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Central Excise - CENVAT Credit on services availed outside the Factory Premises - Services Used in Setting Up of Unit - Appellant, a cement manufacturer, collected fly ash from NTPC's electricity generation plant and incurred costs for loading, transportation, unloading and maintenance of the fly ash pond as per Pollution Control Board specifications - The appellant claimed CENVAT credit for services rendered at the fly ash pond as well as for loading, unloading and freight charges for movement of fly ash – Denial of credit on the ground that services were rendered outside the factory premises and hence CENVAT credit was... [Read more]

Central Excise - CENVAT Credit on services availed outside the Factory Premises - Services Used in Setting Up of Unit - Appellant, a cement manufacturer, collected fly ash from NTPC's electricity generation plant and incurred costs for loading, transportation, unloading and maintenance of the fly ash pond as per Pollution Control Board specifications - The appellant claimed CENVAT credit for services rendered at the fly ash pond as well as for loading, unloading and freight charges for movement of fly ash – Denial of credit on the ground that services were rendered outside the factory premises and hence CENVAT credit was not eligible - Whether CENVAT credit can be taken for services used in or in relation to manufacture of final products even when such services are rendered outside the factory premises - HELD - The definition of input service under Rule 2(l) of CENVAT Credit Rules 2004 does not impose any requirement that the service must be received by the manufacturer within the factory premises. The Rule states that input services include any service used by a manufacturer whether directly or indirectly in or in relation to the manufacture of final products and clearance thereof up to the place of removal. The definition expressly includes services relating to procurement of inputs, setting up of factories and inward transportation of inputs which are often rendered outside factory premises - The mere location of service delivery outside factory premises does not make it ineligible for credit if it is used in or in relation to manufacture. Fly ash is admittedly the raw material and input for manufacturing cement and the services incurred in loading, unloading, transportation and maintenance of fly ash pond are directly used in relation to manufacture of cement. The services do not need to be rendered within the factory premises to qualify as input services - The CENVAT credit is available for services related to fly ash operations and other operations even when conducted outside the factory premises - The impugned order denying CENVAT credit is set aside and the appeal is allowed [Read less]

GST - Bail - ITC Fraud - Petitioners were arrested for alleged offences under Section 132(1)(c) of the CGST Act for fraudulently obtaining GST registrations in names of different persons, generating fake tax invoices and unlawfully availing ITC. The Department opposed bail contending that investigation was still in progress and multiple Aadhaar cards were recovered suggesting possible role in larger conspiracy - Whether bail should be granted in a GST fraud case where the maximum punishment is five years and the petitioners have already undergone more than 55 days of incarceration - HELD - In cases involving ITC fraud and ... [Read more]

GST - Bail - ITC Fraud - Petitioners were arrested for alleged offences under Section 132(1)(c) of the CGST Act for fraudulently obtaining GST registrations in names of different persons, generating fake tax invoices and unlawfully availing ITC. The Department opposed bail contending that investigation was still in progress and multiple Aadhaar cards were recovered suggesting possible role in larger conspiracy - Whether bail should be granted in a GST fraud case where the maximum punishment is five years and the petitioners have already undergone more than 55 days of incarceration - HELD - In cases involving ITC fraud and GST offences under Section 132(1)(c) of the CGST Act carrying a maximum punishment of five years imprisonment, bail should normally be granted unless extraordinary circumstances justify continued incarceration. The Supreme Court has observed that it is surprised when accused persons are denied bail at all levels of courts in such cases where the maximum punishment is only five years - The fact that investigation is still pending does not by itself constitute an extraordinary circumstance especially when the petitioner has already been in custody for a substantial period exceeding 55 days and much of the investigation would have been completed. The offence under Section 132(1)(c) is compoundable under Section 138 of the GST Act which further militates against prolonged incarceration. The prosecution case rests substantially on documentary evidence and there is no requirement for custodial interrogation for documentary evidence. The mere allegation of running shell companies without foundational facts or evidence of involvement of the petitioners in their operation does not justify continued custody - Bail is granted subject to appropriate conditions including personal bond, sureties, deposit of amount and reporting obligations – The petition is allowed [Read less]

Service Tax on Profit from Investment in Venture Capital Fund Units – Demand under Banking and Financial Services - Classification of profit from venture capital fund investment - Appellant was a unit-holder Venture Capital Fund and received profit from sale of units held in the fund. Department sought to tax this profit as consideration for fund management services under Banking and Financial Services - Whether profit from investment in venture capital fund units can be taxable under banking and financial services on the basis of accounting nomenclature - HELD - A unit-holder receiving its rightful share of profits from... [Read more]

Service Tax on Profit from Investment in Venture Capital Fund Units – Demand under Banking and Financial Services - Classification of profit from venture capital fund investment - Appellant was a unit-holder Venture Capital Fund and received profit from sale of units held in the fund. Department sought to tax this profit as consideration for fund management services under Banking and Financial Services - Whether profit from investment in venture capital fund units can be taxable under banking and financial services on the basis of accounting nomenclature - HELD - A unit-holder receiving its rightful share of profits from a venture capital fund has not provided any fund management service for which such profit could be consideration. The appellant did not manage the funds of Adharshila Venture Capital Fund for this specific receipt, rather, the appellant was a unit-holder receiving its rightful share of profits - The nomenclature used in books of accounts cannot determine the taxability of a transaction. The profit was earned as a unit-holder receiving distribution from the fund upon its exit or valuation gain, not as a service provider managing the fund's assets. The revenue relied entirely on accounting nomenclature and the difference between ST-3 returns and audited financial statements to claim taxation but failed to produce any evidence of a taxable service provided by the appellant. The income earned by the appellant on the basis of differential figures between the books of accounts and ST-3 Returns, cannot form the taxable service provided by the appellant - The demand of service tax on profit from investment in Venture Capital Fund is set aside and no penalties are imposable on the appellant – The impugned order is set aside and the appeal is allowed - Intellectual Property Services - Royalty received for use of copyright - Statutory exclusion of copyright from intellectual property rights - Appellant received royalty from another entity for permitting use of computer software and website portal which were registered as copyright works. Department classified the royalty as taxable intellectual property service - Whether royalty for the use of copyright, which is statutorily excluded from the definition of intellectual property right, can be taxed as intellectual property service - HELD - The statutory definition of intellectual property right under Section 65(55a) of the Finance Act specifically states that it means any right to intangible property including trademarks, designs, patents or any other similar intangible property, but does not include copyright. The transaction involved granting of right to use registered copyright of a literary work which constitutes computer programme, which is a literary work under Section 13(1)(a) of the Copyright Act, 1957. The copyright was the essential character of the transaction for which royalty was paid at ten percent of gross revenues, while the trademark transfer was merely incidental with nominal consideration. Therefore, the royalty received for the use of copyright which is expressly excluded from the definition of intellectual property right cannot be taxed under intellectual property service - The demand is set aside - CENVAT Credit - Denial on technical grounds - Procedural defects in documentation - Appellant availed CENVAT credit on service tax paid by the suppliers for input services which were used for provision of output services. The credit was denied on technical grounds such as non-submission of documents, mismatch of addresses and invoices issued in the name of key managerial personnel - Whether substantive CENVAT credit can be denied merely on procedural or clerical discrepancies in invoices when the receipt of services, payment of tax by supplier and use for output services are not disputed - HELD - It is a well-settled principle that the substantive right to avail CENVAT credit cannot be denied due to curable procedural defects. The appellant had availed credit on payment of service tax by the supplier which is not disputed by the revenue. The services were received by the appellant for its business and were used for provision of output services. The invoices were in the name of the appellant's key managerial personnel but the receipt of services and payment of tax by the supplier and use for output services were not disputed by the revenue. Merely on technical grounds or clerical discrepancies, the substantive CENVAT credit cannot be denied when the material facts are not disputed - The credit is allowed - Limitation - Extended period of limitation - Invocation on basis of difference between returns and audited accounts - Whether the extended period of limitation can be invoked on the basis of difference between returns and audited financial statements - HELD - The extended period of limitation can only be invoked if the non-payment of tax is occasioned by fraud, collusion, wilful misstatement or suppression of facts with deliberate intent to evade payment of tax. The burden of proving such mala fide intent lies squarely on the revenue. In this case, the show-cause notice was issued on the basis of audit of books of accounts and scrutiny of profit and loss account. The invoices dated 31.03.2008 on which the demand was based were available in the financial report for the year 2007-2008 itself. No fresh material has been brought by the revenue to allege any suppression of facts with intention to evade tax. The demand of service tax cannot be confirmed merely on the difference between returns and audited accounts. The show-cause notice issued on 17.10.2012 is barred by limitation - Imposition of penalties under Section 77 and Section 78 of Finance Act, 1994 - Penalties under Section 77 and Section 78 were imposed on the appellant on the basis of the alleged short payment of service tax - Whether penalties can be imposed when the underlying demand of service tax is set aside - HELD - When the demand of service tax is not sustainable against the appellant, consequently, no penalties imposed on the appellant on the basis of that demand are also not sustainable. The penalties cannot be allowed to stand independently when the underlying demand on which they were based is set aside. Therefore, the penalties imposed under Section 77 and 78 of the Finance Act, 1994 are set aside. 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Service Tax - Conditions for entitlement to benefit of Exemption Notification - Non-filing of export return in time - Appellant engaged commission agents located overseas for export of goods and claimed exemption under Notification No.18/2009-ST and Notification No.42/2012-ST. Department alleged that appellant did not file EXP-3 Returns within prescribed time and failed to submit documents with EXP-4, thereby violating mandatory conditions of the notification. Department demanded service tax on commission payments - Whether substantive benefit of exemption notification can be denied when the procedural condition of timely ... [Read more]

Service Tax - Conditions for entitlement to benefit of Exemption Notification - Non-filing of export return in time - Appellant engaged commission agents located overseas for export of goods and claimed exemption under Notification No.18/2009-ST and Notification No.42/2012-ST. Department alleged that appellant did not file EXP-3 Returns within prescribed time and failed to submit documents with EXP-4, thereby violating mandatory conditions of the notification. Department demanded service tax on commission payments - Whether substantive benefit of exemption notification can be denied when the procedural condition of timely filing of EXP-3 Return is breached - HELD - The conditions prescribed in exemption notifications must be examined and distinguished between mandatory substantive requirements and procedural requirements. The substantive requirements being those which go to the heart of the exemption such as engagement of commission agents outside India and payment of commission to such agents. The procedural requirements being those pertaining to filing of forms and returns within time - When an assessee has complied with the substantive requirements of an exemption notification, denial of the benefit on account of procedural lapses such as delayed filing of returns or lack of proper authentication of documents would be inequitable and contrary to settled principles of tax law. Procedural requirements which are technical in nature cannot be allowed to override the substantive benefit earned by the assessee. The observations of the Commissioner (Appeals) were self-contradictory as he found on one hand that documents were not authenticated and on the other that they were not submitted. The original authority correctly concluded that delay in filing EXP-3 does not amount to violation of mandatory substantive provisions and cannot disentitle the appellant from exemption benefit when the substantive conditions are satisfied - The appeal is allowed and the demand is set aside [Read less]

Service Tax - Invocation of extended period of limitation - Appellant claimed exemption under the small-scale exemption notification and asserted that income from weigh bridge service was not taxable, while paying service tax on Technical Inspection and Certification Agency Service - Department raised show cause notice demanding service tax on weigh bridge income, alleging that exemption was forfeited by payment of tax on other services, and invoked extended period of limitation claiming suppression of facts with intent to evade tax - Whether extended period of limitation can be invoked when issue involves legal interpreta... [Read more]

Service Tax - Invocation of extended period of limitation - Appellant claimed exemption under the small-scale exemption notification and asserted that income from weigh bridge service was not taxable, while paying service tax on Technical Inspection and Certification Agency Service - Department raised show cause notice demanding service tax on weigh bridge income, alleging that exemption was forfeited by payment of tax on other services, and invoked extended period of limitation claiming suppression of facts with intent to evade tax - Whether extended period of limitation can be invoked when issue involves legal interpretation of taxability and the assessee was a bona fide registered assessee regularly filing returns and showing all particulars in financial records - HELD - Extended period of limitation under the proviso to Section 73 can be invoked only when there is clear evidence of suppression of facts or undervaluation with deliberate intent to evade payment of tax. When the issue involves question of legal interpretation regarding taxability of a service and the assessee is a small operator registered under service tax regime regularly filing returns and maintaining proper books of accounts showing all particulars, there is no basis to allege suppression with intent to evade tax - The mistake in classification of services or interpretation of taxability, when made bona fide by a conscientious taxpayer, cannot justify invocation of extended period. The fact that the issue came to light through audit further indicates absence of any deliberate suppression. The extended period cannot be invoked - The appeal is allowed and the impugned order is set aside [Read less]

GST - Parallel Proceedings - Forum Shopping - Maintainability of Writ Petition when Statutory Appeal Pending - Whether a writ petition challenging the same assessment orders is maintainable when the petitioner has already filed statutory appeals challenging the identical orders - HELD - When a petitioner has already filed statutory appeals challenging assessment orders before the appellate authority and the very same assessment orders are subsequently challenged by way of writ petition before the High Court, the petitioner cannot be permitted to simultaneously invoke the jurisdiction of multiple forums as such practice is ... [Read more]

GST - Parallel Proceedings - Forum Shopping - Maintainability of Writ Petition when Statutory Appeal Pending - Whether a writ petition challenging the same assessment orders is maintainable when the petitioner has already filed statutory appeals challenging the identical orders - HELD - When a petitioner has already filed statutory appeals challenging assessment orders before the appellate authority and the very same assessment orders are subsequently challenged by way of writ petition before the High Court, the petitioner cannot be permitted to simultaneously invoke the jurisdiction of multiple forums as such practice is not in the interest of justice. The question regarding whether parallel proceedings violate Section 6(2)(b) of the CGST Act or whether the orders were passed without jurisdiction is a matter that can be appropriately examined and decided by the appellate authority when the statutory appeals are taken up for adjudication - Simultaneous pursuit of parallel remedies defeats the purpose of the hierarchical appellate structure and creates forum shopping which is contrary to principles of judicial economy and justice - The petitioner is granted liberty to raise all its contentions before the appellate authority - The writ petitions are disposed of [Read less]

GST - Bail - Fraudulent availment of input tax credits through fake invoices - Right to bail in cases of offences under Section 132(1) of CGST Act, 2017 - Petitioner alleged to have created bogus firms and fraudulently availed and passed on fake input tax credits through fake invoices without actual supply of goods or services. Department contended that the offence was serious, involving fraudulent creation and operation of multiple fake entities and large quantum of fake ITC, warranting denial of bail - Whether bail should be granted in cases under Section 132(1) of CGST Act - HELD - In cases under Section 132(1), in norm... [Read more]

GST - Bail - Fraudulent availment of input tax credits through fake invoices - Right to bail in cases of offences under Section 132(1) of CGST Act, 2017 - Petitioner alleged to have created bogus firms and fraudulently availed and passed on fake input tax credits through fake invoices without actual supply of goods or services. Department contended that the offence was serious, involving fraudulent creation and operation of multiple fake entities and large quantum of fake ITC, warranting denial of bail - Whether bail should be granted in cases under Section 132(1) of CGST Act - HELD - In cases under Section 132(1), in normal course, accused should get bail unless there are extraordinary circumstances. The quantum of fake input tax credits involved and the serious nature of allegations are not by themselves extraordinary circumstances warranting denial of bail. Where investigation is complete, case is based on electronic and documentary evidence which has been appended with the complaint, witnesses to be examined are government officers with negligible chances of tampering or influence, the offence is punishable with maximum imprisonment of five years, the accused have undergone substantial period of custody and have roots in society with no criminal antecedents, bail should be granted - Further detention in custody is not warranted when allegations are to be tested at trial and circumstances do not indicate risk of tampering with evidence or influencing witnesses. Petitioner is released on regular bail with standard conditions – The petitions are allowed [Read less]

GST – Uttarakhand AAR - Input Tax Credit on upfront lease amount - Admissibility of ITC on GST paid on upfront lease amount for construction of factory on leased land - Meaning of term "plant and machinery" under Section 17(5)(d) of CGST Act - Applicant sought ITC of GST charged on upfront payment of lease amount for long term lease of industrial plot from lessor where applicant intended to construct factory building on such leased land. Department argued that ITC was blocked under Section 17(5)(d) as land and building are specifically excluded from "plant and machinery" - Whether ITC is admissible on GST paid on upfront... [Read more]

GST – Uttarakhand AAR - Input Tax Credit on upfront lease amount - Admissibility of ITC on GST paid on upfront lease amount for construction of factory on leased land - Meaning of term "plant and machinery" under Section 17(5)(d) of CGST Act - Applicant sought ITC of GST charged on upfront payment of lease amount for long term lease of industrial plot from lessor where applicant intended to construct factory building on such leased land. Department argued that ITC was blocked under Section 17(5)(d) as land and building are specifically excluded from "plant and machinery" - Whether ITC is admissible on GST paid on upfront lease amount for construction of immovable property other than plant and machinery - HELD - Input tax credit shall not be available in respect of goods or services received for construction of immovable property other than plant and machinery on own account when used in course or furtherance of business. As per Explanation in Section 17(6), the expression "plant and machinery" under the Act specifically excludes land, building and any other civil structures. Judicial pronouncements in similar cases before Advance Ruling Authorities in other States have consistently held that ITC of GST paid on lease rental for land is blocked under Section 17(5)(d) as legislative intent is to block ITC in respect of services pertaining to land received by taxable person for construction of immovable property - In present case applicant intends to construct factory building on leased land which is an immovable property other than ‘plant and machinery’ and therefore ITC is blocked. Applicant is not eligible for claim of ITC of GST paid on upfront payment of lease amount – Ordered accordingly - Jurisdiction of Authority for Advance Ruling - Application seeking Ruling on admissibility of refund of GST - Applicant sought ruling from Authority for Advance Ruling regarding whether it could claim refund of GST paid on upfront lease amount for industrial plot - Whether Authority for Advance Ruling has jurisdiction to pronounce ruling on admissibility of refund under Section 97(2) of CGST Act, 2017 - HELD - Admissibility of refund is governed by Section 54 of the CGST Act and is not covered under any clause of Section 97(2) of the Act. Section 97(2) permits Authority to pronounce ruling only on seven specified matters namely classification of goods or services, applicability of notifications, determination of time and value of supply, admissibility of input tax credit, determination of tax liability, requirement of registration, and whether any act results in supply of goods or services. Seeking ruling on admissibility of refund of tax paid by applicant is not within purview of Section 97(2) of the Act and Authority has no jurisdiction to pronounce ruling thereon. Application relating to admissibility of refund is rejected. [Read less]

Central Excise – Classification of Nicotine Sulphate and Applicability of Extended Period of Limitation – Appellant manufactured Organic Manure and Nicotine Sulphate and cleared products in DTA and for export – Dept investigated case of mis-classification of Nicotine Sulphate, alleged it should be classified under CTH 24039990 instead of CTH 29399900 declared by appellant in returns - Whether Nicotine Sulphate is correctly classifiable under CTH 24039990 covering tobacco extracts and essences or under CTH 29399900 covering vegetable alkaloids – HELD – Appellant had intimated department about manufacture of Nicoti... [Read more]

Central Excise – Classification of Nicotine Sulphate and Applicability of Extended Period of Limitation – Appellant manufactured Organic Manure and Nicotine Sulphate and cleared products in DTA and for export – Dept investigated case of mis-classification of Nicotine Sulphate, alleged it should be classified under CTH 24039990 instead of CTH 29399900 declared by appellant in returns - Whether Nicotine Sulphate is correctly classifiable under CTH 24039990 covering tobacco extracts and essences or under CTH 29399900 covering vegetable alkaloids – HELD – Appellant had intimated department about manufacture of Nicotine Sulphate under CTH 29397002 vide letter dated 07.04.2006 addressed to Deputy Commissioner, Central Excise and monthly Excise Returns (ER-1) filed for disputed period clearly disclosed manufacture and clearance of Nicotine Sulphate under CTH 29399900. Since the Classification was already known to Department therefore no ground to allege suppression or misstatement to invoke extended period – Information declared in statutory returns, if suppression cannot be alleged for non-furnishing of any other information not required to be supplied in statutory return. When facts are known to both sides, omission to do what ought to have been done cannot be considered as suppression – Demand for period June-2015 to June-2017 is barred by limitation – Further, the appellant correctly classified Nicotine Sulphate under CTH 29399900 and demand of differential duty is set aside – The appeal is allowed - Classification - Nicotine Sulphate obtained by adding dilute sulphuric acid to Nicotine extracted from tobacco is vegetable alkaloid and appropriately classifiable under CTH 2939. Manufacturing process clearly indicates that Nicotine Sulphate is vegetable alkaloid extracted from tobacco – Chapter Note 1(a) restricting heading to separate chemically defined compounds does not apply as sub-heading C under General Notes to Chapter 29 provides exceptions for certain products which remain classified in Chapter 29 even when not separate chemically defined compounds, alkaloids being one such exception – CTH 2403 covers Other Manufactured Tobacco and Tobacco Substitutes, Homogenised or Reconstituted Tobacco and Tobacco Extracts and Essences – Nicotine Sulphate obtained by the appellant is vegetable alkaloid and therefore, it is appropriately classifiable under CTH 2939 - Validity of Test Report - Test report on sample drawn from third party premises on 08.03.2016 is unreliable as samples drawn in absence of manufacturer or his representative violated CBIC Supplementary Manual procedure requiring samples to be drawn in presence of owner or manager of factory – Sample tested after more than one year from date of drawl violating IS 10627:1983 prescribing testing within 90 days of manufacture – Chemical examiner's opinion on classification is not relevant, role being only to supply analytical data not to determine classification –Appellant correctly classified Nicotine Sulphate under CTH 29399900 and demand of differential duty is set aside - Related party sales – The related party sales, showing one common director between appellant and BGP Healthcare Pvt Ltd does not establish related party status as Section 4(3)(b) of Central Excise Act requires mutuality of business interest which is absent – Allegation of related party sale without supportive evidence cannot be sustained – Differential duty demand on undervaluation for related party sales is also set aside and the appeal is allowed [Read less]

Customs - Confiscation of Gold - Notified goods recovered from conscious possession of appellant at interception - Whether seized gold biscuits were properly liable to absolute confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962 given appellant's contention that the Department failed to prove its foreign origin or smuggled nature - HELD - Gold being notified goods under Section 123 of the Customs Act, the statutory burden squarely rested upon the appellants to establish the licit importation or lawful acquisition and possession thereof. Despite adequate opportunity, no documentary evidence whatsoever was... [Read more]

Customs - Confiscation of Gold - Notified goods recovered from conscious possession of appellant at interception - Whether seized gold biscuits were properly liable to absolute confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962 given appellant's contention that the Department failed to prove its foreign origin or smuggled nature - HELD - Gold being notified goods under Section 123 of the Customs Act, the statutory burden squarely rested upon the appellants to establish the licit importation or lawful acquisition and possession thereof. Despite adequate opportunity, no documentary evidence whatsoever was brought on record to substantiate the lawful import, procurement or possession of the seized gold - The Dept had not rested its case merely upon the statutory presumption under Section 123 but had brought on record various attendant circumstances, including statements recorded under Section 108 and the recovery effected from the conscious possession of appellant, which consistently pointed towards the illicit nature of the seized gold. No cogent material was placed to indicate a lawful source or to satisfactorily explain the possession and transportation of such substantial quantity of notified goods. The cumulative effect of evidence, viewed in its proper perspective, lent due corroboration to the Revenue's case. Moreover, appellant had relinquished and disowned any claim over the seized gold during adjudication, and a subsequent attempt to question the order of absolute confiscation despite such unequivocal relinquishment did not inspire confidence - The seized gold biscuits have rightly been held liable to confiscation under Sections 111(b) and 111(d) of the Customs Act - The order directing absolute confiscation is affirmed and the appeal is dismissed [Read less]

GST - Service - Notice and Order Through Common Portal - Effectual Service - Whether uploading of SCN and order-in-original on the common portal amounts to effectual service when the petitioner has no actual knowledge of such uploading and no acknowledgment of receipt has been obtained - HELD - Service of SCN or order-in-original by merely uploading on the common portal cannot be deemed to constitute proper service merely on account of uploading unless its receipt is acknowledged or a reply is filed by the assessee in response to the SCN. The CGST Rules expressly limit the utility of the common portal to specific functions... [Read more]

GST - Service - Notice and Order Through Common Portal - Effectual Service - Whether uploading of SCN and order-in-original on the common portal amounts to effectual service when the petitioner has no actual knowledge of such uploading and no acknowledgment of receipt has been obtained - HELD - Service of SCN or order-in-original by merely uploading on the common portal cannot be deemed to constitute proper service merely on account of uploading unless its receipt is acknowledged or a reply is filed by the assessee in response to the SCN. The CGST Rules expressly limit the utility of the common portal to specific functions such as registration, filing returns, payment of tax, refunds, appeals and e-way bills but do not authorize service of SCN or orders through the portal. Rule 142 of the CGST Rules 2017 provides that orders must be communicated electronically but uploading on the common portal is not equivalent to electronic communication. The Government notification issued under Section 146 of the CGST Act specifically identifies the manner of service and uploading on common portal is not an authorized mode of service - The writ petition is disposed of in terms of the precedent established in Luxmi Traders and The Amar Cooperative LC Society cases – Ordered accordingly [Read less]

Service Tax - Appeal before High Court - Maintainability - Questions relating to rate of duty and taxability - Whether appeal before High Court is maintainable against CESTAT order determining the taxability of a particular service under Section 35L of the Central Excise Act - HELD - where the CESTAT determines the taxability of a particular service, an appeal against such determination would lie before the Hon'ble Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court - The Allahabad High Court decision in NKG Infrastructure Ltd. v. Commissioner did not consider the maintainability ... [Read more]

Service Tax - Appeal before High Court - Maintainability - Questions relating to rate of duty and taxability - Whether appeal before High Court is maintainable against CESTAT order determining the taxability of a particular service under Section 35L of the Central Excise Act - HELD - where the CESTAT determines the taxability of a particular service, an appeal against such determination would lie before the Hon'ble Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court - The Allahabad High Court decision in NKG Infrastructure Ltd. v. Commissioner did not consider the maintainability issue before the High Court and cannot be relied upon to establish a contrary principle. No statutory provision or binding precedent supports the contention that appeals on taxability issues are maintainable before the High Court – The appeals on questions relating to taxability are governed by Section 35L and must be taken before the Supreme Court - The present appeal before the High Court is not maintainable and dismissed [Read less]

Central Excise - CENVAT Credit on Structural Steel Items - Capital Goods - Immovable Property - Whether structural steel items and materials used for fabrication of support structures that become permanently affixed to the ground and form part of immovable property can be claimed as CENVAT credit on inputs or capital goods, and whether the amendment to CENVAT Credit Rules 2004 dated 07.07.2009 is clarificatory or prospective in operation - HELD - The issue of CENVAT credit eligibility for structural steel items used in fabrication of support structures for capital goods is no longer res integra having been considered in ca... [Read more]

Central Excise - CENVAT Credit on Structural Steel Items - Capital Goods - Immovable Property - Whether structural steel items and materials used for fabrication of support structures that become permanently affixed to the ground and form part of immovable property can be claimed as CENVAT credit on inputs or capital goods, and whether the amendment to CENVAT Credit Rules 2004 dated 07.07.2009 is clarificatory or prospective in operation - HELD - The issue of CENVAT credit eligibility for structural steel items used in fabrication of support structures for capital goods is no longer res integra having been considered in catena of decisions by the Tribunal, High Courts and Supreme Court. The principle that capital goods become immovable property is irrelevant to the question of credit eligibility which must be determined at the stage before such goods become part of immovable property. The structural steel items used for fabrication of structures for installation of capital goods are directly or indirectly used in manufacture of final products and fall within the definition of inputs under the CENVAT Credit Rules - The amendment to the CCR, 2004 by Notification No. 16/2009-CE (NT) dtd 07.07.2009 is not clarificatory but prospective in operation and cannot apply retrospectively to periods prior to 07.07.2009 - For the period prior to 07.07.2009, the appellant is duly eligible to avail CENVAT credit on steel, cement, electrodes and gases used for fabrication of structural items - The impugned order denying CENVAT credit is set aside to the extent of demands up to 07.07.2009 – The appeal is partly allowed [Read less]

GST - Procedure for granting opportunity of hearing under Section 75(4) of CGST Act, 2017 - Requirement to intimate date, time and venue of personal hearing - Show-cause notice and three subsequent reminders did not specify date, time or venue of personal hearing. Petitioners replied selecting "No" against personal hearing column - Whether omission to intimate date, time and venue of personal hearing in show-cause notice and reminders vitiates proceedings or whether petitioner's selection of "No" against personal hearing absolves authority from duty to grant opportunities of hearing - HELD – The Section 75(4) of CGST Act... [Read more]

GST - Procedure for granting opportunity of hearing under Section 75(4) of CGST Act, 2017 - Requirement to intimate date, time and venue of personal hearing - Show-cause notice and three subsequent reminders did not specify date, time or venue of personal hearing. Petitioners replied selecting "No" against personal hearing column - Whether omission to intimate date, time and venue of personal hearing in show-cause notice and reminders vitiates proceedings or whether petitioner's selection of "No" against personal hearing absolves authority from duty to grant opportunities of hearing - HELD – The Section 75(4) of CGST Act mandates that opportunity of hearing shall be granted where request is received or where any adverse decision is contemplated. As per Section 75(5), adjudication authority must grant up to three adjournments meaning four dates for personal hearing. It is incumbent upon authorities to intimate date, time and venue of personal hearing in show-cause notice before passing final order against assessee. Failure to specify date, time and venue of personal hearing in notice and reminders deprives assessee of effective opportunity of hearing – The selection of "No" against personal hearing column does not absolve authority from statutory duty to grant three opportunities of hearing as contemplated under Section 75(4). Authority must pass reasoned and speaking order considering all materials on record, not merely order that assessee remained absent – The impugned order is non-speaking order which is absolutely unreasoned cannot be sustained and quashed – The matter is remanded to jurisdictional State Tax Officer with direction to pass fresh order after affording opportunity of hearing in accordance with law – The petition is disposed of [Read less]

GST - Anti-Profiteering - Obligation to pass on benefit of additional Input Tax Credit to homebuyers under Section 171(1) of CGST Act - Complaint alleging that construction service supplier did not pass on benefit of ITC to homebuyers by reducing prices on introduction of GST - DGAP investigation found that supplier became eligible to avail ITC after GST implementation whereas it had no CENVAT or VAT credit eligibility in pre-GST period - Whether benefit of additional ITC was required to be passed on to homebuyers - HELD - Where a supplier becomes entitled to benefit of ITC on account of implementation of GST on inputs and... [Read more]

GST - Anti-Profiteering - Obligation to pass on benefit of additional Input Tax Credit to homebuyers under Section 171(1) of CGST Act - Complaint alleging that construction service supplier did not pass on benefit of ITC to homebuyers by reducing prices on introduction of GST - DGAP investigation found that supplier became eligible to avail ITC after GST implementation whereas it had no CENVAT or VAT credit eligibility in pre-GST period - Whether benefit of additional ITC was required to be passed on to homebuyers - HELD - Where a supplier becomes entitled to benefit of ITC on account of implementation of GST on inputs and input services, such benefit is required to be passed on to recipients by way of commensurate reduction in prices. Section 171 casts statutory obligation upon every registered supplier to ensure that benefit arising from availability of additional ITC is not retained by supplier but is passed on to recipients. Respondent not disputing entitlement to additional ITC or computation by DGAP. Accordingly, supplier became entitled to benefit of additional ITC upon implementation of GST and such benefit was required to be passed on to eligible homebuyers in accordance with Section 171(1) of CGST Act, 2017 – Ordered accordingly - Scope of Section 171(1) of CGST Act - Meaning of "commensurate reduction in prices" - Supplier contended that it passed on ITC benefit by carrying out structural upgrades and additional fittings in flats free of cost and that value of such works exceeded profiteered amount - Whether additional structural works and free fittings constitute passing on benefit of ITC in manner contemplated under Section 171(1) of CGST Act - HELD - Section 171(1) requires benefit of ITC to be passed on by way of commensurate reduction in prices. Supplier cannot substitute such reduction in prices by extending benefit in any other form such as increase in quantity, supply of free material or any collateral benefit. The legislative mandate is that reduction of tax rate or benefit of ITC must not only be reflected in reduction of prices but must also reach recipient. Statutory requirement cannot be tampered with by supplier by substituting benefit in form of reduction of actual price with any other form such as additional or free material – The additional structural works and fittings carried out by supplier, even if actually executed and even if value thereof exceeds profiteered amount, cannot be treated as passing on benefit in manner contemplated under Section 171(1) – The supplier is not at liberty to substitute prescribed mode by providing additional works or other benefits. Accordingly, additional structural works and fittings do not amount to passing on benefit of ITC by way of commensurate reduction in prices - Calculation of profiteered amount - Inclusion of GST component in amount to be refunded to homebuyers - Supplier required to pass on profiteered amount with corresponding GST component along with interest - Consideration collected by supplier from homebuyers was inclusive of GST - Whether profiteered amount should be refunded without GST component or inclusive of GST - HELD - Consideration collected by supplier from homebuyers was inclusive of GST. Profiteered amount being part of consideration realised from homebuyers is liable to be returned along with corresponding GST component. Both Central and State Government had no intent of collecting additional GST on higher price as they had sacrificed their revenue in favour of buyer - By compelling buyers to pay additional GST on higher price, supplier has not only defeated intent of Governments but has also acted against interest of consumer. GST collected by supplier on additional realization has rightly been included in profiteered amount. Respondent is liable to pass on profiteered amount together with GST component to eligible homebuyers - Interest payable on profiteered amount - Supplier liable to pay interest at prescribed rate from date of collection of higher amount - Rule 133(3)(b) of CGST Rules provides that registered person shall return amount not passed on together with interest at prescribed rate from date of collection of higher amount till date of its return - Whether interest is payable on profiteered amount and at what rate - HELD - Where benefit of reduction in tax or ITC has not been passed on by way of commensurate reduction in prices, registered person shall return amount not passed on together with interest. Section 171 is broad enough to empower Central Government to prescribe interest to ensure that suppliers are deterred from pocketing benefits meant for consumers - Respondent is liable to pay interest at rate of eighteen per cent per annum on profiteered amount from date of collection till date of its actual payment in terms of Rule 133(3)(b) of CGST Rules, 2017 - Penalty under Section 171(3A) of CGST Act - Penalty provision came into force on 01.01.2020 but profiteering activity occurred in period prior to enforcement - Investigation period extends from 01.07.2017 to 02.01.2020. Construction of project completed and occupancy certificate applied for prior to coming into force of penalty provision on 01.01.2020 - Whether penalty under Section 171(3A) is attracted - HELD - Section 171(3A) was inserted by Finance (No. 2) Act, 2019 and came into force on 01.01.2020. Although proceedings culminated just one day after insertion of penalty provision, conduct constituting alleged contravention had already concluded prior to coming into force of said provision. In peculiar facts and circumstances where project had been completed and Respondent had already applied for Occupancy Certificate before 01.01.2020, imposition of penalty under Section 171(3A) would not be warranted. Accordingly, no penalty under Section 171(3A) of CGST Act, 2017 is leviable in facts of present case. [Read less]

Customs - Rejection of Transaction Value - Reassessment after Finalization of Assessment - Whether transaction value declared by Appellant for import of Aluminium Scrap can be disregarded and goods reassessed long after assessment and clearance on the basis of circular/guidelines issued by Directorate of Valuation which was issued on the basis of prices declared in the LME - HELD - Once assessment has been finalized and department has not challenged same, then subsequently on basis of guidelines issued by Directorate of Valuation, the transaction value cannot be rejected because there is no evidence on record to show that ... [Read more]

Customs - Rejection of Transaction Value - Reassessment after Finalization of Assessment - Whether transaction value declared by Appellant for import of Aluminium Scrap can be disregarded and goods reassessed long after assessment and clearance on the basis of circular/guidelines issued by Directorate of Valuation which was issued on the basis of prices declared in the LME - HELD - Once assessment has been finalized and department has not challenged same, then subsequently on basis of guidelines issued by Directorate of Valuation, the transaction value cannot be rejected because there is no evidence on record to show that transaction value declared by importer is not correct. Guidelines do not have any statutory force and cannot override provisions of Valuation Rules - Following ratio of Hon'ble High Court of Delhi in Niraj Silk Mills vs. Commr of Customs (ICD) Patparganj which held that reasonable doubt on declared value must be based on empirical and legally justifiable factors, that proper officer must record reasons in support of such doubt, and that transaction values cannot be rejected arbitrarily without corroborative evidence - The impugned order is not sustainable in law and set aside – The appeal is allowed [Read less]

Service Tax - Consulting Engineering Services - Licensing of Pre-existing Intellectual Property versus Rendering of Services - Appellant entered into agreement with technology provider by which technology provider granted non-exclusive, non-divisible, non-transferable and non-assignable right to Appellant to use pre-existing Technology and Know-How for purpose of manufacturing and assembling passenger cars and components thereof in India and for use of trademark - Revenue proceeded on premise that services rendered by technology provider constitute Consulting Engineer Services and appellant as recipient of services from no... [Read more]

Service Tax - Consulting Engineering Services - Licensing of Pre-existing Intellectual Property versus Rendering of Services - Appellant entered into agreement with technology provider by which technology provider granted non-exclusive, non-divisible, non-transferable and non-assignable right to Appellant to use pre-existing Technology and Know-How for purpose of manufacturing and assembling passenger cars and components thereof in India and for use of trademark - Revenue proceeded on premise that services rendered by technology provider constitute Consulting Engineer Services and appellant as recipient of services from non-resident without office in India is liable to pay service tax under reverse charge mechanism w.e.f. period even though reverse charge provision was introduced only from 18.04.2006 - Whether services relating to technical assistance and supply of technical know-how rendered by technology provider under licensing agreement for use of pre-existing technology and trademark constitute taxable Consulting Engineering Services under Section 65 of Finance Act, 1994 - HELD - The agreement is a licensing arrangement not a consulting arrangement. The core object is grant of license by technology provider to Appellant enabling use of pre-existing technology, technical documentation, know-how and trademarks of technology provider - Consulting Engineering Services means services where consulting engineer is engaged and retained to provide engineering expertise for specific client needs and hallmark is rendering of professional skill and judgment by service provider at instance of client. Technology provider is neither a professionally qualified engineer nor an engineering firm but manufacturer of cars. There is not shred of evidence that technology provider was retained to provide any engineering advice, consultation or technical assistance or that it applied its engineering expertise to advise Appellant on specific engineering problem – The mere fact that subject matter of license belongs to domain of engineering does not transform transaction into consulting engineering service. Character of transaction must govern its classification. Correct legal characterisation is that of license or transfer of right to use intellectual property specifically pre-existing know-how and trademark as opposed to rendering of service - A transaction that involves the making available of existing intellectual property for use by the transferee, against consideration in the form of royalty or lump sum fees, is in the nature of a 'transfer of the right to use' or 'license', and not a service rendered by the transferor to the transferee. The services received by the appellant are not consulting engineering service - Further, for the period 2001-02 to 2003-04, RCM applicable only from 18.04.2006, the statutory provision enabling levy of service tax on recipient was not in force - The impugned Order-in-Original is set aside and the appeal is allowed [Read less]

Service Tax - Manpower Recruitment or Supply Agency Service - Appellant is engaged in providing Public Transport Service in State and assigned drivers, conductors and staff to work for another transport entity. Department came to conclusion that Appellant has provided Manpower Recruitment or Supply Agency Service as per relevant provisions till 01.07.2012 and thereafter a taxable service - Whether Public Transport Undertaking providing public utility service by assigning drivers, conductors and staff to another transport entity under governmental control is liable to pay service tax as Manpower Recruitment or Supply Agency... [Read more]

Service Tax - Manpower Recruitment or Supply Agency Service - Appellant is engaged in providing Public Transport Service in State and assigned drivers, conductors and staff to work for another transport entity. Department came to conclusion that Appellant has provided Manpower Recruitment or Supply Agency Service as per relevant provisions till 01.07.2012 and thereafter a taxable service - Whether Public Transport Undertaking providing public utility service by assigning drivers, conductors and staff to another transport entity under governmental control is liable to pay service tax as Manpower Recruitment or Supply Agency Service - HELD - The assessees in this case have assigned their staff to work for other transport entity and other entity reimbursed operational charges to State Government. Both entities were incorporated as transport operators under same Governmental control of Department of Transport. Govt of Punjab decided that staff of Appellant was to be deployed on assignment basis without any additional remuneration or deputation allowance. Salaries of officers and staff are still being paid by State Government but are partly being reimbursed by other entity - Appellant is Governmental Department discharging statutory function to provide transport services to general public and is not a manpower recruitment or supply agency service provider – Further, the extended period cannot be invoked when it has already been invoked on same facts in earlier show cause notice. Revenue has not made out any case for invocation of extended period - Impugned order is set aside and appeal is allowed [Read less]

Service Tax - CENVAT credit on the basis of running account bills - Requirement of mandatory documents under Rule 9(1) CCR 2004 - Whether credit can be availed on running account bills containing substantial particulars even though not in prescribed form - HELD – The Rule 4A of Service Tax Rules 1994 and Rule 9 of CCR 2004 require documents such as invoice bill or challan evidencing payment of service tax containing name address and registration of service provider and receiver description and value of taxable service - Proviso to Rule 9(2) mandates that even if document does not contain all particulars but contains deta... [Read more]

Service Tax - CENVAT credit on the basis of running account bills - Requirement of mandatory documents under Rule 9(1) CCR 2004 - Whether credit can be availed on running account bills containing substantial particulars even though not in prescribed form - HELD – The Rule 4A of Service Tax Rules 1994 and Rule 9 of CCR 2004 require documents such as invoice bill or challan evidencing payment of service tax containing name address and registration of service provider and receiver description and value of taxable service - Proviso to Rule 9(2) mandates that even if document does not contain all particulars but contains details of duty or service tax payable description of goods or taxable service assessable value central excise or service tax registration number name and address of factory or warehouse the authorized officer may allow CENVAT credit – The crux of matter is authority needs to be satisfied about relevant details and particulars not form of document - In present case appellant receiver of contract service and being liable to pay service tax under reverse charge deposited service tax. Credit taken on service tax and service tax payment challan is proper document to claim credit under RCM - Appellant taken credit in books of account and claimed credit in ST-3 Returns on basis of documents. Running account bills read with payment orders contain name and address of service provider service recipient description of service tax registration and service tax amount - Substantial particulars as required under Rule 9(2) CCR 2004 read with Rule 4A of STR 1994 available and requirement fulfilled, hence, appellant cannot be denied benefit of CENVAT credit - Impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Supply of tangible goods for use service - Liberalized Wagon Investment Scheme - Investment in railway wagons and freight concession - Appellant procured privately owned railway wagons under LWIS Scheme - Department entertained view that by permitting Railways to attach wagons to railway engines appellant supplied tangible goods for use to Railways and freight concession received represented consideration for taxable service - Whether the appellant can be said to have rendered any taxable service to the Railways merely because it invested in railway wagons under LWIS and received freight concession - HELD - A... [Read more]

Service Tax - Supply of tangible goods for use service - Liberalized Wagon Investment Scheme - Investment in railway wagons and freight concession - Appellant procured privately owned railway wagons under LWIS Scheme - Department entertained view that by permitting Railways to attach wagons to railway engines appellant supplied tangible goods for use to Railways and freight concession received represented consideration for taxable service - Whether the appellant can be said to have rendered any taxable service to the Railways merely because it invested in railway wagons under LWIS and received freight concession - HELD - Appellant procured wagons entirely at own cost only for facilitating transportation of own goods. Railways neither hired wagons for independent commercial exploitation nor acquired unrestricted right to use them - Wagons remained dedicated to appellant's traffic and could not be deployed by Railways for third-party transportation except in accordance with scheme terms - The Railways merely attached the appellant’s wagons to their locomotives and transported the appellant’s goods on payment of freight. Therefore, the actual transportation service admittedly flowed from the Railways to the appellant. The appellant remained the recipient of transportation service and not the provider of any service - The freight concession granted under the scheme is only an incentive intended to encourage private investment in wagon capacity and such concession merely reduces the freight otherwise payable by the appellant. A reduction in price or grant of rebate under policy cannot automatically assume the character of consideration for a taxable service unless there exists an independent service transaction supported by reciprocal obligations - Department's attempt to split one composite commercial element into two independent transactions viz. transportation service by Railways and supply of wagons by appellant not sustainable - Agreement when read as whole discloses only one commercial objective viz. transportation of appellant's own goods through wagons procured under policy incentive scheme – The operation control exercised by Railways while transporting appellant's goods does not convert transportation contract into contract of hiring of wagons – The appellant has not rendered any taxable service to Indian Railways under LWIS – The impugned orders confirmed demand of service tax interest and penalties are not sustainable in law and set aside – The appeals are allowed [Read less]

Service Tax – Exemption for Coaching Leading to Educational Qualification Recognized by Law – Whether coaching imparted for CA-CPT, ICWA-Foundation and Intermediate (10+2) examinations is eligible for exemption under Notification No. 33/2011-ST granting exemption to coaching or training leading to grant of certificate, diploma, degree or educational qualification recognized by law – HELD – The notification exempts coaching leading to grant of certificate, diploma, degree or educational qualification recognized by law and contains no restriction limiting exemption only to final stage of educational programme – CPT... [Read more]

Service Tax – Exemption for Coaching Leading to Educational Qualification Recognized by Law – Whether coaching imparted for CA-CPT, ICWA-Foundation and Intermediate (10+2) examinations is eligible for exemption under Notification No. 33/2011-ST granting exemption to coaching or training leading to grant of certificate, diploma, degree or educational qualification recognized by law – HELD – The notification exempts coaching leading to grant of certificate, diploma, degree or educational qualification recognized by law and contains no restriction limiting exemption only to final stage of educational programme – CPT is the mandatory first stage of the statutory course under the Chartered Accountants Act, 1949 and regulations framed thereunder, and a candidate cannot proceed to IPCC unless he successfully clears CPT. Thus CPT is not an independent or optional examination but forms an inseparable component of the statutory educational qualification – ICWA-Foundation is also a statutory stage prescribed under the Cost Accountancy Regulations and merely because the certificate issued at the CPT stage enables progression to the next level, it cannot deprive it of the character of an educational qualification recognized by law – The Tribunal in Sri Chaitanya Educational Committee case examined the notification and held that coaching imparted for recognized educational qualifications is not liable to service tax – The adjudicating authority erred in denying exemption merely on the ground that CPT is only qualifying examination as the notification does not employ the expression 'final qualification' and reading an additional condition into the notification amounts to re-writing it, which is impermissible – Further, for subsequent periods the department itself accepted the exemption in respect of similar coaching and refunded excess tax paid. In absence of any change either in facts or in law, the Revenue cannot adopt inconsistent stands for different periods – The demands of service tax, together with interest and penalties, are set aside and the appeals filed by appellant are allowed [Read less]

Service Tax – Denial of exemption to services provided to SEZ Unit, Non-furnishing of Form A-2 – Whether exemption available in respect of taxable services provided to SEZ unit can be denied solely because Form A-2 pertaining to relevant financial year was not furnished – HELD – Section 26 of SEZ Act grants substantive statutory exemption and conditions governing such exemption can only be prescribed under SEZ Act and SEZ Rules – Revenue cannot curtail or deny statutory exemption by imposing additional procedural requirements through notifications issued under Finance Act – Non-filing of Form A-2 cannot result ... [Read more]

Service Tax – Denial of exemption to services provided to SEZ Unit, Non-furnishing of Form A-2 – Whether exemption available in respect of taxable services provided to SEZ unit can be denied solely because Form A-2 pertaining to relevant financial year was not furnished – HELD – Section 26 of SEZ Act grants substantive statutory exemption and conditions governing such exemption can only be prescribed under SEZ Act and SEZ Rules – Revenue cannot curtail or deny statutory exemption by imposing additional procedural requirements through notifications issued under Finance Act – Non-filing of Form A-2 cannot result in denial of exemption otherwise available under SEZ Act. The SEZ Act being special enactment overrides inconsistent provisions by virtue of Section 51 of Act – In present matter no finding was recorded that services were not provided to eligible SEZ unit or services were not used for authorized operations or appellant was otherwise ineligible for exemption. The sole basis for confirming demand was absence of Form A-2 which is directly contrary to law declared by Hon'ble High Court – Once established that services were rendered to eligible SEZ unit for authorized operations, denial of exemption merely on account of non-production of Form A-2 is not sustainable in law – Demand of service tax together with consequential interest and penalty is set aside – Late fee for delayed filing of ST3 returns shall stand restricted to amount legally permissible under Section 70 of Finance Act, 1994 if found to have been imposed in excess of statutory limit – Impugned order set aside and appeal allowed by way of remand for limited purpose of re-quantification of late fee – The appeal is allowed by remand [Read less]

Customs - Classification of “Chinlon Knitted Bonded Fabrics” and “Bonded Fabrics in bracket (Eva Lycra)” - Knitted or crocheted fabrics – Eligibility to exemption under Notification No. 82/2017-Customs - Appellant imported goods declared as Chinlon Knitted Bonded Fabrics and Bonded Fabrics (Eva Lycra) classifying under CTH 60069000 claiming benefit of concessional rate under Notification No. 82/2017-Customs dated 27.10.2017 Sl. Number 169 - Revenue later took view that classification claimed did not appear proper and concessional rate availed not applicable - Show-cause notice invoking extended period to reclassi... [Read more]

Customs - Classification of “Chinlon Knitted Bonded Fabrics” and “Bonded Fabrics in bracket (Eva Lycra)” - Knitted or crocheted fabrics – Eligibility to exemption under Notification No. 82/2017-Customs - Appellant imported goods declared as Chinlon Knitted Bonded Fabrics and Bonded Fabrics (Eva Lycra) classifying under CTH 60069000 claiming benefit of concessional rate under Notification No. 82/2017-Customs dated 27.10.2017 Sl. Number 169 - Revenue later took view that classification claimed did not appear proper and concessional rate availed not applicable - Show-cause notice invoking extended period to reclassify items under CTH 60063100, 60063200, 60063300 or 60063400 - Whether goods were appropriately reclassified and exemption benefit properly denied - HELD – The Adjudicating authority arrived at decision on basis of voluntary statement by appellant wherein stated that fabrics are synthetic in nature and bleached and dyed. However, from examining statement recorded during investigation it is nowhere has appellant stated that fabrics are bleached and dyed – The importer summoned under Section 108 stated that Chinlon Knitted Fabric Chinlon Bonded Fabric and Bonded Fabric (Eva Lycra) are all different types with different uses and all these fabrics are synthetic in nature. The statement does not indicate fabrics are bleached and dyed - Adjudicating authority went on wrong premise and arbitrarily recorded that statement indicates bleached and dyed without adducing any evidence – The benefit of exemption notification cannot be denied in absence of any test report - No merit found in impugned order and same is set aside. The appeal is allowed [Read less]

Central Excise – Clandestine Removal of Pig Iron, Mixed Coke and Crude Tar – DGCEI issued Show Cause Notice proposing recovery of central excise duty under Section 11A(4) of Central Excise Act with interest and penalty alleging that Appellant had clandestinely cleared goods without payment of duty – Appellant contended that shortage was only notional due to accounting methodology - Whether allegation of clandestine removal of goods by Appellant is sustainable on basis of difference between stock recorded by external agency on volumetric basis and figures reflected in statutory records without any tangible evidence �... [Read more]

Central Excise – Clandestine Removal of Pig Iron, Mixed Coke and Crude Tar – DGCEI issued Show Cause Notice proposing recovery of central excise duty under Section 11A(4) of Central Excise Act with interest and penalty alleging that Appellant had clandestinely cleared goods without payment of duty – Appellant contended that shortage was only notional due to accounting methodology - Whether allegation of clandestine removal of goods by Appellant is sustainable on basis of difference between stock recorded by external agency on volumetric basis and figures reflected in statutory records without any tangible evidence – HELD – Allegation of clandestine removal is a serious charge which cannot be sustained on mere presumptions and assumptions, but requires concrete, positive and tangible evidence such as evidence of excess use of raw material, actual removal of unaccounted finished goods from factory, discovery of such goods outside factory, sale to identified parties, receipt of sale proceeds, excess electricity consumption or proof of actual transportation – In present case, no such tangible evidence has been produced by Revenue, merely difference between stock figures on volumetric basis and statutory records cannot prove clandestine removal – External agency's stock verification was conducted on volumetric basis not actual weighment, volumetric estimation is inherently approximate. Appellant's DSA was based on conversion ratios due to absence of weighment facility for pig iron production, different basis adopted for production estimation, consumption, clearance and stock taking, therefore discrepancy between stock taking figures and production figures should not immediately lead to conclusion that difference was removed clandestinely – Appellant is public sector undertaking, therefore possibility of mala fide conduct is remote – Further, statements recorded during investigation violated procedure prescribed under Section 9D(1)(b) of CEA, 1944 as the procedure requires summoning of persons who made statement, examining them as witness and opinion that admission is in interests of justice, which was not done – Extended period of limitation is not invocable as there is no evidence of positive act of suppression or fraud on part of appellant, in fact Appellant itself detected shortage and adjusted in books reflected in Balance Sheet and entire investigation emanates from such disclosure – Revenue failed to discharge burden of proving clandestine manufacture and removal by tangible evidence – Demand of central excise duty confirmed in impugned order is set aside and penalty imposed is also set aside – The appeal is allowed [Read less]

Customs - Classification of ‘Final Gear Kit, Differential', Application of General Explanatory Notes to Section XVII - Imported goods comprising Final Gear Kit, Differential, Gear Differential Side, Pinion Differential and other gears were declared under CTI 84834000 by importer - Department reclassified the said goods under CTI 87085000 arguing they were parts of rear axle assembly used in motor vehicles - Appellant-importer contended that gears and gearing are specifically covered under Heading 8483 and cannot be classified as vehicle parts under Section XVII and further that goods were integral to transmission functio... [Read more]

Customs - Classification of ‘Final Gear Kit, Differential', Application of General Explanatory Notes to Section XVII - Imported goods comprising Final Gear Kit, Differential, Gear Differential Side, Pinion Differential and other gears were declared under CTI 84834000 by importer - Department reclassified the said goods under CTI 87085000 arguing they were parts of rear axle assembly used in motor vehicles - Appellant-importer contended that gears and gearing are specifically covered under Heading 8483 and cannot be classified as vehicle parts under Section XVII and further that goods were integral to transmission function not exclusive to motor vehicles - Whether goods specifically covered under Heading 8483 can be reclassified as parts under Heading 8708 of Section XVII - HELD - Gears and Gearing are specifically mentioned in Heading 8483 and are more specifically covered under Tariff Item 8483 40 00 in Section XVI. Section Note 1(l) of Section XVI explicitly excludes articles of Section XVII from that Section. The HSN Explanatory Notes to Heading 84.83 specifically state that transmission equipment including differentials designed for use solely or principally with vehicles fall in Section XVII but this exclusion does not apply to gears as such - The General Explanatory Notes to Section XVII under category Parts and Accessories stipulate that parts must comply with all three conditions cumulatively. The condition that parts must not be more specifically included elsewhere in the Nomenclature is critical. Since the impugned goods are gears and gearing which are specifically and more precisely covered under Heading 8483, the third condition is not satisfied. Therefore the goods cannot be classified as parts and accessories under Heading 8708. The fact that goods are suitable for use with motor vehicles does not override the more specific coverage under Heading 8483. The classification under CTI 84834000 is correct and the reclassification is untenable - The impugned goods are classifiable under Heading 8483 in terms of Rule 1 itself there is no need to revert to the subsequent Rules of interpretation - The impugned demand for differential customs duty is set aside and the classification under CTI 84834000 is upheld - When the reclassification of goods is set aside and the original classification is found to be correct, the consequent demand for differential duty cannot be sustained - The demand is set aside and the appeals are allowed - Interpretation of explanatory notes to HSN - General explanatory notes given below the General Rules for the Interpretation of the First Schedule stipulates that where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by “-“ the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading, with the further explanation that where the description of an article or group of articles is preceded by “- -“, the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has “-“. Thus, any goods as listed against a heading, sub-heading or tariff item in the schedules of chapters of Section XVII, including ‘parts thereof’, would qualify as “articles of Section XVII”, so long as they are liable to be classified thereunder in accordance with the relevant chapter notes and section notes, read with the explanatory notes to HSN where they are also applicable - Customs - Confiscation and Redemption Fine - Applicability when underlying duty demand is unsustainable - Department held the impugned goods liable for confiscation under Section 111(m) of the Customs Act on the ground that they were imported with short payment of customs duties and the goods were misclassified. A redemption fine of substantial amount was imposed in lieu of confiscation - Whether goods can be held liable for confiscation when the underlying classification and duty demand on which the confiscation is based is found to be erroneous and unsustainable - HELD - Confiscation under Section 111(m) can be ordered only when the goods are found to have been imported with under-payment of duties or in violation of customs law. When the underlying duty demand is set aside as erroneous, the basis for confiscation ceases to exist. The goods cannot be held liable for confiscation when they were correctly classified and no under-payment of duty occurred. Therefore the redemption fine imposed in lieu of confiscation is also liable to be set aside - Customs - Penalties - Imposition on company and individuals - Section 112(a) and Section 114AA - Penalties were imposed on the importer company under Section 114AA and on individual officers under Sections 112(a), 114AA and 117 on the ground that the goods were misclassified, mis-declared and short duty paid customs duties was rendered liable for confiscation - Whether penalties can be imposed when the underlying classification is found to be correct and no duty evasion or misclassification occurred - HELD - Penalties are consequential upon the finding of a contravention. When the underlying duty demand and confiscation are set aside because the classification adopted by the importer is found to be correct, no contravention of customs law occurred. The act of claiming a particular classification based on the understanding of the tariff nomenclature and HSN explanatory notes, when the importer adopts the classification in good faith based on the provisions of the tariff and the General Rules for Interpretation, does not constitute wilful misclassification or misstatement. Penalties cannot be imposed on the company or on the individual officers as no violation of customs law is established. The penalties imposed under Sections 112(a), 114AA and 117 are all set aside. [Read less]

Central Excise - CENVAT Credit on Setting up Services used for fabrication, erection of pipeline, welding, cutting, flange fixing and other services prior to commercial production - Whether appellant is eligible for CENVAT Credit on setting up services for setting up factory before commencement of commercial production - HELD - Services in question come within definition of input service in terms of Rule 2(l) of CENVAT Credit Rules, 2004. Following law laid down in cases including Pepsico India Holdings Pvt Ltd, Bharat Coal Limited and others, services used for setting up of factory even after 01.04.2011 would be eligible ... [Read more]

Central Excise - CENVAT Credit on Setting up Services used for fabrication, erection of pipeline, welding, cutting, flange fixing and other services prior to commercial production - Whether appellant is eligible for CENVAT Credit on setting up services for setting up factory before commencement of commercial production - HELD - Services in question come within definition of input service in terms of Rule 2(l) of CENVAT Credit Rules, 2004. Following law laid down in cases including Pepsico India Holdings Pvt Ltd, Bharat Coal Limited and others, services used for setting up of factory even after 01.04.2011 would be eligible for credit - Any service which is used not only in manufacture but also in relation to manufacture will qualify as input service. The main part of definition is wide enough to cover services in question as they are directly in relation to manufacture and without setting up factory there cannot be any manufacture - Regarding invocation of extended period on ground of suppression and mis-statement, the CENVAT Credit availed and utilized by appellant was admissible and cannot be said that material facts have been suppressed from Department - As per Central Excise Act and Rules, appellant was neither required to give details of nature of service on which credit availed nor to give separate amount of credit in respect of separate services. When law does not require certain information to be given, non-submission of same cannot be held to be suppression or mis-statement with intent to evade payment of duty justifying invocation of longer period of limitation. Therefore, extended period could not have been invoked and appellant not liable for any penalty - The impugned orders are set aside and appeal is allowed [Read less]

GST - Powers and Jurisdiction of Appellate Authority under Section 107(11) of CGST Act, 2017 - Power to permit cross-examination of witnesses during appeal proceedings - Petitioner raised demand for wrongful availment of ITC on basis of fake invoices. Petitioner contended that Appellate Authority has no power to remit matter back to Adjudicating Authority and that petitioner was not given opportunity to cross-examine witnesses during adjudication proceedings, making writ petition maintainable - Whether Appellate Authority under Section 107(11) of CGST Act has power to permit cross-examination of witnesses and undertake fur... [Read more]

GST - Powers and Jurisdiction of Appellate Authority under Section 107(11) of CGST Act, 2017 - Power to permit cross-examination of witnesses during appeal proceedings - Petitioner raised demand for wrongful availment of ITC on basis of fake invoices. Petitioner contended that Appellate Authority has no power to remit matter back to Adjudicating Authority and that petitioner was not given opportunity to cross-examine witnesses during adjudication proceedings, making writ petition maintainable - Whether Appellate Authority under Section 107(11) of CGST Act has power to permit cross-examination of witnesses and undertake further inquiry during appeal proceedings despite prohibition on remanding matter to Adjudicating Authority - HELD - Although Section 107(11) of CGST Act expressly prohibits Appellate Authority from referring case back to Adjudicating Authority, it expressly empowers Appellate Authority to undertake such further inquiry as may be necessary before deciding appeal. Such power is sufficiently wide to enable Appellate Authority in appropriate case to permit cross-examination of witnesses wherever considered necessary for just adjudication - Appellate Authority exercises jurisdiction of first appellate forum and possesses ample powers to confirm, modify or annul order under challenge. Being vested with wide appellate powers, Appellate Authority is competent to examine both factual and legal issues arising from impugned order including grievance relating to denial of cross-examination and consideration of deposits made - Petitioner must exhaust statutory remedy of appeal available under Section 107 of CGST Act before approaching High Court in writ jurisdiction - The writ petition is disposed of [Read less]

GST - Timing of availment of Input Tax Credit under Reverse Charge - Relevant invoice for computing period of limitation under Section 16(4) of CGST Act, 2017 - Petitioner discharged reverse charge liability and issued its own tax invoice. Proper officer rejected claim that ITC was available under Section 16(4) as amended on ground that payment was made in financial year 2021-22 after receiving supplies in financial year 2020-21 - Whether relevant invoice for computing period of limitation for availing ITC under RCM is invoice issued by recipient or invoice issued by supplier and whether proper officer considered Section 3... [Read more]

GST - Timing of availment of Input Tax Credit under Reverse Charge - Relevant invoice for computing period of limitation under Section 16(4) of CGST Act, 2017 - Petitioner discharged reverse charge liability and issued its own tax invoice. Proper officer rejected claim that ITC was available under Section 16(4) as amended on ground that payment was made in financial year 2021-22 after receiving supplies in financial year 2020-21 - Whether relevant invoice for computing period of limitation for availing ITC under RCM is invoice issued by recipient or invoice issued by supplier and whether proper officer considered Section 31(3)(f) of CGST Act - HELD - Under Section 31(3)(f) of CGST Act, relevant invoice for computing limitation period for availing ITC is invoice issued by petitioner/recipient and not invoice issued by supplier. This aspect was not considered in impugned order. Proper officer erroneously recorded finding that taxpayer not eligible to claim and utilize ITC on account of making payment in financial year 2021-22 after receiving supplies in financial year 2020-21 without considering that limitation period is computed from date of invoice issued by petitioner on discharge of reverse charge liability - Additionally approach of arriving at tax liability by adding excess ITC available in petitioner's GSTR-2A in relation to CGST and SGST was clearly erroneous and warrants reconsideration - The impugned order and recovery notice set aside and matter remanded for reconsideration with reasonable opportunity to petitioner including personal hearing - The writ petitions are disposed of [Read less]

GST - Assessment of deceased assessee - Whether tax liability can be recovered from legal representatives under Section 93 of the CGST Act, 2017 without complying with procedural requirements of notice and hearing under Section 75(4) and (6) of the CGST Act - HELD - Section 93 of the CGST Act provides that where an assessee dies, the legal representative of the deceased shall be liable to pay out of the estate of the deceased any tax, interest or penalty that was determined whether before or after the death of the assessee. However, this statutory provision for recovery from legal representatives is subject to compliance w... [Read more]

GST - Assessment of deceased assessee - Whether tax liability can be recovered from legal representatives under Section 93 of the CGST Act, 2017 without complying with procedural requirements of notice and hearing under Section 75(4) and (6) of the CGST Act - HELD - Section 93 of the CGST Act provides that where an assessee dies, the legal representative of the deceased shall be liable to pay out of the estate of the deceased any tax, interest or penalty that was determined whether before or after the death of the assessee. However, this statutory provision for recovery from legal representatives is subject to compliance with the mandatory procedural provisions contained in Sections 75(4) and 75(6) of the CGST Act. Section 75(4) mandates that an opportunity of hearing shall be granted where any adverse decision is contemplated against any person chargeable with tax or penalty. Section 75(6) mandates that the proper officer in his order shall set out the relevant facts and the basis of his decision. These provisions are mandatory in nature and apply with full force to assessment proceedings involving legal representatives of deceased assesses - Assessment orders passed against deceased assessees without issuance of independent notice to the legal representatives and without affording them an opportunity of personal hearing are vitiated and void ab initio. The mere fact that Section 93 provides for recovery from legal representatives does not dilute the procedural safeguards mandated under Sections 75(4) and 75(6) - The assessment orders are quashed and set aside with liberty to the respondents to issue fresh notice to the legal representative and pass fresh orders after affording proper opportunity of hearing – The writ petition is allowed [Read less]

Customs - Classification of Pneumatic Tyres - Mining vs Truck and Bus Radial Tyres - Petitioner importers imported pneumatic tyres declared as Brand New All Steel Radial Mining Tyres classified under CTI 4011 8000, which are freely importable under Foreign Trade Policy - Revenue alleged the goods should be classified under CTI 4011 2010 (Truck and Bus Radial tyres), which is a restricted category requiring BIS compliance - Whether pneumatic tyres marked with speed symbol D corresponding to maximum speed of 65 kmph can be classified as restricted Truck and Bus Radial tyres requiring BIS certification when such tyres are exp... [Read more]

Customs - Classification of Pneumatic Tyres - Mining vs Truck and Bus Radial Tyres - Petitioner importers imported pneumatic tyres declared as Brand New All Steel Radial Mining Tyres classified under CTI 4011 8000, which are freely importable under Foreign Trade Policy - Revenue alleged the goods should be classified under CTI 4011 2010 (Truck and Bus Radial tyres), which is a restricted category requiring BIS compliance - Whether pneumatic tyres marked with speed symbol D corresponding to maximum speed of 65 kmph can be classified as restricted Truck and Bus Radial tyres requiring BIS certification when such tyres are expressly excluded from BIS standards IS 15636:2022 and from Quality Control Order 2009 by virtue of speed limit below 80 kmph, and whether goods can be deemed prohibited for provisional release purposes when they fall under restricted category and merely lack certification rather than being completely banned - HELD - A fundamental distinction exists between prohibited goods which are completely banned under the Customs Act and restricted goods which can be imported subject to obtaining requisite authorizations and complying with prescribed standards. Tyres marked with speed symbol D corresponding to maximum speed of 65 kmph fall outside the scope of IS 15636:2022 which only covers tyres with speed symbol F to H corresponding to speeds of 80 kmph and above - Quality Control Order 2009 expressly exempts commercial vehicle tyres identified by speed symbols A to E from mandatory BIS marking requirements. Therefore tyres with speed symbol D cannot be treated as requiring BIS compliance. The goods cannot be classified as prohibited merely because they lack certification when the applicable standard does not cover them. Since no notification under the Customs Act or any law prohibits the import of these tyres, they remain in the restricted category at most, not prohibited - The distinction between prohibited and restricted is crucial - prohibited goods cannot be released even provisionally whereas restricted goods can be released provisionally pending adjudication. Where classification itself is in dispute and established only through investigation findings rather than a conclusive notification, provisional release cannot be denied – The CESTAT had correctly directed provisional release subject to bond, bank guarantee and undertaking that goods shall not be sold for on-road use in commercial vehicles. The test reports and investigations must be conclusive before treating goods as prohibited - The Writ Petitions filed by assessees are allowed and directions are issued for provisional release of the seized goods within four weeks subject to compliance of conditions. The Writ Petition and Appeals filed by the Customs Department are dismissed [Read less]

GST – Validity of service of notices through GST portal only when registration is cancelled - Petitioner's registration was cancelled on 12.08.2021 effective from 31.07.2021 and thereafter show-cause notice and adjudication order were sought to be served only by uploading on GST portal - Whether service through portal alone is valid service under Section 169 CGST Act when registration is cancelled – HELD - Section 169 of the CGST Act prescribes multiple modes for valid service of notice including direct tender, registered post or courier, email, making available on common portal and affixation in newspaper if other mod... [Read more]

GST – Validity of service of notices through GST portal only when registration is cancelled - Petitioner's registration was cancelled on 12.08.2021 effective from 31.07.2021 and thereafter show-cause notice and adjudication order were sought to be served only by uploading on GST portal - Whether service through portal alone is valid service under Section 169 CGST Act when registration is cancelled – HELD - Section 169 of the CGST Act prescribes multiple modes for valid service of notice including direct tender, registered post or courier, email, making available on common portal and affixation in newspaper if other modes not practicable. Legislative intent is clear that making notice available on common portal is one permissible method but not exclusive method - Department is duty-bound to ensure effective service in manner that actually communicates notice to assessee - Since petitioner's registration stood cancelled before issuance of show-cause notice, insistence by Department that portal-based service alone sufficed amounts to imposing duty on unregistered person which law does not contemplate - Department failed to effect valid service of notices and statutory requirement of service under Section 169 not satisfied - The Adjudication order and order of Appellate Authority are quashed and the matter is remitted to Revenue to proceed from stage of show-cause notice – The petition is disposed of [Read less]

GST - Fixing date of hearing prior to reply submission date - Section 75(4) and (5) CGST Act – The Show-cause notice issued on 21.12.2023 granting time to submit reply by 21.01.2024 but date of personal hearing was fixed for 29.12.2023 which was prior to reply submission deadline – Whether fixing hearing date before reply submission date is lawful and compliant with statutory scheme – HELD – The conjunctive reading of Sections 73, 74 and 75 makes it apparent that approach adopted by authority was contrary to scheme of CGST Act – The scheme of Act enables assessee to seek adjournment not in excess of three times a... [Read more]

GST - Fixing date of hearing prior to reply submission date - Section 75(4) and (5) CGST Act – The Show-cause notice issued on 21.12.2023 granting time to submit reply by 21.01.2024 but date of personal hearing was fixed for 29.12.2023 which was prior to reply submission deadline – Whether fixing hearing date before reply submission date is lawful and compliant with statutory scheme – HELD – The conjunctive reading of Sections 73, 74 and 75 makes it apparent that approach adopted by authority was contrary to scheme of CGST Act – The scheme of Act enables assessee to seek adjournment not in excess of three times and sub-section 5 succeeds sub-section 4 of Section 75 which enables assessee to seek personal hearing. If statute stipulates matter to be performed in particular manner same shall be performed in that manner only - Since date for personal hearing was fixed prior to date of submission of reply, personal hearing allegedly afforded was not effective and resulted in breach of principles of natural justice - Assessment order cannot sustain and quashed - Matter is remitted back to Assessing Officer to proceed from stage of show-cause notice and grant opportunity to petitioner to file reply and thereafter fix date for personal hearing - The writ petition stands disposed of [Read less]

GST - Service of Show Cause Notice and Assessment Order - Validity of service through uploading on Common Portal - Whether service merely by uploading on Common Portal amounts to valid service of SCN and order and whether amendment to Section 115 by Finance Act 2022 permits such service - HELD - Service merely by uploading SCN or order on Common Portal does not amount to valid service. The CGST Rules, 2017 do not contain any provision permitting uploading of SCN or order on Common Portal. Rule 142 relates to electronic communication but does not specify Common Portal for service of SCN or order. Common Portal is explicitly... [Read more]

GST - Service of Show Cause Notice and Assessment Order - Validity of service through uploading on Common Portal - Whether service merely by uploading on Common Portal amounts to valid service of SCN and order and whether amendment to Section 115 by Finance Act 2022 permits such service - HELD - Service merely by uploading SCN or order on Common Portal does not amount to valid service. The CGST Rules, 2017 do not contain any provision permitting uploading of SCN or order on Common Portal. Rule 142 relates to electronic communication but does not specify Common Portal for service of SCN or order. Common Portal is explicitly confined to limited functions such as registration, filing returns, payment, refund, appeal, e-way bill, e-invoicing and recovery proceedings as specified in relevant Rules but Rules do not refer to Common Portal for service of SCN or order – The amendment introduced by Finance Act 2022 to Section 115 does not authorize service of SCN or order through Common Portal as Notification dated 23.01.2018 does not expressly specify Common Portal for this purpose and merely empowers performance of functions provided under CGST Rules on Common Portal - In the present case, the order was uploaded only on the Common Portal, and the petitioner has specifically stated that being an illiterate person, he had no knowledge thereof – The Court is not persuaded to take a view different from the one expressed in Luxmi Traders case merely on account of the reference to the provisions of Finance Act, 2022 – The instant writ petition is also disposed of in terms of Luxmi Traders – The petition is disposed of [Read less]

Customs – Validity of Retrospective application of Circular No. 9/2012 dated 23.03.2012 - Petitioner imported iron ore pellets classified under CTH 2601 which was exempted from Additional Customs duty under Notification dated 01.03.2006. Petitioner obtained clearance of nine consignments from April 2011 to February 2012 on nil duty basis. Subsequently, vide Circular No.9/2012 dated 23.03.2012, the Board clarified that ores and concentrates are two distinct products and that the exemption notification applies only to ores and not to concentrates – SCN issued demanding recovery of additional customs duty with retrospecti... [Read more]

Customs – Validity of Retrospective application of Circular No. 9/2012 dated 23.03.2012 - Petitioner imported iron ore pellets classified under CTH 2601 which was exempted from Additional Customs duty under Notification dated 01.03.2006. Petitioner obtained clearance of nine consignments from April 2011 to February 2012 on nil duty basis. Subsequently, vide Circular No.9/2012 dated 23.03.2012, the Board clarified that ores and concentrates are two distinct products and that the exemption notification applies only to ores and not to concentrates – SCN issued demanding recovery of additional customs duty with retrospective effect from 06.04.2011 - Whether a clarificatory Circular which restricts the scope of an existing exemption and adopts the concept of manufacture under Central Excise Act into Customs Tariff can be applied retrospectively to recover duty from traders who had obtained clear assessments prior to its issuance - HELD - A clarificatory Circular which clarifies the scope of an existing exemption has the potential to be oppressive and not beneficial to the assessee. When a clarification by the Board restricts the scope of an exemption that was previously operative and traders had relied upon such exemption in obtaining goods cleared at nil duty on proper assessment by the Customs Authority, such clarification cannot be applied retrospectively - The principle established in Suchitra Components case is that a beneficial Circular is to be applied retrospectively but an oppressive Circular limiting the scope of exemption is to be applied prospectively. The Board has borrowed the concept of manufacture from Note 4 of Chapter 26 of Central Excise Act, 1944 and has attempted to apply it to the Customs Tariff Act, 1975, which operate in different spheres and are governed by separate statutes. The Circular cannot be applied retrospectively to impose financial liabilities on traders who had obtained proper clearances prior to its issuance - The show-cause notices demanding differential duty with retrospective effect are quashed and set aside - The writ petitions are partly allowed [Read less]

Customs – Classification of Facsimile Machines - Appellant imported Facsimile Machines and parts declaring goods under Customs Tariff Heading 8443 3260 as Facsimile machines capable of connecting to automatic data processing machine or to a network, claiming exemption under Notification No. 24/2005-Cus – Later on, the Dept took view that imported Facsimile Machines were not capable of connecting to network within meaning of Heading 8443 3260 but merited classification under Heading 8443 3970 – Dept issued notice proposing recovery of differential Customs Duty and imposition of penalties invoking extended period under... [Read more]

Customs – Classification of Facsimile Machines - Appellant imported Facsimile Machines and parts declaring goods under Customs Tariff Heading 8443 3260 as Facsimile machines capable of connecting to automatic data processing machine or to a network, claiming exemption under Notification No. 24/2005-Cus – Later on, the Dept took view that imported Facsimile Machines were not capable of connecting to network within meaning of Heading 8443 3260 but merited classification under Heading 8443 3970 – Dept issued notice proposing recovery of differential Customs Duty and imposition of penalties invoking extended period under Section 28(4) of Customs Act – Whether imported Facsimile Machines requiring external Analogue Telephone Adapter (ATA) device for network connectivity are classifiable under CTH 8443 3260 for machines capable of connecting to network or under CTH 8443 3970 for machines not so capable – HELD - Revenue failed to discharge burden of proving that imported Facsimile Machines merit classification under CTH 8443 3970. The Tariff employs expression capable of connecting and does not prescribe requirement of direct cable connection without external interface device – In modern information technology architecture, network connectivity is frequently achieved through routers, gateways, adapters, converters, wireless interfaces and other intermediary devices, such devices do not cease to be network-capable merely because connectivity is achieved through external interface. Department's own investigation records establish and acknowledge that imported machines can be networked through Analogue Telephone Adapter or similar interface devices, thereby admitting network capability - It is well-settled that classification under Customs Tariff must be determined primarily on basis of language employed in tariff itself and resort to HSN Explanatory notes permissible only as aid to interpretation where statutory language is ambiguous - Classification must ultimately be based upon actual characteristics of imported goods and not upon unduly restrictive reading of Explanatory material – Burden of establishing that goods fall within particular tariff entry lies upon Revenue and must be discharged by adducing satisfactory evidence and not by mere reinterpretation – The B/Es were filed declaring imported goods as Facsimile Machines under CTH 8443 3260, goods were examined by proper officers after physical verification. The classification was not mere self-assessment accepted mechanically but assessment undertaken after physical verification by Dept itself. The demand of differential duty, interest and penalties not sustainable – The impugned order is set aside and the appeal is allowed - Applicability of Extended Period of Limitation – HELD - Extended period under Section 28(4) of Customs Act can be invoked only where duty has not been levied or has been short levied by reason of collusion, wilful misstatement, suppression of facts or fraud requiring deliberate intent to evade payment of duty – Appellant disclosed goods as Facsimile machines, produced relevant invoices, catalogues and technical literature and claimed classification under tariff heading which according to it correctly described goods, such conduct wholly inconsistent with any allegation of fraud or deliberate suppression – Every material fact necessary for assessment was available before Department at time of import itself and Revenue has not pointed out any document that was concealed or false declaration made. The subsequent change of opinion on classification cannot by itself constitute suppression of facts or wilful misstatement – In the present case, the conditions precedent for invoking extended period is absent. [Read less]

Customs - Settlement Application under Section 127B of Customs Act, 1962 - Procedure to be followed by Settlement Commission - Principles of natural justice - Applicant filed Settlement application after goods imported under Bill of Entry were seized as they contained cigarettes along with declared waste paper. Settlement Commission admitted application determining duty liability but later enhanced duty liability based on report of jurisdictional Commissioner which was never supplied to applicant - Whether Settlement Commission violated principles of natural justice and statutory provisions of Section 127C(5) by passing or... [Read more]

Customs - Settlement Application under Section 127B of Customs Act, 1962 - Procedure to be followed by Settlement Commission - Principles of natural justice - Applicant filed Settlement application after goods imported under Bill of Entry were seized as they contained cigarettes along with declared waste paper. Settlement Commission admitted application determining duty liability but later enhanced duty liability based on report of jurisdictional Commissioner which was never supplied to applicant - Whether Settlement Commission violated principles of natural justice and statutory provisions of Section 127C(5) by passing order based on report of jurisdictional Commissioner without supplying that report to applicant and affording opportunity of hearing on that report - HELD - Section 127C(5) requires Settlement Commission to afford opportunity of hearing to applicant after receiving report from concerned Commissioner and after examining such further evidence as may be placed before it or obtained by it, before passing any order. The quintessential feature of Section 127C(5) is obligation to afford opportunity of hearing to applicant who has filed settlement application under Section 127B(1) and thereafter upon hearing concerned Commissioner to pass appropriate order – The Settlement Commission is under statutory obligation to afford opportunity to applicant to respond to report furnished to it and thereafter pass appropriate order in accordance with Act - In present case report of jurisdictional Commissioner on which reliance was placed for enhancing duty liability was never supplied to applicant. Impugned order not only suffers from violation of principles of natural justice but also contravenes statutory provisions of Section 127C(5) of Customs Act. Order is quashed and matter remanded to Settlement Commission for fresh consideration in accordance with statutory provisions after affording opportunity of hearing to applicant – The petition is allowed [Read less]

GST - Parallel Adjudication Proceedings - Overlapping Charges in SGST and CGST proceedings - Whether SGST authorities can initiate and conduct separate adjudication proceedings for disallowance of Input Tax Credit when parallel CGST proceedings are already initiated for overlapping period on substantially the same charge - HELD - Applying the twofold test laid down by the Apex Court in M/s. Armour Security (India) Ltd. case, the charges for disallowance of ITC in both proceedings appear to be for irregular availment of ITC on account of discrepancy between GSTR-1 of supplier and GSTR-3B of petitioner. The demand differs on... [Read more]

GST - Parallel Adjudication Proceedings - Overlapping Charges in SGST and CGST proceedings - Whether SGST authorities can initiate and conduct separate adjudication proceedings for disallowance of Input Tax Credit when parallel CGST proceedings are already initiated for overlapping period on substantially the same charge - HELD - Applying the twofold test laid down by the Apex Court in M/s. Armour Security (India) Ltd. case, the charges for disallowance of ITC in both proceedings appear to be for irregular availment of ITC on account of discrepancy between GSTR-1 of supplier and GSTR-3B of petitioner. The demand differs only because CGST proceedings covered a larger tax period. The SGST authorities should have considered the parallel CGST proceedings and addressed the overlap while passing the order - The Assessment Order lacks proper application of mind regarding the overlapping nature of proceedings. The matter deserves remand to enable SGST authorities to pass fresh order after giving opportunity to petitioner and considering its reply and documents. If SGST authorities find that disallowance of ITC is on the same issue as CGST proceedings, they should drop that charge and proceed only on charges relating to underreporting of tax liability based on audit report if found sustainable - The petition is disposed of [Read less]

GST - Right to Personal Hearing, Extent of time to be afforded during personal hearing, Discretion of adjudicating authority - Petitioner challenged adjudication order passed by Assistant Commissioner on ground that no opportunity of personal hearing was extended before passing of order - Respondent contended that total three personal hearing notices were issued and petitioner's authorized representative appeared and submitted reply - HELD – The counter affidavit of respondent authorities clearly reflects that opportunity of personal hearing was afforded to petitioner, though details in affidavit may not match petitioner... [Read more]

GST - Right to Personal Hearing, Extent of time to be afforded during personal hearing, Discretion of adjudicating authority - Petitioner challenged adjudication order passed by Assistant Commissioner on ground that no opportunity of personal hearing was extended before passing of order - Respondent contended that total three personal hearing notices were issued and petitioner's authorized representative appeared and submitted reply - HELD – The counter affidavit of respondent authorities clearly reflects that opportunity of personal hearing was afforded to petitioner, though details in affidavit may not match petitioner's satisfaction regarding extent of time granted. The extent of time to be afforded during personal hearing falls within discretion of adjudicating authority and Court cannot comment upon the same - The order was passed after due consideration of petitioner's reply and detailed response to petitioner's submissions was recorded in the adjudication order. Court cannot conduct mini trial to adjudicate facts regarding time granted for personal hearing - Since opportunity of personal hearing was in fact granted and considered before passing order, allegations of violation of natural justice are not sustainable – The petitioner is not entitled to extraordinary jurisdiction of Court. Petitioner directed to pursue statutory remedy of appeal under the GST Act – The writ petition is disposed of [Read less]

Service Tax – Activity of testing Dielectric strength of Transformer Oil and Protective Relays and issuance of Test Certificates – Demand under Business Auxiliary Services - Appellant collected certain amounts termed as liaison charges. Revenue formed view that liaison charges were taxable under BAS - Whether liaison charges collected by testing and certification service provider constitute taxable Business Auxiliary Services under Section 65(19) of Finance Act, 1994 - HELD - Business Auxiliary Service is wide but structural definition where each limb constitutes separate taxable activity. Classification under BAS cann... [Read more]

Service Tax – Activity of testing Dielectric strength of Transformer Oil and Protective Relays and issuance of Test Certificates – Demand under Business Auxiliary Services - Appellant collected certain amounts termed as liaison charges. Revenue formed view that liaison charges were taxable under BAS - Whether liaison charges collected by testing and certification service provider constitute taxable Business Auxiliary Services under Section 65(19) of Finance Act, 1994 - HELD - Business Auxiliary Service is wide but structural definition where each limb constitutes separate taxable activity. Classification under BAS cannot be made in generic terms. On perusal of Show Cause Notice, Department merely reproduced entire definition of BAS without satisfying whether Appellant promoted client's business, whether service was rendered on behalf of client, whether activity falls under clause relating to incidental service or under which precise statutory limb tax is proposed. This omission goes to root of proceedings - Show Cause Notice is foundation of adjudication and if foundation is defective, subsequent proceedings cannot survive. Under BAS there are seven sub-clauses and noticee will not be aware as to precise ground on which tax is proposed to be demanded unless sub-clause is specified - Even on merits, Revenue has not established how liaison charges amount to Business Auxiliary Services. No evidence on record showing Appellant promoted client's business, marketed services, procured customers, rendered customer care or acted as commission agent. Mere collection of liaison charges or reimbursement cannot automatically become Business Auxiliary Service. Taxability cannot be based on presumption. Show Cause Notice suffers from incurable vagueness – The impugned order is set aside and appeal is allowed [Read less]

Customs - Classification of Interactive Flat Panel Display Assembly - Distinction between Automatic Data Processing Machine and Monitor - CTH 8471 vs CTH 8528 - Appellant imported Display Assembly 75 inch for clearance under CTH 84733099 claiming nil rate of BCD - Department classified goods under CTH 8528 attracting 10 percent BCD - Whether goods are classifiable under CTH 8471 as ADPM or CTH 8528 as monitor – HELD – The subject goods satisfy all four conditions of Chapter Note 5(A) to Chapter 84 for automatic data processing machines namely storing processing programme and data, being freely programmed according to u... [Read more]

Customs - Classification of Interactive Flat Panel Display Assembly - Distinction between Automatic Data Processing Machine and Monitor - CTH 8471 vs CTH 8528 - Appellant imported Display Assembly 75 inch for clearance under CTH 84733099 claiming nil rate of BCD - Department classified goods under CTH 8528 attracting 10 percent BCD - Whether goods are classifiable under CTH 8471 as ADPM or CTH 8528 as monitor – HELD – The subject goods satisfy all four conditions of Chapter Note 5(A) to Chapter 84 for automatic data processing machines namely storing processing programme and data, being freely programmed according to user requirements, performing arithmetical computations specified by user and executing processing program without human intervention - Interactive Flat Panel display goods contain central processing unit and operate on software that functions independently from monitors of CTH 8528 – The CTH 8528 covers monitors capable of receiving and displaying signals when attached to ADPM or other devices and not capable of functioning independently or processing data. The HSN Explanatory Notes to CTH 8528 mention viewable image sizes not generally exceeding 30 inches and monitors usually cannot be operated by remote control – The goods in present case are 65 inches and 86 inches and have remote control. Such goods do not merit classification under CTH 8528 - Classification is determined according to terms of headings and relevant Section or Chapter Notes and Chapter Note rules of interpretation prevail over General Rules of Interpretation - Tribunal decision in Ingram Micro India Private Limited held that goods are ADPM capable of working standalone and satisfying conditions of Chapter Note 5(A). The Board Circular dated 07.04.2025 issued by Technical Officer TRU cannot be construed as Circular issued by CBIC in terms of Section 151A and has no sanctity in law - Reliance on proposals in Finance Bill 2025 and Board Circular dated 07.04.2025 is unsustainable in law – The subject goods are classifiable under CTH 8471 41 90 as ADPM – The order under challenge is set aside and the appeal is allowed [Read less]

Central Excise – Refund of duty paid on Supplementary Invoices for price enhancement rejected by buyer – Appellant issued supplementary invoices seeking increase in rates of automobile parts already cleared against original invoices but buyer did not accept enhanced prices and did not pay any amount against supplementary invoices – Appellant filed refund claim for duty paid on proposed price enhancement – Original authority rejected refund claim alleging that even if customer did not honour increased price, appellant remained liable to pay duty on transaction value – Whether appellant is entitled to refund of dut... [Read more]

Central Excise – Refund of duty paid on Supplementary Invoices for price enhancement rejected by buyer – Appellant issued supplementary invoices seeking increase in rates of automobile parts already cleared against original invoices but buyer did not accept enhanced prices and did not pay any amount against supplementary invoices – Appellant filed refund claim for duty paid on proposed price enhancement – Original authority rejected refund claim alleging that even if customer did not honour increased price, appellant remained liable to pay duty on transaction value – Whether appellant is entitled to refund of duty paid on supplementary invoices for price enhancement when buyer did not accept enhanced prices and issued certificate confirming non-acceptance, non-payment and non-availment of CENVAT credit - HELD – The assessable value under Section 4(1)(a) of CEA, 1944 is transaction value being price actually paid or payable for goods. The enhancement of price sought through supplementary invoices was rejected by buyer and no amount was actually paid or remained payable. Since buyer never accepted enhanced price and was never liable to pay enhanced amount, such amounts cannot be part of transaction value by any stretch of definition – Further, the buyer did not avail any CENVAT credit on strength of supplementary invoices as it was availing area-based exemption. The principle of unjust enrichment not applicable when price increase not accepted by buyer and buyer issued certificate to that effect – Both lower authorities wrongly treated refund claim as one of refund of duty paid on clearance effected on basis of transaction value. The reliance placed by lower authorities on Section 4(3)(d) wholly misplaced – The impugned order not sustainable in law and set aside – The appeal is allowed [Read less]

Punjab Value Added Tax Act, 2005 - Penalty for alleged tax evasion - Requirement of intent under Section 51(7) PVAT Act - Stock transfer of mobile phones with accessories - Petitioner challenged order imposing penalty under Section 51(7)(c) PVAT Act for alleged attempt to evade tax on mobile phone accessories which carried higher tax rate of 8% compared to mobile phones at 5% - Whether penalty can be imposed at check-post when classification of goods was not settled and there was bonafide belief regarding tax liability - HELD - Section 51(7) of PVAT Act categorically specifies that for levy of penalty there has to be inten... [Read more]

Punjab Value Added Tax Act, 2005 - Penalty for alleged tax evasion - Requirement of intent under Section 51(7) PVAT Act - Stock transfer of mobile phones with accessories - Petitioner challenged order imposing penalty under Section 51(7)(c) PVAT Act for alleged attempt to evade tax on mobile phone accessories which carried higher tax rate of 8% compared to mobile phones at 5% - Whether penalty can be imposed at check-post when classification of goods was not settled and there was bonafide belief regarding tax liability - HELD - Section 51(7) of PVAT Act categorically specifies that for levy of penalty there has to be intent to evade tax on part of assessee – For exercise of power at check-post to be valid must have reasonable nexus with attempt at evasion - Where relevant documents duly produced but bonafide plea against taxability is raised and there is neither mis-declaration nor concealment, exercise of power of imposing penalty at check-post on ground of attempt at evasion not intended - The Supreme Court held in Nokia India Pvt. Ltd. that accessory of mobile phone would have to be taxed separately. This by itself would not lead to inference of intent on part of appellant to evade payment of tax - Accessories were clearly specified as being part of mobile phone in Stock Transfer Invoice which would point to fact that there was no intent to suppress that mobiles in transit were not accompanied by accessories – The material available with check-post authorities was insufficient to infer intent to evade tax and absence of such intent makes levy of penalty itself bad in law – The impugned order is set aside and the appeal is allowed [Read less]

Gujarat Value Added Tax Act, 2003 – Eligibility to Input Tax Credit - Burden of proof regarding genuineness of transaction and actual movement of goods under Section 70 of Gujarat VAT Act, 2003 – Appellant-assessee claimed ITC on purchases made from dealers whose registration was cancelled, furnishing tax invoices, weigh bridge slips and proof of payment through cheques but failed to produce transport receipts bearing truck numbers mentioned in weigh bridge slips - Whether mere production of tax invoices, weigh bridge slips and payment details is sufficient to discharge burden of proof under Section 70 of the Act to cl... [Read more]

Gujarat Value Added Tax Act, 2003 – Eligibility to Input Tax Credit - Burden of proof regarding genuineness of transaction and actual movement of goods under Section 70 of Gujarat VAT Act, 2003 – Appellant-assessee claimed ITC on purchases made from dealers whose registration was cancelled, furnishing tax invoices, weigh bridge slips and proof of payment through cheques but failed to produce transport receipts bearing truck numbers mentioned in weigh bridge slips - Whether mere production of tax invoices, weigh bridge slips and payment details is sufficient to discharge burden of proof under Section 70 of the Act to claim ITC - HELD - Section 70 casts burden upon purchasing dealer claiming ITC to prove correctness of ITC claim and genuineness of transaction. Merely because dealer claims to be bona fide purchaser is not enough. Mere production of invoices or payment by cheques is not sufficient to discharge burden of proof - Dealer claiming ITC has to prove beyond doubt actual transaction by furnishing name and address of selling dealer, details of vehicle which delivered goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars - Dealer must prove actual physical movement of goods and genuineness of transaction by furnishing detailed supporting material. Production of tax invoices is one document but not sufficient to discharge burden to prove genuineness of transaction - In present case, assessee failed to produce independent evidence such as transport receipts bearing truck numbers mentioned in weigh bridge slips or other cogent material establishing actual physical movement of goods. The assessee failed to discharge burden of proof cast under Section 70 of the GVAT Act and therefore disallowance of ITC was justified. Tribunal rightly applied decision of Supreme Court in Ecom Gill Coffee Trading case and confirmed the disallowance – The appeal is dismissed [Read less]

GST - Statutory Interpretation of Section 73(2) CGST Act - Time limit for issuance of show-cause notice and assessment order - Petitioner challenged two assessment orders passed for same period contending that Section 73(2) requires minimum three month gap between show-cause notice and assessment order and orders - Whether Section 73(2) requires three month interval between issuance of show-cause notice and assessment order or whether it relates to timing of show-cause notice relative to limitation deadline - HELD - Section 73(2) must be interpreted in light of Section 73(10) which prescribes three year limitation period f... [Read more]

GST - Statutory Interpretation of Section 73(2) CGST Act - Time limit for issuance of show-cause notice and assessment order - Petitioner challenged two assessment orders passed for same period contending that Section 73(2) requires minimum three month gap between show-cause notice and assessment order and orders - Whether Section 73(2) requires three month interval between issuance of show-cause notice and assessment order or whether it relates to timing of show-cause notice relative to limitation deadline - HELD - Section 73(2) must be interpreted in light of Section 73(10) which prescribes three year limitation period for issuance of order from due date of annual return. The provision in Section 73(2) requiring show-cause notice to be issued at least three months prior to time limit specified in Section 73(10) is intended to ensure that SCN is issued not less than three months before the limitation period for adjudication expires. The object and purpose is to prevent proper officer from issuing show-cause notice close to expiry of limitation deadline and thereafter hastily concluding adjudication without reasonable opportunity to taxpayer - The provision does not mandate a mandatory three month interval between issuance of show-cause notice and issuance of assessment order. Even if SCN was issued more than three months before limitation period deadline, the assessment order can be issued after reasonable interval without strict compliance of three month period between SCN and order. A reasonable interval between show-cause notice and order is required to provide taxpayer with meaningful opportunity to respond and contest proposals – The view taken by Bombay High Court in AM Market Places case that Section 73(2) prescribes three month interval between SCN and order is not endorsed – The writ petitions are disposed of - Assessment - Contradictory Premises in Separate Orders - Two assessment orders were passed for same assessment period in separate writ petitions. First order proceeded on premise that supplies were exempt and petitioner wrongly availed input tax credit in respect of exempt supplies, while the second order proceeded on contrary premise that supplies are taxable and not exempt - Whether adjudicating authority can pass contradictory orders for same assessment period based on contradictory treatment of whether supplies are exempt or taxable - HELD - Two orders proceeding on mutually contradictory and inconsistent premises regarding character of supplies cannot stand together for same assessment period. The first order assuming supplies are exempt supplies while second order assumes supplies are taxable supplies are inconsistent and contradictory - There is merit in petitioner's contention that orders are contradictory and cannot be sustained in their present form. Such contradictory orders require fresh consideration and re-adjudication to ensure consistency - Both impugned orders are set aside and remanded for reconsideration. Proper officer shall examine whether supplies are exempt or taxable and pass fresh order consistently applicable to entire assessment period after providing reasonable opportunity to petitioner. [Read less]

Central Excise – Recovery of sanctioned refund - Doctrine of unjust enrichment - Recovery of refund already sanctioned on the assumption that the said refunds were erroneously granted - Credit notes issued for duty paid in excess - Whether refunds already sanctioned based on final appellate orders can be recovered merely on ground of unjust enrichment without considering that duty burden was not passed on to customers – HELD - The Bangalore Bench of the Tribunal specifically observed in final order that there is no unjust enrichment as appellant assessee had not passed on incidence of duty to any other person. The Benc... [Read more]

Central Excise – Recovery of sanctioned refund - Doctrine of unjust enrichment - Recovery of refund already sanctioned on the assumption that the said refunds were erroneously granted - Credit notes issued for duty paid in excess - Whether refunds already sanctioned based on final appellate orders can be recovered merely on ground of unjust enrichment without considering that duty burden was not passed on to customers – HELD - The Bangalore Bench of the Tribunal specifically observed in final order that there is no unjust enrichment as appellant assessee had not passed on incidence of duty to any other person. The Bench noted findings of Commissioner (Appeals) that price had not been fixed in view of fluctuating market prices and appellant had not collected extra amount - Appellant had taken back incidence of duty initially passed on by crediting buyer's accounts at end of every month with disputed amount of duty - Appellant duly submitted Chartered Accountant's certificate stating duty burden not passed on to customers - Supreme Court in Addison & Co. Ltd. observed that when assessee has duly submitted CA certificate to effect that duty burden not passed the assessee should not be denied claim of refund – The bar of unjust enrichment not applicable where duty amount initially charged has been returned back by assessee by issuing credit notes - Maxims require no man should be vexed twice for same cause and there must be end to litigation otherwise rights of persons would be in endless confusion. The earlier judgment cannot be reopened or reviewed on basis of subsequent judgment - When there is no case of unjust enrichment entire basis of raising demand on grounds of unjust enrichment cannot be sustained - Impugned orders are set aside and the appeals are allowed [Read less]

Customs - Interest under Section 61(2) Customs Act for Capital goods transferred to MOOWR warehouse cleared for home consumption - Difference between intended for use and actual use - Appellant imported cooler (gearbox) under MOOWR licensed warehouse with intention to use in manufacturing process but subsequently cleared for home consumption due to operational and commercial considerations - Show Cause Notice issued demanding interest along with deferred duty and levy of interest - Whether interest is payable on capital goods cleared for home consumption from Section 65 warehouse when such goods were imported with intentio... [Read more]

Customs - Interest under Section 61(2) Customs Act for Capital goods transferred to MOOWR warehouse cleared for home consumption - Difference between intended for use and actual use - Appellant imported cooler (gearbox) under MOOWR licensed warehouse with intention to use in manufacturing process but subsequently cleared for home consumption due to operational and commercial considerations - Show Cause Notice issued demanding interest along with deferred duty and levy of interest - Whether interest is payable on capital goods cleared for home consumption from Section 65 warehouse when such goods were imported with intention to use but not actually used - HELD - The statutory requirement contained in Section 61(1)(a) is that capital goods must be intended for use in warehouse where manufacturing operations permitted under Section 65. Provision does not stipulate that goods must necessarily be installed or actually used before qualifying for benefit of deferred payment of customs duty without interest. When the Notification speaks of ‘intended for use’ simpliciter, the same cannot be read to adduce the meaning that the Notification calls for actual ‘usage’ of the capital goods within the warehoused premises - In present case imported Cooler (Gear Box) was covered under MOOWR license application as goods permitted to be imported for use in manufacturing operations. Appellant imported subject goods with intention to use in process of manufacturing which is evident from application made to CBIC under MOOWR Scheme. The subject goods were subsequently cleared for home consumption due to operational and commercial considerations - Demand of interest based on ground that capital goods have not been used and cleared for home consumption - Clarifications issued by Customs authorities through public notices and trade facilitation advisories stated that no interest is leviable on ex-bond bills of entry filed for clearance of goods for home consumption from Section 65 warehouse - CBIC issued updated FAQ dated 27.10.2020 clarifying that capital goods can be cleared for home consumption as per Section 68 read with Section 61 of Customs Act on payment of applicable duty without interest – The impugned order stands set aside and the appeal is allowed [Read less]

Customs – Late Filing Fee for Supplementary Bill of Entry – Appellant imported bulk consignment of PCI Coal through vessel and filed original B/E on 31.05.2024 for clearance of manifested quantity of coal which was duly assessed and cleared without any dispute regarding quantity, classification or valuation – After clearance of manifested quantity, excess quantity of coal still remained lying within the Port area – Appellant obtained requisite permission from proper officer and filed Supplementary Bill of Entry on 17.12.2024 for clearance of excess quantity – ICEGATE system automatically imposed late filing fee u... [Read more]

Customs – Late Filing Fee for Supplementary Bill of Entry – Appellant imported bulk consignment of PCI Coal through vessel and filed original B/E on 31.05.2024 for clearance of manifested quantity of coal which was duly assessed and cleared without any dispute regarding quantity, classification or valuation – After clearance of manifested quantity, excess quantity of coal still remained lying within the Port area – Appellant obtained requisite permission from proper officer and filed Supplementary Bill of Entry on 17.12.2024 for clearance of excess quantity – ICEGATE system automatically imposed late filing fee under Section 46(3) of Customs Act, 1962 by computing the period of delay with reference to date of filing of original Import General Manifest – Whether the levy of late filing fee under Section 46(3) of Customs Act, 1962 in respect of Supplementary Bill of Entry filed for clearance of excess quantity of imported cargo is legally sustainable – HELD – The excess quantity of PCI Coal arose solely on account of the peculiar nature of bulk cargo including variations in moisture content and allied factors, which is a well-recognised and accepted incident in handling of bulk cargo and by itself does not render such quantity distinct from or alien to the original imported consignment – Appellant had filed original B/E covering entire manifested quantity well within the stipulated period and Supplementary Bill of Entry came to be filed only after excess quantity was noticed during clearance operations and upon requisite permission granted by Customs authorities in accordance with prescribed procedure – Section 46(3) of Customs Act, 1962 is attracted only where there is failure to present Bill of Entry within prescribed period without sufficient cause – Late filing fee cannot be imposed mechanically ignoring bona fide conduct of appellant and peculiar nature of transaction – The Proper Officer has authority to waive late fee in deserving cases and in present case late filing cannot be attributed due to any act or fault on part of appellant – In view of bona fides of appellant, imposition of late fee is unwarranted and is a fit case for waiver of late fee – The impugned Order-in-Appeal upholding levy of late filing fee is set aside and appeal is allowed [Read less]

Customs – Eligibility for Reduced Duty Benefit on Imported Electric Scooters in Knocked Down Condition – Appellant imported electric scooters in CKD condition model without tyre, battery and charger seeking classification under Customs Tariff Heading 8711 6020 with reduced duty benefit under Notification No. 50/2017-Cus – The adjudicating authority found that since the impugned consignment was not inclusive of tyre, battery and charger, it was not eligible for reduced duty benefit contemplated under Serial No. 531A(1)(a) but was eligible for concessional rate of duty contemplated under clause 2 of Serial No. 531A –... [Read more]

Customs – Eligibility for Reduced Duty Benefit on Imported Electric Scooters in Knocked Down Condition – Appellant imported electric scooters in CKD condition model without tyre, battery and charger seeking classification under Customs Tariff Heading 8711 6020 with reduced duty benefit under Notification No. 50/2017-Cus – The adjudicating authority found that since the impugned consignment was not inclusive of tyre, battery and charger, it was not eligible for reduced duty benefit contemplated under Serial No. 531A(1)(a) but was eligible for concessional rate of duty contemplated under clause 2 of Serial No. 531A – Whether the impugned goods are eligible for the benefit of amended Notification No. 02/2022-Cus when the import was prior to the issue of amendment notification – HELD – The benefit of Notification No. 50/2017-Cus at Serial No. 531A(1)(a) was rightly denied since the explanation in amended Notification No. 02/2022-Cus was issued post the import of the impugned goods – The description at Serial No. 531A of Notification No. 50/2017-Cus dated 30.06.2017 has been changed in amended Notification No. 02/2022-Cus dated 01.02.2022 whereby the benefit of notification is available even if electrically operated vehicles are imported incomplete or unfinished as a knocked down kit – The explanation is applicable only to imports after 01.02.2022 under Notification No. 02/2022-Cus dated 01.02.2022 and has no retrospective application – As per pre-amended Notification No. 50/2017-Cus, the motorcycle has to be imported as a knocked down kit containing all the necessary components, parts or sub-assemblies for assembling a complete vehicle – Since the impugned import did not contain all the necessary components, parts or sub-assemblies for assembling a complete electrically operated motorcycle, the benefit of Notification No. 50/2017-Cus at Serial No. 531A(1)(a) is not available – The decisions of the lower authorities are sustainable and the impugned order is upheld – The appeal is dismissed [Read less]

Service Tax – Taxability of Construction services for construction of residential quarters, Validity of remand by the CESTAT where there exists settled legal precedent – Demand of service tax on construction of residential quarters for State Police Housing Corporation - Petitioner appealed before CESTAT contending that since the work was undertaken for a Government organization, Service Tax provisions did not apply. The CESTAT, despite settled legal precedent on issue chose to remand the matter to adjudicating authority - Whether CESTAT was correct to remand the matter to adjudicating authority when there is settled le... [Read more]

Service Tax – Taxability of Construction services for construction of residential quarters, Validity of remand by the CESTAT where there exists settled legal precedent – Demand of service tax on construction of residential quarters for State Police Housing Corporation - Petitioner appealed before CESTAT contending that since the work was undertaken for a Government organization, Service Tax provisions did not apply. The CESTAT, despite settled legal precedent on issue chose to remand the matter to adjudicating authority - Whether CESTAT was correct to remand the matter to adjudicating authority when there is settled legal precedent on the exact issue raised and thereby cause multiplicity of proceedings - HELD - When a matter before the CESTAT involves interpretation of law and there exists settled legal precedent directly applicable to the facts in issue, the CESTAT should decide the matter on merits rather than remand it to the adjudicating authority. The remand to the adjudicating authority to examine facts and terms of contract when settled legal precedent clearly excludes Government undertakings from the scope of taxable services would give rise to multiplicity of proceedings. The CESTAT should have examined whether the construction was undertaken for a Government organization in light of settled precedent and decided the matter finally instead of remanding. The endeavor of the CESTAT should be to avoid multiplicity of the proceedings and to provide finality to disputes - The order remanding the matter to adjudicating authority is quashed and the matter is remanded to CESTAT to decide the appeal on merits by passing a speaking order – The petition is allowed [Read less]

Central Excise - CENVAT Credit on Generation and Sale of Electricity - Generation of electricity from bagasse which is byproduct of sugar manufacture. Appellants used generated electricity captively within factory for manufacturing purpose and sold remaining surplus electricity to MSEDCL. Department contended that since generation of electricity and wheeling out of same to MSEDCL is exempted from payment of duty, appellants were required to observe procedure laid down under Rule 6(3) of CENVAT Credit Rules, 2004 and liable to pay amount equal to 6 percent of value of exempted electricity sold to MSEDCL - Whether sale of el... [Read more]

Central Excise - CENVAT Credit on Generation and Sale of Electricity - Generation of electricity from bagasse which is byproduct of sugar manufacture. Appellants used generated electricity captively within factory for manufacturing purpose and sold remaining surplus electricity to MSEDCL. Department contended that since generation of electricity and wheeling out of same to MSEDCL is exempted from payment of duty, appellants were required to observe procedure laid down under Rule 6(3) of CENVAT Credit Rules, 2004 and liable to pay amount equal to 6 percent of value of exempted electricity sold to MSEDCL - Whether sale of electricity generated from bagasse and wheeled out to Electricity Distribution Company would be considered as sale of exempted goods for purpose of payment of amount equal to 6 percent of value of exempted electricity - HELD - Issue arising out of dispute is no more open for any debate. An identical dispute came up for decision in the case of M/s Olam Agro India Pvt Ltd & others v. Commissioner of CGST & Central Excise wherein it was held that electricity produced from bagasse and sold to MSEDCL cannot be subjected to payment of amount equal to 6 percent of value of electricity sold under Rule 6(3) of CENVAT Credit Rules, 2004 - The impugned orders are set aside and the appeals are allowed in favour of the appellants [Read less]

Central Excise - Jurisdiction to question certificate of eligibility issued by High Powered Committee constituted under Notification No.39/2001-CE – Petitioner-Manufacturer claimed central excise duty exemption for setting up new industrial unit in earthquake-hit area of Kachchh and claimed refund of duty paid on finished goods manufactured and cleared during exemption period – Dept issued notice after five years alleging that manufacturer obtained certificate of eligibility from High Powered Committee by misleading departmental officers and without actually setting up new unit - Whether Commissioner of Central Excise ... [Read more]

Central Excise - Jurisdiction to question certificate of eligibility issued by High Powered Committee constituted under Notification No.39/2001-CE – Petitioner-Manufacturer claimed central excise duty exemption for setting up new industrial unit in earthquake-hit area of Kachchh and claimed refund of duty paid on finished goods manufactured and cleared during exemption period – Dept issued notice after five years alleging that manufacturer obtained certificate of eligibility from High Powered Committee by misleading departmental officers and without actually setting up new unit - Whether Commissioner of Central Excise has jurisdiction to question validity of certificate issued by High Powered Committee by alleging fraud and misrepresentation - HELD - High Powered Committee consisting of Chief Commissioner of Central Excise and Principal Secretary to Government of Gujarat is statutory authority formed under Notification dated 31.07.2001 to issue certificate that unit is new unit set up during specified period. Allegations regarding misrepresentation and fraud in obtaining certificate can only be examined by the High Powered Committee which issued certificate - Commissioner of Central Excise has no jurisdiction to question certificate issued by statutory committee by alleging misrepresentation unless committee itself has doubted certificate or unless proceedings are initiated before committee itself – Further, the Commissioner did not inform committee about alleged misrepresentation nor took action against officers involved in verification. Commissioner accepted certificates and processed refunds based thereon - The Show-cause notice questioning certificate is illegal and without jurisdiction being bereft of authority. Respondent acted arbitrarily and abused its authority in issuing show-cause notice after five years. Show-cause notice is quashed and set aside – The petition is allowed [Read less]

Gujarat Sales Tax Act, 1969 - Supersession of Circular and Applicability of Exemption Benefit - Assessees received benefit of exemption during 2001-2005 pursuant to Circular dated 19.02.2001. The said Circular was sought to be superseded by the impugned Circular dated 02.09.2005. The 2005 Circular was assailed by the respondents/Assessees before the Gujarat High Court. The matter ultimately travelled to the Supreme Court and by order dated 04.02.2009, the same was remanded to the High Court to answer two questions of law which were framed by the Supreme Court - Whether the two questions of law framed by the Supreme Court s... [Read more]

Gujarat Sales Tax Act, 1969 - Supersession of Circular and Applicability of Exemption Benefit - Assessees received benefit of exemption during 2001-2005 pursuant to Circular dated 19.02.2001. The said Circular was sought to be superseded by the impugned Circular dated 02.09.2005. The 2005 Circular was assailed by the respondents/Assessees before the Gujarat High Court. The matter ultimately travelled to the Supreme Court and by order dated 04.02.2009, the same was remanded to the High Court to answer two questions of law which were framed by the Supreme Court - Whether the two questions of law framed by the Supreme Court should be answered and decided on merits by the High Court - HELD - The Gujarat enactment, i.e., Gujarat Sales Tax Act, 1969 has been superseded by the Central enactment w.e.f. 01.07.2017, i.e., the GST Act, 2017. The period of assessment involved in these cases is from 2001-2005 which is more than two decades. Assuming the State is successful in these special leave petitions, it is only as against the respondents/assessees that there could be re-opening of assessments. At this length of time it may not be practicable to undertake such an exercise. In respect of an enactment which is no longer in force, a decision to be made by the Court at this stage would be wholly academic. The ends of justice would be served if these SLPs are disposed of leaving the questions of law, which have been raised by the State in these petitions open, to be agitated in any other appropriate matter in case of necessity - The assessment of the respondents herein for the years 2001-2005 which has attained finality shall not be interfered with – Ordered accordingly [Read less]

Central Excise - Cenvat Credit - Actual Physical Receipt of Inputs - Appellant, a manufacturer of aluminium products, claimed Cenvat Credit on imported aluminium scrap and other input materials - Department found that although imports were made in the Appellant's name, the scrap was diverted to third parties in connivance with co-noticees and was never physically received in the Appellant's factory - Whether Cenvat Credit can be validly claimed when the claimed inputs are not actually received in the factory - HELD - Cenvat Credit is admissible only when inputs are actually received in the factory as required under Rule 3(... [Read more]

Central Excise - Cenvat Credit - Actual Physical Receipt of Inputs - Appellant, a manufacturer of aluminium products, claimed Cenvat Credit on imported aluminium scrap and other input materials - Department found that although imports were made in the Appellant's name, the scrap was diverted to third parties in connivance with co-noticees and was never physically received in the Appellant's factory - Whether Cenvat Credit can be validly claimed when the claimed inputs are not actually received in the factory - HELD - Cenvat Credit is admissible only when inputs are actually received in the factory as required under Rule 3(1) of the Cenvat Credit Rules, 2004. The documentary evidence including gate endorsements directing diversion of scrap, corroborated statements of Custom House Agents, and admissions of the Appellant itself clearly established that the imported scrap was never received in the factory. The Appellant failed to produce any cogent evidence beyond its own account ledger to support the claimed credit. The named suppliers had made no transaction or supply to the Appellant as per department investigation. The technical plea of non-admissibility of evidence raised by the Appellant was not acceptable given the facts and circumstances. The Cenvat credit has been wrongly availed in violation of Rule 3(1) and the reversal as ordered by the Commissioner (Appeals) has been rightly upheld - Central Excise Duty - Clandestine Removal of Manufactured Goods - HELD - The evidence on record including freight vouchers, dispatch details, booking registers and lowery receipt books clearly established that the Appellant cleared finished products clandestinely in collusion and connivance with co-noticees thereby causing evasion of excise duty. The admissions of the Appellant and the recipient parties were corroborated by the documentary evidence. The adjudicating authority meticulously examined all records and correctly concluded that the clearance was fraudulent. As the case involved fraud and willful suppression of facts rather than mere procedural lapses, the extended period of limitation was rightly invoked. The imposition of penalty was justified in view of the fraudulent conduct. The demand of excise duty has been rightly confirmed and penalty was imposed. [Read less]

Customs - Duty Drawback - All Industry Rate (AIR) - Retrospective Application of Clarificatory Circular - Petitioner claimed entitlement to AIR customs duty drawback at 1% on exports of Soya Bean Meal despite having availed CENVAT credit. The Customs Department denied the benefit on the ground that the clarificatory Circular No. 35/2010-Cus dated 17.09.2010 expressly stating that duty drawback was available to SBM merchants despite CENVAT availed only operated prospectively from 20.09.2010 onwards and could not be applied retrospectively to the years 2008-2010 - Whether a clarificatory circular that merely explains and set... [Read more]

Customs - Duty Drawback - All Industry Rate (AIR) - Retrospective Application of Clarificatory Circular - Petitioner claimed entitlement to AIR customs duty drawback at 1% on exports of Soya Bean Meal despite having availed CENVAT credit. The Customs Department denied the benefit on the ground that the clarificatory Circular No. 35/2010-Cus dated 17.09.2010 expressly stating that duty drawback was available to SBM merchants despite CENVAT availed only operated prospectively from 20.09.2010 onwards and could not be applied retrospectively to the years 2008-2010 - Whether a clarificatory circular that merely explains and settles the scope of benefit under previous notifications can be given retrospective operation - HELD - A distinction exists between a clarificatory Circular which explains the scope of existing provisions and one which introduces a new fiscal regime. The Circular No. 35/2010-Cus dated 17.09.2010 is clarificatory and explanatory in nature and does not substantively modify or amend the previous CBEC Notifications Nos. 81 of 2006, 68 of 2007, 103 of 2008 and 84 of 2010 - The language of the Circular does not expand or alter the scope of previous Notifications but merely cements the claim of merchant exporters who were entitled to receive the benefit of AIR customs duty drawback since 2007. By virtue of the Circular, no new right or benefit was created but the actual scope of the benefit was explained and settled. The Circular merely clarified that the benefit of 1% customs duty drawback under prior Notifications was available to SBM merchants despite having availed CENVAT. Being explanatory in nature, the Circular cannot be construed as adopting a fresh fiscal regime for rebate of customs duty intended to affect vested rights - The doctrine of fairness requires that where a beneficial provision merely explains existing entitlements without inflicting undue burden, retrospective effect should be granted. The petitioner is entitled to the benefit of 1% AIR customs duty drawback on export of SBM from 2008 onwards with retrospective operation to the Circular - The impugned order denying the drawback is quashed and set aside – The writ petition stands allowed [Read less]

GST - Applicability of GST on compensation for land acquisition - Petitioner's land was acquired by Union of India for road widening and compensation paid. The respondent deducted 18% GST from the compensation amount. The petitioner challenged this deduction contending that acquisition of land cannot be construed as sale of goods or provision of services and therefore GST provisions are not applicable - Whether acquisition of land and structure by the State would fall within the definition of supply of goods or services under the GST Act - HELD - An immovable property cannot at any stretch of imagination be construed as go... [Read more]

GST - Applicability of GST on compensation for land acquisition - Petitioner's land was acquired by Union of India for road widening and compensation paid. The respondent deducted 18% GST from the compensation amount. The petitioner challenged this deduction contending that acquisition of land cannot be construed as sale of goods or provision of services and therefore GST provisions are not applicable - Whether acquisition of land and structure by the State would fall within the definition of supply of goods or services under the GST Act - HELD - An immovable property cannot at any stretch of imagination be construed as goods. There is neither supply of goods nor services but an expropriation of property of a citizen using statutory power. The petitioner has neither sold any goods nor provided any service in surrendering property - Even if a wide latitude is given to the words supply of goods or service, the acquisition of property by the State in exercise of its power of eminent domain cannot fall within the definition of supply of goods or services. The respondents failed to explain under what provision of the GST Act the acquisition of land or structure would amount to supply of goods or provision of service - The High Court of Judicature at Madras has held in a similar matter that no levy of GST is applicable on compensation amount paid to the petitioner. The respondents have acted in excess of their power in deducting GST from compensation payable to the petitioner - The award deducting GST from compensation is quashed. Respondent is directed to refund the deducted GST with interest – The petition is allowed [Read less]

Customs AAR - Classification of 'Moving Style' - Whether the product 'Moving Style' merit classification under CTH 8471 as claimed by the applicant or under Heading 8528 as suggested by the Dept – HELD - Moving style is a movable monitor having interactive panel, not a general-purpose computer - 'Moving style' is not in the nature of Cathode Ray tube monitors, hence it would not be classifiable under CTSH 8528 42 or 8528 49. Further, it is also not designed for use with automatic data processing machine (CTH 8528 52 00) and hence it merits classification under residuary heading under 'Other Monitors' and especially under... [Read more]

Customs AAR - Classification of 'Moving Style' - Whether the product 'Moving Style' merit classification under CTH 8471 as claimed by the applicant or under Heading 8528 as suggested by the Dept – HELD - Moving style is a movable monitor having interactive panel, not a general-purpose computer - 'Moving style' is not in the nature of Cathode Ray tube monitors, hence it would not be classifiable under CTSH 8528 42 or 8528 49. Further, it is also not designed for use with automatic data processing machine (CTH 8528 52 00) and hence it merits classification under residuary heading under 'Other Monitors' and especially under CTH 8528 5900 – The product ‘Moving style’ is classifiable under Tariff item 8528 59 00 and the 'Floor stand' of Moving style is classifiable under Tariff item 8529 90 90 of the First Schedule to the Customs Tariff Act, 1975 – Ordered accordingly - Classification of 'Floor stand' of Moving style – HELD - the product, 'Floor stand' for Moving style is not in the nature of Aerials and aerial reflectors of all kinds, hence it would not be classifiable under CTSH 8529 10. Further, it is not designed for use for communication jamming equipment or amateur radio communication equipment and hence it merits classification under residuary entry and especially under CTH 8529 90 90. [Read less]

GST - Right to cross-examination of witnesses in adjudication proceedings - Petitioner sought opportunity to cross-examine persons whose statements were relied on in show cause notice, particularly contending that statements were recorded under compulsion while firm's Chairman was under detention. Adjudicating authority rejected request for cross-examination stating that persons had not retracted statements, documents corroborated statements, and cross-examination would be biased in favour of petitioner - Whether adjudicating authority can deny opportunity to cross-examine witnesses whose statements form basis of adjudicat... [Read more]

GST - Right to cross-examination of witnesses in adjudication proceedings - Petitioner sought opportunity to cross-examine persons whose statements were relied on in show cause notice, particularly contending that statements were recorded under compulsion while firm's Chairman was under detention. Adjudicating authority rejected request for cross-examination stating that persons had not retracted statements, documents corroborated statements, and cross-examination would be biased in favour of petitioner - Whether adjudicating authority can deny opportunity to cross-examine witnesses whose statements form basis of adjudication order under Section 74 of CGST Act, 2017 - HELD - When statements of witnesses form basis of adjudication order and are relied upon in show-cause notice, petitioner must be provided opportunity to cross-examine such witnesses if requested – The opportunity for cross-examination forms integral part of natural justice principles. Reason that persons have not retracted statements is not valid ground to deny cross-examination as purpose of cross-examination is to test veracity and challenge truthfulness of statements. Presumption that cross-examination would be biased cannot be basis for denying opportunity, as question of bias must be determined after evaluating statements elicited in cross-examination, not before - Documents relied as corroborative evidence cannot substitute for cross-examination when statements form primary basis of findings. Adjudicating authority possesses discretion to allow or deny cross-examination but must provide sound and justifiable reasons for denial - In this case, reasons provided were not convincing or sustainable. Statements recorded under compelling circumstances like Chairman's detention strengthen case for granting cross-examination – The adjudication order is quashed and the matter is remanded for fresh proceedings with direction that petitioner's request for cross-examination of witnesses shall be considered and cannot be rejected on reasons previously stated – The writ petition is disposed of - Assessment Procedure - Block Assessment for Multiple Tax Years - Whether assessment under Section 74 of CGST Act can be completed as composite block assessment covering multiple tax years or must be conducted separately for each tax period - HELD - Assessment under Section 74 must be completed on basis of individual tax periods as defined in statute and not as block or composite assessment for multiple years. Composite notice for multiple assessment years while completing assessment under Section 74 is not legally sustainable. Court has accepted this contention in earlier decisions in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories and Tharayil Medicals cases where it was observed that composite notice for multiple assessment years is not permissible – The adjudication order passed as block assessment for multiple years is liable to be set aside on this ground itself. [Read less]

Customs AAR - Classification of components of Driver Monitoring System viz. Cable, Unit Assembly and Controller Assembly – Eligibility to exemption under Notification No. 69/2011-Customs - HELD – The Cable, being a PVC (plastic) insulated electric cable fitted with connectors at both ends, is correctly classifiable under CTI 8544 42 20 of the First Schedule to the Customs Tariff Act, 1975, as 'Plastic Insulated' cable fitted with connectors for a voltage not exceeding 1,000V. The Cable imported from Japan is eligible for customs duty exemption under S. No. 733 of Notification No. 69/2011- Customs dated 29.07.2011, whic... [Read more]

Customs AAR - Classification of components of Driver Monitoring System viz. Cable, Unit Assembly and Controller Assembly – Eligibility to exemption under Notification No. 69/2011-Customs - HELD – The Cable, being a PVC (plastic) insulated electric cable fitted with connectors at both ends, is correctly classifiable under CTI 8544 42 20 of the First Schedule to the Customs Tariff Act, 1975, as 'Plastic Insulated' cable fitted with connectors for a voltage not exceeding 1,000V. The Cable imported from Japan is eligible for customs duty exemption under S. No. 733 of Notification No. 69/2011- Customs dated 29.07.2011, which covers 'All goods' of sub-headings 8544 20 to 8544 60 - Classification of Unit Assembly – HELD - The Unit Assembly (comprising panel, camera, LED, chassis and harness), being exclusively designed and used as a sub-assembly of the Driver Monitoring System installed in motor vehicles, and not being specifically covered by any heading of Chapter 85, is classifiable under CTI 8708 99 00 of the First Schedule to the Customs Tariff Act, 1975, as 'Other' parts and accessories of motor vehicles of headings 8701 to 8705. The Unit Assembly is not classifiable under CTI 8512 90 00, consequently, the question of eligibility for exemption under S. No. 656 of Notification No. 69/2011-Customs dated 29.07.2011 does not arise - Classification of Controller Assembly – HELD - The Controller Assembly (comprising cover, PCB, case and bracket), being exclusively designed and used as a sub-assembly of the Driver Monitoring System installed in motor vehicles, and not being specifically covered by any heading of Chapter 85, is classifiable under CTI 8708 99 00 of the First Schedule to the Customs Tariff Act, 1975, as 'Other' parts and accessories of motor vehicles of headings 8701 to 8705. The Controller Assembly is not classifiable under CTI 8512 90 00. Consequently, the question of eligibility for exemption under S. No. 656 of Notification No. 69/2011-Customs dated 29.07.2011 does not arise. [Read less]

M.P. Commercial Tax Act, 1994 - Interpretation of Notification No. 48 dated 23.04.2002 - Classification of Soya flour - whether covered under exemption for flour of cereals and pulses - Petitioner challenged suo moto revision order raising additional demand - Deputy Commissioner reopened case under Section 28(1) and passed reassessment order treating soya flour as exempted goods with nil tax - Authority subsequently passed order under Section 62(3) imposing Central Sales Tax on soya flour at 10% and declined benefit of exemption - Whether soya flour falls within exempted category under Notification No. 48 dated 23.04.2002 ... [Read more]

M.P. Commercial Tax Act, 1994 - Interpretation of Notification No. 48 dated 23.04.2002 - Classification of Soya flour - whether covered under exemption for flour of cereals and pulses - Petitioner challenged suo moto revision order raising additional demand - Deputy Commissioner reopened case under Section 28(1) and passed reassessment order treating soya flour as exempted goods with nil tax - Authority subsequently passed order under Section 62(3) imposing Central Sales Tax on soya flour at 10% and declined benefit of exemption - Whether soya flour falls within exempted category under Notification No. 48 dated 23.04.2002 - HELD – The Notification No. 48 explicitly states flour (atta) and besan of grains (cereals) and pulses i.e. the word cereals has been used for atta and pulses for besan but soya is not mentioned in said notification - Soybeans fall under oilseeds not pulses and soya flour is not grain (cereal). Treating soya flour as cereal flour not in accordance with law - On behalf of taxpayer referencing Entry 90 and 91 of Schedule 1 of MP Commercial Tax Act it was argued that soya flour included in said entry which is tax-free. However, this Schedule entry was valid only up to period ending 31.03.99 – The conditional exemption granted to cereal flour and pulse besan under Notification 48 dated 23.04.02. The Petitioner cannot avail benefit of said notification as they do not manufacture atta from cereals and besan from pulses but manufacture soya flour from soybeans which was not tax-free at material time whereas exemption notification specifically covered atta derived from cereals and besan derived from pulses - Department correctly noted that soybean legally classified as oilseed not pulse and soya flour cannot be classified as cereal - Extending exemption to soya flour deemed contrary to law – The impugned order is upheld and the writ petition is dismissed [Read less]

Customs AAR - Admissibility of duty exemption u/s 65 of Customs Act, 1962 read with Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR Scheme) - Whether export of only by products (resultant product from the manufacturing) such as Palm Fatty Acid Distillate, Refined Palm Stearin, Sunflower Acid Oil, and Sunflower Distilled Fatty Acid would qualify as “export of manufactured goods” under Section 65 of the Customs Act, 1962 read with MOOWR, 2019 – HELD - Export of by-products such as Palm Fatty Acid Distillate, Refined Palm Stearin, Sunflower Acid Oil, and Sunflower Distilled Fatty Acid qualifies as... [Read more]

Customs AAR - Admissibility of duty exemption u/s 65 of Customs Act, 1962 read with Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR Scheme) - Whether export of only by products (resultant product from the manufacturing) such as Palm Fatty Acid Distillate, Refined Palm Stearin, Sunflower Acid Oil, and Sunflower Distilled Fatty Acid would qualify as “export of manufactured goods” under Section 65 of the Customs Act, 1962 read with MOOWR, 2019 – HELD - Export of by-products such as Palm Fatty Acid Distillate, Refined Palm Stearin, Sunflower Acid Oil, and Sunflower Distilled Fatty Acid qualifies as export of “resultant goods” and consequently as export of manufactured goods under Section 65 of the Customs Act, 1962 read with the MOOWR, 2019 - Where such resultant goods are exported, they are eligible for remission of duty on the imported crude input oils contained therein, even where main products such as Refined Palmolein and Refined Sunflower Oil are cleared for home consumption - Accordingly, where by-products alone are exported while main products are sold domestically, proportionate duty exemption is admissible on the quantity of crude input oils attributable to such exported by-products, in terms of Section 69 of the Customs Act, 1962 read with Clause 7 of Circular No. 34/2019-Customs dated 01.10.2019 - The MOOWR Scheme permits duty-free import of crude oils to the extent they are contained in resultant goods exported from the bonded warehouse and does not restrict such benefit only to principal products, including where only by-products are exported – Ordered accordingly [Read less]

GST - Assessment - Non-adherence to Statutory Time Period – Challenge to assessment on multiple grounds including that show cause notice was issued less than six months prior to passing of order as mandated by Section 74(2) of the CGST Act, 2017 and that the assessment was passed in violation of principles of natural justice without affording genuine opportunity of hearing - Whether the requirement of issuing show cause notice at least six months prior to passing of assessment order under Section 74(2) is mandatory and whether non-compliance thereof vitiates the assessment order - HELD - The provision of Section 74(2) re... [Read more]

GST - Assessment - Non-adherence to Statutory Time Period – Challenge to assessment on multiple grounds including that show cause notice was issued less than six months prior to passing of order as mandated by Section 74(2) of the CGST Act, 2017 and that the assessment was passed in violation of principles of natural justice without affording genuine opportunity of hearing - Whether the requirement of issuing show cause notice at least six months prior to passing of assessment order under Section 74(2) is mandatory and whether non-compliance thereof vitiates the assessment order - HELD - The provision of Section 74(2) requiring issuance of SCN at least six months prior to passing of assessment order does not appear to be mandatory in nature as no consequences thereof are provided and mere use of the word shall in such situation will not render it mandatory. Even otherwise such provisions must be tested on whether the assessee has suffered any prejudice. In the facts of the case the petitioner was granted multiple opportunities for filing reply and personal hearing at different stages after issuance of show cause notice - The personal hearing notices were issued and the petitioner participated in the hearing on 23.03.2026. The order was passed on 28.03.2026 well within the period of limitation for passing assessment order. The petitioner had not raised the grounds of non-observance of Section 74(2) in the earlier writ petitions filed before this court - The assessment order has been passed after affording multiple opportunities to the petitioner. No real prejudice has been caused to the petitioner by non-adherence to the time period of six months. The Supreme Court in its order dated 13.05.2026 has relegated the petitioner to avail the statutory remedy of appeal and in the modification order dated 29.05.2026 has observed that it is up to the petitioner to prefer statutory appeal or avail any other remedy in law. In the circumstances the writ petition should not be entertained - The writ petition is dismissed and the petitioner is relegated to avail the statutory remedy of appeal as per the observations of the Supreme Court - GST - Dismissal of appeal for non-deposit of statutory pre-deposit, Opportunity to cure procedural defects through defect memo - At the time of filing appeal, there was a shortfall in statutory pre-deposit of 10% required under Section 107(6)(b) of the CGST Act. The Appellate Authority rejected the appeal on the sole ground that statutory pre-deposit was not completed at the time of filing. However, prior to passing the Order-in-Appeal dismissing the appeal, the Petitioner had completed the shortfall deposit well within the one-month grace period under the statute and before the order was passed - Whether an appeal can be dismissed merely on procedural ground of non-deposit of statutory pre-deposit when such defect was subsequently rectified before the order of dismissal was passed - HELD – The procedural requirements for filing appeals such as deposit of statutory pre-deposit are mandatory but cannot be used as an excuse to deny justice without first giving the appellant adequate opportunity to rectify the defect. When a procedural defect exists in an appeal, the Appellate Authority is duty-bound to issue a defect memo intimating the Appellant of the deficiency and providing reasonable time to cure it, rather than summarily dismissing the appeal. Justice cannot be denied for failure to comply with procedure without granting opportunity to the Appellant to rectify procedural defects - The principles of natural justice require that when a defect has been cured before the order of dismissal is passed, the appeal should not be rejected on the basis of the defect. In this case the shortfall in pre-deposit was completed within the grace period provided by statute and before the appellate order was passed, therefore the ground for dismissing the appeal ceased to exist. The Appellate Authority acted in a mechanical manner without adequate consideration of the facts and without giving opportunity for cure - The Order-in-Appeal is set aside and the appeal is restored with direction to Appellate Authority to hear the matter on merits – The writ petition stands allowed [Read less]

Customs AAR - Classification of natural rough diamonds mapped on the surface using Sarine Galaxy system – HELD – the subject goods cannot be considered as diamond in their natural state. Once a diamond is marked for cutting, it has entered the production workflow, and cannot be treated as an untouched rough stone – Further, diamonds extracted naturally and diamonds duly mapped have different commercial identity and duly mapped diamonds command a value attributable to the processing already undertaken. Therefore, the subject goods fall under the category of semi-processed diamonds as the diamonds are engraved - The di... [Read more]

Customs AAR - Classification of natural rough diamonds mapped on the surface using Sarine Galaxy system – HELD – the subject goods cannot be considered as diamond in their natural state. Once a diamond is marked for cutting, it has entered the production workflow, and cannot be treated as an untouched rough stone – Further, diamonds extracted naturally and diamonds duly mapped have different commercial identity and duly mapped diamonds command a value attributable to the processing already undertaken. Therefore, the subject goods fall under the category of semi-processed diamonds as the diamonds are engraved - The diamond stones with Galaxy mark on them would attracts merit classification under CTI 71023390 as “other” of the First Schedule of the Custom Tariff Act, 1975 and since the subject goods falls under purview of semi-processed diamond, serial no. 345 of the Notification No. 50/2017 dated 30.06.2017 is not applicable – Ordered accordingly [Read less]

GST - Anti-Profiteering - Calculation of profiteered amount and passing on of benefit of ITC in real estate project - Methodology for computation of additional ITC benefit - Inclusion of GST on profiteered amount where benefit already passed by way of discount - DGAP investigation found that developer had passed on 95% benefit. Developer contended that reversal of ITC on unsold inventories, subsequent passing of remaining 5% benefit to home-buyers and applicability of GST on profiteered amount where benefit already passed by way of discount requires consideration - Whether DGAP correctly computed profiteered amount without... [Read more]

GST - Anti-Profiteering - Calculation of profiteered amount and passing on of benefit of ITC in real estate project - Methodology for computation of additional ITC benefit - Inclusion of GST on profiteered amount where benefit already passed by way of discount - DGAP investigation found that developer had passed on 95% benefit. Developer contended that reversal of ITC on unsold inventories, subsequent passing of remaining 5% benefit to home-buyers and applicability of GST on profiteered amount where benefit already passed by way of discount requires consideration - Whether DGAP correctly computed profiteered amount without considering ITC reversal on unsold inventories and when benefit of ITC already passed by way of discount to home-buyers - HELD - It is admitted fact that developer passed on 95% benefit of ITC to home-buyers. DGAP considered reversal of ITC but did not appreciate it in light of fact that developer was executing multiple projects simultaneously. Where ITC reversal relates to unsold inventories specifically attributable to project, it requires proper examination as it affects calculation of profiteered amount. Where developer already passed benefit of ITC to home-buyers by way of discount and reduced taxable value, imposition of GST at 12% on such profiteered amount requires examination. Subsequently passing on of remaining 5% benefit and cancellation of allotments of certain buyers require verification. Matter remanded to DGAP for further investigation on specific issues including proper consideration of reversal of ITC, applicability of GST on discount already provided, and verification of subsequent passing on of remaining benefit with opportunity of hearing to respondent – Ordered accordingly [Read less]