums of understanding (MOUs) with M/s Omax Limited. Under the MOUs, the appellants acquired land in their own names for and on behalf of Omax, and Omax was granted the rights to develop, construct, and market the projects - Demanding service tax on the transfer of land development rights, treating it as a 'deemed service' under the Finance Act, 1994 - Whether the appellant is liable to service of transfer of land development rights – HELD - The transfer of land development rights does not amount to rendering of services under the head of 'development rights'. The transfer of development rights is immovable property and, therefore, stands excluded from the definition of 'service' under Section 65B(44) of the Finance Act, 1994 - the issue of transfer of development rights does not amount to rendering of services under the head of “development rights” is squarely covered in favour of the assessee in the earlier decisions. The Revenue argument that the present case is distinguishable from the earlier decisions is rejected on the basis that the SCNs were issued to the landowning companies (the appellants) and not to the developer (Omax). This distinction does not alter the basic principles enunciated in the earlier decisions, which is that the transfer of land development rights does not fall within the ambit of service tax - the impugned orders are set-aside and the appeals are allowed [Read less]

Central Excise - Cenvat credit on tippers, hydraulic cabs and hydraulic boomers; Service of site formation and clearance - Appellant availed Cenvat credit on tippers, hydraulic cabs and hydraulic boomers used for providing output service of "Site Formation & Clearance, Excavation and Earth Movers Service"- Department objected to the credit availed prior to 01.10.2010, as these items were not covered under the definition of "capital goods" until the amendment made by Notification No. 25/2010-C.E. (N.T.) dated 22.06.2010 - Department invoked the extended period of limitation on the ground that the irregularity would have rem... [Read more]

Central Excise - Cenvat credit on tippers, hydraulic cabs and hydraulic boomers; Service of site formation and clearance - Appellant availed Cenvat credit on tippers, hydraulic cabs and hydraulic boomers used for providing output service of "Site Formation & Clearance, Excavation and Earth Movers Service"- Department objected to the credit availed prior to 01.10.2010, as these items were not covered under the definition of "capital goods" until the amendment made by Notification No. 25/2010-C.E. (N.T.) dated 22.06.2010 - Department invoked the extended period of limitation on the ground that the irregularity would have remained undetected if the audit had not pointed it out – HELD - The extended period of limitation cannot be invoked merely because the audit pointed out the irregularity. The fact that the audit detected the wrong availment of Cenvat credit cannot be the ground to invoke the extended period of limitation – Further, the tippers, hydraulic cabs and hydraulic boomers were used for providing the output service of "Site Formation & Clearance, Excavation and Earth Movers Service" by the appellant. Even though the items were not covered in the specific output services till 22.06.2010, the benefit of bona fide belief should be provided - The matter is remanded to the extent of seeking reversal, if any, for the period that survives in the ordinary period of limitation. No penalty shall be imposed in view of the finding of bona fide belief. The demand of interest shall also be limited to the period that survives in the ordinary period of limitation – The appeal is allowed [Read less]