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2024-VIL-390-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Short payment of service tax - Payment of tax prior to the issue of show cause notice – Appellant case since the was paid by it prior to the issue of show cause notice, as per section 73 (3) of Finance Act, 1994 the department should not have served any notice for the said amount – HELD - it is the job of the assessee to self-assess tax and file returns as required. It is the job of the officer to scrutinize them to ensure that the service tax has been correctly assessed and paid - since the returns are filed online, it is not possible for the assessee to provide any details other than what is required in the ST-3 returns. The central excise officer may seek any details, which he feels necessary to scrutinize them. The appellant cannot be faulted for not providing any information which it was not required to provide in the ST-3 returns - The central excise officer is given sufficient time to scrutinize the returns and issue a demand under section 73 within the normal period of limitation. If he fails to do so, and if some short payment is not detected and the demand gets time barred, the responsibility for that rests squarely on the officer who is mandated to scrutinize the returns and not on the assessee – the ingredients for invoking extended period of limitation need to be established and they cannot be presumed - the Commissioner has erred in issuing a show cause notice covering the amount which was already paid with interest prior to the issue of SCN. This payment is squarely covered by section 73(3) of the Finance Act and it is not excluded by virtue of section 73(4). The demand to this extent is set aside - For the same reason the imposition of penalty under section 78 on the assessee is also set aside - assessee’s appeal is allowed and the Revenue’s appeal is dismissed - Revenue appeal against dropping of demand under rule 6(3) of CCR, 2004 on the ground that the amount of CENVAT credit in terms of rule 6(3) of the Rules was already reversed but due to appellant mistake it was not shown properly in the corresponding ST-3 returns – HELD - the Commissioner examined the returns and the CA certificates and came to the conclusion that the amount under rule 6(3) was correctly reversed - If the Revenue feels that the Commissioner committed an error, it should point out as to where the error lies. It cannot be based on mere conjectures - the Revenue’s appeal is without any merit and it deserves to be dismissed [Read less]

2024-VIL-382-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Payment towards Technology Transfer Agreement - Demand under Reverse Charge Mechanism towards expenses incurred in foreign currency on account of Licence Fee, Documentation charges and Foreign Technician Fees - Whether the Appellant is liable to pay service tax on the license fees and other incidental expenses paid to overseas company towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines under the category of Intellectual Property Services – HELD – the Ld. Commissioner has relied upon the stay order to confirm the demand. However, it would be inappropriate to rely on a stay order as it is merely an interim order and cannot be taken as laying down any enunciation in law and is bereft of any precedent value - technical knowhow provided by a foreign company to an Indian company under a licence for consideration of Royalty equal to a percentage of net sale price of the goods, was nowhere registered or patented in India as an IPR service and therefore, the recipient of such service was not liable to pay Service Tax under RCM as IPR service - the transfer of technology by foreign company to the appellant would not qualify as “intellectual property right” within the meaning of Section 65(55a) of the Finance Act, 1994 and therefore, would not be covered under the definition of “intellectual property service” within the scope of Section 65(55b) of the Act - the impugned order is set and the appeal is allowed - Repair of MIG Engines - Service tax demand on amount received from the Malaysian company against repair of MIG Engines – HELD – appellant has characterized this service of repairs / rectifications provided by them as Export of Service not liable to tax - It is undisputed that the activity of repairs and maintenance was carried out within the jurisdiction of India and therefore was liable for tax under Section 65(105)(zzg) as “management, maintenance or repair” service and was liable for payment of duty in terms of Rule 3(1)(ii) of the Export of Services Rules, 2005 - The Ld. Commissioner vide the impugned order has categorically held that the provision of service having took place in India, there is a breach of Rule 6A of the Service Tax Rules, 1994 and Rule 3(1)(ii) of the Export of Services Rules, 2005. To this extent, agree with the findings of the Ld. Commissioner on the aspect. However, demand for the extended period cannot be sustained as there is nothing on record to establish mala-fides on the part of the appellant - Extended period of limitation – HELD - In view of the fact that the appellant is a public sector company completely under the control of the Ministry of Defence and owned by the Government of India, it is rather unacceptable and quite improper to assume intent to evade payment of duty on the part of the organization – Not in agreement with the findings of the Ld. Commissioner that the appellant had deliberately suppressed material information, wrongly classifying as ‘Export of Service’ with intent to evade duty – No merit to impute the charge of suppression to a government organization owned by the Ministry of Defence, for the non-payment of duty / tax with intent to evade the same by suppressing the material information, more so when it is depicted inappropriately and construed accordingly - the demand for the extended period cannot be sustained [Read less]

2024-VIL-358-BOM | High Court SGST

GST - Section 89 – Liability of Directors of Private Company - Resignation as Director of the Company – Recovery proceedings against former Director of the Company – Validity of attachment of immovable property and current account of former Director for recovery of due of Company – HELD – Recovery sought to be made under the impugned order dated 27th November 2020 is for the period 1st April 2018 to 31st March 2019. However, from March 2018, the petitioner had not taken any active part in the day-to-day affairs of the company. Thus, for the period in question, the petitioner never acted as a director of the company - All such factual issues were required to be verified before the impugned attachment orders were passed by the designated officer, by issuing a show cause notice to the petitioner but such exercise was undertaken. Petitioner was neither issued a show cause notice nor was he heard, before such orders were passed – Further, the principal liability is not on the “petitioner” who is not a registered person within the meaning of Section 79(1) of the MGST Act, 2017. Further Section 89 of the Act clearly provides that before taking any action of recovery against the directors of the company, a subjective satisfaction is required to be achieved by the concerned officer in regard to whether a person concerned against whom recovery is sought to be made was a director of a Private Limited Company for the concerned period. It is only after such satisfaction to the effect that such person was the director of the company, the liability could be fastened against such director - as to on what basis the respondents have proceeded to make the attachment of the petitioner’s property, is not known. No reasons are attributed whatsoever except for the impugned order - the impugned order is in breach of the rights guaranteed to the petitioner under Art. 14, read with Art. 300A, of the Constitution - the impugned order is set aside and the writ petition is allowed [Read less]

2024-VIL-389-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Refund of pre-deposit - Abatement of proceedings - Rule 22 of the CESTAT (Procedure) Rules, 1982 - Initiation of insolvency proceedings under the provisions of the Insolvency and Bankruptcy Code, 2016 during pendency of appeal – approval of Resolution Plan by NCLT – Whether the present appeals abate and the Tribunal, having become functus officio, would thus not be in a position to give any directions in the matter or any further direction to be issued with regard to deposits made by the erstwhile appellants under Section 35F of the Central Excise Act, 1944 – Appellant of the view that in the present case, liquidation process had not been resorted to and it is not a case of winding up of the existing company and therefore, Rule 22 of the CESTAT (Procedure) Rules, 1982 has no application - Difference between ‘liquidation’ and ‘winding up’ - HELD - once the CIRP process is set out, all pending disputes are given a go-by and what occupies the centre stage is the moratorium declaration and its public announcement. Further, the moment the Resolution Plan is approved in terms of Section 31 of the Code or a moratorium is issued in terms of Section 14 of the Code, the said provisions of the code become applicable statutorily - in the context of Rule 22, the terms ‘liquidation’ and ‘winding up’ have been used rather loosely, though resulting in the same implied consequence - to hair-split the argument that Rule 22 cannot be applied to the fact of the case as it deals with winding up of the company, is not made out - ‘winding up’ is the process of settling of accounts and liquidating assets in anticipation of the dissolution of a corporation whereas ‘liquidation’ can be construed as the process of ascertaining the liabilities and distribution of the assets particularly in bankruptcy or dissolution. In other words, liquidation is largely a process of winding up - whether pre-deposit is in the nature of a security deposit or otherwise, does not arise for consideration in the present matter in view of the fact that the Tribunal being a creature of the statute, is bound by the provisions of the statute and the appeals abating under the given circumstances renders the Tribunal as functus officio - The order of abatement cannot be construed to mean that the issue involved has been decided in favour of the appellant. The question of refund of pre-deposit is a natural corollary to the successful outcome of the appeal, to situations concerning insolvency proceedings, no such order can be passed by the Tribunal in view of the existing provisions in law - Having in depth analysed the legal position and case-laws in extenso, with reference to Rule 22 and Rule 41 of the CESTAT (Procedure) Rules, 1982, the observations of the Hon’ble Apex Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., the SOP prescribed by the CBIC dated 23.05.2022 and the Resolution Plan as approved by the NCLT, the present appeals abate. With the abatement of the appeals, the Tribunal is rendered functus officio in matters relating to these appeals - Moreover, the impugned Orders-in-Original get merged with the order of the NCLT, approving the Resolution Plan - the present appeals abate with effect from the date of approval of the Resolution Plan by the NCLT – Ordered accordingly [Read less]

2024-VIL-62-AAR | Advance Ruling Authority SGST

GST – Gujarat AAR - Liability of SEZ unit to discharge GST under RCM on specified services availed from DTA – applicant availed GTA, legal services from advocate, security services, bus hire services from DTA - Whether the applicant being an SEZ unit is required to pay tax under reverse charge mechanism on specified services in accordance with Notification No. 10/2017-IT(Rate) dated 28.6.2017, as amended – HELD - the intention of the Legislature is not to tax supplies to a unit in SEZ or a SEZ Developer - The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notific... [Read more]

2024-VIL-60-AAR | Advance Ruling Authority SGST

2024-VIL-377-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax – Transactions between Associated Enterprises - Demand of service tax on provisional entry made in the book of accounts for expenses towards the payments to be made to associate enterprises - point of taxation with respect to associated enterprises – Extended period of limitation – HELD – Pursuant to amendment to Section 67 of the Finance Act, 1994 vide Section 90 (C) of the Finance Act, 2008, the determination of taxable value in case of associated enterprises was to be made on the basis of any amount credited or debited in any book of accounts of the person liable to pay service tax, where the transaction was between the associated enterprises. Thus, the determination of taxable value was to be after taking into accounts all the credit and debit and credit entries made by the person liable to pay service tax, in case of transaction of services between the associated enterprises - the appellants were require to pay the service tax as advance tax, at the time of making the expense entry in their book of accounts, for the expense incurred towards the services received from their associate enterprises - Appellant is required to pay Service Tax on the service received by them from their associate enterprises on the taxable value as determined in terms of section 67 of the Finance Act, 1994. Appellant should furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority - The service tax liability is to be discharged by the appellant in the manner and at the time as determined in terms of Rule 6 of the Service Tax Rules, 1994 read with Rule 7 of Point of Taxation Rules, 2011. For any delay in payment of Service Tax from the due date interest at appropriate rate should be paid by the appellant in terms of Section 75 of the Finance Act, 1994 for period of delay in payment of tax - Extended period of limitation for making the demand as per Section 73 is invokable for making this demand - Demand of service tax needs to be recomputed after determining the value of taxable service as per section 67 and after adjusting the tax actually paid by the appellant. Reconciliation in the figures of tax paid as per show cause notice and as claimed by the appellant should be done before concluding any short payment of service tax - Penalty under Section 78 is imposable but needs to be redetermined after computing the tax short paid - For re-computation of the demand of tax and interest, and the penalties imposable the matter need to be remanded back to the original authority – the appeal is partly allowed [Read less]

2024-VIL-375-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Multiple assessments of Bills of Entry – Appellant case that Section 17 of the Customs Act, 1962 provides for self-assessment by the importer and re-assessment by the proper officer. Once the Bill of Entry is re-assessed, there is no scope for the proper officer to again reopen and make a third or fourth assessment – whether multiple assessments resorted to by the assessing officers contrary to the provisions of section 17 of the Act – HELD - Nothing in section 17 of the Customs Act, 1962 states that the officer can re-assess only once and not more than once - the submission of the appellant that a second reassessment is not permissible after re-assessment by the officer under section 17 is not correct. It is also incorrect to say that once the re-assessment order is issued, another order of provisional assessment cannot be issued - an assessment is not always a one-shot affair and the proper officer who does the assessment will have to revise the assessment on receiving additional inputs from the examining officer or otherwise - until the order clearing the goods for home consumption under section 47 of the Act is issued, the goods continue to be imported goods and assessment and re-assessment is permissible more than once. It is this flexibility within the system which greatly facilitates trade and expedites clearances while providing an opportunity to the assessing officer to make changes in the assessment if necessitated before clearing the goods for home consumption – appeal is partly allowed - Principles of natural justice - the appellant submitted that the principles of natural justice were violated because no SCN was issued to the appellant before finalizing the assessment – HELD - Regular assessment under section 17 or its finalization under section 18 have no provision for issue of SCN. However, if the duty is re-assessed under section 17(2) by the proper officer, unless the importer accepts such reassessment in writing, he has to issue a speaking order within 15 days. Similarly, nothing in section 18 which deals with provisional assessment or its finalization provides for issue of an SCN. In these cases, initially, the Bills of Entry were provisionally assessed awaiting the test reports of CRCL on receiving which the assessments were finalized. The appellant was provided copies of the test reports and the appellant made written submissions which were considered – there is no violation of either any provision of the Act or the principles of natural justice in not issuing an SCN to the appellant before finalizing the assessment - Whether the Deputy Commissioner, ICD, Piyala is the proper officer to finalise the assessment – the appellant submitted that as per the judgment of the Supreme Court in Canon India, the Deputy Commissioner, ICD, Piyala was not the proper officer to finalise the assessment - HELD – the submission of appellant is completely misplaced. Canon India was on the question as to whether an officer of DRI is the proper officer to issue a notice under section 28 and the Supreme Court held in negative. In this case, neither was a notice issued under section 28 nor is an officer of DRI involved. The provisional assessment order was issued by Assistant Commissioner, ICD, Piyala and it was finalized by the Deputy Commissioner, ICD, Piyala. A successor in office naturally completes the action by the predecessor. Therefore, no infirmity in the order of finalization of assessment being done by the successor officer - Classification of the imported goods - whether goods declared as ‘Amino acids’ are classifiable under CTI 29379090 as claimed by the appellant or under CTI 21069099 as classified by the department – HELD - The composition of the imported goods as seen from the labels shows clearly that they are mixtures of amino acids, vitamins, a few stimulants like caffeine and tea and some flavours and nothing suggests that they are hormone stimulating or hormone inhibiting factors. The impugned goods do not merit classification under CTI2937 90 90 - The imported goods are not protein concentrates (such as whey protein) but are mixtures of amino acids, vitamins, etc. for use by dissolving in water. In our considered view, Chapter Note 5(b) squarely puts the imported goods under heading 2106 and since they do not exactly fall under any of the other Customs Tariff Items, CTI 2106 90 99 is the correct classification. However, the enhancement of value cannot be sustained. [Read less]

2024-VIL-63-AAR | Advance Ruling Authority SGST

GST – Gujarat AAR – Manufacture of not - Classification of activity of insulating of bare M.S. Pipes provided by the customers on job work basis – Whether the activity of insulating of bare M.S. Pipes provided by the customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant would be classifiable under clause (iv) of Sr. No. 26 or under Sr. No. 27 of notification No. 11/2017-CT (Rate) dated 28.6.2017 - applicant case that the services provided by them are amounting to manufacture but not covered by Sr. No. 26 [heading 9988] of the Notification No. 11/2017-CT (Rate) dated 28.6.2017 bu... [Read more]

2024-VIL-355-MAD | High Court SGST

GST - Levy of GST on total trade receivable by treating total trade receivables on pan-India basis as the taxable turnover – Levy of 36% tax on total turnover in the financial statement – HELD - In the impugned orders, the fourth issue dealt with the total trade receivables of the corporate entity was drawn from the financial statement of such corporate entity. Upon consideration of the reply on this issue, further proceedings were dropped. However, the same sum was treated as a taxable turnover under the fifth issue pertaining to sundry creditors and tax liability was imposed on such amount - Given that the issue rela... [Read more]

2024-VIL-61-AAR | Advance Ruling Authority SGST

GST – Karnataka AAR - Section 2(17) of the IGST Act 2017 - Online information and database access or retrieval (OIDAR) services – Scope of phrase “supply of online educational journals or periodicals” - Supply of subscription of online subscription based clinical database services (Clinical Key services) to M/s All India Institute of Medical Sciences (AIIMS) - Whether the supply of services of subscription of Clinical Key to AIIMS is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 – HELD – the supply of subscription-based services via ‘Clinical Key’ is covered under OIDAR services - applicant provides online access and retrieval services to a systematically organized clinical / medical database with one of the constituents of database being journals or periodicals. One constituent part of database alone cannot define the whole. Given the composite nature of contract and supply involving several constituents, the supply by the applicant does not qualify as ‘supply of online educational journals or periodicals’ - Exemption under Entry No. 69(b)(v) of the Notification No. 9/2017-IT(Rate) dtd 28.6.2017 is very specific to ‘supply of online educational journals or periodicals’ and not to entire gamut of OIDAR services, which is a composite supply of service, provided to educational institutions - supply of services by the applicant to AIIMS is not covered under exemption in terms of Entry No. 69(b)(v) of the Notification No. 9/2017-IT(Rate) dtd 28.6.2017 as amended – Ordered accordingly - Section 2(11) & 2(16) of IGST Act, 2017 - Whether it is the Applicant or the AIIMS needs to discharge the GST liability (i) for the period up to 30 September 2023 and (ii) for the period after 01 October 2023 – HELD - AIIMS, being a person located in the taxable territory other than non-taxable online recipient, is liable to discharge GST on OIDAR services for the period upto 30.09.2023, in terms of Sl.No.1 of Notification 10/2017-Integrated Tax (Rate) dated 28.06.2017 - For the period w.e.f 1.10.2023, any unregistered person receiving OIDAR services, located in taxable territory is considered as ‘Non-taxable Online Recipient’ (NTOR). It is an admitted fact in that AIIMS has obtained GST Registration, hence AIIMS being a GST registered recipient of OIDAR services, is liable to discharge GST liability from 1.10.2023 - Applicant is not liable to discharge the GST liability in respect of supply of services by the applicant to AIIMS through subscription of Clinical Key for both the periods i.e, for the period upto 30th September 2023 and for the period after 01 October 2023. The recipient of service, being the importer of service, is liable to discharge GST liability for both the periods - Whether the supply of services of subscription of Clinical Key to other educational institutions is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 – HELD - the exemption under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 is applicable only on ‘supply of online educational journals or periodicals’, whereas the applicant providing services of subscription of Clinical key are providing services by way of online access and retrieval services to a systematically organized clinical / medical database - The supply of services (subscription of Clinical Key) to other educational institutions is not exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 [Read less]

2024-VIL-59-AAR | Advance Ruling Authority SGST

GST – Karnataka AAR – Pure Service - Taxability of supply of Teachers and Lecturers to Municipal schools on outsourcing basis – Eligibility to exemption under entry no.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - the impugned services of supply of teachers/lecturers is provided by way of an activity in relation to the function of promotion of educational aspects entrusted to the Municipality (BBMP) under Article 243W of the Constitution - The service of supply of teachers/ lecturers to schools/ colleges run by BBMP, on outsource basis is covered under pure services being provided to a... [Read more]

2024-VIL-352-MAD | High Court SGST

GST – Issue of notice on account of GSTR-3B and GTRA-2A mismatch – Credit notes wrongly reported in ITC register – HELD - the explanation of the petitioner was not duly examined from the perspective of ascertaining whether the amount reflected as ITC tallies with the value of credit notes issued by the petitioner. If such exercise had been carried out, it would become clear as to whether there was revenue loss by way of excess availment of ITC - Since such exercise was not carried out and findings were recorded confirming the tax demand merely because credit notes were not duly reported in GSTR 1 or in the auto popul... [Read more]

2024-VIL-351-ALH | High Court SGST

GST - Stock Transfer of goods - Wrong vehicle number in e-way bill – Levy of penalty under Section 129 of the CGST Act, 2017 - whether the wrong mention of vehicle no. would be considered as a human error and will be covered under the circular No.41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018 – HELD – since it is a case of stock transfer there is no intention on the part of dealer to evade any tax - the minor discrepancy as to the registration of vehicle in the e-way bill would not attract proceedings for penalty under Section 129 of the CGST Act - Moreover, the Department has not placed any othe... [Read more]

2024-VIL-369-CESTAT-AHM-CU | CESTAT CUSTOMS

Customs – Import of Knitted Polyester Fabrics and various other Electrical goods by SEZ unit - Rejection of Value declared by SEZ unit - Demand of differential Customs Duty from DTA unit under Section 28(4) of the Customs Act along with consequent interest with respect to respective imported goods – Validity of demand based on show cause notice which is yet to be adjudicated - HELD – show cause notice was issued proposing rejection of value declared by said SEZ Unit and demanding differential duty along with interest from DTA buyers (including the appellant) with respect to respective imported goods. The said show ca... [Read more]

2024-VIL-360-MAD | High Court SGST

GST - Issuance of credit notes by supplier - Disallowance of ITC with regard to certain inputs by non-speaking order – Levy of tax under reverse charge mechanism on professional and consultant charges - HELD - With regard to the issue relating to the issuance of credit notes, matter remanded for re-consideration upon considering the submissions of the petitioner that lower ITC was availed of in the subsequent months and that no revenue loss was occasioned as a result – With regards legal and professional charges, the petitioner stated that GST is payable on forward charge basis for professional and consultant charges a... [Read more]

2024-VIL-374-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise – Scope of ‘Input Service - Cenvat Credit on input services of Air Charter service – Revenue appeal seeking to deny Cenvat Credit on Air charter service on the ground that hiring of aircraft does not have any nexus with the manufacturing of goods – HELD - The definition of the input service is wide enough to cover all the services received by the appellant as input services without being directly used in the process of manufacture. If it is established that the services were used by the manufacturer for the production of the finished goods which is one of the criteria to credit could not have been de... [Read more]

2024-VIL-347-MAD | High Court SGST

GST – Manufacture of alcoholic liquors for human consumption – Payment of GST@5% - issue of Show cause notice proposing demand of 18% GST on job work of manufacture of alcohol – HELD – the assessing officer took into account the evidence placed on record, including the licence issued by the Excise Commissioner, the licence cum manufacturing agreement and the statements of petitioners - not inclined to interfere with the impugned order and show cause notice - it is just and appropriate that the petitioner be permitted to present a statutory appeal – writ petition is disposed of by permitting the petitioner to pres... [Read more]

2024-VIL-348-MAD | High Court SGST

GST – Notice for reversal for transitional credit - Petitioner’s case that due closure of business it was unaware of proceedings culminating in the impugned order – HELD - The petitioner appears to be a registered person under applicable GST enactments as on date. As a registered person, the petitioner is under an obligation to monitor the GST portal on an ongoing basis. The present state of affairs has transpired on account of the petitioner not monitoring the GST portal and responding to the show cause notice and hearing notices. At the same time, transitional credit was reversed under the impugned order without he... [Read more]

2024-VIL-376-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise - Classification of display/storage units used as display devices for trade advertisement at retail outlets – whether different display units manufacture by the appellant are classifiable under Chapter Heading 4911 or 9403 of CETA,1985 during the relevant period from 01.10.2009 to 31.03.2014 – Invoking of extended period of Limitation - HELD - the item in question is composite in nature i.e., on the metal/PVC frames, printing and advertising materials are pasted. The claim of the Revenue is that the metal frame on which advertising materials are pasted or affixed is a furniture, whereas the claim of the appellant is that the advertisement material is only affixed on the metal frame for support and display – A plain reading of the subrule (b) of Rule 3 of the General Interpretative Rules makes it clear that the articles which gives the essential character to the composite material be the decisive factory in classifying the composite material - the primary object of the display units supplied by the appellant to their clients is for advertising of material and incidental benefit is, while displaying the material, it is placed on the display unit, which cannot convert the display unit as a ‘furniture’ for storage of the material. Besides, the display units have a short life of one or two weeks, as stated by the customers of the Appellant, that is, till the advertisement of the material or for the occasions of festivals. It is not meant to be used as furniture for longer duration for storage of the material. Therefore, the subject display units are correctly classifiable under chapter 4911 and not under Chapter 9403 as alleged by the department – there is no merit invoking extended period of limitation confirming demand as the facts were within the knowledge of the department much before issuance of the present notice and no misdeclaration or suppression of fact therefore could be alleged - the impugned order is set aside and the appeals are allowed [Read less]

2024-VIL-365-ALH-ST | High Court SERVICE TAX

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Admittance of amount payable by the petitioner before the audit party – Rejection of declaration on the ground no written communication issued to the petitioner with respect to quantification of disputed amount on or before the cut-off date 30.06.2019 – HELD – The CBIC, the highest administrative authority under the Scheme, chose to clarify the statutory scheme and included within the scope of "quantified" amount as mentioned under Section 125 (1) read with Section 121(r) of Finance Act, 2019, any amount that may have been admitted by the declarant before the... [Read more]

2024-VIL-346-MAD | High Court SGST

GST - Classification of catalysts and catalytic converters - Petitioner classified catalysts under HSN Code 38151290 and catalytic converters under HSN Code 84213990 – Issue of SCN under 74 of the CGST Act, 2017 in pre-determined manner – Revenue reliance on Apex Court judgement in Westinghouse Saxby case - Petitioner’s case that Section 74 cannot be invoked in relation to classification disputes – HELD - It is possible for the petitioner to respond to the respective show cause notice and indicate that none of the ingredients of Section 74 are made out. Even if the assessing officer disregards the same and issues a... [Read more]

2024-VIL-372-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax – Scope of term ‘airport/Aerodrome’ - Construction of ‘cargo agents building’ by way of annexxe to the cargo terminal at the airport - Whether construction of cargo agents building falls within the ambit of ‘airport’ and exempt from service tax under the exclusion clause in Section 65(105)(zzzza) of Finance Act, 1944 – HELD - admittedly, the air cargo agent building is constructed as an annexee building to the air cargo terminal and the same is necessary for the smooth functioning of the air cargo terminal - It is admitted fact that both incoming and outgoing cargo is partly processed by the air... [Read more]

2024-VIL-371-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax – Classification – ‘Sponsorship Services’ or ‘Sale of Space for Advertisements’ service - Demand of service tax under the category of ‘sale of space and time for advertisement’ on amount received for providing stands / boxes inside the stadium to corporates during the conduct of cricket tournaments – HELD - appellants have not granted any right to the sponsors to display their products on the boxes / stands. So also, there is no right given in the sponsorship agreement to display any advertisement. The sponsor has only right to display his name on the stand / box - The definition of sponsorshi... [Read more]

2024-VIL-370-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Input service – Denial of refund of Cenvat credit on the ground of nexus of input services with the output services and mismatch of figures of the refund claims and Cenvat credit reflected in relevant ST-3 returns – HELD - The definition of ‘input service’ prior to 1.4.2011 had wide ambit as it included the words “activities relating to business”. Further, in case of output services provider as per first limb of definition of ‘input services’ under Rule 2(l) of CCR 2004, it is merely sufficient to establish that input services were used for providing output services. The first limb of the definition does not use the words ‘directly’ and merely says ‘inputs used for providing output services’ - The finding of Ld. Commissioner (Appeals) that the appellant has not established that input services were directly used for providing output service is adding words into the definition of “input service” and therefore not acceptable - appellant is eligible for the refund of credit of input service prior to 1.4.2011 – Denial of refund for the reason that the input service did not have nexus with the output service, is set aside – Since there is difference in amounts as reflected in the ST-3 returns as well as refund claim, the entire matter requires to be remanded to the adjudicating authority to reconsider afresh, the claims which have been rejected - The impugned orders are set aside and the appeals are allowed by way of remand - Difference in the amount of the cenvat credit disclosed in the ST-3 returns and the refund of credit filed by the appellant for the relevant period – HELD - It is submitted by the Ld. Consultant that the refund claim filed by them is higher than the amount of credit disclosed in the ST-3 returns, and that there is difference of more than Rs.5 lakhs - it is not forthcoming from records as to which of the services this difference in amount is spread over. For this reason, the matter requires to be remanded. In case the appellant is able to furnish that they have availed these input services of higher amount, the original authority is directed to consider as per law and as per findings rendered in this order - Unregistered premises – HELD – Following the judgement of the Hon’ble Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs CST Bangalore it is held that credit cannot be denied for the reason that the premises is not registered - Rejection of refund claim on this grounds is not justified - Grant of interest on delayed refund – HELD - It is brought out that the appellant was issued several deficiency memos as they had not produced the necessary documents at the time of availing refund claim. So also, there is difference in the amount of the refund claim and the amount of credit disclosed in the ST-3 returns. All these require much correlation and consideration by the adjudicating authority. For these reasons, there is no ground to grant interest as there is not much delay in sanctioning refund. The issue of interest on delayed refund is held against the appellant and in favour of the Department - Renting of Immovable Property Services (Parking Service), Air Travel Agency Service, Photography Service, Management Consultancy Service, Commercial or Coaching Service, Event Management Service, Supply of Tangible Goods service, Service tax on out of pocket expenses, Security agency services, Pandhal & Shamina Services – HELD – the services described in the table furnished by appellant do not fall under the exclusion clause of definition of input services (post--1.4.2011). The department therefore cannot reject the refund alleging that the services do not have nexus with output services - original authority is directed to verify the invoices as well as the services of the air travel agency service, photography services, as to whether these are used for personal consumption. If they are used for the activity of the company the appellant would be eligible for credit. However, the appellant is not eligible for refund of credit of out of pocket expenses - For the period post-1.4.2011 also, there is difference in the amount of refund claim as well as the amount of credit disclosed in the ST-3 returns. For these reasons, these appeals also require to be remanded to the adjudicating authority for reconsidering the issue of refund. [Read less]

2024-VIL-373-CESTAT-HYD-CE | CESTAT CENTRAL EXCISE

Central Excise - Appellant is engaged in processing of tubes (stainless steel pipes) so that the pipes can be used for the purposes of oil drilling – Revenue of the view that processing of tubes amounts to ‘manufacture’ and the appellant is liable to discharged excise duty on these goods - whether the processes carried out by the appellant amounts to ‘manufacture’ or not – HELD – the present SCN has been issued by the Revenue due to change of opinion and/or interpretation after introduction of the 8 digit tariff. The only case of Revenue is that under the 8 digit tariff, due to processes undertaken by the app... [Read more]

2024-VIL-368-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise - Eligibility of Cenvat credit on various items such as, down comers, tray decks, separator with lifting beam (frame) assembly, catalyst outlet screen, centrifugal pumps, tools and tackles, regenerator internal steam, gas compressor, tandem dry gas seal, vertical storage container of ST rotor, rotor assembly, turbine assembly, control valve, industrial valves, pipes, tubes, pipe fittings, vales, flanges, heat exchanger, earthing control cables, flame proof lighting, foundation template etc. received and used in the manufacture of various sub-plants in capacity expansion project – HELD – The learned Commi... [Read more]

2024-VIL-357-MAD | High Court SGST

GST - Mismatch of GSTIN in invoices – Claim of input tax credit based on wrong GSTIN - Denial if ITC - Belated filing of Return – Levy of interest – HELD - As far as the denial of input tax credit is concerned, there appears to be discrepancy in the GSTIN given by the supplier in the invoice raised on the petitioner and correct GSTIN of the petitioner. The petitioner can get suitable certificate from the supplier that the sale was indeed made to the petitioner - The petitioner can give proper explanation for the discrepancy in the GST number and in the invoices raised by the supplier and furnish it before the appella... [Read more]

2024-VIL-363-GUJ | High Court VAT

Gujarat Value Added Tax Act, 2003 - SEZ Unit – Reversal of transitioned credit in the electronic ledger - Refund on excess input tax credit transitioned under Section 140 of the GST Act but voluntarily reversed – issue of refund order along with interest – short payment of interest - petitioner aggrieved by suo motu revision of refund payment order by reducing the amount of interest from the date of reversal of the credit – HELD - Merely because the petitioner has transferred the amount to the electronic credit ledger coupled with the fact that such amount remained unutilized till it was reversed by the petitioner ... [Read more]

2024-VIL-362-GUJ | High Court SGST

GST - Change in constitution of firm – Activation of GSTIN with retrospective date - Non-completion of migration to GST regime due to mismatch of PAN and the provisional GSTIN – Petitioner seeking activation of its GSTIN, obtained on 05th April, 2018, to be made effective from 01.07.2017 and granting final certificate of registration to the from 01.07.2017 and allow petitioner to file returns for the period from July 2017 to March 2018, avail and utilize input tax credit – HELD - there is no fault on part of the petitioner for not being able to utilise the provisional GST number which was given to the petitioner on t... [Read more]

2024-VIL-353-MAD | High Court SGST

GST – Carry forward of excess tax paid as per self-assessment – Appellant-case that excess amount has to be returned back and it can be adjusted by way of carry forward the same into ITC for the next year – Demand of amount carried forward as input tax credit – HELD - the net tax payable on the previous year has been shown both for the State GST as well as Central GST in minus, that means, if it is zero balance nothing to be returned, if it is in minus, the tax excessively paid previously has to be returned back, therefore, the said excess payment of more than net tax payable have been made as a carry forward by wa... [Read more]

2024-VIL-354-MAD | High Court SGST

GST - Section 140 of the TNGST Act, 2017 - Transitional credit of advance tax paid under TNVAT Act, 2006 - admissibility of transitional credit of advance tax paid that remained unutilized in the Return filed by the petitioner for the month of June, 2017 – HELD - If the amount of advance tax had remained un-utilised under the VAT or under the TNVAT Act, 2006, it has to be allowed to be transitioned under Section 140 of the TNGST Act 2017. The language of Section 140(1) of the TNGST Act, 2017 makes it clear that any amount of Value Added Tax and Entry Tax remaining un-utilized in the return shall be allowed to be transiti... [Read more]

2024-VIL-15-AAR-CU | Advance Ruling Authority CUSTOMS

Customs AAR - Classification of Airsoft gun – Electronic toys - Toy Gun – HELD - Airsoft Toy Guns of models AK Series CYMA, Double Bell, Classic Army, SRC; M4 Series CYMA, Double Bell, Classic Army, SRC; - P90 Series CYMA, Double Bell, Classic Army, SRC: - M15 and M16 Series CYMA, Double Bell, Classic Army, SRC; MP5 Series CYMA, Double Bell, Classic Army, SRC; G36 Series CYMA, Double Bell, Classic Army, SRC; Shotgun toy blaster CYMA, Double Bell, Classic Army, SRC; LMGs CYMA, Double Bell, Classic Army, SRC; Electric Pistols CYMA, Double Bell, Classic Army, SRC, as claimed by the applicant as Toys merit classification u... [Read more]

2024-VIL-364-GUJ-CE | High Court CENTRAL EXCISE

Central Excise - Eligibility to Cenvat credit on welding electrodes, wire FLR, filler Wires, Welding wires, Wire rope, material used for railway line and capital goods i.e. M.S. Gratings/ G.I. Coated Gratings - Revenue case that use of subject goods for repair and maintenance of plant and machinery cannot be considered to have been used “in or in relation to the manufacture of final products” and, as such, goods are not integrally connected with the manufacture of the petroleum products – HELD – the issue is no more res-integra in view of the decision of the Hon’ble Apex Court in Kisan Co-operative Sugar Factory ... [Read more]

2024-VIL-359-KER | High Court VAT

Kerala General Sales Tax Act, 1963 – Section 44 - Eligibility to interest on amount of tax refunded pursuant to favourable Court order - HELD - It is true that the earlier orders of assessment were set aside and this Court specifically directed the authorities to extend the benefit of the G.O. dated 07-07-2008 and the circular dated 24-07-2008, in respect of inter-state transactions to the petitioner. However, the Court while disposing of the writ petition specifically directed the passing of fresh orders of assessment – Section 44 of the KGST Act, 1963 and in particular sub-section (4) clearly indicates that it is onl... [Read more]

2024-VIL-349-GAU | High Court VAT

Assam Value Added Tax Act, 2003 – Sale or Service - Supply of launch vehicles on hire charge basis in connection with construction of railway bridge - Whether the transactions in relation to the hiring of launch vehicles in connection with construction of the Bridge Project on the basis of contract with Railways would come within the ambit of ‘sale’ as defined in Section 2(43) of the Assam VAT Act, 2003 or it would be ‘service’ in terms with Section 65(105) (zzzzj) of the Finance Act 1994 – HELD - the contracts in question are for providing the service of the launch vessels to the Railways, as the Railways are ... [Read more]

2024-VIL-350-KAR-ST | High Court SERVICE TAX

Service Tax - Construction of Residential Complex Service – Suppression or not - setting aside of penalty under Section-78 of the Finance Act, 1994 - Whether the CESTAT erred in dropping the demand for extended period in respect of Construction of Residential Complex Service (other than Villas) by stating that there is no suppression, when the assessee has not declared the correct value of taxable services vis-à-vis the figures shown in the Balance Sheet – HELD - the Appellate Tribunal has considered the relevant aspect of the matter and noticing the judgment of the Hon’ble Supreme Court in the case of Nizam Sugar F... [Read more]

2024-VIL-378-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs – Customs Tariff Act, 1975 – Import of goods – Classification – Appellant filed bills of entry for clearance of imported goods by declared same to be ‘automatic data processing machine’ under CTH 8471 of First Schedule to the Act – Adjudicating authority rejected classification claimed by Appellant under CTH 8471 and adopted classification under CTH 9503 and confirmed demand of differential duty – HELD – Classification of goods is a matter relating to chargeability and burden of proof is squarely upon Revenue – If Department intends to classify goods under a particular heading different from tha... [Read more]

2024-VIL-384-CESTAT-MUM-CE | CESTAT CENTRAL EXCISE

Central Excise – Manufacture of medicaments – Determination of assessable value – Demand of duty – Appellant is engaged in manufacture of Medicaments, which were marketed through distributors – Revenue issued show cause notice to Appellant questioning non-inclusion of certain expenditures borne by distributors in assessable value – Adjudicating authority confirmed demand of differential duty – Appellate authority set aside demand and remanded matter to adjudicating authority – Adjudicating authority once again confirmed demand proposed in show cause notice – Commissioner (Appeals) affirmed order passed by... [Read more]

2024-VIL-379-CESTAT-CHD-ST | CESTAT SERVICE TAX

Service Tax – Section 65(19) of Finance Act, 1994 – Sale of tickets – Earning of commission – Tax liability – Appellants are engaged in providing Air Travel Agents Services – Appellants were buying tickets from other GSA/IATA agents and sale same to clients – GSA/IATA agents passed discount or commission given by airlines to Appellants after retaining a portion of same – Revenue opined that commission retained/earned by Appellants is towards service rendered by them to co-GSA/IATA agents for business auxiliary services provided by Appellants to co-GSA/IATA agents – Adjudicating authority confirmed demand of service tax under category of Business Auxiliary Services – Whether Appellants are liable to pay service tax on commission earned by them under “Business Auxiliary Service” – HELD – Case of Revenue is that Appellants are commission agents for their co-operators and are earning commission for same and therefore, they are rendering business auxiliary service to their co-operators – On-going through explanation given under Section 65(19) of the Act, commission agent means a person who acts on behalf of another person and causes sale or purchase of goods, for a consideration and includes any person who does some of things, while acting on behalf of another person – Practice of trade, if observed closely, would indicate that Appellants are buying tickets on behalf of their customers/clients and not definitely on behalf of their co-operators – There is no principal and agent relationship between other GSA/IATA operators and Appellants – Relation between Appellant and co-operators appears to be one of principal-to-principal basis – If at all Appellants are presumed to be acting on behalf of somebody else for a commission, it is their customers/clients for whom they are buying tickets from other GSA/IATA operators – Appellants are not rendering any Business Auxiliary Service to other GSA/IATA operators and therefore, commission earned by them is not exigible to service tax as proposed in show cause notice and confirmed in impugned order – Impugned order demanding service tax under category of Business Auxiliary Service is not legally sustainable and is liable to be set aside – Appeal allowed [Read less]

2024-VIL-391-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax – Section 102 of Finance Act, 1994 – Providing of construction services – Payment of tax – Entitlement of refund – Appellant had rendered services as a sub-contractor of National Buildings Construction Corporation (NBCC) to University of Lucknow for construction of ONGC Centre of Advance Studies and paid service tax to department for providing said services – Appellant filed refund application claiming refund of tax under provisions of Section 102 of the Act – Adjudicating Authority rejected claim of Appellant – Commissioner (Appeals) rejected appeal filed by Appellant – Whether Appellant is e... [Read more]

2024-VIL-388-CESTAT-CHE-CU | CESTAT CUSTOMS

Customs – Section 111(m) of Customs Act, 1962 – Customs Tariff Act, 1975 – Import of nickel hydroxide compound – Classification – Appellant imported Compound of Nickel Hydroxide by classified it under CTH 28254000 – Department viewed that Appellant had mis-classified goods claiming undue benefit of Nil rate of Basic Customs Duty (BCD) under Notification No.50/2017 – Department issued show cause notice proposing to reclassify goods under CTH 38259900 @7.5% BCD and to demand differential duty – Adjudicating Authority confirmed classification of imported goods under CTH 38249000 and demand of differential duty and ordered for confiscation of goods – Whether goods imported by Appellant is classifiable under CTH 28254000 as declared by Appellant or under CTH 38249900 as classified by Revenue – HELD – Appellant has adopted classification under CTH 28254000 and claimed Nil rate of Customs duty under Notification No.50/2017 – Chapter Note 28 excludes any mixture of separate chemical elements or separate chemically defined compounds – It is an admitted fact that imported product is primarily containing Nickel Hydroxide with minor proportions of Cobalt Hydroxide and Graphite – Nickel Hydroxide is a compound, Cobalt Hydroxide is also a separate compound and Graphite is an element/metal – Imported product being a mixture of compounds goes out of Chapter 28 of 1975 Act – Chapter 38 deals with Miscellaneous Chemical Products – As imported product consists of mixture of Nickel Hydroxide, Cobalt Hydroxide and Graphite, it is more appropriately classifiable under CTH 38249900 as a chemical product – Imported product is classifiable under CTH 38249900 and not under CTH 28254000 as adopted by Appellant – Consequently, Appellant is not eligible for benefit of Notification No.50/2017 – Demand of duty along with interest is confirmed – Appeal partly allowed - Confiscation of goods – Imposition of penalty – Whether order of confiscation and imposition of redemption fine and penalty is justified or not in facts and circumstances of this case – HELD – Main contention of Appellant is that there is no wilful mis-declaration rendering imported goods liable for confiscation under Section 111(m) of the Act – Merely claiming benefit of exemption in Bills of Entry does not amount to suppression/mis-declaration on part of Appellant – Penalty cannot be imposed, as there was no intention to evade payment of duty – Order of confiscation and imposition of fine and penalty is not justified and ordered to be set aside. [Read less]

2024-VIL-386-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax – Section 66D of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is registered with Service Tax Department for providing service under category of Advertising Agency Services – On-going through the nature of services undertaken by Appellant, revenue viewed that services provided by Appellant were appropriately covered under category of Business Auxiliary Service – Department issued show cause notice to Appellant, proposing demand of service tax under category of Business Auxiliary Service – Commissioner confirmed demand proposed in show cause notice – Whether Appellant ... [Read more]

2024-VIL-385-CESTAT-HYD-CE | CESTAT CENTRAL EXCISE

Central Excise – Manufacture of fruit pulps – Allegation of clandestine removal – Demand of duty – Appellants are engaged in manufacture of various types of fruit pulps – Anti-Evasion Officers visited unit of Appellants and found excess physical stock of finished goods in comparison with stock accounted in manual RG1 Register – Commissioner confiscated excess stock of fruit pulp and imposed redemption fine – Officers again visited the factory and verified stock of finished goods and compared same with stock reflected in SAP account and found certain shortage – Department issued show cause notices proposing to recover specified amounts of duty on fruit pulp allegedly cleared clandestinely – Commissioner confirmed demand of specified duty – Whether demand of duty confirmed on alleged shortage of goods said to be found on basis of comparison of quantity accounted in SAP system and quantity accounted in manual RG1 Register is correct or not – HELD – Sole ground based on which demand has been confirmed by Commissioner is that there was certain difference in quantity of fruit pulp accounted for in RG1 Register and those physically available in factory premises, when compared with stock accounted for in SAP system – Differential quantity has been considered as clandestinely removed by Appellants and demand has been confirmed accordingly – It is an admitted fact that Appellants were maintaining all their records including statutory records relating to production and clearance of final products in SAP system – Department preferred to compare physical stock with defunct RG-1 stock, even though correct stock on day-to-day basis was maintained by Appellants in their SAP system – When Department compared physical stock with defunct RG1 Register for purpose of arriving at excess stock to confiscate same, Department cannot take a different stand and compare quantity accounted in SAP system with quantity accounted in defunct RG1 Register to arrive at alleged shortage and demand duty thereon – SAP alone was the proper account being maintained and there cannot be any comparison with so called RG1 register either for excess or for shortage – There was no excess or shortage of fruit pulp when physical stock is compared with stock accounted for in SAP system – Department’s reliance on manual RG1 Register, when accounts are maintained in SAP system, is misconceived and cannot be accepted – Stock verification was not done by officers in proper and justifiable manner – Department has not brought any independent evidence to prove its claim of clandestine removal – Impugned order passed by Commissioner set aside – Appeals allowed [Read less]

2024-VIL-393-CESTAT-BLR-CU | CESTAT CUSTOMS

Customs – Import of goods – Classification – Appellant imported goods declared as ‘fish protein’ and classified same under Customs Tariff Heading 3504 0099 – Revenue after testing the goods found that declaration of goods as ‘fish protein’ was incorrect, as impugned goods were found to be processed/de-mineralized fish scale classifiable under CTH 0511 9190 – Commissioner classified imported goods under CTH 0511 9190 and demanded differential duty and denied benefit of Notification No.96/2009 – Whether goods imported by Appellant are classifiable as demineralised fish scale under chapter heading 0511 or as fish protein under CTH 3504 of the Act – HELD – It is an admitted fact that Appellant manufactured peptide by using collagen protein contained in demineralized fish scale imported by Appellant – Just because imported item contains protein which has been extracted through various processes to manufacture peptide, it does not make imported product a ‘fish protein’ – Content of protein cannot establish product as a protein, instead it is only a source of protein – Classification is based on description at time of import and not on basis of its content as claimed by Appellant – Test reports and technical literature clearly established that product imported is demineralised fish scale – Goods imported by Appellant are appropriately classifiable under Chapter Heading 0511 9090 – Appeal partly allowed - Advance authorisation scheme – Denial of benefit – Whether Appellant has mis-declared description of product in order to claim benefit of advance authorization – HELD – Notification No.96/2009-Cus grants exemption to materials imported into India against Advance Authorization in terms of Para 4.1.3 of Foreign Trade Policy – There is no dispute that goods were initially tested and test report declared goods as fish protein – Based on this test report, goods were cleared under chapter heading 3504 as claimed by Appellant – At a later date, after physically examining the goods imported, samples were drawn and test reports with regard to samples clearly stated that they were nothing but fish scales with a high content of fish protein and therefore, goods are classifiable under chapter heading 0511 and not under 3504 as claimed by Appellant – Denial of benefit of advance authorisation scheme to earlier consignments based on current test reports is not sustainable – Benefit of advance authorisation is to be denied only prospectively for consignments where samples were drawn and thereafter – Demand is upheld for 6 bills of entry – Other 9 bills of entry which are provisionally assessed are to be reassessed by reclassifying same under Chapter Heading 0511. [Read less]

2024-VIL-392-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise – Section 11A(1) of Central Excise Act, 1944 – Rule 14 of CENVAT Credit Rules, 2004 – Disallowance of Cenvat Credit – Sustainability – Appeal is directed against order in appeal of Commissioner (Appeals) upholding Order-in-Original passed by Adjudicating Authority disallowing Cenvat Credit availed by Appellant and order for recovery of same under provisions of Rule 14 of the Rules read with Section 11A(1) of the Act – Whether lower authorities are justified in disallowing Cenvat Credit taken on items such as Channels, Plates, HR Coils etc. of iron and steel used in repair and maintenance of capit... [Read more]

2024-VIL-387-CESTAT-BLR-ST | CESTAT SERVICE TAX

Service Tax – Section 65(zzzze) of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is engaged in manufacture of Thin Client, which is a computer with nominal storage capacity – Appellant had entered into Customer License Agreement for embedded systems with Microsoft Corporation (MS), which grants them limited world-wide license – In pursuance to license granted by MS, Appellant builds MS images using software tools from toolkit purchased locally from dealer of MS – In terms of agreement with MS, Appellant had to procure Certificate of Authenticity (COA) and affix same on Thin Client manufactured by them – Appellant purchased COAs on High Sea Sale (HSS) basis and affixed same to manufactured Thin Clients – Commissioner confirmed demand of service tax under category of Information Technology Software Service as defined under Section 65(zzzze) of the Act – Whether purchase of COA on high sea sale basis and later affixed on Thin Clients already installed with MS software embedded system procured from local Microsoft authorized distributors, is a ‘sale’ or ‘service’ classifiable under taxable category of Information Technology Software Service – HELD – Crux of dispute in present case centers around fact either purchase/import of COAs/stickers/labels will result in sale or service – Appellant are engaged in manufacture of Thin Clients, which required a software to make it functional/operational – To acquire necessary software to be embedded with system, Appellant entered into an agreement with MS, whereby they were authorized to procure off-shelf MS OS software, which also provided them the right to replicate into individual hard discs installed later into Thin Clients – Software would be operational or functional only with affixation of COAs – Appellant procured/purchased COAs/stickers/labels on HSS basis from Priya Limited – Imported stickers/labels are considered as ‘goods’ more or less in line with Circular No.15/2011 issued by Board – Merely by affixing stickers/labels providing authenticity to software loaded to each of Thin Clients cannot be construed as a ‘service’ received by Appellant under category of ITSS – Whole transaction/activity including installation of software and later affixing stickers/labels to Thin Clients procured/purchased on HSS basis are in nature of ‘sale’ and not ‘service’ – Consequently, demand of service tax cannot be sustained – Appeal allowed [Read less]

2024-VIL-356-BOM | High Court SGST

GST on Ocean Freight – Application of Mohit Minerals case to FOB contracts - Revenue contention that Mohit Minerals case needs to be applied only in respect of the cases which involve the contracts on CIF basis and not FOB contracts – HELD - issue has been decided in petitioner’s favour by the Supreme Court in Union of India vs. Mohit Minerals case - The submission of the Revenue that decision in Mohit Minerals is applicable only to cases which involve the contracts on CIF basis and not FOB contracts, is totally untenable inasmuch as the case in Mohit Minerals before the High Court of Gujarat involved both categories... [Read more]

2024-VIL-383-CESTAT-HYD-CU | CESTAT CUSTOMS

Customs – Denial of refund of CVD + SAD claimed under the provision of Section 142(3) of the CGST Act, 2017 - Refund of CVD + SAD paid for regularisation of Advance License (Import License) deposited after 01.07.2017 in relation to imports prior to 01.07.2017 – HELD - Section 142(3) read with 142(5) of the CGST Act, 2017 provides that every claim for refund by any person before, on or after the appointed day, for refund of any amount of Cenvat credit/duty/tax/interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law and any amount eventually acc... [Read more]

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