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Service Tax - Assignment of copyright and undertaking of production work - Appellant assigned the exclusive copyrights and all ownership rights to Gemini TV for a perpetual period, while also agreeing to undertake the production work for the serial on behalf of Gemini TV as per their directions – Whether Assignment of copyright and production work falls under the taxable service of "Programme Producer's Service" under Section 65(105)(zzu) of the Finance Act, 1994 – HELD - The agreement between the appellant and Gemini TV contained terms that evidenced the appellant undertaking production work on behalf of Gemini TV, in... [Read more]

Service Tax - Assignment of copyright and undertaking of production work - Appellant assigned the exclusive copyrights and all ownership rights to Gemini TV for a perpetual period, while also agreeing to undertake the production work for the serial on behalf of Gemini TV as per their directions – Whether Assignment of copyright and production work falls under the taxable service of "Programme Producer's Service" under Section 65(105)(zzu) of the Finance Act, 1994 – HELD - The agreement between the appellant and Gemini TV contained terms that evidenced the appellant undertaking production work on behalf of Gemini TV, in addition to the assignment of copyrights in perpetuity - The consideration received by the appellant for the production work undertaken is taxable under the "Programme Producer's Service" category, notwithstanding the fact that the agreement also contained terms for assignment of copyrights in perpetuity - The fact that the agreement contains clauses indicating perpetual assignment of copyright of the program produced does not detract from the fact that the agreement equally contains clauses that required the appellant to undertake production work on behalf of M/s. Gemini TV. In such circumstances, the agreement cannot be viewed as one that pertains solely to assignment of copyrights so as to denude the Revenue from levying service tax on the service rendered by the appellant to M/s. Gemini TV, namely, the activity of production work – The invocation of the extended period of limitation and imposition of penalty is upheld, as the appellant had failed to disclose the income from the production work in its ST-3 returns initially, despite commencing payment of service tax from April 2008 without any material change in the agreement - The demand of service tax on the appellant for 'programme producer's services' based on the assignment agreement between the appellant and Gemini TV is upheld and the appeal is dismissed [Read less]

Service Tax - Applicability of Service Tax under Intellectual Property Rights Service (IPRS) - Whether the exchange of non-public information like designs, plans, ideas, and cost data between the appellant and a foreign entity would fall under the ambit of IPRS under Section 65(55b) of the Finance Act 1994 and thereby attract service tax – HELD - For an activity to be taxed under IPRS, the intangible property like trademark, design, patent, etc. should be governed and enforceable under Indian laws – In the instant case, there is nothing on record to suggest that said confidential information was otherwise protected und... [Read more]

Service Tax - Applicability of Service Tax under Intellectual Property Rights Service (IPRS) - Whether the exchange of non-public information like designs, plans, ideas, and cost data between the appellant and a foreign entity would fall under the ambit of IPRS under Section 65(55b) of the Finance Act 1994 and thereby attract service tax – HELD - For an activity to be taxed under IPRS, the intangible property like trademark, design, patent, etc. should be governed and enforceable under Indian laws – In the instant case, there is nothing on record to suggest that said confidential information was otherwise protected under any Indian law or otherwise and therefore such exchange of information could not have been brought under the purview of IPRS - Further, even though, classification itself has not been contested under the category of IPRS, even though there were certain clarifications issued by Board and certain judgments were also available on this issue, the appellant had opted not to contest the classification on merit - Since the confidential information exchanged was not protected under any Indian law, it could not be considered as an IPR and thus, the demand under IPRS is not maintainable. However, service tax demand is upheld as the appellant did not contest the classification - The service tax demand under IPRS is upheld, but the payment made by the appellant through CENVAT credit is held to be valid. The penalty under Section 15 of the CENVAT Credit Rules 2004 is set aside, but the penalty under Sections 76, 77, and 78 of the Finance Act 1994 is upheld – The appeal is partly allowed - Utilization of CENVAT Credit for payment of service tax under Reverse Charge Mechanism - Whether the appellant could utilize the available CENVAT credit to pay the service tax liability under RCM prior to the amendment in Cenvat Credit Rules 2004 w.e.f. 01.07.2012 – HELD - The appellant was entitled to utilize the available CENVAT credit to discharge the service tax liability under RCM for the period prior to 01.07.2012, as there was no statutory bar during that period. The payment made by the appellant by debiting the CENVAT credit account was correct and should be adjusted towards the confirmed demand. [Read less]

Service Tax – Reimbursement of salary, Deputation of expats, Penalty under Section 78 and 77 of the Finance Act, 1994 - The appellant reimbursed the salary and travelling expenses incurred on deputation by experts from a company situated outside India - Department raised demand for service tax under the category of 'Manpower Recruitment or Supply Agency Services' (MRSAS) and also imposed penalties under Sections 78, 77(1) and 77(2) of the Finance Act, 1994 – HELD - The appellant had bonafide belief that service tax was not payable on the reimbursement of expenses as it was on a cost-to-cost basis, and the appellant had... [Read more]

Service Tax – Reimbursement of salary, Deputation of expats, Penalty under Section 78 and 77 of the Finance Act, 1994 - The appellant reimbursed the salary and travelling expenses incurred on deputation by experts from a company situated outside India - Department raised demand for service tax under the category of 'Manpower Recruitment or Supply Agency Services' (MRSAS) and also imposed penalties under Sections 78, 77(1) and 77(2) of the Finance Act, 1994 – HELD - The appellant had bonafide belief that service tax was not payable on the reimbursement of expenses as it was on a cost-to-cost basis, and the appellant had voluntarily paid the entire service tax and interest before the issuance of the Show Cause Notice. The taxability on seconded employees was a matter of prolonged litigation, and there was no deliberate attempt by the appellant to evade payment of service tax. In the given factual matrix, the appellant is eligible for relief under Section 73(3) of the Finance Act, 1994 and the penalties under Sections 78 and 77 are not sustainable - The penalties imposed under Sections 78 and 77 are set aside, while upholding the remaining part of the Order-in-Original – The appeal is allowed partly [Read less]

The jurisdiction to levy assess and collect IGST on goods imported for the purpose of supply, would vest only with the Customs authorities. the State Tax Authority cannot claim benefit of cross empowerment to assume jurisdiction in such cases.

GST – Gujarat AAR – Eligibility to Input Tax Credit on input services for construction of foundation and structural support for plant and machinery within factory – Appellant installed various equipment and machinery which cannot be placed directly on the land without adequate supporting structures or foundations – Foundation and structural support within the scope of definition of ‘plant and machinery’ - Whether the applicant is eligible to avail ITC on the input services used for the construction of foundation and structural support for the equipment and machinery installed within the factory, in terms of Sec... [Read more]

GST – Gujarat AAR – Eligibility to Input Tax Credit on input services for construction of foundation and structural support for plant and machinery within factory – Appellant installed various equipment and machinery which cannot be placed directly on the land without adequate supporting structures or foundations – Foundation and structural support within the scope of definition of ‘plant and machinery’ - Whether the applicant is eligible to avail ITC on the input services used for the construction of foundation and structural support for the equipment and machinery installed within the factory, in terms of Section 17(5)(c) of the CGST Act, 2017 – HELD - What qualifies as ‘plant and machinery’ is an apparatus, equipment, and machinery which is fixed to earth by foundation. The various equipments which are set up in the SRP and METP plants would qualify as an apparatus/machinery - The equipment and machinery installed in the plants, such as reactors, distillation columns, pumps, etc., qualify as 'plant and machinery' as per the explanation to Section 17 of the CGST Act. Further, the foundation and structural support provided to these equipment and machinery are also included within the definition of 'plant and machinery' as per the said explanation – Further, The CBIC Circular No. 219/13/2024-GST had clarified that ITC on ducts and manholes used in the network of Optical Fiber Cables is eligible, as they are the basic components for the OFC network used in providing telecommunication services. Drawing an analogy, the ITC on the foundation and structural supports for the equipment and machinery installed in the SRP and METP is also eligible, as they are integral and necessary for the functioning of these plants - The applicant is eligible to avail ITC on the input services used for the construction of foundation and structural support for the equipment and machinery installed within the factory for the SRP and METP plants, in terms of Section 17(5)(c) of the CGST Act, 2017 – Ordered accordingly [Read less]

Service Tax on cargo handling charges – Demand of service tax on the loading charges collected from the customers, classifying it under 'Cargo Handling Service' (CHS) - Whether the activity of loading of cut iron etc. on trucks for transportation to customer's premises would be covered within the ambit of Cargo Handling Service (CHS) - HELD - The goods which were loaded on the trucks were clearly in the nature of "cargo" as they were intended for transportation to the destination of the buyer, and therefore, the activity of loading was rightly classified under Cargo Handling Service, even for the period prior to 2008 whe... [Read more]

Service Tax on cargo handling charges – Demand of service tax on the loading charges collected from the customers, classifying it under 'Cargo Handling Service' (CHS) - Whether the activity of loading of cut iron etc. on trucks for transportation to customer's premises would be covered within the ambit of Cargo Handling Service (CHS) - HELD - The goods which were loaded on the trucks were clearly in the nature of "cargo" as they were intended for transportation to the destination of the buyer, and therefore, the activity of loading was rightly classified under Cargo Handling Service, even for the period prior to 2008 when the definition was amended to include "goods" along with "cargo". The case laws relied upon by the appellant are distinguishable from the present case, as they involved activities within the factory premises or mining area, whereas in the present case, the loading was for the purpose of transportation to the customer's premises - The demand of service tax is upheld, however, the penalties under Sections 77 and 78 of the Finance Act are set aside under Section 80, as the appellant had a reasonable cause for not paying the service tax, owing to their bonafide belief that the activity of loading was not chargeable to service tax – The appeal is partly allowed [Read less]

GST - Jurisdiction of State Tax officers – Inter-State transport of goods - State officers intercepted and initiated proceedings under Sections 129 and 130 of CGST Act, 2017 on the ground that the goods were grossly undervalued or that the goods do not match the description in the accompanying documents, or that the quantum of goods was higher than the quantity set out in the accompanying documents – Whether the State Tax authorities have no jurisdiction, to initiate proceedings under Section 129 or section 130, in relation to movement of goods under the IGST Act – HELD - The State officers appointed under an SGST Ac... [Read more]

GST - Jurisdiction of State Tax officers – Inter-State transport of goods - State officers intercepted and initiated proceedings under Sections 129 and 130 of CGST Act, 2017 on the ground that the goods were grossly undervalued or that the goods do not match the description in the accompanying documents, or that the quantum of goods was higher than the quantity set out in the accompanying documents – Whether the State Tax authorities have no jurisdiction, to initiate proceedings under Section 129 or section 130, in relation to movement of goods under the IGST Act – HELD - The State officers appointed under an SGST Act can exercise jurisdiction under CGST Act only if the taxpayer has been administratively allotted to the State, and the State officer is appointed as the proper officer for that taxpayer; similarly, State officers can exercise jurisdiction under IGST Act only when the State is entitled to a share of the IGST tax under Section 17 of the IGST Act for that inter-state transaction. The State officers cannot exercise jurisdiction under IGST Act in relation to inter-state sales, which originate outside the State and culminate outside the State - Mere cross-empowerment under Section 6 of CGST/SGST Acts is not sufficient to confer jurisdiction on State officers over inter-State transactions where the State has no fiscal interest - Further, State officers under Sections 129/130 cannot go into valuation or classification issues and can only detain/seize goods in case of clear evasion like absence of e-way bills or mismatch in goods. - The impugned orders passed by state officers are set aside and the goods are directed to be released, while the State officers are permitted to forward the discrepancies, if any, to the proper officers of the consignor and consignee for further action – In the present case, the State authorities in the State of Andhra Pradesh, have no jurisdiction, to initiate proceedings under Section 129 or section 130, in relation to movement of goods under the IGST Act – The proceedings initiated against the petitioners are set aside leaving it open to the respondents to forward their records etc. to the respective proper officers of the petitioners - The writ petitions are disposed of - Grounds for detention of goods - Merely because the manufacturer sells his products to its customer or dealer at a price lower than the MRP, as such cannot be a ground on which the product or the vehicle could be seized or detained – Further, undervaluation of a good in the invoice cannot be a ground for detention of the goods and vehicle for a proceeding to be drawn under Section 129 of the CGST Act, 2017 read with Rule 138 of the CGST Rules, 2017 – The questions of seizure or confiscation, would not arise before a proper officer, under Section 129 or 130, even in the normal course, on grounds of variation in valuation etc. - The goods, which have been seized or confiscated under various impugned orders, would require to be released. [Read less]

GST – Gujarat AAR - Exemption to Training Services provided by NSDC Approved Training Partner – Applicant is an NSDC approved training partner, provides digital marketing training courses as part of the Government's Skill India initiative - Prior to the changes in law, the training services provided by the applicant were treated as exempt supplies. However, due to amendments in 2024 and their subsequent reversal in 2025, there was ambiguity about the GST applicability during the interim period - Whether the training services provided by the applicant as an MSDE/NSDC affiliated Training Partner imparting NSQF-aligned di... [Read more]

GST – Gujarat AAR - Exemption to Training Services provided by NSDC Approved Training Partner – Applicant is an NSDC approved training partner, provides digital marketing training courses as part of the Government's Skill India initiative - Prior to the changes in law, the training services provided by the applicant were treated as exempt supplies. However, due to amendments in 2024 and their subsequent reversal in 2025, there was ambiguity about the GST applicability during the interim period - Whether the training services provided by the applicant as an MSDE/NSDC affiliated Training Partner imparting NSQF-aligned digital marketing courses to students are exempt from GST under Sl. No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended from time to time (including by Notification Nos. 08/2024-CT(R) and 06/2025-CT(R)) – HELD – The Entry No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended exempts services provided by a training partner approved by the NSDC in relation to the National Skill Development Programme implemented by NSDC or any other scheme implemented by NSDC. Since the applicant is an NSDC approved training partner and the digital marketing course it provides is aligned with the National Skills Qualifications Framework (NSQF) and is part of the Government's Skill India mission, the applicant's services fall within the scope of the exemption - However, during the intervening period from 10.10.2024 to 15.01.2025, when the exemption for NSDC approved training partners was temporarily withdrawn, the applicant's liability to pay GST would be on an 'as is where is' basis. This means that if the applicant had not paid GST during this period, it would not be required to do so now, but if it had paid, the payment would be allowed to stand - The training services provided by the applicant are exempt from GST under Entry No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended, except for the intervening period from 10.10.2024 to 15.01.2025, where the liability would be on an 'as is where is' basis – Ordered accordingly [Read less]

Service Tax – Demand beyond the scope of Show Cause Notice, Classification of taxable service – While the SCN proposed demand under "Construction of Residential Complex Services" in the Show Cause Notice, the Adjudicating Authority confirmed the demand under 'Works Contract Services' - Whether the adjudicating authority can confirm the demand under a taxable category different from the one proposed in the notice - HELD – The adjudicating authority cannot travel beyond the scope of the show cause notice and confirm the demand under a different taxable head. A service tax demand must align with the specific head propos... [Read more]

Service Tax – Demand beyond the scope of Show Cause Notice, Classification of taxable service – While the SCN proposed demand under "Construction of Residential Complex Services" in the Show Cause Notice, the Adjudicating Authority confirmed the demand under 'Works Contract Services' - Whether the adjudicating authority can confirm the demand under a taxable category different from the one proposed in the notice - HELD – The adjudicating authority cannot travel beyond the scope of the show cause notice and confirm the demand under a different taxable head. A service tax demand must align with the specific head proposed in the show cause notice. Confirming the demand under WCS, when it was proposed under 'Construction of Residential Complex Services', violates the principles of natural justice as the assessee cannot defend a charge not originally levelled - The show cause notice is the foundation of the case and the adjudicating authority is bound by the classification stated therein – The demand confirmed under WCS is set aside and the appeal of the assessee is allowed - Exemption for construction of historical monument and related facilities - Fact - The department appealed against the dropping of demand for service tax on the construction of Coronation Park, which included an International Centre and a Restaurant building - HELD - The Coronation Park is a historical monument of national importance. The construction of the park and the related facilities like parking lot are eligible for exemption under the Mega Notification 25/2012-ST. The activities carried out by the Government for public welfare, without profit motive, cannot be considered as 'commercial' in nature. Thus, the construction of the parking lot adjacent to the historical monument is also eligible for the exemption. Further, even if there was a demand on the construction of International Centre and Restaurant, the same cannot be sustained as the demand was initially proposed under a different taxable head - The cross-appeal filed by the Department is rejected [Read less]

Customs - Misdeclaration of goods weight - Imposition of redemption fine and penalty – HELD - The appellant-importer was not directly responsible for the mismatch in the declared and actual weight of the goods. The invoice and packing list provided by the foreign supplier clearly mentioned the weight which was also declared in the B/E. It was only upon physical examination at the Indian Customs that the actual weight was discovered. The Appellant's bonafides cannot be doubted and the excess weight could not be attributed to any specific role or hand of the Appellant. However, since there was a mismatch in the weight, the... [Read more]

Customs - Misdeclaration of goods weight - Imposition of redemption fine and penalty – HELD - The appellant-importer was not directly responsible for the mismatch in the declared and actual weight of the goods. The invoice and packing list provided by the foreign supplier clearly mentioned the weight which was also declared in the B/E. It was only upon physical examination at the Indian Customs that the actual weight was discovered. The Appellant's bonafides cannot be doubted and the excess weight could not be attributed to any specific role or hand of the Appellant. However, since there was a mismatch in the weight, the Appellant had to face the consequences as stipulated under the statute. Accordingly, the redemption fine is reduced from Rs. 3,00,000/- to Rs. 1,00,000/- and the penalty under Section 112(a) from Rs. 1,50,000/- to Rs. 50,000/- - The appeal is partly allowed [Read less]

Customs - Classification of Electronic Power Steering - Electronic Control Unit (EPS-ECU) – Appellant challenge the classification of the EPS-ECU imported by it under Customs Tariff Item (CTI) 8708 94 00 instead of CTI 9032 90 00 - Whether the EPS-ECU is classifiable under CTI 8708 94 00 as a part of the power steering system or under CTI 9032 90 00 as an instrument or apparatus for automatically controlling or regulating non-electrical quantities – HELD - The EPS-ECU is not an instrument or apparatus but a part of the power steering system, and therefore, it is correctly classified under CTI 8708 94 00. The EPS-ECU is... [Read more]

Customs - Classification of Electronic Power Steering - Electronic Control Unit (EPS-ECU) – Appellant challenge the classification of the EPS-ECU imported by it under Customs Tariff Item (CTI) 8708 94 00 instead of CTI 9032 90 00 - Whether the EPS-ECU is classifiable under CTI 8708 94 00 as a part of the power steering system or under CTI 9032 90 00 as an instrument or apparatus for automatically controlling or regulating non-electrical quantities – HELD - The EPS-ECU is not an instrument or apparatus but a part of the power steering system, and therefore, it is correctly classified under CTI 8708 94 00. The EPS-ECU is a microprocessor that receives information from sensors and processes it to regulate the assistance provided by the power steering to the driver, and therefore, it does not merit classification under CTI 9032 90 00 - The alternative claims of the appellant for classification under CTI 8537 10 00 and CTI 8543 70 99 is also rejected, as the EPS-ECU is not designed for electricity distribution or electric control, and it is not a general electrical machine or apparatus - The Final Order in the case of the appellant has been appealed against by the appellant before the Supreme Court but no stay has been granted. The earlier decision of this bench, therefore, holds the field on the question of classification of EPS-ECU imported by the appellant - The classification of the EPS-ECU under CTI 8708 94 00 is upheld and the appeals are dismissed [Read less]

Customs - Levy of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 equivalent to Rubber Cess under Section 12 of the Rubber Act, 1947 on imported natural rubber – Appellant imported natural rubber falling under CTH 40012200 – Department issued demand notice along with applicable interest under Section 28AB of the Customs Act, 1962, on the ground that the appellant was liable for Cess - Whether the levy of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 equivalent to Rubber Cess under Section 12 of the Rubber Act, 1947 on the imported natural rubber is legally s... [Read more]

Customs - Levy of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 equivalent to Rubber Cess under Section 12 of the Rubber Act, 1947 on imported natural rubber – Appellant imported natural rubber falling under CTH 40012200 – Department issued demand notice along with applicable interest under Section 28AB of the Customs Act, 1962, on the ground that the appellant was liable for Cess - Whether the levy of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 equivalent to Rubber Cess under Section 12 of the Rubber Act, 1947 on the imported natural rubber is legally sustainable – HELD - Both the parties cited various judicial precedents in their favour claiming that the issue was no more res integra. The appeals against the CESTAT orders in many cases were dismissed by the Hon'ble Supreme Court either on account of inordinate delay or on the ground of disputed amount being very less. However, in the appellant's own case, the Bangalore Bench of the CESTAT had recently dismissed the appeal by following the order of the Tribunal in the appellant's own case for an earlier period and after relying on the ratio of the Larger Bench decision in the case of TTK-LIG Ltd. - While dismissing the appeal against the order of the Chennai Bench in the case of TTK-LIG Ltd, the Hon'ble Supreme Court kept the question of law open. As on the date of the current order, there is no stay order or any interim order granted by the Hon'ble Supreme Court in any of the appeals that were admitted by the Apex Court. Considering the above, the order of the coordinate Bangalore Bench in the appellant's own case is to be followed, wherein the issue had been decided against the appellant – The appellant’s appeal against the levy of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 equivalent to Rubber Cess under Section 12 of the Rubber Act, 1947 on the imported natural rubber is dismissed [Read less]

Customs - Interest on refund of Customs duty - Petitioners imported mobile devices and paid customs duty at higher rate but later claimed refund as they were eligible for lower concessional rate under notification - Whether Petitioners entitled to interest on refund amounts – HELD – The Petitioners are entitled to interest on refund amounts from the date when they first applied for re-assessment of Bills of Entry, as there was substantial delay in Department passing the re-assessment orders despite Petitioners' applications. At the time when applications for re-assessment were filed, the judgment in ITC Limited v. CCE,... [Read more]

Customs - Interest on refund of Customs duty - Petitioners imported mobile devices and paid customs duty at higher rate but later claimed refund as they were eligible for lower concessional rate under notification - Whether Petitioners entitled to interest on refund amounts – HELD – The Petitioners are entitled to interest on refund amounts from the date when they first applied for re-assessment of Bills of Entry, as there was substantial delay in Department passing the re-assessment orders despite Petitioners' applications. At the time when applications for re-assessment were filed, the judgment in ITC Limited v. CCE, Kolkata, which laid down the requirement of re-assessment before claiming refund, had not been passed. Further, the customs duty paid by Petitioners was clearly not payable in view of the Supreme Court judgment in SRF Ltd. v. Commissioner of Customs, which was the prevailing law at the relevant time. Thus, Petitioners could not be deprived of interest on valid refund amounts for such a long period - in the matters of W.P.(C) 10977/2017 and W.P.(C) 11319/2017, since the refunds were granted within the stipulated 3 months period under Section 27A of the Customs Act, 1962, no interest would be payable. However, in the matters of W.P.(C) 1225/2024, W.P.(C) 1291/2024, W.P.(C) 1297/2024, and W.P.(C) 1325/2024, there was a substantial delay by the department in passing the re-assessment orders, despite the petitioners' applications for re-assessment - The impugned orders in the four writ petitions were modified with the direction that the Deputy Commissioner (Refund) shall compute the interest payable and grant such interest to the Petitioners within a period of three months - The petitions are disposed of [Read less]

Service Tax - Refund claim under CENVAT Credit Rules, 2004 - The appellant, a 100% EOU, filed a refund claim for input tax credit on car parking/rent, rent-a-cab service, and alleged wrong value adopted for total turnover, which was partially rejected by the Adjudicating Authority and further upheld by the Commissioner (Appeals) – HELD - The denial of credit on car parking/rent and rent-a-cab service is not in order as the issue has been decided in favor of the taxpayer by various CESTAT Benches. Regarding the alleged wrong value adopted for total turnover, in the absence of any domestic sale/receipt, the export turnover... [Read more]

Service Tax - Refund claim under CENVAT Credit Rules, 2004 - The appellant, a 100% EOU, filed a refund claim for input tax credit on car parking/rent, rent-a-cab service, and alleged wrong value adopted for total turnover, which was partially rejected by the Adjudicating Authority and further upheld by the Commissioner (Appeals) – HELD - The denial of credit on car parking/rent and rent-a-cab service is not in order as the issue has been decided in favor of the taxpayer by various CESTAT Benches. Regarding the alleged wrong value adopted for total turnover, in the absence of any domestic sale/receipt, the export turnover would be the total turnover, and the reasoning given by the lower authorities is not valid. Further, the Point of Taxation Rules, 2011 should be applied to determine the total turnover. Hence, the allegation as to the wrong value being adopted for total turnover by the Revenue, cannot sustain - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Irregular availment of Cenvat credit - The appellant availed Cenvat credit on the basis of invoices issued by two service providers, who were found to be non-existent during investigation – Disallowance of credit and imposition of interest and penalty – HELD - The appellant had acted in good faith and complied with the Cenvat Credit Rules. The credit cannot be denied merely because the service providers were not available at their registered addresses later, as the appellant had paid the service tax component to them - the Cenvat credit legally availed by the appellant on the basis of valid documents cann... [Read more]

Service Tax - Irregular availment of Cenvat credit - The appellant availed Cenvat credit on the basis of invoices issued by two service providers, who were found to be non-existent during investigation – Disallowance of credit and imposition of interest and penalty – HELD - The appellant had acted in good faith and complied with the Cenvat Credit Rules. The credit cannot be denied merely because the service providers were not available at their registered addresses later, as the appellant had paid the service tax component to them - the Cenvat credit legally availed by the appellant on the basis of valid documents cannot be denied on account of non-existence of the service providers in their registered offices and non payment of service tax so collected by the input service providers – Further, the extended period of limitation is also found inapplicable as there was no suppression of facts. However, the late fee imposed under the Finance Act is sustained - The appeal is partially allowed, setting aside the disallowance of Cenvat credit and interest/penalty, but upholding the late fee – The appeal is partly allowed [Read less]

Service Tax liability on supply of manpower by holding company to subsidiary - The appellant company received services from its holding company in the form of supply of manpower, which was held to be taxable under "Manpower Recruitment or Supply Agency Service" category during the relevant period - Invocation of the extended period of limitation to recover the service tax is challenged by the appellant – HELD - The Supreme Court's decision in the case of M/s. Northern Operation Systems Pvt. Ltd. is squarely applicable to the present case - The appellants have not disputed the leviability of service tax, in principle for ... [Read more]

Service Tax liability on supply of manpower by holding company to subsidiary - The appellant company received services from its holding company in the form of supply of manpower, which was held to be taxable under "Manpower Recruitment or Supply Agency Service" category during the relevant period - Invocation of the extended period of limitation to recover the service tax is challenged by the appellant – HELD - The Supreme Court's decision in the case of M/s. Northern Operation Systems Pvt. Ltd. is squarely applicable to the present case - The appellants have not disputed the leviability of service tax, in principle for the services rendered during the relevant period against Master Service Agreement entered into by the appellant and the holding company for supply of manpower for their operations of the appellant in India – The appellants have contested the recovery of service tax for the extended period of limitation and imposition of penalty - The appellant's view about its liability was neither untenable nor mala fide, and therefore, the Department was not justified in invoking the extended period of limitation to recover the service tax. The impugned orders are modified to confirm the demand for the normal period of limitation with interest and set aside the demand for the extended period and penalties imposed on the appellant – The appeals are disposed of [Read less]

Service Tax - Refund of service tax paid under erstwhile regime but could not be availed as credit due to transition to GST - Appellant had paid service tax under reverse charge mechanism on certain services. After the transition to GST regime, the appellant could not avail the Cenvat credit of this service tax paid - Whether the appellant is entitled to the refund of the service tax paid under the previous regime which could not be availed as credit in the GST regime - HELD - The appellant is entitled to the refund of service tax paid under the previous regime as per the transitional provisions under Section 142(3) of the... [Read more]

Service Tax - Refund of service tax paid under erstwhile regime but could not be availed as credit due to transition to GST - Appellant had paid service tax under reverse charge mechanism on certain services. After the transition to GST regime, the appellant could not avail the Cenvat credit of this service tax paid - Whether the appellant is entitled to the refund of the service tax paid under the previous regime which could not be availed as credit in the GST regime - HELD - The appellant is entitled to the refund of service tax paid under the previous regime as per the transitional provisions under Section 142(3) of the CGST Act, 2017. In the case of NSSL Pvt Ltd and in the case of Gigamon Solutions Pvt Ltd, it has been held that the refund claims filed by the assessee under the erstwhile law should be considered in accordance with the provisions of the existing law i.e. as per Section 142(3) of the CGST Act - The appellant had correctly paid the service tax during the previous regime, and the inability to avail the Cenvat credit was due to the transition to the new GST regime. Therefore, the impugned order is set aside and matter is remanded to the jurisdictional officer to consider and allow the refund applications of the appellant - The appeals are allowed [Read less]

GST - Denial of meaningful opportunity of hearing, Conclusion of personal hearing and passing of order on the same day - Petitioner's contention that the opportunity of personal hearing afforded was illusory - Violation of principles of natural justice – HELD - The petitioner was required to respond within an unreasonably truncated timeline of less than one effective working day to collate voluminous documents and file a response. The mere participation in the hearing does not fulfill the requirement of affording a fair and effective opportunity as contemplated under Sections 66(4) and 75(4) of the CGST Act - The OIO was... [Read more]

GST - Denial of meaningful opportunity of hearing, Conclusion of personal hearing and passing of order on the same day - Petitioner's contention that the opportunity of personal hearing afforded was illusory - Violation of principles of natural justice – HELD - The petitioner was required to respond within an unreasonably truncated timeline of less than one effective working day to collate voluminous documents and file a response. The mere participation in the hearing does not fulfill the requirement of affording a fair and effective opportunity as contemplated under Sections 66(4) and 75(4) of the CGST Act - The OIO was passed in undue haste, with the personal hearing concluding on 31.12.2025 and the OIO being passed on the same date, raising a legitimate apprehension that the material placed on record may not have been adequately considered - The impugned OIO is set aside and the matter is remanded to the Adjudicating Authority for fresh adjudication granting the petitioner a proper opportunity of hearing and dealing with all contentions raised by the petitioner with due regard to the principles of natural justice – The petition is disposed of [Read less]

Service Tax liability on Services provided by educational institute affiliated with NIELIT – Appellant-institute was running certificate, diploma and degree courses affiliated with the National Institute of Electronics & Information Technology (NIELIT) - Based on information received from the Income Tax Department, a demand was raised alleging that the appellant suppressed value of taxable services and did not pay the applicable service tax - Whether the services provided by the appellant institute were exempt from service tax under Notification No. 25/2012-ST dated 20.06.2012 – HELD - The diploma/certificate courses r... [Read more]

Service Tax liability on Services provided by educational institute affiliated with NIELIT – Appellant-institute was running certificate, diploma and degree courses affiliated with the National Institute of Electronics & Information Technology (NIELIT) - Based on information received from the Income Tax Department, a demand was raised alleging that the appellant suppressed value of taxable services and did not pay the applicable service tax - Whether the services provided by the appellant institute were exempt from service tax under Notification No. 25/2012-ST dated 20.06.2012 – HELD - The diploma/certificate courses run by the appellant institute, which was affiliated with NIELIT, are covered by the exemption under Notification No. 25/2012-ST dated 20.06.2012 for the services provided to educational institutions. The educational institutions conducting any course which is a requirement to write an examination to obtain a degree or certificate awarded by any agency created by law and which enables the students to get jobs or work as an entrepreneur/self-employed, are entitled to the exemption under the said notification - Furthermore, the demand is barred by limitation as the revenue had picked up the figures from the Income Tax Return maintained by the assessee, which is a public document. When the income arising from various activities is reflected in the public documents, it cannot be said that there was any suppression or misstatement on the part of the assessee to invoke the longer period of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Development of property under Joint Development Agreement, Demand under Commercial or Industrial Construction Service – Appellants are developer engaged in the construction of commercial buildings and residential complexes - Demand alleging rendering of 'Commercial or Industrial Construction Service' without registration or payment of service tax for the period October 2005 to March 2008 – HELD - The construction agreements between builders/developers and buyers are works contracts, which became taxable only from 01.07.2010, upon insertion of the Explanation to Section 65(105)(zzzh). Accordingly, no ser... [Read more]

Service Tax – Development of property under Joint Development Agreement, Demand under Commercial or Industrial Construction Service – Appellants are developer engaged in the construction of commercial buildings and residential complexes - Demand alleging rendering of 'Commercial or Industrial Construction Service' without registration or payment of service tax for the period October 2005 to March 2008 – HELD - The construction agreements between builders/developers and buyers are works contracts, which became taxable only from 01.07.2010, upon insertion of the Explanation to Section 65(105)(zzzh). Accordingly, no service tax was leviable on the appellant's activities prior thereto - Since the disputed period in this appeal, is October 2005 to March 2008, there was no legislative intent to tax the appellant’s activities – Further, no malafide could be attributed to the appellants warranting invoking of the extended period of limitation - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Penalty under Rule 26 of Central Excise Rules, 2002 - The appellant, a director of M/s. Rathi Steel Industries Pvt. Ltd., was alleged to have issued excise invoices for "TMT Bar Cutting/MS Round Cutting" without actually supplying the goods, in order to enable the buyer to fraudulently avail CENVAT credit - The Revenue authorities imposed a penalty on the appellant under Rule 26 of the Central Excise Rules, 2002, which was upheld by the Commissioner (Appeals) – HELD - The evidence on record, including the appellant's own statements and the investigation findings, indicated that the appellant could not ha... [Read more]

Central Excise - Penalty under Rule 26 of Central Excise Rules, 2002 - The appellant, a director of M/s. Rathi Steel Industries Pvt. Ltd., was alleged to have issued excise invoices for "TMT Bar Cutting/MS Round Cutting" without actually supplying the goods, in order to enable the buyer to fraudulently avail CENVAT credit - The Revenue authorities imposed a penalty on the appellant under Rule 26 of the Central Excise Rules, 2002, which was upheld by the Commissioner (Appeals) – HELD - The evidence on record, including the appellant's own statements and the investigation findings, indicated that the appellant could not have undertaken the manufacturing activity or supplied the raw materials to buyers as claimed. The small size of the appellant's godown, lack of electricity, and the commercially non-viable nature of cutting TMT Bars into scrap, along with the unavailability of vehicles for transportation, raised suspicion on the appellant's role. However, considering the limited evidence against the appellant and the fact that the main manufacturer had opted for the VCES scheme and paid the demanded amounts, the penalty is reduced from Rs. 10,00,000/- to Rs. 1,00,000/- - The appeal is partly allowed [Read less]

Central Excise - Limitation period for appeal, Condonation of delay – Dismissal of appeal by the CESTAT on the ground that same was filed beyond the time stipulated under Section 35 of the Central Excise Act – HELD - The Supreme Court's order dated 10.01.2022 in Suo Motu Writ Petition had excluded the period from 15.03.2020 to 28.02.2022 for the purposes of limitation under any general or special laws, and had further provided that in cases where the limitation would have expired during this period, all persons shall have a limitation period of 90 days from 01.03.2022 - The direction given by the Supreme Court clearly ... [Read more]

Central Excise - Limitation period for appeal, Condonation of delay – Dismissal of appeal by the CESTAT on the ground that same was filed beyond the time stipulated under Section 35 of the Central Excise Act – HELD - The Supreme Court's order dated 10.01.2022 in Suo Motu Writ Petition had excluded the period from 15.03.2020 to 28.02.2022 for the purposes of limitation under any general or special laws, and had further provided that in cases where the limitation would have expired during this period, all persons shall have a limitation period of 90 days from 01.03.2022 - The direction given by the Supreme Court clearly stated that the limitation would be 90 days from 01.03.2022, and this would apply irrespective of the limitation prescribed under the Statute. The appeal filed by the appellant was within the 90-day limitation period provided by the Supreme Court's order. Accordingly, the order of CESTAT is set aside and matter is restored for decided on merits – The appeal stands allowed [Read less]

Customs - Relevant date for determination of rate of duty, Applicability of Customs Duty Exemption Notification 21/2022 for import of raw cotton - On the same day as the last Bill of Entry was filed, a new exemption Notification No. 21/2022 was issued exempting BCD and Additional Duty of Customs on import of cotton with effect from April 14, 2022 - Appellant sought reassessment and substitution/cancellation of the Bills of Entry to avail the exemption benefit under Notification No. 21/2022, which was rejected by the authorities - Whether the appellant is eligible to avail the exemption benefit provided by Notification No. ... [Read more]

Customs - Relevant date for determination of rate of duty, Applicability of Customs Duty Exemption Notification 21/2022 for import of raw cotton - On the same day as the last Bill of Entry was filed, a new exemption Notification No. 21/2022 was issued exempting BCD and Additional Duty of Customs on import of cotton with effect from April 14, 2022 - Appellant sought reassessment and substitution/cancellation of the Bills of Entry to avail the exemption benefit under Notification No. 21/2022, which was rejected by the authorities - Whether the appellant is eligible to avail the exemption benefit provided by Notification No. 21/2022 – HELD - The appellant is not entitled to avail the benefit of Notification No. 21/2022 as the same was non-existent on the date of filing of the B/E. As per Section 15(1)(a) of the Customs Act, 1962, the relevant date for determination of duty rate is the date of filing of the Bill of Entry. Since the exemption notification was issued after the filing of the Bills of Entry, the benefit thereof cannot be extended to the appellant - The appellant's request for substitution of the Bills of Entry from home consumption to warehousing was rightly rejected by the authorities as the primary concern is to protect the interest of the Revenue, which would have been prejudicially affected by permitting such substitution solely to avail the benefit of the later exemption notification. The appellant cannot exercise the option to choose the more beneficial exemption notification when the later notification was not in existence at the time of filing of the Bills of Entry - The impugned order is affirmed and the appeal is dismissed [Read less]

Customs - Valuation of used machinery import, Enhancement of value based on Chartered Engineer's Certificate - The appellant imported 20 used Picanol GTM AS Rapier Looms and declared a value of USD 4,000 per unit. The Customs authorities rejected the declared value and re-determined the value at USD 7,500 per unit based on a Chartered Engineer's certificate obtained locally - Whether the declared value of the imported second-hand machines was rightly enhanced based solely on the Chartered Engineer's Certificate – HELD - The Appellant had obtained a Chartered Engineer's certificate from the port of loading, which containe... [Read more]

Customs - Valuation of used machinery import, Enhancement of value based on Chartered Engineer's Certificate - The appellant imported 20 used Picanol GTM AS Rapier Looms and declared a value of USD 4,000 per unit. The Customs authorities rejected the declared value and re-determined the value at USD 7,500 per unit based on a Chartered Engineer's certificate obtained locally - Whether the declared value of the imported second-hand machines was rightly enhanced based solely on the Chartered Engineer's Certificate – HELD - The Appellant had obtained a Chartered Engineer's certificate from the port of loading, which contained all the material particulars of the used machinery, except the year of manufacture. The rejection of the Load Port Chartered Engineer's certificate solely on the ground of non-mentioning of the year of manufacture is not justified, especially when the local Chartered Engineer's certificate also did not indicate any significant difference in the condition of the machinery - The purpose of the Board's Circular of 2008, which mandated the Load Port Chartered Engineer's certificate, was to curb the practice of importing new machinery in the guise of used machinery. However, in the present case, the Load Port Chartered Engineer's certificate contained all the material particulars, and the only missing information was the year of manufacture, which did not fundamentally alter the nature of the goods imported. Therefore, the redetermination of the declared value based solely on the local Chartered Engineer's certificate is not in order and set aside - The impugned order is set aside and the appeal is allowed [Read less]

GST – Tamil Nadu AAAR - Eligibility of Input Tax Credit on acquisition of leasehold rights - Appellant acquired leasehold rights property from M/s. India Pistons Limited (IPL) for the remainder period (72 years) of leasehold rights. Appellant sought an advance ruling on entitlement to avail ITC of GST charged by IPL for the transaction - The AAR ruled that the Appellant (an applicant at that stage) is not entitled to avail and utilize ITC of GST charged by IPL as the same is restricted under Section 17(5)(d) of the CGST Act 2017 - Whether the appellant is entitled to avail and utilize ITC of GST charged by IPL for the tr... [Read more]

GST – Tamil Nadu AAAR - Eligibility of Input Tax Credit on acquisition of leasehold rights - Appellant acquired leasehold rights property from M/s. India Pistons Limited (IPL) for the remainder period (72 years) of leasehold rights. Appellant sought an advance ruling on entitlement to avail ITC of GST charged by IPL for the transaction - The AAR ruled that the Appellant (an applicant at that stage) is not entitled to avail and utilize ITC of GST charged by IPL as the same is restricted under Section 17(5)(d) of the CGST Act 2017 - Whether the appellant is entitled to avail and utilize ITC of GST charged by IPL for the transaction - HELD - The service received by the appellant towards acquisition of the leasehold rights is for 'construction' of the manufacturing facility, which is an immovable property, on its own account. Further, the manufacturing facility does not qualify as 'plant and machinery' as defined under the Explanation to Section 17 of the Act, as the overall installation cannot be treated as an 'apparatus, equipment or machinery' under the statutory definition - The exclusion of 'land, building or any other civil structures' from the definition of 'plant and machinery' implies that the ITC on the acquisition of leasehold rights is blocked under Section 17(5)(d) - The Appellant is not entitled to avail and utilize ITC of GST charged by IPL, as the same is restricted under Section 17(5)(d) of the CGST Act, 2017, if such transaction is considered to be a supply – Ordered accordingly [Read less]

GST – Odisha AAR – Transfer of leasehold land and partially constructed property as capital contribution to LLP, Non-monetary consideration – Applicant proposes to enter into a Limited Liability Partnership (LLP) with another party for operating the hotel business. As its capital contribution to the LLP, the applicant intends to transfer the developed leasehold land and the constructed hotel portion of the building - Whether contribution of developed leasehold land and constructed structure to the LLP constitutes a "supply" under GST law and attracts GST liability – HELD - The proposed transaction would be treated ... [Read more]

GST – Odisha AAR – Transfer of leasehold land and partially constructed property as capital contribution to LLP, Non-monetary consideration – Applicant proposes to enter into a Limited Liability Partnership (LLP) with another party for operating the hotel business. As its capital contribution to the LLP, the applicant intends to transfer the developed leasehold land and the constructed hotel portion of the building - Whether contribution of developed leasehold land and constructed structure to the LLP constitutes a "supply" under GST law and attracts GST liability – HELD - The proposed transaction would be treated as a supply of service under the GST Act and not a mere capital contribution. The applicant has undertaken the construction and development of the hotel project with the clear intention of commercially exploiting it through a pre-planned LLP arrangement. The contribution of the developed leasehold rights and associated commercial infrastructure to the LLP is not a passive or incidental capital restructuring but a structured commercial transaction undertaken with a clear commercial objective of transferring the developed leasehold rights and associated commercial infrastructure to the LLP for the purpose of operating a hotel business - Under the GST framework, the true nature of a transaction must be determined based on its economic substance rather than the nomenclature adopted by the parties. Where a transaction is structured as part of a pre-arranged commercial arrangement resulting in the transfer of valuable business rights to another taxable person, the same would fall within the scope of 'supply' under Section 7 read with Schedule II of the CGST Act, 2017 - The proposed transaction by the applicant of transferring the developed leasehold land and constructed hotel property as capital contribution to the LLP would be treated as a supply of service under the GST framework and attract the levy of GST – Ordered accordingly [Read less]

GST – Karnataka AAR - Applicability of GST exemption on printing services of exam papers provided to universities - Applicant is engaged in supplying printing services of exam papers to various universities. They print and supply the question papers as per the specification and format provided by the universities - Whether the printing of exam papers provided to universities is exempt from tax in terms of Sl.no.66 (b) (IV) of the Notification No. 12/2017-Central (Tax) Rate dated 28.06.2017, as amended - HELD - The service of printing of examination question papers supplied by the applicant to universities constitutes a s... [Read more]

GST – Karnataka AAR - Applicability of GST exemption on printing services of exam papers provided to universities - Applicant is engaged in supplying printing services of exam papers to various universities. They print and supply the question papers as per the specification and format provided by the universities - Whether the printing of exam papers provided to universities is exempt from tax in terms of Sl.no.66 (b) (IV) of the Notification No. 12/2017-Central (Tax) Rate dated 28.06.2017, as amended - HELD - The service of printing of examination question papers supplied by the applicant to universities constitutes a service relating to the conduct of examinations. Such services are specifically covered under Entry at Serial No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – The universities, being educational institutions, are statutorily required to conduct examinations as part of their academic functions, and activities such as printing of question papers, which are indispensable and integrally connected to the conduct of examinations, cannot be divorced from the examination process. Therefore, such services are services relating to the conduct of examination by an educational institution and are eligible for exemption from GST - The service of printing of examination question papers supplied by the applicant to universities is exempt from levy of GST – Ordered accordingly [Read less]

GST – Karnataka AAR - Taxability of pure labour service to single standalone residential dwelling units - The applicant is engaged in the supply of pure labour services to various single residential dwelling units. The applicant does not provide such services to residential apartments or residential complexes, and the services are strictly restricted to the supply of pure labour services only - Whether the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt fr... [Read more]

GST – Karnataka AAR - Taxability of pure labour service to single standalone residential dwelling units - The applicant is engaged in the supply of pure labour services to various single residential dwelling units. The applicant does not provide such services to residential apartments or residential complexes, and the services are strictly restricted to the supply of pure labour services only - Whether the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt from GST - HELD - The services supplied by the applicant satisfy all the essential conditions prescribed under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate). The phrase "otherwise than as a part of a residential complex" in Entry Serial No. 11 of Notification No. 12/2017-CT (R) clearly excludes services rendered in respect of apartment buildings, housing projects, or residential complexes comprising multiple dwelling units with common infrastructure and shared facilities. Since the applicant provides services only to individual owners of stand-alone residential houses and not to residential apartments or complexes, the supply of pure labour services for construction, erection, commissioning, or installation of original works pertaining to single residential dwelling units, otherwise than as part of a residential complex, is exempt from GST, subject to fulfilment of the conditions that the activity qualifies as original works, the residential unit is a single stand-alone dwelling unit, and the same does not form part of a residential complex – Ordered accordingly [Read less]

GST – Karnataka AAR – Taxability of Rebates received from bank for usage of Corporate Card - Applicant, a liquor manufacturer, has obtained a Corporate Card from HSBC Bank to make payments towards excise duty. Based on the total excise duty payments made during a month, HSBC Bank grants a rebate at a specified percentage, which is adjusted against the outstanding card balance - Whether the rebate received for payment of excise duty through the Corporate Card is liable to GST – HELD - The rebates received by the applicant from bank are merely transaction in money and do not involve any supply of goods or services. The... [Read more]

GST – Karnataka AAR – Taxability of Rebates received from bank for usage of Corporate Card - Applicant, a liquor manufacturer, has obtained a Corporate Card from HSBC Bank to make payments towards excise duty. Based on the total excise duty payments made during a month, HSBC Bank grants a rebate at a specified percentage, which is adjusted against the outstanding card balance - Whether the rebate received for payment of excise duty through the Corporate Card is liable to GST – HELD - The rebates received by the applicant from bank are merely transaction in money and do not involve any supply of goods or services. The rebate is granted by the bank as a post-transaction financial adjustment linked to the usage of the corporate card and is not attributable to any independent or identifiable supply of goods or services by the applicant to the bank - The rebate merely results in a reduction of the outstanding monetary liability payable to the bank and falls within the definition of "money" under Section 2(75) of the CGST Act, 2017. The rebate does not represent consideration for any taxable service and hence cannot be brought to tax under GST - Further, the transaction is covered under the exemption provided for services by way of extending deposits, loans, or advances where the consideration is represented by way of interest or discount. Therefore, the rebates received by the applicant does not fall within the ambit of Section 7 of the CGST Act, 2017 and is not liable to GST - Ordered accordingly [Read less]

GST – Odisha AAR - Scope of “manufacture" under Section 2(72) of the CGST Act, 2017 - Transforming of raw limestone/dolomite extracted from its mine into finished, marketable products through a series of processing steps: crushing, sizing, screening, and grading – Whether the activity of crushing, screening and sizing of limestone/dolomite amounts to "manufacture" under Section 2(72) of the CGST Act, 2017 – HELD - For an activity to qualify as "manufacture" under Section 2(72), all three tests i.e. distinct name, distinct character, and distinct use, must be satisfied cumulatively. In the present case, the raw mate... [Read more]

GST – Odisha AAR - Scope of “manufacture" under Section 2(72) of the CGST Act, 2017 - Transforming of raw limestone/dolomite extracted from its mine into finished, marketable products through a series of processing steps: crushing, sizing, screening, and grading – Whether the activity of crushing, screening and sizing of limestone/dolomite amounts to "manufacture" under Section 2(72) of the CGST Act, 2017 – HELD - For an activity to qualify as "manufacture" under Section 2(72), all three tests i.e. distinct name, distinct character, and distinct use, must be satisfied cumulatively. In the present case, the raw material as well as the processed output is limestone/dolomite. The chemical composition, mineral identity and commercial understanding of the product remain unchanged - The processes undertaken, namely crushing, screening and sizing, only alter the physical dimensions of the mineral to make it suitable for transportation or specific industrial usage. Such processes do not result in the emergence of a new product having a distinct name, character or use - In the present case, there is no transformation into a new article, only physical dimensions are altered, while the chemical composition, mineral identity and commercial nomenclature remain unchanged – Further, the applicant contention regarding the contractor bearing the commercial/operational risk is irrelevant for GST classification purposes, as the CGST Act does not recognize allocation of commercial risk as a criterion for determining manufacture or supply of goods. The activity falls squarely under Section 7 of the CGST Act read with Sl. No. 03 to Schedule-II, which prescribes that any treatment or process which is applied to another person's goods is a supply of service - The activity carried out by the contractor does not amount to "manufacture" under Section 2(72) of the CGST Act, 2017 – Ordered accordingly [Read less]