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Power to confiscate goods and impose redemption fine u/s 130 is not limited to only physically available goods, authorities can exercise the power of confiscation and imposition of redemption fine even when the goods are not physically available.

Customs - Reassessment of Bills of Entry, Concessional rate of Customs Duty (CVD), Notification No. 12/2012-CE – Appellant imported mobile phones and discharged CVD at a concessional rate of 6% in accordance with Sl. No. 263A(i) of Notification No. 12/2012-CE. The appellant later claimed that they were entitled to the benefit of a lower concessional rate of 1% CVD under Sl. No. 263A(ii) of the same notification - Whether the appellant is entitled to the benefit of the lower concessional rate of 1% CVD under Sl. No. 263A(ii) of Notification No. 12/2012-CE and entitled to reassessment of the Bills of Entry - HELD - the app... [Read more]

Customs - Reassessment of Bills of Entry, Concessional rate of Customs Duty (CVD), Notification No. 12/2012-CE – Appellant imported mobile phones and discharged CVD at a concessional rate of 6% in accordance with Sl. No. 263A(i) of Notification No. 12/2012-CE. The appellant later claimed that they were entitled to the benefit of a lower concessional rate of 1% CVD under Sl. No. 263A(ii) of the same notification - Whether the appellant is entitled to the benefit of the lower concessional rate of 1% CVD under Sl. No. 263A(ii) of Notification No. 12/2012-CE and entitled to reassessment of the Bills of Entry - HELD - the appellant was justified in requesting the reassessment of the self-assessed Bills of Entry to claim the concessional rate of 1% CVD in light of the Supreme Court's judgment in the SRF Limited case. The Hon'ble Supreme Court in the case of ITC Ltd. v. CCE had laid down that to claim a refund of excess duty paid, the order of assessment or self-assessment needs to be modified in accordance with law, which includes filing an appeal under Section 128 of the Customs Act, 1962 – Further, the Tribunal had allowed the benefit of the concessional notification in the appellant's own cases and various Customs Commissionerates had also sanctioned refunds after allowing the reassessment of the Bills of Entry – The impugned order is set aside and matter is remanded to the adjudicating authority to reassess the Bills of Entry and allow the benefit of the concessional rate of 1% CVD under Sl. No. 263A(ii) of Notification No. 12/2012-CE – The appeal is allowed by remand [Read less]

Central Excise - Duty demand against non-submission of re-warehousing certificate, EOUs and SEZ clearance - Whether the duty demand against the Appellant for non-submission of re-warehousing certificates is valid – HELD - entire section/unit dealing with 100% EOU/SEZ matters was closed by the Customs department and the jurisdiction of the Commissioner had travelled into the hands of multiple Commissioners for which no document was traceable from the department side - Neither the Department had any right to raise a demand in the absence of any documentary proof to substantiate such demand, nor the appellant could be absol... [Read more]

Central Excise - Duty demand against non-submission of re-warehousing certificate, EOUs and SEZ clearance - Whether the duty demand against the Appellant for non-submission of re-warehousing certificates is valid – HELD - entire section/unit dealing with 100% EOU/SEZ matters was closed by the Customs department and the jurisdiction of the Commissioner had travelled into the hands of multiple Commissioners for which no document was traceable from the department side - Neither the Department had any right to raise a demand in the absence of any documentary proof to substantiate such demand, nor the appellant could be absolved of its liability since it refused to cooperate in the adjudication process by not furnishing proof of delivery of goods to the customers. However, as per the specific direction given in its earlier order, the Officer at the consignee's end would be in a better position to confirm the receipt of goods or otherwise from their own records. The consignee had not been examined or contacted to furnish the required proof of receipt of goods by them, which would have met the requirement of para 3b of Circular No. 579/16/2001-CX dated 26.06.2001. Hence, the demand for non-furnishing of proof of re-warehousing certificate alone cannot form the basis to confirm the said demand – The impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of crude degummed soyabean oil, Agricultural product, Validity of Circular No.10/2004-Cus. dated 30.01.2004 – Appellant was granted a duty-free credit entitlement (DFCE) certificate under the Export-Import policy to import goods with a nexus to its exported products. The appellant imported crude degummed soyabean oil and claimed duty exemption under the DFCE scheme -Denial of exemption on the ground that crude degummed soyabean oil was an agricultural product and excluded from the DFCE Scheme - Whether crude degummed soyabean oil imported by the appellant is an agricultural product, and therefore exclu... [Read more]

Customs – Import of crude degummed soyabean oil, Agricultural product, Validity of Circular No.10/2004-Cus. dated 30.01.2004 – Appellant was granted a duty-free credit entitlement (DFCE) certificate under the Export-Import policy to import goods with a nexus to its exported products. The appellant imported crude degummed soyabean oil and claimed duty exemption under the DFCE scheme -Denial of exemption on the ground that crude degummed soyabean oil was an agricultural product and excluded from the DFCE Scheme - Whether crude degummed soyabean oil imported by the appellant is an agricultural product, and therefore excluded from the duty exemption under the DFCE scheme - HELD - The process undertaken by the appellant to convert soyabean into crude degummed soyabean oil amounts to manufacturing, as it results in a new and distinct commodity with a different name, character, and use from the original soyabean. Applying the common parlance test, crude degummed soyabean oil cannot be considered an agricultural product, as it is a distinct marketable commodity different from the primary agricultural product, soyabean - The test ‘manufacturing’ is not whether the end product is a consumable product or not. The High Court clearly erred in holding that because crude degummed soyabean oil was not further refined, therefore, was not a consumable item, it did not have a distinct identity and crude degummed soyabean oil is also an agricultural product - Crude degummed soyabean oil is a product different and distinct in character and identity from soyabean. The process carried out by the appellant using soyabean as raw material and ending in the product crude degummed soyabean oil is manufacturing. Crude degummed soyabean oil is not an agricultural product. Therefore, appellant would be entitled to the benefits under notification No.53/2003 dated 01.04.2003 – The impugned judgement by the High Court is set aside and the appeal is allowed - Validity of Circular No.10/2004-Cus. dated 30.01.2004 – HELD - The Circular No.10/2004-Cus. dated 30.01.2004 sought to expand the exclusion of "agricultural and dairy products" under the statutory notification to include all products derived from agricultural or dairy origin - In contra-distinction to the exclusion of agricultural and dairy products from the goods exempted from paying customs duty etc. on import as stated in the statutory notification No.53/2003-Cus, the circular has expanded the meaning of the expression ‘other than agricultural and dairy products’ to mean ‘all types of products derived from agriculture/dairy origin including crude edible oil’. A Circular cannot restrict or whittle down the benefits granted under a statutory notification - The Circular No.10/2004-Cus dated 30.01.2004 insofar it expands the exclusionary clause in the statutory notification No.53/2003 dated 01.04.2003 would have no legal consequence. [Read less]

When the petitioner receives goods from the sole supplier at a fixed price and supplies the goods to PDS at a price fixed by the State Govt, there can be no difficulty to Dept in verifying the genuineness of the transactions with respect to ITC.

Customs - Duty Exemption Pass Book Scheme (DEPB) scrips, Forged documents, duty liability – Appellant imported goods under the DEPB Scheme and availed customs duty exemption. The DEPB scrips used by the appellant were later found to have been obtained by the original holders on the basis of forged documents - Whether the appellant, being a bona fide purchaser of the DEPB scrips, can be held liable to pay Customs duty when the scrips were later found to have been obtained by fraud by the original holders - HELD - The Supreme Court and various High Courts have held that a license/scrip obtained by fraud is not void ab-init... [Read more]

Customs - Duty Exemption Pass Book Scheme (DEPB) scrips, Forged documents, duty liability – Appellant imported goods under the DEPB Scheme and availed customs duty exemption. The DEPB scrips used by the appellant were later found to have been obtained by the original holders on the basis of forged documents - Whether the appellant, being a bona fide purchaser of the DEPB scrips, can be held liable to pay Customs duty when the scrips were later found to have been obtained by fraud by the original holders - HELD - The Supreme Court and various High Courts have held that a license/scrip obtained by fraud is not void ab-initio and is merely voidable. As long as the license/scrip is valid at the time of import, the importer cannot be denied the exemption benefit even if the license/scrip is later cancelled due to fraud by the original holder. The importer, being a bona fide purchaser for value without notice, should not be penalized for the fraud committed by the original holder. The exemption benefit cannot be denied to the appellant merely because the DEPB scrips were later cancelled due to fraud by the original holders, as the scrips were valid at the time of import – The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation under the proviso to Section 28(1) of the Customs Act was properly invoked in the present case. HELD - The show cause notice and the impugned order do not mention any reasons for invoking the extended period of limitation of 5 years under the proviso to Section 28(1). The normal period of limitation under Section 28(1) is 6 months, and the extended period can only be invoked if the short-levy is due to "collusion or any wilful mis-statement or suppression of facts by the importer or the exporter". Since the department failed to properly invoke the extended period, the entire demand confirmed in the impugned order deserves to be set aside. [Read less]

GST – West Bengal AAAR - Classification of Supply, Transfer of Right to Use Goods – Respondent provides air conditioning system, fire sprinkler system, DG sets, electrical installations etc. to various tenants of the properties held by their subsidiaries – Revenue appeal against the ruling of the Advance Ruling Authority which held that the supply of such services would be covered under leasing or rental services (Entry 17(viii)) and attract 18% GST - Whether the supplied items (air conditioners, fire extinguishers etc.) are 'goods' or part of immovable property - HELD - the crux of the issue is whether the subject a... [Read more]

GST – West Bengal AAAR - Classification of Supply, Transfer of Right to Use Goods – Respondent provides air conditioning system, fire sprinkler system, DG sets, electrical installations etc. to various tenants of the properties held by their subsidiaries – Revenue appeal against the ruling of the Advance Ruling Authority which held that the supply of such services would be covered under leasing or rental services (Entry 17(viii)) and attract 18% GST - Whether the supplied items (air conditioners, fire extinguishers etc.) are 'goods' or part of immovable property - HELD - the crux of the issue is whether the subject assets are to be classified as immovable property or as goods - the entire issue depends on the various clauses of the agreement entered into between the concerned parties wherefrom the actual nature of use of the assets concerned is required to be ascertained, i.e. whether they remain to be goods or become a part of an immovable property, which is required to be examined in depth - Without delving into the merit of the case, the impugned Advance Ruling Order is set aside and matter is remanded back to WBAAR for fresh decision after considering all aspects of the matter – Ordered accordingly [Read less]

Service Tax - Refund, Unjust Enrichment – Refund claim of wrongly paid service tax on specified services on which exemption was available under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012 - Whether the appellant is eligible for exemption under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012 as amended, in respect of the input and final product transported to and from the factory - HELD - The Commissioner (Appeals) held that all edible items stated in the show cause notice that qualified for foodstuff and were transported by the appellant are entitled to exemption under Sr. No. 21... [Read more]

Service Tax - Refund, Unjust Enrichment – Refund claim of wrongly paid service tax on specified services on which exemption was available under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012 - Whether the appellant is eligible for exemption under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012 as amended, in respect of the input and final product transported to and from the factory - HELD - The Commissioner (Appeals) held that all edible items stated in the show cause notice that qualified for foodstuff and were transported by the appellant are entitled to exemption under Sr. No. 21 of Notification No. 25/2012 dated 28th June, 2012 as amended, for the period covered under the show cause notice - the finding of the Commissioner that exemption under Sr. No. 21 (d) of Notification No. 25/2012-ST dated 26th June, 2012 as amended must be interpreted in such a way so as to hold that edible items stated in the SCN qualified for foodstuff which were transported by appellant during the period covered under the show cause notice and they are entitled for exemption under Sr. No. 21 of the Notification No. 25/2012 dated 28th June, 2012 as amended. The finding of the learned Commissioner in this regard is liable to be upheld - The appeal is allowed by way of remand - Whether the rejection of the refund claim on the ground of non-submission of documents is justified - HELD - The appellant should have filed the supporting documents in favor of its application for refund, as per the requirement under Section 11B(1) of the Central Excise Act, 1944. The excuse given by the appellant that the record was bulky is not convincing. However, the appellant had submitted sample copies of invoices/bilties to substantiate their claim and had requested the Adjudicating Authority to direct any concerned officer to inspect the said documents. The authorities below did not consider these sample copies of invoices/bilties submitted by the appellant – Matter is remanded the matter back to the Adjudicating Authority to consider the matter afresh, after taking into consideration the sample copies of invoices/bilties submitted by the appellant - the appellant is directed to submit all the original documents or other evidence in support of the refund application, irrespective of the fact that the record would be bulky or there may be a very large number of invoices. [Read less]

Customs - Imports gold/silver dore bars under actual user license (import authorization), Demand of differential customs duty, Assessable value – Appellant imported gold/silver dore bars from various foreign suppliers under actual user license - Demand for differential customs duty on the ground that the assessable value declared was lower than the final invoice value, and metal lease charges and insurance premium were not included in the assessable value – Demand invoking extended period of limitation under Section 28(4) of the Customs Act and penalty under Section 114A on the ground of wilful misstatement or suppress... [Read more]

Customs - Imports gold/silver dore bars under actual user license (import authorization), Demand of differential customs duty, Assessable value – Appellant imported gold/silver dore bars from various foreign suppliers under actual user license - Demand for differential customs duty on the ground that the assessable value declared was lower than the final invoice value, and metal lease charges and insurance premium were not included in the assessable value – Demand invoking extended period of limitation under Section 28(4) of the Customs Act and penalty under Section 114A on the ground of wilful misstatement or suppression of facts – HELD - The extended period of limitation and penalty under Section 114A could not be invoked as there was no evidence of wilful misstatement or suppression of facts by the appellant. The appellant had paid excess duty in some cases where the gold content in the final invoice was less than that mentioned in the finalized Bills of Entry, indicating that there was no motive to suppress the final invoice value - The appellant had also claimed refund of excess duty paid, which further negated any intention to evade duty - the appeal is partly allowed by setting aside the invocation of the extended period of limitation and imposition of penalty under Section 114A, but upholding the inclusion of metal lease charges and insurance premium in the assessable value – The appeal is partly allowed - Whether the metal lease charges were correctly included in the assessable value – HELD - As per the agreements, the title of the imported goods remained with the foreign suppliers, and the appellant was treated as a bailee. The metal lease charges were paid as a condition of sale and not as interest on deferred payment, and hence, were rightly included in the assessable value - In view of the specific terms of the Agreement and the stand taken by the appellant before the RBI, it is clear that metal lease charges were not in the nature of interest. The Principal Commissioner, therefore, was justified in upholding the demand of differential duty on metal lease charges - Whether the insurance premium was correctly included in the assessable value – HELD - As per the agreements, the appellant was required to get the goods insured and pay the insurance premium as a bailee of the goods, and hence, the insurance premium was a "condition of sale" and rightly included in the assessable value under the Customs Valuation Rules. This finding recorded by the Principal Commissioner is based on the Agreement and does not suffer from any illegality as the appellant was required to get the goods insured and pay insurance premium in terms of the Agreement as a bailee of the goods. [Read less]

Central Excise – Clearance of cement bags, Non-trade sale, Retail Sale Price, Industrial/Institutional Consumers, Packaged vs Unpackaged Goods – Appellants were clearing cement to both trade parties (retail consumers, dealers, etc.) and non-trade parties (industrial/institutional consumers) - Department alleged that in case of non-trade sale, the appellants had wrongly availed the benefit of Sr. No. 1A of the Notification No. 4/2007-CE dated 1.3.2007 and thus had short paid central excise duty, whereas they should have paid Central Excise duty under Sr. No. 1C of the said Notification for all non-trade sales - Whether ... [Read more]

Central Excise – Clearance of cement bags, Non-trade sale, Retail Sale Price, Industrial/Institutional Consumers, Packaged vs Unpackaged Goods – Appellants were clearing cement to both trade parties (retail consumers, dealers, etc.) and non-trade parties (industrial/institutional consumers) - Department alleged that in case of non-trade sale, the appellants had wrongly availed the benefit of Sr. No. 1A of the Notification No. 4/2007-CE dated 1.3.2007 and thus had short paid central excise duty, whereas they should have paid Central Excise duty under Sr. No. 1C of the said Notification for all non-trade sales - Whether the appellants have rightly claimed the benefit of Entry No. 1A of the Notification No. 4/2007 dated 01.03.2007 as amended - HELD - Once the cement was cleared in packaged form, irrespective of whether it was sold to trade parties or non-trade (industrial/institutional) parties, the benefit of Sr. No. 1A of the Notification No. 4/2007-CE would be applicable. The Notification did not make any distinction between trade and non-trade parties and the key criteria was whether the goods were cleared in packaged or unpackaged form. Since the cement was cleared in packaged form with RSP printed on the bags, the benefit of Sr. No. 1A was rightly claimed by the appellants, even if the goods were ultimately sold to industrial/institutional consumers – Further, the mere fact that RSP was affixed on the packaged goods did not make the clearance a "retail sale" if the goods were not intended for the ultimate consumer - Since the appellant has cleared cement in packaged form i.e. in the bags of 50 kg each with RSP printing thereupon to the institute DSD&G, the appellant is entitled for the benefit of Entry No. 1A of the said Notification No. 4/2007 dated 1.3.2007 - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - CENVAT credit on capital goods, Captive power plant, items of Iron and Steel - Appellant availed CENVAT credit on various inputs, capital goods, and input services used in the installation and operation of a captive power plant set up within its factory premises – Denial of CENVAT credit on the grounds that: the appellant was not the manufacturer of the captive power plant and hence not entitled to the credit, the credit on "structural items of Iron and Steel" used for constructing the supporting structure of the chimney was not eligible, and the credit on capital goods and inputs transferred to the capt... [Read more]

Central Excise - CENVAT credit on capital goods, Captive power plant, items of Iron and Steel - Appellant availed CENVAT credit on various inputs, capital goods, and input services used in the installation and operation of a captive power plant set up within its factory premises – Denial of CENVAT credit on the grounds that: the appellant was not the manufacturer of the captive power plant and hence not entitled to the credit, the credit on "structural items of Iron and Steel" used for constructing the supporting structure of the chimney was not eligible, and the credit on capital goods and inputs transferred to the captive power plant unit, which was maintained as a separate unit was required to be reversed under rule 3(4)/3(5) of the CENVAT Credit Rules, 2004 - Whether the appellant was eligible to avail CENVAT credit on the parts, components and accessories used in the installation of the captive power plant by the contractor – HELD - The ownership of the goods is irrelevant for the purpose of CENVAT credit eligibility. The appellant being the manufacturer of the final products, was entitled to the credit even though the actual installation was done by the contractor - The finding recorded by the Commissioner that at the time of receipt of “capital goods” in the factory for use in installation of the Captive Power Plant, it is the Contractor who is the real manufacturer of the said plant and would eligible to take credit and not the appellant is, therefore, not correct - The Tribunal, relying on its earlier decisions in Hindustan Zinc Ltd. and Gujarat Ambuja Cements Ltd., held that the appellant is eligible to avail the CENVAT credit on the parts, components and accessories used in the installation of the captive power plant by the contractor - Once the demand of CENVAT credit is not sustainable, the recovery of interest does not arise – The impugned order is set aside and the appeal is allowed - Whether the "structural items of Iron and Steel" used for constructing the supporting structure of the chimney would qualify as "accessories" eligible for CENVAT credit as capital goods – HELD - the "structural items of Iron and Steel" used for fabrication and installation of the chimney in the captive power plant were an integral part of the capital goods and eligible for CENVAT credit. These items were necessary for the proper and smooth functioning of the capital goods (chimney) and hence, qualified as "accessories" under the CENVAT Credit Rules - Whether the CENVAT credit on capital goods and inputs transferred to the captive power plant unit, which was maintained as a separate unit for compliance with section 80IA of the Income Tax Act, was required to be reversed under rule 3(4)/3(5) of the CCR, 2004 – HELD - The maintenance of separate books of accounts for the captive power plant unit was only for the purpose of compliance with the statutory requirements under section 80IA of the Income Tax Act, and did not mean that it was a separate business entity. The captive power plant was located within the factory premises of the appellant and all the inputs and capital goods were received and consumed within the registered premises. Therefore, the provisions of rule 3(4)/3(5) for reversal of CENVAT credit on removal of goods were not applicable. [Read less]

Service Tax – Appeal, Computation of limitation period, Condonation of delay – Appeal against Order-in-Original - Commissioner (Appeals) rejected the appeal as being barred by limitation. Aggrieved, the petitioner filed a writ petition before the High Court - Whether the Commissioner (Appeals) was correct in rejecting the appeal on the ground that it was filed beyond the limitation period, including the condonable period of one month under the proviso to Section 85(3A) of the Finance Act, 1994 – HELD - As per Section 12(1) of the Limitation Act, 1963, the day from which the limitation period is to be reckoned must be... [Read more]

Service Tax – Appeal, Computation of limitation period, Condonation of delay – Appeal against Order-in-Original - Commissioner (Appeals) rejected the appeal as being barred by limitation. Aggrieved, the petitioner filed a writ petition before the High Court - Whether the Commissioner (Appeals) was correct in rejecting the appeal on the ground that it was filed beyond the limitation period, including the condonable period of one month under the proviso to Section 85(3A) of the Finance Act, 1994 – HELD - As per Section 12(1) of the Limitation Act, 1963, the day from which the limitation period is to be reckoned must be excluded. Therefore, the period of limitation would commence from 13.04.2024, the day after the Order-in-Original was served on the petitioner - under the proviso to Section 85(3A) of the Finance Act, 1994, the period of limitation for filing the appeal is two months, and the Appellate Authority has the power to condone the delay for a further period of one month. Thus, the total period within which the appeal could have been filed was three months from 13.04.2024, i.e., up to 12.07.2024. Since the appeal was filed on 12.07.2024, it was within the condonable period - the order of the Commissioner (Appeals) is set aside and matter is remitted the matter back to the Appellate Authority to exercise its discretion under the proviso to Section 85(3A) of the Finance Act, 1994 and adjudicate the matter on the issue of limitation afresh - The writ petition is allowed [Read less]

Central Excise - Cenvat Credit, Rebate, Limitation Period, Extended Period of Limitation - As per Notification No. 16/2008 (NT) dated 27.03.2008, the appellant was eligible for refund at the rate of 39% of the Gross Duty paid. The rebate claims filed by the appellant were sanctioned by the proper officer, but the payment of rebate was restricted to the extent of FOB value, and the balance amount was ordered to be credited to the appellant's Cenvat Credit account - Whether the appellant was justified in delaying the availment of Cenvat Credit and taking it in March 2010 after the exemption period had ended on 27.03.2010 –... [Read more]

Central Excise - Cenvat Credit, Rebate, Limitation Period, Extended Period of Limitation - As per Notification No. 16/2008 (NT) dated 27.03.2008, the appellant was eligible for refund at the rate of 39% of the Gross Duty paid. The rebate claims filed by the appellant were sanctioned by the proper officer, but the payment of rebate was restricted to the extent of FOB value, and the balance amount was ordered to be credited to the appellant's Cenvat Credit account - Whether the appellant was justified in delaying the availment of Cenvat Credit and taking it in March 2010 after the exemption period had ended on 27.03.2010 – HELD - The appellant had challenged the rebate orders first at the Commissioner (Appeals) level and then before the Joint Secretary to the Government of India in a revision application. While the decision in the revision application was pending, the appellant decided to take the Cenvat Credit in March 2010 due to financial problems. The Joint Secretary to the Government of India had set aside the impugned orders and remanded the case back to the original authority with a direction that if any excess duty was paid, the same should be returned to the party in the manner in which it was paid. The entire rebate amount should have been paid by the rebate sanctioning authority in the same mode of payment of Excise Duty – The appeal is allowed - Whether the extended period of limitation was correctly invoked by the department to issue the show cause notice – HELD - The Cenvat Credit taken by the appellant was reflected in their respective ER-1 returns, which were filed regularly with the department. The argument that the issue came to light only during the audit of the records of the appellant was not convincing, as the department had access to the ER-1 returns. The Tribunal held that the show cause notice was issued beyond the normal period of time, and the grounds taken for invoking the extended period of limitation were not sustainable. The Tribunal concluded that the appeal succeeded on both the grounds of merit and limitation. [Read less]

Andhra Pradesh VAT Act, 2005 – Classification of Fitness Equipment - Whether the gym equipment sold by the petitioner, such as weight lifting equipment, treadmills, dumbbells, rotators and fit-kit exercisers, can be classified as "sports goods" under Entry 60 of Schedule IV of the AP VAT Act, attracting a concessional tax rate of 5% or under unspecified goods – HELD - The weight lifting equipment is directly connected to the sport of weight lifting and would qualify as sports goods under Entry 60 of Schedule IV of the APVAT Act - As for the other fitness equipment like treadmills, dumbbells, rotators and fit-kit exerci... [Read more]

Andhra Pradesh VAT Act, 2005 – Classification of Fitness Equipment - Whether the gym equipment sold by the petitioner, such as weight lifting equipment, treadmills, dumbbells, rotators and fit-kit exercisers, can be classified as "sports goods" under Entry 60 of Schedule IV of the AP VAT Act, attracting a concessional tax rate of 5% or under unspecified goods – HELD - The weight lifting equipment is directly connected to the sport of weight lifting and would qualify as sports goods under Entry 60 of Schedule IV of the APVAT Act - As for the other fitness equipment like treadmills, dumbbells, rotators and fit-kit exercisers, while they may not be associated with any one specific sport, they are necessary for maintaining physical fitness, which is essential for participation in any physical sport – The fitness equipment and other exercise equipment are also to be considered as "sports goods" under Entry 60 - the assessment orders are set aside and matter remanded back to the assessing officer to pass fresh orders treating the goods in question as falling within Entry 60 of Schedule IV of the APVAT Act, attracting tax rate of 5% - The writ petitions are allowed [Read less]

Service Tax - Exemption, Government Authority, Extended Period of Limitation – Petitioner was engaged in the construction of bridges and roads in the State of Bihar – Demand of service tax on the 'centage' and other charges collected from the contractors along with penalty and interest - Whether BRPNNL is a "Government", "Local Authority" or "Governmental Authority" within the meaning of the Finance Act, 1994 and Mega Exemption Notification and thus entitled to exemption from payment of service tax – HELD – The petitioner being a company incorporated under the Companies Act, 1956, does not fall within the definitio... [Read more]

Service Tax - Exemption, Government Authority, Extended Period of Limitation – Petitioner was engaged in the construction of bridges and roads in the State of Bihar – Demand of service tax on the 'centage' and other charges collected from the contractors along with penalty and interest - Whether BRPNNL is a "Government", "Local Authority" or "Governmental Authority" within the meaning of the Finance Act, 1994 and Mega Exemption Notification and thus entitled to exemption from payment of service tax – HELD – The petitioner being a company incorporated under the Companies Act, 1956, does not fall within the definition of "Government", "Local Authority" or "Governmental Authority" as per the provisions of the Finance Act, 1994 and the Mega Exemption Notification. The petitioner was not established by an Act of Parliament or State Legislature and the condition of 90% or more participation by way of equity or control by the Government to carry out functions entrusted to a Municipality under Article 243W of the Constitution was also not fulfilled – Further, unless the petitioner is able to demonstrate by cogent evidence that it is engaged in providing services by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of a road or bridge for use by the general public, it would not be possible to hold that its activity would be exempted under clause 13(a) of the Mega Exemption Notification - the ‘centage’, which is received for service charge/technical assistance or for any other purpose by the petitioner does not fall under the Mega Exemption Notification, as amended and also under the negative list under Section 66D. Moreover, the Circular No.192/02/2016-Service Tax dated 13.04.2016 states that even the government/local authority is liable to pay service tax, if they received fee, consideration for performing such activities – The petitioner cannot claim exemption from payment of service tax under the Mega Exemption Notification – The petitioner is liable to pay the service tax, interest and penalty as determined by the respondent authorities in the impugned order. However, the petitioner is granted the opportunity to prefer a statutory appeal under Section 86 of the Finance Act, 1994, if so advised - The writ application is disposed of - Whether the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 was rightly invoked by the respondent authorities – HELD - The High Court upheld the invocation of the extended period of limitation by the respondent authorities. The Court noted that BRPNNL had not assessed its service tax liability and did not deposit the same on the relevant dates. The matter came to the knowledge of the department only when an investigation was initiated based on third-party data. The Court found that BRPNNL had willfully suppressed the facts of its taxable value from the department with an intention to evade the payment of service tax, by not filing the statutory ST-3 returns during the relevant period. Therefore, the extended period of limitation under the proviso to Section 73(1) was rightly invoked. [Read less]

Service Tax - Business Auxiliary Services, Best Judgment Assessment – Appellant had entered into an agreement with M/s World Resort Ltd. (WRL) to carry out promotional activities for the marketing and sales of Hotel - Whether the services rendered by the Appellant are covered under the taxable category of 'Business Auxiliary Services' – HELD - the services rendered by the Appellant, which included inserting advertisements, placing hoardings, contacting people over the telephone, and informing the public about the hotel facilities, are fully covered under the taxable category of 'Business Auxiliary Services' as defined ... [Read more]

Service Tax - Business Auxiliary Services, Best Judgment Assessment – Appellant had entered into an agreement with M/s World Resort Ltd. (WRL) to carry out promotional activities for the marketing and sales of Hotel - Whether the services rendered by the Appellant are covered under the taxable category of 'Business Auxiliary Services' – HELD - the services rendered by the Appellant, which included inserting advertisements, placing hoardings, contacting people over the telephone, and informing the public about the hotel facilities, are fully covered under the taxable category of 'Business Auxiliary Services' as defined under Section 65(105)(22b) of the Finance Act, 1994 - with effect from 1.07.2012, Section 66B provided that service tax would be levied at the rate of twelve per cent on the 'value of all the services, other than those specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another. The services provided by the appellant are neither covered under Section 66D of the Act nor fall under any exemption notification, therefore, service tax is leviable on such services under Section 66B of the Act – The impugned order is upheld and the appeal is dismissed - Whether the Department was justified in resorting to the Best Judgment Assessment method under Section 72 of the Finance Act, 1994 for the Financial Year 2014-15 – HELD - the admitted fact is that the Appellant did not submit the copy of the Balance Sheet for the year 2014-15. Consequently, the Department had to resort to Best Judgment method under Section 72 of the Finance Act, 1994 - the Department was justified in resorting to the Best Judgment Assessment method under Section 72 of the Finance Act, 1994 in the absence of any evidence or records submitted by the Appellant for the Financial Year 2014-15. [Read less]

Service Tax – Sale of flats after obtainment of Occupancy Certificate, Reversal of Cenvat credit, Exempted service, Service tax on consideration received towards construction of parking area in Housing project, Works contract service, Declared service under section 66E(e), Retention charges – appellant received consideration from prospective buyers of flats in the housing project who had booked and purchased the flats after obtainment of Partial Occupancy Certificate(s)/ Final Occupancy Certificate - Appellant availed credit on the input services on the construction of these flats which were sold without payment of ser... [Read more]

Service Tax – Sale of flats after obtainment of Occupancy Certificate, Reversal of Cenvat credit, Exempted service, Service tax on consideration received towards construction of parking area in Housing project, Works contract service, Declared service under section 66E(e), Retention charges – appellant received consideration from prospective buyers of flats in the housing project who had booked and purchased the flats after obtainment of Partial Occupancy Certificate(s)/ Final Occupancy Certificate - Appellant availed credit on the input services on the construction of these flats which were sold without payment of service tax - Demand for reversal of Cenvat credit – HELD - The appellant had received consideration from prospective buyers of flats after obtainment of Partial Occupancy Certificate/ Final Occupancy Certificate, on which no service tax was payable as the same was considered as sale of immovable property under Section 65B(44) of the Finance Act, 1994. However, the appellant had availed Cenvat credit on the input services used in construction of these flats – Term ‘service’ as defined in Section 65B(44) of the Finance Act, 1994 w.e.f. 01.07.2012 does not include an activity which constitutes merely a transfer of title in goods or immovable property, by way of sale, gift or in any other manner. Since, the clearance of flats after the receipt of completion certificate are considered to be sale of immovable property, they are not liable to pay service tax. The Explanation (3) introduced under Rule 6 of the Cenvat Credit Rules, 2004 w.e.f. 01.04.2016 only explains that the above clearances under Section 65B(44) are deemed to be exempted services. Even without this Explanation, there is no doubt that the clearances under Section 65B(44) are not liable to service tax in view of the fact that Section 66E clearly held that the flats sold after the receipt of the Completion Certificate are not liable to service tax, hence, the question of availing cenvat credit on such services does not arise - The appellant has to reverse the proportionate credit availed on such flats which have been sold and consideration received on or after receipt of the Completion Certificate – The demand of reversal of Cenvat credit during the period from August 2012 to September 2015 is set aside but the reversal of proportionate credit is upheld. Matter remanded for limited purpose for re-quantification of proportionate credit – All the penalties imposed under Section 77 and 78 are set aside. The appeal is partly allowed - Non-payment of service tax on consideration received towards construction/development of parking area – HELD - The demand of service tax on the consideration received for ‘parking area’ service is accepted by the appellant and only penalty is being disputed. Hence, on merit this amount is confirmed along with interest - Non-payment of service tax on the consideration received towards development costs from M/s Promont Hilltop Private Ltd. as per the Development Agreement – HELD - the agreement between the appellant and M/s Promont Hilltop Private Ltd. was a works contract service and not a mere transfer of development rights - From the Clauses of the Agreement, it is clear that there is no sale of an ongoing concern as claimed by the appellant as there is nothing in the Agreement to deem it to be sale or transfer, instead it establishes the fact that the Agreement is based on sharing of gross proceeds. The actual consideration charged as development costs, which includes construction, marketing and sales of the project, which is in the nature of works contract, hence, the Commissioner after deducting the cost of land has rightly provided 40% abatement. However, the demand is upheld only for the normal period, hence, it is remanded for limited purpose for re-quantification - Non-payment of service tax on compensation received towards cancellation/termination of Joint Development Agreement under section 66E(e) – HELD - The compensation received for termination of JDA is in the nature of liquidated damages and not consideration for any service rendered, hence, not exigible to Service Tax - Non-payment of service tax on 'forfeiture income' on account of cancellation of bookings – HELD - the forfeiture money received from customers on cancellation of bookings was in the nature of liquidated damages and not consideration for any service – Demand on this ground is set aside - Short payment of service tax under 'Interior Design Consultancy Service' – HELD - The demand of short-payment of service tax on the on 'interior design consultancy' service is accepted by the appellant and paid along with interest and only penalty is being disputed hence, on merit these amounts are confirmed along with interest - Non-reversal of proportionate input service credit attributable to retention charges, in respect of the services received from contractors/sub-contractors – Since the appellant had not paid retention charges to the service providers within three months, as envisaged under Rule 4(7) of the CCR, 2004, the Revenue demanded reversal of cenvat credit availed on such input services - HELD - Rule 4(7) during the relevant period is linked with the invoice/bill/challan of input service and not with payment of invoice – Since the appellant had paid the service tax in full to the service providers and the retention of a part of the value was as per the understanding between the parties, the appellant was entitled to the Cenvat credit. Consequently, reversal of proportionate Cenvat credit is set aside. [Read less]

Service Tax - Construction of Residential Complex, Works Contract Service, Renting of Immovable Property, Mutual Fund Agent, Legal Expenses – Demand of service tax on the grounds of short payment of tax on booking of flats, non-payment of tax on booking of commercial property, non-payment of service tax on job receipts, short payment of service tax on rent received, non-payment of service tax on forfeiture of guest house booking amount, non-payment of service tax on commission received, and short payment of service tax under reverse charge mechanism on legal expenses - Whether the demand of service tax under the head 'Co... [Read more]

Service Tax - Construction of Residential Complex, Works Contract Service, Renting of Immovable Property, Mutual Fund Agent, Legal Expenses – Demand of service tax on the grounds of short payment of tax on booking of flats, non-payment of tax on booking of commercial property, non-payment of service tax on job receipts, short payment of service tax on rent received, non-payment of service tax on forfeiture of guest house booking amount, non-payment of service tax on commission received, and short payment of service tax under reverse charge mechanism on legal expenses - Whether the demand of service tax under the head 'Construction of Residential Complex' on the amount of advances received from prospective buyers is sustainable - HELD - For the activity of 'Construction of Residential Complex' to be taxable under service tax, there must be an ongoing construction even after 01.07.2010, when the service was introduced. For projects completed or substantially completed before 01.07.2010, the portion of construction completed before that date would not be taxable. The appellant's reconciliation statement provided in this regard to be satisfactory and the demand is set aside on this ground – The demands confirmed in impugned Order is erroneous and set aside – The appeal is allowed - Whether the demand on construction services provided by the Appellant to M/s Jaypee Cooperative Group Housing Society Ltd. is sustainable – HELD - the Appellant had provided evidence in the form of agreement, WCT deduction certificates, and correspondence to demonstrate that the services provided to M/s Jaypee were in the nature of Works Contract Service, which was not taxable in the earlier period when the work was completed. The Tribunal also noted that the Appellant had deposited the requisite service tax on the amount received in FY 2013-14, and the demand was accordingly set aside - Whether the demand under the head 'Renting of Immovable Property' service is sustainable – HELD – The demand is upheld as the Appellant did not make any submissions or provide any reasoning to dispute this demand - Whether the demand under the head 'Business Auxiliary Service' on the amount received as forfeited guest house booking amount is sustainable – HELD - The Adjudicating Authority had classified the demand under a different category (Mandap keeper service) than the one proposed in the Show Cause Notice (Business Auxiliary Service), which is not permissible under law – Demand is set aside - Whether the demand received by the Appellant as commission from Mutual Fund transactions is exempt under Notification No.25/2012 – HELD - The Exemption Notification does not require the Appellant to have an AMFI/ARN number to be considered a mutual fund agent and avail the exemption. Since the Appellant had received the commission from an asset management company, it was entitled to the benefit of the exemption under Clause 29(c) of the Notification - Whether the demand on alleged short payment of tax on 'legal expenses' under Reverse Charge Mechanism is sustainable – HELD - The Appellant had provided documentary evidence to show that the 'legal expenses' pertained to payments made to entities other than advocates/advocate firms, and hence, would not be taxable under Reverse Charge Mechanism. [Read less]

Customs - Special Warehouse License, Penalty under Section 112(a), Maintainability of Appeal - Appellant filed an application for a special bonded warehouse license under Section 58A of the Customs Act, 1962, which was rejected by the Principal Commissioner of Customs on the ground that the appellant had been previously penalized under Section 112(a) of the Customs Act - Whether the present appeal is maintainable before the CESTAT – HELD - The language of Section 129A(1)(a) of the Customs Act allows an appeal to the Tribunal by any person aggrieved by "any decision or order passed by the Principal Commissioner of Customs... [Read more]

Customs - Special Warehouse License, Penalty under Section 112(a), Maintainability of Appeal - Appellant filed an application for a special bonded warehouse license under Section 58A of the Customs Act, 1962, which was rejected by the Principal Commissioner of Customs on the ground that the appellant had been previously penalized under Section 112(a) of the Customs Act - Whether the present appeal is maintainable before the CESTAT – HELD - The language of Section 129A(1)(a) of the Customs Act allows an appeal to the Tribunal by any person aggrieved by "any decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority." The CESTAT noted that the Principal Commissioner's decision to reject the license application was a final decision that affected the appellant's rights, and hence, it qualified as an order passed by an adjudicating authority under the Customs Act. The CESTAT relied on various judicial precedents, including the decisions of the Supreme Court, to hold that even if the order is communicated through a letter or an informal communication, it can still be considered an appealable order if it finally decides the rights of the assessee. The CESTAT held that denying an initial license could be equally or more severe than cancelling an existing one, and hence, the legislature could not have intended to create an anomaly by providing an appeal for one and not the other - The appeal is allowed - Whether the rejection of the appellant's special warehouse license application on account of a prior penalty under Section 112(a) is legally sustainable – HELD - The rejection of the appellant's special warehouse license application on account of a prior penalty under Section 112(a) is not legally sustainable. The Customs Act clearly distinguishes between contraventions that attract civil penalties and offences that attract criminal prosecution. The CESTAT relied on the decision in Kundan Care Products Ltd. vs. Commissioner of Customs, New Delhi, wherein it was held that a penalty under Section 112 is not the same as being "penalized for an offence" under the Customs Act. The CESTAT noted that the appellant had not been prosecuted or convicted for any offence under the Customs Act, and the penalty under Section 112(a) was for a wrong claim of exemption, which is a civil contravention and not an offence. The CESTAT further observed that even if the penalty under Section 112(a) is considered an "offence" for the purposes of Regulation 3(2)(c) of the Special Warehousing Licensing Regulations, 2016, the Principal Commissioner should have examined the nature and gravity of the appellant's past violation and exercised discretion judiciously instead of treating the Regulation as an absolute bar - the impugned order is set aside and the Principal Commissioner is directed to grant the special warehouse license to the appellant - The appeal is allowed. [Read less]

Central Excise - Classification of goods, Extended period of limitation – Appellant is engaged in manufacturing and selling various products like soap solution, potassium base brown soap, anti-adhesive, sodium hypochlorite, detergent powder etc. – Duty demand alleging that the appellant had wrongly classified the goods under Chapter 15 of the Central Excise Tariff Act, 1985 instead of Chapter 34 - Whether the goods manufactured by the appellant are correctly classifiable under Chapter 15 or Chapter 34 of the Central Excise Tariff Act, 1985 – HELD - The goods manufactured by the appellant are appropriately classifiabl... [Read more]

Central Excise - Classification of goods, Extended period of limitation – Appellant is engaged in manufacturing and selling various products like soap solution, potassium base brown soap, anti-adhesive, sodium hypochlorite, detergent powder etc. – Duty demand alleging that the appellant had wrongly classified the goods under Chapter 15 of the Central Excise Tariff Act, 1985 instead of Chapter 34 - Whether the goods manufactured by the appellant are correctly classifiable under Chapter 15 or Chapter 34 of the Central Excise Tariff Act, 1985 – HELD - The goods manufactured by the appellant are appropriately classifiable under Chapter Heading 3403 of the Central Excise Tariff Act, 1985 which deals with 'Lubricating Preparations', as the products are used as lubricating solutions for movement of LPG cylinders. As per the interpretative rules, when a product is classifiable under more than one Chapter Heading, the more specific heading should be preferred over the general heading. Since Chapter Heading 3403 specifically covers lubricating preparations, the Tribunal held that the goods are correctly classifiable under this heading and not under Chapter 15 - The demand is restricted to the normal period of limitation, and the penalties imposed on both the appellants are set aside – The appeals are partly allowed - Whether the demand for extended period of limitation is sustainable – HELD - the Department was aware that the appellant had been classifying the goods under Chapter 15 and availing the benefit of relevant notifications, and hence the allegation of suppression of facts to invoke the extended period is not established. Accordingly, the demand is restricted to normal period of limitation - Whether the penalties imposed on the appellant company and its proprietor are sustainable – HELD - Since there is no suppression of facts with intention to evade duty, the penalty imposed on the appellant company is not sustainable and is set aside - the identity of a proprietor and its proprietorship concern are one and the same, and hence separate demands and penalties cannot be raised against both. Accordingly, the penalty imposed on the proprietor is also set aside. [Read less]

Central Excise - Non-existent manufacturers, Second stage dealers, Denial of cenvat credit - Denial of cenvat credit based on an investigation by the DGCEI which revealed that some excisable goods were being passed off by registered dealers to manufacturers of MS Ingots either directly or through second stage dealers on the basis of invoices of non-existent manufacturers - Whether the appellant is entitled to take the cenvat credit on the basis of invoices issued by the second stage dealer – HELD - The appellant had procured the inputs through the invoices issued by the second stage dealer and had used those inputs in th... [Read more]

Central Excise - Non-existent manufacturers, Second stage dealers, Denial of cenvat credit - Denial of cenvat credit based on an investigation by the DGCEI which revealed that some excisable goods were being passed off by registered dealers to manufacturers of MS Ingots either directly or through second stage dealers on the basis of invoices of non-existent manufacturers - Whether the appellant is entitled to take the cenvat credit on the basis of invoices issued by the second stage dealer – HELD - The appellant had procured the inputs through the invoices issued by the second stage dealer and had used those inputs in the manufacture of the final product, which was cleared on payment of duty. There is no evidence to show that the appellant had not received the goods against the invoices issued by the second stage dealer - in the absence of any corroborative evidence to show that the appellant had not received the goods, the cenvat credit cannot be denied merely on the ground that the manufacturer or the first stage dealer was found to be non-existent - the impugned order is set aside and the appeal is allowed [Read less]

GST - Fraudulent input tax credit - Proprietor was engaged in creation of fake firms, which were used for availment and passing of fraudulent input tax credit to various end users without any supply of goods or services. The petitioner's registration was cancelled, and a demand was raised. The petitioner filed a writ petition challenging the show cause notice and the order-in-original - Whether the writ petition was maintainable bypassing the alternative remedy of appeal under the Act – HELD - In a case of fraudulent availment of ITC based on supply from non-existent firms and without receiving any actual supply, the ple... [Read more]

GST - Fraudulent input tax credit - Proprietor was engaged in creation of fake firms, which were used for availment and passing of fraudulent input tax credit to various end users without any supply of goods or services. The petitioner's registration was cancelled, and a demand was raised. The petitioner filed a writ petition challenging the show cause notice and the order-in-original - Whether the writ petition was maintainable bypassing the alternative remedy of appeal under the Act – HELD - In a case of fraudulent availment of ITC based on supply from non-existent firms and without receiving any actual supply, the plea would always fall within the parameters of Section 74 of the CGST Act, 2017 as the same would be 'input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts'. The fact that the input tax credit was availed based on fake supplies does not mean that the provisions of Section 74 would not apply - the ITC would be available to a dealer only after he discharges the burden to establish actual receipt of goods, and mere production of invoices and payment to the selling dealer by account payee cheque is not sufficient - the pleas raised by the petitioner and the reply to the show cause notice had been appropriately dealt with by the adjudicating authority. The writ petition was not maintainable, and the petitioner should avail the alternative remedy of appeal in accordance with the law – The petition is dismissed [Read less]

Service Tax - Extended Period of Limitation, Suppression of facts, Electronic Service of Notice - Charge of suppression of value of services in ST-3 returns based on data received from the Income Tax Department - Demand invoking extended period of limitation - Whether the proceedings initiated by the show cause notice are valid as the notice was served on the appellant by email and not in the manner prescribed under the law – HELD - in view of the Supreme Court's order dated 10.07.2020 in the suo moto writ petition during the COVID-19 pandemic, the service of notices, summons, etc. through electronic media and email was ... [Read more]

Service Tax - Extended Period of Limitation, Suppression of facts, Electronic Service of Notice - Charge of suppression of value of services in ST-3 returns based on data received from the Income Tax Department - Demand invoking extended period of limitation - Whether the proceedings initiated by the show cause notice are valid as the notice was served on the appellant by email and not in the manner prescribed under the law – HELD - in view of the Supreme Court's order dated 10.07.2020 in the suo moto writ petition during the COVID-19 pandemic, the service of notices, summons, etc. through electronic media and email was valid and binding on all courts. The appellant, having responded to the show cause notice and attended the personal hearing, cannot take the stand that there was no valid service of the notice - the extended period of limitation can be invoked in cases where the assessee has suppressed the material facts with the intent to evade payment of tax. The demand was based on the data received from the Income Tax Department, which revealed that the appellant had wilfully and deliberately not declared the actual value of services in their statutory returns. The appellant's failure to disclose the correct information attracted the provisions for extended period of limitation and imposition of penalties – The appeal is dismissed [Read less]

Central Excise - Denial of Cenvat credit, Burden of proof, lapse of time – Denial of Cenvat credit on the ground that the appellant did not actually receive the goods and availed the credit only on the basis of invoices - HELD -The mechanical appliances purchased from the supplier were found in the appellant's unit and the non-availability of the supplier's logo/stamp on the goods after four years of use cannot be a reason to deny the credit. The statement of the supplier's confirmed the sale of goods to the appellant and the appellant's Director also stated that all the materials mentioned in the invoices were received ... [Read more]

Central Excise - Denial of Cenvat credit, Burden of proof, lapse of time – Denial of Cenvat credit on the ground that the appellant did not actually receive the goods and availed the credit only on the basis of invoices - HELD -The mechanical appliances purchased from the supplier were found in the appellant's unit and the non-availability of the supplier's logo/stamp on the goods after four years of use cannot be a reason to deny the credit. The statement of the supplier's confirmed the sale of goods to the appellant and the appellant's Director also stated that all the materials mentioned in the invoices were received in the factory and the payments were made by account cheques - The Department visited the appellant's factory after a lapse of more than four years from the date of purchase and the non-availability of the supplier's logo/stamp on the goods after such a long period cannot be a ground to deny the credit - the disallowance of the Cenvat credit is set aside and the appeal is allowed [Read less]

GST – uploading of Show Cause Notice in "Additional Notices Tab", Personal Hearing - Whether the show cause notice was properly communicated to the petitioner, and whether the petitioner was provided an opportunity to be heard before the impugned order was passed – HELD - after 16th January 2024, changes have been made to the GST portal and the ‘Additional Notices Tab’ has been made visible. However, considering the fact that the petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner, the matter deserves to be remanded back to the concerned Adjudicating Auth... [Read more]

GST – uploading of Show Cause Notice in "Additional Notices Tab", Personal Hearing - Whether the show cause notice was properly communicated to the petitioner, and whether the petitioner was provided an opportunity to be heard before the impugned order was passed – HELD - after 16th January 2024, changes have been made to the GST portal and the ‘Additional Notices Tab’ has been made visible. However, considering the fact that the petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner, the matter deserves to be remanded back to the concerned Adjudicating Authority - the impugned order is set aside and the matter was remanded back to the adjudicating authority - The writ petition is disposed of [Read less]

Service Tax – Liability of Sub-contractor, Residential Complex Service – Rendering of various services such as construction of police housing, heritage development, lake development, health and sanitation related construction, irrigation/canal related work, compound walls for buildings/schools owned by Municipal Corporation and school construction during the period from 2009-10 to 2013-14 (up to December 2013) - Whether the appellant is liable to pay service tax on the services provided by him as a sub-contractor to M/s. D.H. Patel and M/s. Tourism Corporation of Gujarat Ltd. (TCGL) – HELD - The appellant had provide... [Read more]

Service Tax – Liability of Sub-contractor, Residential Complex Service – Rendering of various services such as construction of police housing, heritage development, lake development, health and sanitation related construction, irrigation/canal related work, compound walls for buildings/schools owned by Municipal Corporation and school construction during the period from 2009-10 to 2013-14 (up to December 2013) - Whether the appellant is liable to pay service tax on the services provided by him as a sub-contractor to M/s. D.H. Patel and M/s. Tourism Corporation of Gujarat Ltd. (TCGL) – HELD - The appellant had provided services as a subcontractor to M/s. D.H. Patel, who had received work contracts from M/s. GSPHCL (a 100% government-owned company) and M/s. TCGL - The plea taken by the appellant for not taking service tax registration and non-payment of service tax is that the main contractor would be paying the service tax and he being a subcontractor, is not be liable to pay the service tax. This argument of the appellant does not hold good in view of the findings by the Larger Bench of this Tribunal in the case of Commissioner of Service Tax, New Delhi Vs. Melange Developers Private Ltd - The sub-contractor is required to discharge the service tax liability even if the main contractor has paid the tax. The clarification issued by the Board that a subcontractor is liable to pay service tax, and the appellant's plea that he is not liable as a subcontractor is not acceptable - Matter remanded to the lower authority to work out the demand of service tax under the "Construction of Residential Complex Service" category from the date when service has been brought into tax net - The appeal is partly allowed [Read less]

Service Tax – Valuation, Manpower Recruitment or Supply Agency Service, ESI/PF Contributions - Whether the value of taxable services under the "Manpower Recruitment or Supply Agency Service" should include the salaries, ESI/PF contributions paid by the appellant or only the commission/overhead charges received by the appellant should be considered as the taxable value – HELD - As per the agreement, ONGC was paying the wages along with statutory obligations pertaining to the workers engaged, directly to the appellant (service provider) and not to the workers individually - M/s ONGC calculates the wages payable as per ag... [Read more]

Service Tax – Valuation, Manpower Recruitment or Supply Agency Service, ESI/PF Contributions - Whether the value of taxable services under the "Manpower Recruitment or Supply Agency Service" should include the salaries, ESI/PF contributions paid by the appellant or only the commission/overhead charges received by the appellant should be considered as the taxable value – HELD - As per the agreement, ONGC was paying the wages along with statutory obligations pertaining to the workers engaged, directly to the appellant (service provider) and not to the workers individually - M/s ONGC calculates the wages payable as per agreement, PF, ESI and any other statutory dues and remits the same to the appellant-society for disbursal to the members of the society and for payment to Government accounts respectively - The service recipient was concerned about the overall provision of security service irrespective of bifurcation of payment of service paid by the service recipient to the appellant. Therefore, it cannot be said that salary of guards, PF, ESI, etc., are reimbursable expenditures to be deducted from the gross value of security service - the gross amount charged towards providing the service shall be liable to service tax and the salary of the workers, PF, ESI, etc. cannot be considered as reimbursable expenditures to be deducted from the gross value - the demand for service tax on the gross amount charged by the appellant for the manpower supply services is upheld – The appeal is dismissed [Read less]

Customs AAR - Classification of Timber Steel made of galvanized steel, Laminated Veneered Lumber and Plastic Cover – HELD – In the product Steel Timber, the essential character is provided by the Steel. Since the product is used in Shuttering (Formworks) in construction activities, the subject goods merit classification in Heading 7308 and more specifically under CTI 73084000 as ‘Equipment for Scaffolding, Shuttering, propping and Pit-Propping’ in terms of Rule 3(b) of the General Rule of Interpretation – Ordered accordingly

Service Tax - Works contract, Valuation of service portion, Rule 2A of Service Tax (Determination of Value) Rules, 2006 - Appellant had followed two different valuation methods under Rule 2A for the same contract/invoice - paying service tax on full value of labour charges under Rule 2A(i) and paying service tax on 70% value of painting work under Rule 2A(ii)B. The department alleged short payment of service tax - Whether the appellant was justified in adopting two different valuation methods under Rule 2A for the same contract/invoice - HELD - The appellant was justified in bifurcating the composite contract into two part... [Read more]

Service Tax - Works contract, Valuation of service portion, Rule 2A of Service Tax (Determination of Value) Rules, 2006 - Appellant had followed two different valuation methods under Rule 2A for the same contract/invoice - paying service tax on full value of labour charges under Rule 2A(i) and paying service tax on 70% value of painting work under Rule 2A(ii)B. The department alleged short payment of service tax - Whether the appellant was justified in adopting two different valuation methods under Rule 2A for the same contract/invoice - HELD - The appellant was justified in bifurcating the composite contract into two parts - one where the value of goods transferred was determinable, and another where the value of consumables like paint was not determinable. For the former, the appellant rightly opted for valuation under Rule 2A(i), while for the latter, valuation under Rule 2A(ii)B was permissible as the value of paint consumed could not be separately quantified. The Tribunal relied on the constitutional provision of deemed sale under Article 366(29A) and the principles laid down in the decisions of the Supreme Court in Larsen & Toubro Ltd. v. State of Karnataka and the High Court of Madhya Pradesh in Agarwal Colour Advance Photo System v. Commissioner of Central Excise - When the law permits two different methods, the assessee cannot be faulted for adopting the appropriate method for each part of the composite contract - the order under challenge is set aside and the appeal is allowed [Read less]

Service Tax - Cenvat Credit, Proportionate Reversal, Rule 6(3)(ii), Limitation Period, Principles of Natural Justice - Appellant availed Cenvat credit of Service Tax paid on common input services on proportionate basis, by following the procedure prescribed under Rule 6(3)(ii) of the Cenvat Credit Rules - Department alleged that the appellant had taken Cenvat credit of entire tax paid on common input services and as the appellant was not maintaining separate records for inputs used exclusively for exempted services, they would be liable to pay an amount calculated as per Rule 6(3)(i) of the Cenvat Credit Rules - Whether th... [Read more]

Service Tax - Cenvat Credit, Proportionate Reversal, Rule 6(3)(ii), Limitation Period, Principles of Natural Justice - Appellant availed Cenvat credit of Service Tax paid on common input services on proportionate basis, by following the procedure prescribed under Rule 6(3)(ii) of the Cenvat Credit Rules - Department alleged that the appellant had taken Cenvat credit of entire tax paid on common input services and as the appellant was not maintaining separate records for inputs used exclusively for exempted services, they would be liable to pay an amount calculated as per Rule 6(3)(i) of the Cenvat Credit Rules - Whether the delay in filing the appeal before the Commissioner (Appeals) can be condoned – HELD - The delay in filing the appeal was not intentional and the appellant did not gain anything by delaying the filing of the appeal. The Tribunal relied on the decisions in Central Industries Security Force and Jagdish Ispat Pvt Ltd, which held that a liberal approach should be adopted for condonation of delay as a litigant does not stand to benefit by lodging an appeal late and refusal to condone the delay can result in a meritorious matter being thrown out at the very threshold, defeating the cause of justice. Therefore, the delay in filing the appeal is condoned - the Commissioner, in the earlier Order-in-Original, had found that the extended period of limitation was wrongly invoked as the facts were already known to the Department during the earlier audit. Therefore, the Show Cause Notice is not maintainable on the ground of limitation - Taking in to account other factors that the Show Cause Notice is vague and non-specific, the same does not have any chance of survival - the impugned OIO and OIA are not maintainable – The appeal is allowed - Whether the Show Cause Notice is valid and sustainable – HELD - The Show Cause Notice was vague and did not provide the necessary details such as the input service on which credit was wrongly taken, the period for which the notice was given, the source for computation of duty, etc. This was in violation of the principles of natural justice as the appellant could not file a suitable reply in defence - Further, this was the second Show Cause Notice issued on the basis of the same audit objection. The Department had already invoked the extended period of limitation in the first Show Cause Notice, which was dropped by the Commissioner in the earlier Order-in-Original. The Tribunal held that the extended period of limitation cannot be invoked in the subsequent Show Cause Notice, as per the principles laid down in the Nizam Sugar Factory case. [Read less]

Service Tax – Valuation, Commercial training and coaching services, Hostel fees, Revenue sharing arrangement, Library subscription - Department raised demands on the appellant for non-payment of service tax under various heads - Whether the demand of service tax on hostel fees received for non-residential courses is sustainable - HELD - The stand-alone hostel charges collected for non-residential courses have no connection with commercial training and coaching services. In terms of clarification provided in Circular No DOF/334/1/2007-TRU dated 28.02.2007, residential accommodation such as hostels are specifically exempte... [Read more]

Service Tax – Valuation, Commercial training and coaching services, Hostel fees, Revenue sharing arrangement, Library subscription - Department raised demands on the appellant for non-payment of service tax under various heads - Whether the demand of service tax on hostel fees received for non-residential courses is sustainable - HELD - The stand-alone hostel charges collected for non-residential courses have no connection with commercial training and coaching services. In terms of clarification provided in Circular No DOF/334/1/2007-TRU dated 28.02.2007, residential accommodation such as hostels are specifically exempted from service tax - There should be a nexus between the amount collected and the services rendered. In the present case, the hostel charges for non-residential courses were optional and had no nexus with the commercial training services. Therefore, the demand of service tax on hostel fees for non-residential courses is set aside - The demands of service tax on hostel fees for non-residential courses, share of fees received from CMC Limited, sale of newspapers, magazines, forms, and prospectus, and library subscription, fine, and library development charges, are set aside - The demands on short payment due to accrual accounting, service tax on miscellaneous receipts and reversal of CENVAT credit is upheld. The penalty imposed are also set aside – The appeal is partly allowed - Whether the demand of service tax on the share of fees received from CMC Limited under Business Support Services is sustainable - HELD - The agreement between the appellant and CMC Limited was a revenue sharing arrangement on a principal-to-principal basis, and there was no service provider-service recipient relationship. Relying on the decisions in Inox Leisure Ltd. Vs Commissioner of Service Tax, Hyderabad and the CBEC Circular No 109/3/2009-ST, the Tribunal held that in such revenue sharing arrangements where the parties act on a principal-to-principal basis, the activities are not covered under service tax. Accordingly, the Tribunal set aside the demand of service tax on the share of fees received from CMC Limited - Whether the demand of service tax on sale of newspapers, magazines, and forms/prospectus is sustainable - HELD - The sale of newspapers, magazines, forms, and prospectus are tantamount to sale of goods, which is not leviable to service tax. The Tribunal relied on the decision in Aditya College of Competitive Exam Vs C.C.E., Vishakhapatnam, which held that there should be a nexus between the amount collected and the services rendered. In the present case, the sale of these items had no nexus with the commercial training services provided by the appellant. Therefore, the Tribunal set aside the demand of service tax on the sale of these items - Whether the demand of service tax on library subscription, fine, and library development charges is sustainable - HELD - The library membership and charges collected by the appellant are not towards providing any commercial training or coaching services under section 65(105)(zzc) of the Finance Act or under any taxable service liable to service tax till 01.07.2012. The library services provided by the appellant were optional and had no nexus with the commercial training services. Therefore, the Tribunal set aside the demand of service tax on the library subscription, fine, and library development charges. [Read less]

GST – Gujarat AAR - Classification of ‘sada tambaku pre-mixed with lime’ - Applicant contends that the product 'sada tambaku pre-mixed with lime' falls under HSN 2401 as unmanufactured tobacco – The Department is of the view that the process undertaken by the applicant amounts to manufacture and the product is classifiable under HSN 24039910 as 'chewing tobacco - without lime tube' - What will be the classification of the goods viz 'sada tambaku pre-mixed with lime' proposed to be manufactured & supplied by the applicant - HELD - The process undertaken by the applicant of mixing raw tobacco with lime paste in a mix... [Read more]

GST – Gujarat AAR - Classification of ‘sada tambaku pre-mixed with lime’ - Applicant contends that the product 'sada tambaku pre-mixed with lime' falls under HSN 2401 as unmanufactured tobacco – The Department is of the view that the process undertaken by the applicant amounts to manufacture and the product is classifiable under HSN 24039910 as 'chewing tobacco - without lime tube' - What will be the classification of the goods viz 'sada tambaku pre-mixed with lime' proposed to be manufactured & supplied by the applicant - HELD - The process undertaken by the applicant of mixing raw tobacco with lime paste in a mixer results in the emergence of a new product having a distinct name, character and use. As per the applicant's own submission, the tobacco leaves are never chewed/used directly but are mixed with lime and then consumed. The moment the tobacco is mixed with lime and subsequently supplied, it does not remain tobacco as such - the applicant's product 'sada tambaku pre-mixed with lime' falls within the ambit of 'chewing tobacco' and classifiable under HSN 24039910 - 'Chewing tobacco' – Ordered accordingly - Applicable rate of GST & compensation cess of the goods viz 'sada tambaku pre-mixed with lime' - HELD - Since the applicant's product 'sada tambaku pre-mixed with lime' is classified under HSN 24039910, it will be leviable to GST at the rate of 28% in terms of serial No. 15 of Schedule IV of the CGST Notification No. 1/2017-CT(Rate) dated 28.6.2017. Further, the Compensation cess will be leviable at the rate of 0.56R per unit in respect of the product with declared retail sale price or at the rate of 160% in respect of products other than goods covered under serial No. 26 of the Compensation Cess Notification No. 1/2017-Compensation Cess (Rate) dated 28.6.2017. [Read less]

GST – Gujarat AAR - Eligibility to input tax credit on inputs and input services used in the execution of Works contract service when supplied for construction of an immovable property, Works Contract – For the expansion project applicants are required to install a Pre-Engineered Building Structure (PEB) - Eligibility of proportionate input tax credit on steel, cement and other consumables used in the execution of the works contract, installation and erection services of the PEB, and other capital goods like rails, electrification etc. installed for the operation of a crane - Whether proportionate ITC is admissible on ... [Read more]

GST – Gujarat AAR - Eligibility to input tax credit on inputs and input services used in the execution of Works contract service when supplied for construction of an immovable property, Works Contract – For the expansion project applicants are required to install a Pre-Engineered Building Structure (PEB) - Eligibility of proportionate input tax credit on steel, cement and other consumables used in the execution of the works contract, installation and erection services of the PEB, and other capital goods like rails, electrification etc. installed for the operation of a crane - Whether proportionate ITC is admissible on the inputs and input services used in the execution of the works contract service for the construction of the PEB – HELD - the ITC on inputs and input services used for the construction of the immovable property, i.e. the PEB, is blocked under Section 17(5)(c) and (d) of the CGST Act, 2017. The PEB cannot be considered as 'plant and machinery' which is the only exception under these provisions - The Supreme Court in the case of M/s. Safari Retreats P Ltd laid down the law regarding the interpretation of Sections 17(5)(c) and (d). The explanation to Section 17(5) explicitly excludes civil structures from the definition of 'plant and machinery'. Therefore, the proportionate ITC on inputs and input services used for the construction of the PEB is not admissible - No proportionate ITC is admissible for the supply of steel, cement and other consumables used in the execution of the works contract for the construction of the PEB, installation and erection services of the PEB, and other capital goods like rails, electrification etc. installed for operation of the crane – Ordered accordingly - Whether proportionate ITC is admissible on the other capital goods like rails, electrification etc. installed for the smooth operation of the crane – HELD - Once these capital goods become embedded in the civil structure and form part of the immovable property, the ITC on the same is also blocked under Sections 17(5)(c) and (d) of the CGST Act. [Read less]

Customs - Provisional export, Detention of goods - Petitioner seeking direction to allow the export of goods - Authorities had detained the goods for examination and sampling, and the petitioner's application for provisional export was pending - Whether the conditions imposed by the respondents for provisional release of the goods, particularly the requirement of a bank guarantee are valid and reasonable - HELD - In case of mis-declaration and pending confirmation of such mis-declaration by test, ordinarily, the export goods detained for the purpose of test must be dealt with on priority basis and the export should be allo... [Read more]

Customs - Provisional export, Detention of goods - Petitioner seeking direction to allow the export of goods - Authorities had detained the goods for examination and sampling, and the petitioner's application for provisional export was pending - Whether the conditions imposed by the respondents for provisional release of the goods, particularly the requirement of a bank guarantee are valid and reasonable - HELD - In case of mis-declaration and pending confirmation of such mis-declaration by test, ordinarily, the export goods detained for the purpose of test must be dealt with on priority basis and the export should be allowed expeditiously unless the same is found to be prohibitory items under the Customs Act 1962. In the present case, the respondents have not been able to confirm that the export goods are of prohibitory items, as such, has permitted export - The direction to provide a bank guarantee of Rs. 3 crore, which is much higher than the value of the goods, is onerous and not in line with the Circular No. 01/2011-Customs and the Circular No. 35/2017-Cus. The Circulars suggest that the security should cover the amount of duty/differential duty leviable on the seized goods, taking into account the market price and estimated profit margin - the authorities are directed to reconsider the amount of the bank guarantee in accordance with the Circulars – The petition is disposed of - Whether the petitioner should be liable for detention charges during the period of investigation by the customs authorities - HELD - The petitioner should not be saddled with the detention charges, as per the relevant notifications, which exempt such charges for goods detained by customs for verification of entries. The detention charges should not be levied on the petitioner, subject to the petitioner providing appropriate bond/security [Read less]

Customs - EPCG License, Export Obligation, Deemed Exports - Appellant was issued an EPCG license to import capital goods on payment of concessional customs duty but failed to fulfill the export obligation during the first two-year block period - DRI issued show cause notices demanding recovery of customs duty, interest and penalty for non-fulfillment of export obligation - Whether the EODC (Export Obligation Discharge Certificate) issued by the DGFT in 2012 certifying fulfillment of export obligation should be accepted – HELD - The DGFT is the competent authority to determine the fulfillment of export obligation under th... [Read more]

Customs - EPCG License, Export Obligation, Deemed Exports - Appellant was issued an EPCG license to import capital goods on payment of concessional customs duty but failed to fulfill the export obligation during the first two-year block period - DRI issued show cause notices demanding recovery of customs duty, interest and penalty for non-fulfillment of export obligation - Whether the EODC (Export Obligation Discharge Certificate) issued by the DGFT in 2012 certifying fulfillment of export obligation should be accepted – HELD - The DGFT is the competent authority to determine the fulfillment of export obligation under the foreign trade policy - the DGFT authorities have accepted the compensation fee paid towards the export obligation and concluded that the appellant had fulfilled their export obligation - Once the DGFT has issued the EODC in 2012 certifying that the company had fulfilled its export obligation, the Customs authorities cannot ignore this and initiate recovery proceedings - the Customs authorities cannot refuse the exemption benefit on the allegation of misrepresentation, if the licensing authority (DGFT) has not taken any action. When the proper authority has already considered the fulfilment of export obligation, raising of demand of Customs duty on the ground that they have not fulfilled the export obligation, is not legally sustainable - the demand of duty, interest and penalties confirmed in the impugned order are set aside – The appeal is allowed - Whether the supplies made by the company to M/s. Timken India Ltd. (a Star Export House) can be considered as 'deemed exports' for the purpose of fulfilling the export obligation – HELD - Since the EPCG license number and date were not endorsed on the shipping bills of M/s. Timken India Ltd., the supplies made by the company cannot be treated as 'deemed exports' as per the Foreign Trade Policy requirements. However, since the DGFT has accepted these supplies as fulfillment of export obligation in the EODC, the customs authorities cannot raise a demand. [Read less]

Service Tax – Classification, Business Auxiliary Service or Mining Service – Appellant is engaged by mine owners for recovery of embedded iron ore and transporting the same to the screening point for screening by machines installed and managed by the mine owners. After screening, the appellant made weighment of the goods and raised bills for payment – Dept of the view that the appellant's activity was classifiable under the category of Business Auxiliary Service - Whether the appellant's activity of recovering and transporting iron ore to the screening point, where the screening was done by the mine owners, can be cl... [Read more]

Service Tax – Classification, Business Auxiliary Service or Mining Service – Appellant is engaged by mine owners for recovery of embedded iron ore and transporting the same to the screening point for screening by machines installed and managed by the mine owners. After screening, the appellant made weighment of the goods and raised bills for payment – Dept of the view that the appellant's activity was classifiable under the category of Business Auxiliary Service - Whether the appellant's activity of recovering and transporting iron ore to the screening point, where the screening was done by the mine owners, can be classified as BAS – HELD - The appellant's activity of recovering embedded iron ore and transporting it to the screening point, where the screening was done by the mine owners, cannot be classified as Business Auxiliary Service – The appellant's activity was undertaken within the mining area and more appropriately classifiable as "mining service," which was not taxable during the relevant period – Further, the entire demand of service tax is barred by the extended period of limitation. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Majority Order - Service Tax Liability on Sub-Contractor, Extended Period of Limitation – Appellant is engaged in providing 'Works Contract Services' and 'Erection, Commissioning & Installation Services' - Whether the decision of the Tribunal in the case of Commissioner of Customs & Central Excise, Indore Vs. Shivhare Roadlines and JAC Air Services Pvt. Ltd. Vs. Commissioner of Service Tax would apply or the issue having been settled by the Larger Bench in the case of CST Vs. Melange Developers P.Ltd. would apply and, therefore, the demand needs to be confirmed only for the normal – HELD – The Shivhar... [Read more]

Service Tax – Majority Order - Service Tax Liability on Sub-Contractor, Extended Period of Limitation – Appellant is engaged in providing 'Works Contract Services' and 'Erection, Commissioning & Installation Services' - Whether the decision of the Tribunal in the case of Commissioner of Customs & Central Excise, Indore Vs. Shivhare Roadlines and JAC Air Services Pvt. Ltd. Vs. Commissioner of Service Tax would apply or the issue having been settled by the Larger Bench in the case of CST Vs. Melange Developers P.Ltd. would apply and, therefore, the demand needs to be confirmed only for the normal – HELD – The Shivhare Roadlines decision was rendered on account peculiar circumstances as the period in dispute and the impugned order passed therein was before the issuance of the Master Circular dated 23.08.2007 clarifying that sub-contractors are also liable to service tax. In that view, it was held that the sub-contractor shall not be doubly taxed if the principal-contractor has already paid the duty amount - the issue on merits stands concluded by the Larger Bench of the Tribunal in the case of CST vs. Melange Developers P. Ltd. wherein it was held that a sub-contractor would be liable to pay service tax even if the main contractor has discharged the service tax liability on the activity undertaken by the sub-contractor in pursuance of the contract. This decision is binding and has to be followed in the present case as well as in all future cases, unless a decision contrary to that is rendered by a higher forum - the issue of interpretation regarding the liability of a sub-contractor to pay service tax was a matter of dispute during the relevant period, and there were divergent views expressed by various Benches of the Tribunal as well as circulars and trade notices issued by the Department. In such cases, where the assessee has a bonafide belief that it is not liable to pay the tax based on the prevailing interpretation, the extended period of limitation cannot be invoked. Therefore, the demand can only be restricted to the normal period of limitation and the extended period demand is set aside - The appeal is partly allowed by Majority Order [Read less]

Central Excise - Valuation, Jurisdiction of High Court - Revenue appeal against the order of the Tribunal which had held that the respondent-assessee is entitled to a special rate of value addition at 73.5% based on the actual value of the cost of raw materials and inventory reflected in the audited financial statement - Whether the High Court has jurisdiction to entertain the appeal relating to the determination of the rate of duty of excise or the value of goods for the purposes of assessment – HELD – In terms of Section 35G(1) of the Central Excise Act, 1944, no appeal shall lie before the High Court from any order ... [Read more]

Central Excise - Valuation, Jurisdiction of High Court - Revenue appeal against the order of the Tribunal which had held that the respondent-assessee is entitled to a special rate of value addition at 73.5% based on the actual value of the cost of raw materials and inventory reflected in the audited financial statement - Whether the High Court has jurisdiction to entertain the appeal relating to the determination of the rate of duty of excise or the value of goods for the purposes of assessment – HELD – In terms of Section 35G(1) of the Central Excise Act, 1944, no appeal shall lie before the High Court from any order passed by the CESTAT if the order relates to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. Since the present matter relates to the valuation of goods, the High Court does not have the jurisdiction to entertain, try and determine the issue raised by the Revenue - the appellant is at liberty to approach the Supreme Court of India for redressal of their grievances, if any, in accordance with the law - the appeal is disposed of [Read less]

Customs - Status Holder Incentive Scrips (SHIS), Capital Goods, Spares/Parts of Capital Goods, Allowable Limit of 10% of Scrip Value - Whether the goods imported by the appellant are 'capital goods' themselves and hence the restriction of debiting duty from SHIS scripts in excess of the allowable limit of 10% of the total scrip value is not applicable to them – HELD - from examining the definition of 'capital goods' as provided in the Customs Notification and the FTP, and the functions of the imported goods, it is found that the goods imported by the appellant, namely, crucible pot, pot ring, abrasive belt, PVA wheels, b... [Read more]

Customs - Status Holder Incentive Scrips (SHIS), Capital Goods, Spares/Parts of Capital Goods, Allowable Limit of 10% of Scrip Value - Whether the goods imported by the appellant are 'capital goods' themselves and hence the restriction of debiting duty from SHIS scripts in excess of the allowable limit of 10% of the total scrip value is not applicable to them – HELD - from examining the definition of 'capital goods' as provided in the Customs Notification and the FTP, and the functions of the imported goods, it is found that the goods imported by the appellant, namely, crucible pot, pot ring, abrasive belt, PVA wheels, beveling cone, and refractories, are 'capital goods' themselves, as they are 'accessories' or 'equipment' required for the manufacture or production of glassware by the appellant, either directly or indirectly. The items required for replacement, modernization, technological upgradation, or expansion of the plant are also covered within the ambit of 'capital goods' as per the definition - Since the imported goods satisfy the definition of 'capital goods', the restriction of debiting duty from SHIS scripts in excess of the allowable limit of 10% of the total scrip value is not applicable to the goods imported by the appellant. Consequently, the demand of customs duty confirmed in the impugned order, as well as the interest and penalty imposed on the appellant are set aside – The appeal is allowed [Read less]

The petitioners, as Director, were actively involved in the company’s operations and owe a responsibility to ensure that the company does not engage in fraudulent activities of availing ITC without actual supply of goods or non-filing of GST returns.

GST – Rajasthan AAR - Classification of “Blades” cleared as “Spare Parts” for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed – whether the subject goods is classifiable under CTH 8436100 as claimed by the applicant or be classified under CTH 82084000 - HELD - the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter - the Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36 – Order... [Read more]

GST – Rajasthan AAR - Classification of “Blades” cleared as “Spare Parts” for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed – whether the subject goods is classifiable under CTH 8436100 as claimed by the applicant or be classified under CTH 82084000 - HELD - the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter - the Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36 – Ordered accordingly [Read less]

GST – Rajasthan AAR - Section 2(68) of the CGST Act, 2017 - Job work, Composite supply, Principal supply, Classification - Applicant is engaged in the business of supplying job work services towards fabrication and attachment of Body of commercial vehicles and carriers - Applicant receives the unfinished vehicle (consisting of chassis, engine, wheels, etc.) from its customer on free of cost basis and fabricates the tipper body and attaches it to the chassis using its own labor and machinery - Whether the activity undertaken by the Applicant would qualify as 'job work' as per the provisions of Section 2(68) of the CGST A... [Read more]

GST – Rajasthan AAR - Section 2(68) of the CGST Act, 2017 - Job work, Composite supply, Principal supply, Classification - Applicant is engaged in the business of supplying job work services towards fabrication and attachment of Body of commercial vehicles and carriers - Applicant receives the unfinished vehicle (consisting of chassis, engine, wheels, etc.) from its customer on free of cost basis and fabricates the tipper body and attaches it to the chassis using its own labor and machinery - Whether the activity undertaken by the Applicant would qualify as 'job work' as per the provisions of Section 2(68) of the CGST Act – Difference of Opinion – HELD – Per Member (Central Tax): the process undertaken by the applicant amounts to job work and fit for classifiable under ‘supply of services’ - the services of fabrication of body on chassis provided by their customer is rightly covered under Heading 9988 [Manufacturing services on physical inputs owned by others], which attracts tax rate of 18% - Per Member (State Tax): the activity of fabrication of tipper body by the applicant on the chassis provided by the customer is a composite supply. The principal supply of goods i.e. tipper body is classifiable under chapter heading 8707 attracting 28% tax rate - Since both members of Advance Ruling Authority have divergent views on the application, the matter is referred to Appellate Authority, Jaipur in terms of Section 98(5) of the CGST Act, 2017 – Ordered accordingly [Read less]

GST - Assessment, Personal Hearing, Adjournment – Issue of Show Cause Notice on account of difference in the value of outward supplies declared in GSTR 1 and the value of E-way Bills raised – Validity of fixing the personal hearing date before the last date for submission of reply – HELD – The fixing of personal hearing date before the last date for submission of reply is akin to putting the cart before the horse - The approach of the Revenue Authority in fixing the personal hearing date before the last date for submission of reply is contrary to the scheme of the Act - The Section 75(4) and 75(5) of the CGST Act, ... [Read more]

GST - Assessment, Personal Hearing, Adjournment – Issue of Show Cause Notice on account of difference in the value of outward supplies declared in GSTR 1 and the value of E-way Bills raised – Validity of fixing the personal hearing date before the last date for submission of reply – HELD – The fixing of personal hearing date before the last date for submission of reply is akin to putting the cart before the horse - The approach of the Revenue Authority in fixing the personal hearing date before the last date for submission of reply is contrary to the scheme of the Act - The Section 75(4) and 75(5) of the CGST Act, 2017 grant the assessee the right to seek adjournment and the authority is required to grant the same on a showing of sufficient cause – If the statute stipulates a matter to be performed in a particular manner, the same shall be performed in that manner only. Law in this regard is no more res integra and is well-settled by catena of judgments of the Apex Court - the order of assessment is set aside and matter is remitted back to the competent authority to proceed from the stage of the notice – The petition is disposed of [Read less]

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Notice under Section 87 of the Finance Act, 1994, Voluntary Disclosure, Time Limit for Payment, Expiry of Partner - One of the partners of the petitioner-firm made a voluntary disclosure under the SVLDRS for the year 2016-17. However, the partner expired due to COVID-19 before the time limit to pay the disclosed amount expired. The respondents issued notices to the petitioner for non-payment of the disclosed amount and initiated recovery proceedings - Whether the petitioner can be allowed to pay the balance amount with interest under the SVLDRS scheme despite the tim... [Read more]

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Notice under Section 87 of the Finance Act, 1994, Voluntary Disclosure, Time Limit for Payment, Expiry of Partner - One of the partners of the petitioner-firm made a voluntary disclosure under the SVLDRS for the year 2016-17. However, the partner expired due to COVID-19 before the time limit to pay the disclosed amount expired. The respondents issued notices to the petitioner for non-payment of the disclosed amount and initiated recovery proceedings - Whether the petitioner can be allowed to pay the balance amount with interest under the SVLDRS scheme despite the time limit having expired - HELD - The petitioner had made a voluntary disclosure under the SVLDRS scheme and was required to pay the disclosed amount within 30 days as per the scheme. However, due to the death of the partner, the petitioner could not make the payment within the stipulated time - while the Circular issued under the Scheme provided for the lapse of the declaration if the amount was not paid within the time limit, the scheme itself did not have any such prohibition. Considering the objective of the Scheme to provide relief to taxpayers, the petitioner is directed to deposit the balance amount along with 9% interest per annum from June 30, 2020 till the amount is realised. The respondent is directed to adjust the amount from the petitioner's attached bank account and quash the recovery notice once the full payment is made - allowing the petitioner to make the payment would meet the objective of the scheme, particularly since the petitioner had come forward to make the voluntary disclosure - The petition is disposed of [Read less]

Bihar VAT Act, 2005 - Disallowance of Entry Tax set off, Interest imposition under BVAT Act - Respondent authority disallowed the claim of Entry Tax set off taken on closing stock for the period 2012-13. The petitioner argued that the disallowance of the Entry Tax set off and the imposition of interest under Section 39(4) of the BVAT Act was arbitrary - Whether the respondent authority was justified in disallowing the claim of Entry Tax set off taken on closing stock for the period 2012-13 – HELD - In the assessment order for the year 2012-13, the Assessing Authority had clearly stated that the petitioner would get the b... [Read more]

Bihar VAT Act, 2005 - Disallowance of Entry Tax set off, Interest imposition under BVAT Act - Respondent authority disallowed the claim of Entry Tax set off taken on closing stock for the period 2012-13. The petitioner argued that the disallowance of the Entry Tax set off and the imposition of interest under Section 39(4) of the BVAT Act was arbitrary - Whether the respondent authority was justified in disallowing the claim of Entry Tax set off taken on closing stock for the period 2012-13 – HELD - In the assessment order for the year 2012-13, the Assessing Authority had clearly stated that the petitioner would get the benefit of adjustment of the Entry Tax amount on the closing stocks after sale of the stocks in the coming year. However, when the petitioner claimed the adjustment of the Entry Tax amount on the goods sold in the year 2017-18, the same was disallowed by the respondent authority. The approach of the respondent authority to be unfair and against the principles of natural justice - The respondent authority's own statement in the 2012-13 assessment order contradicted its later stance that there was no provision to allow the adjustment of the Entry Tax amount. Therefore, the respondent authority is required to act fairly by considering the claim of the petitioner for adjustment of the Entry Tax - Since the respondent authority had not allowed the adjustment of the Entry Tax amount, which the petitioner was entitled to, the imposition of interest under Section 39(4) of the BVAT Act was arbitrary and against the principles of fair play. The imposition of interest was unjustified and set aside - the impugned assessment order and demand order is quashed and matter is remitted to the respondent authority to consider the request of the petitioner for adjustment of the Entry Tax amount – The writ application is allowed [Read less]

Customs – Rejection of application for Private Warehouse License - Petitioner filed an application for obtaining a private bonded warehouse license under the Customs Act. The application was rejected by the respondent authorities on the ground that the petitioner has been penalized for offences under the Customs Act, Central Excise Act, and the Finance Act as per the provisions of para 3(2)(c) of the Private Warehouse Licensing Regulations - Whether the rejection of the petitioner's application for private warehouse license on the ground of pending litigation and alleged offences under indirect tax laws is justified – ... [Read more]

Customs – Rejection of application for Private Warehouse License - Petitioner filed an application for obtaining a private bonded warehouse license under the Customs Act. The application was rejected by the respondent authorities on the ground that the petitioner has been penalized for offences under the Customs Act, Central Excise Act, and the Finance Act as per the provisions of para 3(2)(c) of the Private Warehouse Licensing Regulations - Whether the rejection of the petitioner's application for private warehouse license on the ground of pending litigation and alleged offences under indirect tax laws is justified – HELD - The pending litigations against the petitioner do not involve any offences under the Customs Act, Central Excise Act or GST Act, but only contraventions or breaches of the general provisions of these Acts. There is a distinction between "contravention" and "offence" under the law. The petitioner or its officers have not been penalized for any offence under the relevant indirect tax laws - the provisions of para 3(2)(c) of the Regulations, which preclude issuance of license if the applicant has been penalized for an offence, are not attracted in the present case as the pending litigations involve only contraventions and not offences. The impugned orders rejecting the petitioner's application is quashed and the respondents are directed to issue the license under the provisions of the Regulation as prayed for by the petitioner if further conditions are fulfilled except para 3(2)(c) of the Regulation - The petition is allowed [Read less]

Customs - Provisional release of goods, Section 110A of Customs Act 1962, Non-compliance with BIS standards - Import of LED lighting chains/luminaries from China. DRI found that the imported goods were undervalued and did not comply with the mandatory BIS standards under IS:10322 (Part 5/Section 7):2017. Accordingly, the goods were seized under the Customs Act, 1962. The petitioner filed for provisional release of the goods under Section 110A of the Customs Act, 1962 - Whether the seized goods can be provisionally released to the petitioner under Section 110A of the Customs Act, 1962 – HELD - Under the Foreign Trade Poli... [Read more]

Customs - Provisional release of goods, Section 110A of Customs Act 1962, Non-compliance with BIS standards - Import of LED lighting chains/luminaries from China. DRI found that the imported goods were undervalued and did not comply with the mandatory BIS standards under IS:10322 (Part 5/Section 7):2017. Accordingly, the goods were seized under the Customs Act, 1962. The petitioner filed for provisional release of the goods under Section 110A of the Customs Act, 1962 - Whether the seized goods can be provisionally released to the petitioner under Section 110A of the Customs Act, 1962 – HELD - Under the Foreign Trade Policy 2015-2020, the import of all electronic and IT goods notified under the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012 was prohibited unless they were registered with the Bureau of Indian Standards (BIS) and complied with the BIS labelling requirements. Import of unregistered/non-compliant notified products was prohibited - the samples of the imported goods were found to be non-compliant with the BIS standards, as per the reports of the BIS - The Section 110A of the Customs Act, 1962, allows the adjudicating authority to provisionally release the seized goods to the owner on furnishing a bond and security as deemed fit by the authority - the petitioner had earlier requested for provisional release of the goods by furnishing bank guarantees, but the same was not considered by the respondents - Applying the principles laid down by the Supreme Court in the Delhi Photocopies case, the seized goods can be provisionally released to the petitioner subject to certain conditions - the respondents are directed to provisionally release the seized goods to the petitioner, subject to the certain conditions – The writ petition is allowed [Read less]

GST – Maharashtra AAR - Canteen Facility, Transportation Facility, Input Tax Credit, Employer-Employee Relationship - Whether the deduction of a nominal amount by the applicant from the salary of the employees who are availing the facility of food provided in the factory premises would be considered as a "Supply of Service" by the applicant under the provisions of the GST Act – HELD - The deduction of nominal amount from the employees' salary towards the canteen facility provided by the applicant would be considered as a supply of service by the applicant under Section 7 of the CGST/MGST Act, 2017. The activity of prov... [Read more]

GST – Maharashtra AAR - Canteen Facility, Transportation Facility, Input Tax Credit, Employer-Employee Relationship - Whether the deduction of a nominal amount by the applicant from the salary of the employees who are availing the facility of food provided in the factory premises would be considered as a "Supply of Service" by the applicant under the provisions of the GST Act – HELD - The deduction of nominal amount from the employees' salary towards the canteen facility provided by the applicant would be considered as a supply of service by the applicant under Section 7 of the CGST/MGST Act, 2017. The activity of providing canteen facility is in the course or furtherance of the applicant's business, as it is incidental and ancillary to the principal business activity. Further, there is a clear reciprocity between the employees and the applicant with respect to the canteen facility, as the facility is provided as per the employment contract and the employees are paying a nominal amount as consideration - the exemption from GST on perquisites provided by the employer to the employee under the CBIC Circular No. 172/04/2022-GST dated 06.07.2022 would not apply in the instant case, as the recovery of nominal amount from the employees cannot be considered as a perquisite. Accordingly, the GST would be applicable on the nominal amount deducted from the employees' salary towards the canteen facility – Ordered accordingly - Whether the deduction of nominal amount by the applicant from the salary of the employees who will be availing the non-air-conditioned bus transportation facility proposed to be provided by the prospective Transport Service Provider will be construed as 'supply of service' by the applicant under the provisions of the GST Act – HELD - The deduction of nominal amount from the employees' salary towards the transportation facility provided by the applicant would also be considered as a supply of service by the applicant under Section 7 of the CGST/MGST Act. The transportation facility provided by the applicant to its employees cannot be considered as a perquisite, as the facility is provided for a nominal consideration and not free of cost. Accordingly, GST would be applicable on the nominal amount deducted from the employees' salary towards the transportation facility - Eligibility to avail input tax credit on the GST paid to the canteen service provider and the transport service provider – HELD - the applicant would not be eligible to avail input tax credit on the GST paid to the canteen service provider and the transport service provider, as the services provided are for the personal consumption of the employees and not for the furtherance of the applicant's business. [Read less]