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Central Excise - Cenvat credit on construction services pertaining to modernization, renovation or repair of the factory - Revenue case that the appellant had wrongly availed Cenvat credit on "Outward Freight Service" and "Construction Services" during the period from January 2010 to March 2014 - Whether the appellant was eligible for the Cenvat credit availed on "Construction Services" for the period from January 2010 to December 2011 – HELD - The construction activity carried out by the Appellant was explained in response to the SCN related to modernization, renovation or repair of the factory. As per the exclusion cla... [Read more]

Central Excise - Cenvat credit on construction services pertaining to modernization, renovation or repair of the factory - Revenue case that the appellant had wrongly availed Cenvat credit on "Outward Freight Service" and "Construction Services" during the period from January 2010 to March 2014 - Whether the appellant was eligible for the Cenvat credit availed on "Construction Services" for the period from January 2010 to December 2011 – HELD - The construction activity carried out by the Appellant was explained in response to the SCN related to modernization, renovation or repair of the factory. As per the exclusion clause in Rule 2(l) of the Cenvat Credit Rules, 2004, the credit on construction services is not eligible as long as the construction of a building or a civil structure or a part thereof is involved. The Tribunal did not find any merit in the appellant's arguments and dismissed this part of the appeal - The appeal insofar as the grounds relating to ‘construction service’ are accordingly dismissed. However, the impugned order to the extent of denial of credit for service tax on the payment of GTA outward transportation service is set aside – The appeal is partly allowed - Whether the appellant was eligible for the Cenvat credit availed on "Outward Transportation Services" during the period from June 2011 to March 2014 – HELD - The Chennai Bench had earlier ruled in favor of the appellant on this issue, following the judgment of the Larger Bench of the Tribunal in the case of The Ramco Cements Vs. CCE Pondicherry. Accordingly, the Tribunal set aside the impugned order to the extent of denial of credit for service tax on the payment of GTA outward transportation service and allowed this part of the appeal. [Read less]

Customs – Benefit of Exemption Notification Aircraft and spare-parts, Non-Scheduled Air Transport Service, Suppression of Facts, Extended Period of Limitation - Appellant imported an aircraft and its spare parts claiming the benefit of Exemption Notification No. 21/2002-Cus. and Notification No. 6/2006-CE. The DR) issued a show cause notice alleging that the appellant had misused the Exemption Notification by not using the aircraft for the intended purpose of non-scheduled operations and instead allowing it to be used by the promoters and their family members - The DRI also alleged that the spare parts imported were not ... [Read more]

Customs – Benefit of Exemption Notification Aircraft and spare-parts, Non-Scheduled Air Transport Service, Suppression of Facts, Extended Period of Limitation - Appellant imported an aircraft and its spare parts claiming the benefit of Exemption Notification No. 21/2002-Cus. and Notification No. 6/2006-CE. The DR) issued a show cause notice alleging that the appellant had misused the Exemption Notification by not using the aircraft for the intended purpose of non-scheduled operations and instead allowing it to be used by the promoters and their family members - The DRI also alleged that the spare parts imported were not used for repair or maintenance under the Exemption Notification, and the appellant was not a 'dedicated company' eligible to claim the benefit under the Exemption Notification - Whether the appellant had violated the conditions of the Exemption Notification by not using the aircraft for the intended purpose of non-scheduled operations – HELD - The Delhi High Court in Commissioner of Customs (Preventive), New Delhi vs. Global Vectra Helicorp Ltd. and the Larger Bench of the Tribunal in VRL Logistics vs. Commissioner of Customs held that a non-scheduled (passenger) operator can carry out charter services, and there is no requirement of publication of tariff. The appellant's Memorandum of Association and Articles of Association clearly show that one of the principal objectives of the company is the operation of air transport services, and the appellant could provide charter services to its group companies as such operations were carried out against remuneration. Therefore, the appellant had not violated the conditions of the Exemption Notification - The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation under section 28(4) of the Customs Act could have been invoked in the present case – HELD - For invoking the extended period of limitation, there must be a deliberate attempt to evade payment of duty, and mere suppression of facts is not enough. In the present case, the Additional Director General did not make any finding that the appellant had suppressed information with the intention to evade payment of duty. Therefore, the extended period of limitation could not have been invoked. [Read less]

Service Tax - Bundle service, Service tax on advances - Appellant is engaged in providing maintenance and repair services. The department raised a demand for service tax on various grounds including non-payment of tax on bundle services, non-payment of tax on advances received, irregular availment of CENVAT credit, and non-payment of tax on legal services under reverse charge mechanism - Whether the appellant is liable to pay service tax on the amount received from clients towards electricity charges, gas charges, air conditioning charges etc. as part of bundle service - HELD - The appellant is not liable to pay service ta... [Read more]

Service Tax - Bundle service, Service tax on advances - Appellant is engaged in providing maintenance and repair services. The department raised a demand for service tax on various grounds including non-payment of tax on bundle services, non-payment of tax on advances received, irregular availment of CENVAT credit, and non-payment of tax on legal services under reverse charge mechanism - Whether the appellant is liable to pay service tax on the amount received from clients towards electricity charges, gas charges, air conditioning charges etc. as part of bundle service - HELD - The appellant is not liable to pay service tax on such amounts as it was acting as a pure agent in collecting these reimbursements from the clients. The appellant submitted invoices and a CA certificate to substantiate that the reimbursements were lower than the actual amounts paid. Further, the amounts received by the appellant were in the nature of refundable loans based on the loan agreements and bank statements submitted by the appellant. No service tax is payable on such refundable loans - The disallowance of CENVAT credit to the extent which the appellant had already discharged along with interest - The demand of service tax on bundle services and advances, and the penalties are set aside. The demand of service tax on legal services under reverse charge mechanism and the disallowance of CENVAT credit to the extent already discharged by the appellant is upheld – The appeal is partly allowed [Read less]

Central Excise - Electricity generation and sale – Appellant availed CENVAT credit on inputs and input services used in its captive power plant. This power was partly consumed in the appellant's factory, partly transferred to its sister concerns, and partly sold to the State Electricity Board. The department objected to the availment of CENVAT credit for the portion of electricity that was wheeled out to the sister concerns and sold to the State Electricity Board - Whether interest could be charged under Section 11AA of the Central Excise Act read with Rule 14 of the CENVAT Credit Rules, 2004 on the CENVAT credit availed... [Read more]

Central Excise - Electricity generation and sale – Appellant availed CENVAT credit on inputs and input services used in its captive power plant. This power was partly consumed in the appellant's factory, partly transferred to its sister concerns, and partly sold to the State Electricity Board. The department objected to the availment of CENVAT credit for the portion of electricity that was wheeled out to the sister concerns and sold to the State Electricity Board - Whether interest could be charged under Section 11AA of the Central Excise Act read with Rule 14 of the CENVAT Credit Rules, 2004 on the CENVAT credit availed by the appellant towards the electricity sold to the State Electricity Board – HELD - The show cause notice did not give any reason as to why interest is recoverable under Section 11AA. It merely alleged that the credit was wrongly availed in contravention of the rules. However, the appellant had reversed the CENVAT credit attributable to the electricity sold to the State Electricity Board on a monthly basis prior to the issuance of the SCN. Thus, the credit was not wrongly availed but was voluntarily reversed, which amounts to non-availing of credit. The Department did not specifically allege any violation of Rule 6 of the CENVAT Credit Rules, 2004 in the show cause notice to justify the levy of interest. Therefore, the demand of interest is set aside – The appeal is allowed - Whether penalty could be imposed on the appellant under Rule 15(1) of the CENVAT Credit Rules, 2004 on the CENVAT credit availed towards the electricity sold to the State Electricity Board – HELD - Since the appellant had reversed the CENVAT credit attributable to the electricity sold to the State Electricity Board, it amounted to non-availing of credit. The Supreme Court and the Tribunal have held that reversal of credit means the party did not avail the input service credit. Therefore, Rule 15(1), which deals with wrongful availing or utilization of CENVAT credit, could not be invoked. Accordingly, the penalty imposed on the appellant is set aside. [Read less]

GST - SEZ unit - Refund of unutilized input tax credit – Rejection of refund applications were rejected by the respondent authorities on the ground that the supplier of goods or services can file a refund claim, and not the recipient-SEZ unit - Whether the SEZ unit is entitled to claim a refund of the unutilized ITC under the GST law – HELD - The Gujarat High Court, in the case of Britannia Industries Ltd. v. Union of India, had held that an SEZ unit is entitled to claim a refund of the unutilized ITC, as exports are made without payment of tax under the LUT. The Supreme Court had also disposed of a case challenging th... [Read more]

GST - SEZ unit - Refund of unutilized input tax credit – Rejection of refund applications were rejected by the respondent authorities on the ground that the supplier of goods or services can file a refund claim, and not the recipient-SEZ unit - Whether the SEZ unit is entitled to claim a refund of the unutilized ITC under the GST law – HELD - The Gujarat High Court, in the case of Britannia Industries Ltd. v. Union of India, had held that an SEZ unit is entitled to claim a refund of the unutilized ITC, as exports are made without payment of tax under the LUT. The Supreme Court had also disposed of a case challenging the Gujarat High Court's decision, keeping the question of law open - The law declared by the Gujarat High Court in the Britannia Industries case is binding on the authorities in the present case, until a contrary decision is given by any other High Court. Therefore, the respondent authorities were bound to consider the petitioner's refund applications in light of the Britannia Industries judgment - the impugned orders rejecting the petitioner's refund applications is quashed and the matter is remanded back to the respondent to pass fresh orders after examining whether the services in question were for authorized operations as endorsed by the specified officer of the SEZ - The petition is partly allowed [Read less]

Central Excise - Job Work, Marketability, Notification No. 214/86-CE – Appellant manufactured side pillars and door pillars under job work and cleared the same to M/s Bombardier (raw material supplier) without payment of Central Excise duty. M/s Bombardier had filed a declaration under Notification No. 214/86-CE, stating that the goods received from the appellant were used in their factory for the manufacture of final products - Dept held that M/s Bombardier had not disclosed the process involved in the job work to the Central Excise Department, with a view to evading duty of excise, as they were aware that the process c... [Read more]

Central Excise - Job Work, Marketability, Notification No. 214/86-CE – Appellant manufactured side pillars and door pillars under job work and cleared the same to M/s Bombardier (raw material supplier) without payment of Central Excise duty. M/s Bombardier had filed a declaration under Notification No. 214/86-CE, stating that the goods received from the appellant were used in their factory for the manufacture of final products - Dept held that M/s Bombardier had not disclosed the process involved in the job work to the Central Excise Department, with a view to evading duty of excise, as they were aware that the process carried out in job work amounted to manufacture and duty was payable on the goods - Whether the door pillars/side pillars manufactured by the appellant were excisable goods and the appellant was liable to pay the Central Excise duty – HELD - The door pillars/side pillars manufactured by the appellant were not finished goods capable of being marketed, as they were subjected to further manufacturing process by Bombardier for supply to the Delhi Metro. The raw material supplied by Bombardier on the job work challan did not belong to the appellant, and the processed material/goods also did not belong to the appellant. The appellant had received only job work charges from Bombardier - The job worker is not liable to pay the duty and the duty liability is of the raw material supplier who had furnished the undertaking under Notification No. 214/86-CE – Further, the "excisable goods" definition under Section 2(d) of the Central Excise Act, 1944 requires the goods to be "capable of being bought and sold for a consideration and such goods shall be deemed to be marketable." In the present case, the door pillars/side pillars manufactured by the appellant were not capable of being bought and sold and had no independent marketability - the demand of duty is not sustainable and the imposition of penalty would also not sustain – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of mixture of Liquefied Petroleum Gas (LPG) – Butane, Eligibility for the exemption benefits under Customs Notification No. 21/2002 and Central Excise Notification No. 4/2005 - The goods were provisionally assessed and classified under CTH 2711 1300 as "Butane" - Appellant filed a refund claim seeking classification under CTH 2711 1900 as "Others" to avail the benefit of exemptions under Customs Notification No. 21/2002 and Central Excise Notification No. 4/2005. The Adjudicating Authority as well as the Commissioner (Appeals) upheld the classification under CTH 2711 1300 and denied the exemption... [Read more]

Customs - Classification of mixture of Liquefied Petroleum Gas (LPG) – Butane, Eligibility for the exemption benefits under Customs Notification No. 21/2002 and Central Excise Notification No. 4/2005 - The goods were provisionally assessed and classified under CTH 2711 1300 as "Butane" - Appellant filed a refund claim seeking classification under CTH 2711 1900 as "Others" to avail the benefit of exemptions under Customs Notification No. 21/2002 and Central Excise Notification No. 4/2005. The Adjudicating Authority as well as the Commissioner (Appeals) upheld the classification under CTH 2711 1300 and denied the exemption benefits - Whether the imported goods should be classified under CTH 2711 1900 as "Others" or under CTH 2711 1300 as "Butane" – HELD - The imported goods were indeed a mixture of Propane and Butane, with Butane being the predominant component at up to 98%. The goods were described on the B/E and relevant documents as "LPG-Butane". The lower authorities were right in conclusion that at the correct classification was under CTH 2711 1300 as "Butane", and not under CTH 2711 1900 as "Others" - the exemption notifications were amended vide Notification No. 37/2005-Customs and Notification No. 18/2005-Central Excise, which included "Liquefied Petroleum and Butane mixture, Liquefied Propane, Liquefied Butane" in the exemption, but these amendments were effective from 02.05.2005. Since the goods in the present case were imported and cleared for home consumption prior to 02.05.2005, the appellant was not eligible for the exemption benefits - The classification of the imported goods under CTH 2711 1300 as "Butane" and the denial of exemption benefits for the period prior to 02.05.2005 is upheld – The appeal is dismissed [Read less]

Service tax on consultancy services for construction of railway siding for private company - Whether the services received by the appellant from the contractor for construction of the railway siding are exempt from service tax on the ground that the railway siding is being constructed for a public sector undertaking – HELD - The issue is no longer res integra and is covered by the previous decisions of the Tribunal in the cases of Nabha Power Ltd. and Konkan Railway Corporation Ltd. - The definition of "Railway" under the Finance Act, 1994 does not make any distinction between public and private railways. Even though the... [Read more]

Service tax on consultancy services for construction of railway siding for private company - Whether the services received by the appellant from the contractor for construction of the railway siding are exempt from service tax on the ground that the railway siding is being constructed for a public sector undertaking – HELD - The issue is no longer res integra and is covered by the previous decisions of the Tribunal in the cases of Nabha Power Ltd. and Konkan Railway Corporation Ltd. - The definition of "Railway" under the Finance Act, 1994 does not make any distinction between public and private railways. Even though the railway siding was constructed for use by a public sector undertaking, MPPGCL, it would still be covered under the exemption from service tax as the exclusion of "railways" from the ambit of service tax was not restricted to only public railways - The services received by them from the contractor for the construction of the railway siding are exempt from service tax – The appeal is allowed [Read less]

Service Tax on Mobilization Advances, Point of Taxation Rules - Whether the mobilization advances received by the appellant in the year 2009-2010 were taxable under Service Tax – HELD - The 'Point of Taxation Rules 2011' introduced vide Notification No. 18/2011-ST dated 01.03.2011 provided that the date of receipt of mobilization advances cannot be considered as the date for provision of any taxable Service, nor such amount would be considered as consideration towards any taxable service during the material time - The Tribunal in the decisions in Gammon India Ltd. Vs CST Mumbai and Thermax Instrumentation Ltd. Vs CCE, ha... [Read more]

Service Tax on Mobilization Advances, Point of Taxation Rules - Whether the mobilization advances received by the appellant in the year 2009-2010 were taxable under Service Tax – HELD - The 'Point of Taxation Rules 2011' introduced vide Notification No. 18/2011-ST dated 01.03.2011 provided that the date of receipt of mobilization advances cannot be considered as the date for provision of any taxable Service, nor such amount would be considered as consideration towards any taxable service during the material time - The Tribunal in the decisions in Gammon India Ltd. Vs CST Mumbai and Thermax Instrumentation Ltd. Vs CCE, has held that the mobilization advances were in the nature of a deposit or an earnest money, and not towards the value of services provided. The advances were proportionately transferred to the sale/consideration of service in the books as and when the invoices were raised on the customers. Therefore, the mobilization advances were not taxable during the relevant period - The order of the Commissioner is not sustainable and set aside - The appeal filed by the appellant is allowed [Read less]

Customs – Export of iron ore – Redetermination of transaction value – Demand of duty – In all these appeals, different Appellants/exporters, who were engaged in export of iron ore, have come in appeal either in respect of rejection of their refund claims in full or part on finalization of provisional assessment or in view of demand made for payment of additional duty as a consequence to finalization – Whether rejection of transaction value declared by Appellants at time of export is sustainable – HELD – Based on documents furnished by Appellants/exporters, department finalized shipping bills and as a conseque... [Read more]

Customs – Export of iron ore – Redetermination of transaction value – Demand of duty – In all these appeals, different Appellants/exporters, who were engaged in export of iron ore, have come in appeal either in respect of rejection of their refund claims in full or part on finalization of provisional assessment or in view of demand made for payment of additional duty as a consequence to finalization – Whether rejection of transaction value declared by Appellants at time of export is sustainable – HELD – Based on documents furnished by Appellants/exporters, department finalized shipping bills and as a consequence, granted them refunds either in view of excess payment made at time of export in respect of provisionally assessed shipping bills or demanded/adjusted duty short paid. Appellants are aggrieved that said calculation of refunds or demand is based on wrong redetermination of value of export. There is no dispute that Appellants/exporters have realized any amount over and above what had been declared in final invoice. When there is no major deviation in terms of parameters and they being within tolerance limit or accepted norms as agreed upon by both sides in terms of contracts, department could not have rejected transaction value declared by Appellants at time of final assessment and adopted contemporaneous price and worked out the refund based on said re-determined value. Demand raised on account of redetermination of transaction value applying any contemporaneous value would not sustain and to that extent, demand will be set aside. However, insofar as re-computation of refund amount is concerned, matter is remanded back to Original Authority to re-compute total amount of refund admissible – Appeals partly allowed [Read less]

Service Tax – Providing of services – Demand of tax – Appellant is a Public Sector Undertaking engaged in carrying out certain construction works and other related activities in steel plant, power plant, railways, etc. – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Adjudicating Authority confirmed demands as proposed in show cause notice – Whether demand confirmed against Appellant under category of Cargo Handling Service (CHS) is sustainable – HELD – What is essential for this service is that service provided should be relating to or in rela... [Read more]

Service Tax – Providing of services – Demand of tax – Appellant is a Public Sector Undertaking engaged in carrying out certain construction works and other related activities in steel plant, power plant, railways, etc. – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Adjudicating Authority confirmed demands as proposed in show cause notice – Whether demand confirmed against Appellant under category of Cargo Handling Service (CHS) is sustainable – HELD – What is essential for this service is that service provided should be relating to or in relation to cargo handling by a cargo handling agency and said service should be integrally or inseparably connected with handling of cargo without being mere activity of transportation of such cargo. Perusal of agreement does not support view of department that Appellant was a cargo handling agency and on contrary, they were essentially engaged in handling certain materials including transportation thereof within premises of plant itself using their own heavy equipments. Activity carried out by Appellant inside plant was not considered as falling under category of CHS. Demand will not sustain under category of CHS – Appeal partly allowed - Repair service – Tax liability – Whether Adjudicating authority is justified in confirming demand raised under category of Management, Maintenance or Repair service – HELD – From perusal of scope of contract itself, it was very much in nature of maintenance and repair contract. Nature of activities performed by Appellant was akin to maintenance or repair. It was not necessary that Appellant had to undertake both activities of maintenance as well as repairs and if they had either maintained or repaired or both, they will still be covered within scope of service. There is no infirmity in order of adjudicating authority to this extent - Manpower recruitment service – Demand of tax – Whether demand confirmed under category of Manpower Recruitment or Supply Agency service (MRSAS) is sustainable – HELD – Adjudicating authority had examined three contracts while confirming demand raised under this head. MRSAS was brought under tax net w.e.f. 16-6-2005. In view of contracts, services were provided prior to introduction of this levy. Merely because bills were raised later on for this service and payments were received later on, demand cannot be made in respect of three contracts under category of MRSAS. Therefore, to that extent, order of adjudicating authority is liable to be set aside. [Read less]

Central Excise – Manufacture of sponge iron – Allegation of clandestine clearance – Demand of duty – Appellant is engaged in manufacture of Sponge Iron – Based on third party records, department alleged that Appellant had cleared Sponge Iron clandestinely without payment of Excise Duty – Adjudicating Authority confirmed demand of duty along with interest and penalty – Whether department had established allegation of clandestine clearance of sponge iron against Appellant with sufficient evidence – HELD – Entire proceedings have been initiated solely on basis of search operations conducted at third party’... [Read more]

Central Excise – Manufacture of sponge iron – Allegation of clandestine clearance – Demand of duty – Appellant is engaged in manufacture of Sponge Iron – Based on third party records, department alleged that Appellant had cleared Sponge Iron clandestinely without payment of Excise Duty – Adjudicating Authority confirmed demand of duty along with interest and penalty – Whether department had established allegation of clandestine clearance of sponge iron against Appellant with sufficient evidence – HELD – Entire proceedings have been initiated solely on basis of search operations conducted at third party’s premises. There is nothing to indicate that any search operations were subsequently conducted at premises of Appellant and any incriminating documents were seized from them. There is no record of any shortage/excess being found at Appellant’s premises after conducting any stock verification. Revenue had not come out with any corroborative evidence with regard to movement of vehicles carrying alleged quantity of sponge iron. Allegation about removal of goods clandestinely cannot be construed based on assumptions and presumptions only. Confirmed demand is legally not sustainable. Order under challenge is set aside – Appeals allowed [Read less]

Central Excise - Excise duty on ready-mix concrete (RMC) - Appellant was manufacturing concrete mix at a site for the construction of a workshop-cum-depot for Bangalore Metro Rail Corporation Ltd. (BMRCL) - Dept alleged that the appellant was manufacturing excisable RMC without registration and payment of excise duty - Whether the product manufactured by the appellant was falling under the category of 'Ready Mix Concrete (RMC)', an excisable product under the Central Excise Tariff Act, 1985 – HELD - There is no evidence to show that the goods manufactured by the appellant at the batching plant at the site were capable of... [Read more]

Central Excise - Excise duty on ready-mix concrete (RMC) - Appellant was manufacturing concrete mix at a site for the construction of a workshop-cum-depot for Bangalore Metro Rail Corporation Ltd. (BMRCL) - Dept alleged that the appellant was manufacturing excisable RMC without registration and payment of excise duty - Whether the product manufactured by the appellant was falling under the category of 'Ready Mix Concrete (RMC)', an excisable product under the Central Excise Tariff Act, 1985 – HELD - There is no evidence to show that the goods manufactured by the appellant at the batching plant at the site were capable of producing RMC as specified in the Indian Standard IS 4926. The Circular No. 368/1/98-CX dated 06.01.1998, clarifies that concrete mix conforming to IS 456-1978, produced and used at the site of construction, is exempt from excise duty - As per the notifications in force, the duty on concrete mix manufactured at the site of construction for use in the construction site was exempted. Therefore, the impugned orders confirming the demand of excise duty, interest, and penalty are unsustainable - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Duty Exemption to Mega Power Project - Appellant supplied various steel pipe fittings to several Mega Power Projects claiming exemption from excise duty by availing the benefit of Notification No. 6/2006-CE dated 01.03.2006, which exempts goods supplied against International Competitive Bidding (ICB) for Mega Power Projects, provided that such goods are exempt from customs duty when imported – Denial of exemption, holding that the appellant's goods did not fall under Chapter 9801 of the Customs Tariff, which is a prerequisite for the customs duty exemption under Notification No. 21/2002-Cus dated 01.03.2... [Read more]

Central Excise - Duty Exemption to Mega Power Project - Appellant supplied various steel pipe fittings to several Mega Power Projects claiming exemption from excise duty by availing the benefit of Notification No. 6/2006-CE dated 01.03.2006, which exempts goods supplied against International Competitive Bidding (ICB) for Mega Power Projects, provided that such goods are exempt from customs duty when imported – Denial of exemption, holding that the appellant's goods did not fall under Chapter 9801 of the Customs Tariff, which is a prerequisite for the customs duty exemption under Notification No. 21/2002-Cus dated 01.03.2002 (Sl. No. 400) - Whether the appellant is entitled to the central excise duty exemption under Notification No. 6/2006-CE dated 01.03.2006 (Sl. No. 91) for the supplies made to Mega Power Projects – HELD - The authorities below had adopted an unduly narrow interpretation of Chapter 9801 of the Customs Tariff, which covers not only "machinery" but also instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, and all components or raw materials required for the initial setting up of a power project. The pipe fittings supplied by the appellant, such as tube bends, tees, reducers, and elbows, are essential components for the installation of Mega Power Projects and fall squarely within the ambit of Heading 9801, notwithstanding their classification under Chapter 73 – Further, the fulfilment of the conditions under Notification No. 21/2002-Cus (Sl. No. 400) is not a prerequisite for availing the exemption under Notification No. 6/2006-CE (Sl. No. 91), as long as the goods are cleared under ICB for use in Mega Power Projects and are exempt from customs duty when imported - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Activity of importing and re-packing of Peanut Butter, Cenvat credit on CVD - Appellant was engaged in importing and re-packing Peanut Butter. The appellant availed Cenvat credit on CVD paid at the time of import and utilized the same towards duty paid on re-packed Peanut Butter and payment of SAD - The Department held that the goods were unconditionally exempted under Notification No. 03/2006-CE dated 01.03.2006, and therefore the appellant had wrongly taken and utilized the Cenvat credit - Whether Peanut Butter can be considered as "similar edible preparation" to Margarine and therefore excluded from t... [Read more]

Central Excise – Activity of importing and re-packing of Peanut Butter, Cenvat credit on CVD - Appellant was engaged in importing and re-packing Peanut Butter. The appellant availed Cenvat credit on CVD paid at the time of import and utilized the same towards duty paid on re-packed Peanut Butter and payment of SAD - The Department held that the goods were unconditionally exempted under Notification No. 03/2006-CE dated 01.03.2006, and therefore the appellant had wrongly taken and utilized the Cenvat credit - Whether Peanut Butter can be considered as "similar edible preparation" to Margarine and therefore excluded from the exemption notification – HELD – earlier in appellant’s own case, the Commissioner (Appeals) has clearly held the impugned goods were similar to Margarine and therefore clearly excluded from the exemption notification. The Department has not challenged this order and therefore, the view of the Commissioner (Appeals) has to be considered as the view of the Department. Therefore, when the Department itself has decided that demand is not sustainable in the given factual matrix, both on grounds of revenue neutrality as well as on account of its being similar edible preparation to Margarine, then now the demand raised on the similar issue cannot sustain to the extent of recovery of credit taken in respect of CVD utilized towards payment of duty on re-labelled Peanut Butter - Even otherwise, both Peanut Butter and Margarine are edible preparations directly fit for human consumption, with similar fat content, origin and usage. The expression “similar edible preparation” has to be interpreted expansively, and Peanut Butter and Margarine are similar edible preparations. Therefore, the demand for recovery of Cenvat credit is not sustainable and set aside. However, the demand of Cenvat Credit where the goods itself has not been utilized for manufacture or for that matter written off in books of accounts, is upheld – The appeal is partly allowed [Read less]

Customs - Confiscation of a luxury car, levy of penalties - A Mercedes Benz car was imported by importer-on-record. The Commissioner rejected the declared value, re-assessed the value and ordered confiscation under Section 111(d) with an option to redeem on payment of fine, and imposed penalty. The matter was remanded by the Tribunal for de-novo consideration - Meanwhile, the appellant purchased the car partly financed by a bank loan. Later on, the DRI commenced investigations into mis-declaration of imported luxury cars. A Show Cause Notice was issued alleging mis-declaration of the car as "new" to claim benefit under Not... [Read more]

Customs - Confiscation of a luxury car, levy of penalties - A Mercedes Benz car was imported by importer-on-record. The Commissioner rejected the declared value, re-assessed the value and ordered confiscation under Section 111(d) with an option to redeem on payment of fine, and imposed penalty. The matter was remanded by the Tribunal for de-novo consideration - Meanwhile, the appellant purchased the car partly financed by a bank loan. Later on, the DRI commenced investigations into mis-declaration of imported luxury cars. A Show Cause Notice was issued alleging mis-declaration of the car as "new" to claim benefit under Notification No. 21/2002-Customs, undervaluation, and collusion. Penalties were imposed on the appellants - Whether the car can be re-confiscated after it has already been confiscated and released on payment of redemption fine – HELD - Once the car has been confiscated and allowed to be redeemed on payment of redemption fine, it cannot be re-confiscated. After releasing the goods into the market and permitting the sale, the Department cannot initiate another proceeding to recover the alleged difference in valuation from the ultimate bona fide purchaser. The confiscation of the car in the impugned order is set aside – Further, the appellants had purchased the car in a bona fide manner and there was no breach of any legal provisions by them. Since there was no finding that the appellants had done any act or omission rendering the goods liable to confiscation under Section 111, or that they had abetted the illegal import of the car, there was no basis to impose penalties under Section 112(a) of the Customs Act - The penalty under Section 114AA was not applicable as there was no use of false or incorrect material by the appellants. The confiscation of the car and the penalties imposed on the appellants are set aside – The appeals are allowed [Read less]

Customs – Import of cars under EPCG scheme, discharge export obligation, foreign exchange earnings - Appellant imported cars under the EPCG scheme and claimed the benefit of Notification No. 49/2000 and Notification No. 44/2002 - Appellant fulfilled the export obligation by rendering various services related to tourism and travelling. The DGFT issued EODCs for two of the licenses. However, the third EODC was kept pending due to an investigation initiated by the DRI regarding the import of the cars - Whether the export obligation had to be fulfilled only through the exclusive use of the imported cars, or could it be fulfi... [Read more]

Customs – Import of cars under EPCG scheme, discharge export obligation, foreign exchange earnings - Appellant imported cars under the EPCG scheme and claimed the benefit of Notification No. 49/2000 and Notification No. 44/2002 - Appellant fulfilled the export obligation by rendering various services related to tourism and travelling. The DGFT issued EODCs for two of the licenses. However, the third EODC was kept pending due to an investigation initiated by the DRI regarding the import of the cars - Whether the export obligation had to be fulfilled only through the exclusive use of the imported cars, or could it be fulfilled through the overall foreign exchange earnings from the appellant's tourism and travel-related services – HELD - The requirement of scheme is actual use of the capital goods imported under EPCG Scheme to render services to earn foreign exchange, and not that services rendered through the exclusive use of capital goods imported would only be considered for considering fulfilment of export obligation - The foreign exchange earned by the appellant through its tourism and travel-related services, including hotel accommodation, food and beverages, and transportation of tourists, should be considered towards the discharge of the export obligation under the EPCG scheme. The DGFT clarification also stated that in the hotel, tourism and travel service industry, the vehicles are part of an overall package, and it is not practically possible to show export earnings separately from the use of these vehicles. The DGFT had explicitly stated that all earnings from the hotel, travel and tourism activities should be eligible for consideration towards the discharge of the export obligation - the appellant had fulfilled its export obligation under the EPCG scheme and was entitled to the benefit of the relevant notifications – The impugned order is set aside and the appeal is allowed - Whether the customs authorities had the jurisdiction to scrutinize the validity of the EODCs issued by the DGFT – HELD - Once the EODCs had been issued by the DGFT, the same was deemed to be the completion of all export obligations – Further, the Supreme Court had set aside the Tribunal's earlier observation that the holding of the EODC was not determinative of the fulfillment of the export obligation. The holding of the EODCs was determinative of the appellant completing its export obligations, and the Customs authorities did not have the jurisdiction to sit in judgment over the EODC issued by the DGFT. [Read less]

Central Excise – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in processing of Man Made Fabrics and were availing Cenvat Credit on basis of invoices issued by manufacturers of grey fabrics – Enquiry conducted by department revealed that Appellant had availed Cenvat Credit on strength of invoices issued by fake/non-existing units – Department issued show cause notice, proposing demand of credit, to Appellant by invoking extended period of limitation – Adjudicating authority confirmed demand along with interest and penalty – Commissioner (Appeals) upheld order passed by Ad... [Read more]

Central Excise – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in processing of Man Made Fabrics and were availing Cenvat Credit on basis of invoices issued by manufacturers of grey fabrics – Enquiry conducted by department revealed that Appellant had availed Cenvat Credit on strength of invoices issued by fake/non-existing units – Department issued show cause notice, proposing demand of credit, to Appellant by invoking extended period of limitation – Adjudicating authority confirmed demand along with interest and penalty – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – During investigation, it was proved that suppliers of inputs were found non-existent and fraud was perpetrated by certain persons involving fake/fictitious identities. Appellant claimed to have purchased duty paid inputs from those entities which were later found to be non-existent. In absence of any allegation that Appellants were parties to fraud, larger period of limitation cannot be applied. Commissioner (Appeals) and Adjudicating Authority have erred in invoking extended period of limitation in confirming demand of Cenvat credit and imposing penalty on Appellant. Impugned order passed by Commissioner (Appeals) is liable to be set aside – Appeals allowed [Read less]

GST - Uploading of order in "View Additional Notices and Orders" tab, Condonation of delay - Petitioners submitted that they were not aware of the order passed by the Adjudicating Authority as it was uploaded on the GST portal under the "View Additional Notices and Orders" tab - Whether the delay in filing the appeal should be condoned, considering the difficulties faced by the petitioners in accessing the order on the GST portal – HELD - It would not be expected of a registered taxpayer to open and look into the "View Additional Notices and Orders" tab for the purpose of checking main orders or orders passed disposing o... [Read more]

GST - Uploading of order in "View Additional Notices and Orders" tab, Condonation of delay - Petitioners submitted that they were not aware of the order passed by the Adjudicating Authority as it was uploaded on the GST portal under the "View Additional Notices and Orders" tab - Whether the delay in filing the appeal should be condoned, considering the difficulties faced by the petitioners in accessing the order on the GST portal – HELD - It would not be expected of a registered taxpayer to open and look into the "View Additional Notices and Orders" tab for the purpose of checking main orders or orders passed disposing of main proceedings. This difficulty had been recognized by Coordinate Benches in similar cases, and in one case, the delay was condoned despite the petitioner having responded to the show-cause notice - Considering the ends of justice, the matter is remanded back to the Appellate Authority for a decision on merits, by condoning the delay, subject to the petitioners making a payment of Rs. 15,000/- with the Calcutta High Court Legal Services Committee – The petition is disposed of [Read less]

Central Excise - Refund of duty paid on ambulances under "Arogya Kavacha" scheme – Appellant signed an MoU with the Government of Karnataka to run the "Arogya Kavacha" ambulance service, under which the appellant ordered vehicles from various manufacturers, which were then sent to a fabricator for conversion into ambulances - Dept of the view that the fabrication activities by fabricator amounted to "manufacture" and liable to duty. The fabricator-M/s BHPL paid the duty under protest and the appellant later filed a claim for refund of the duty paid claiming that they have paid the duty on behalf of the Government of Karn... [Read more]

Central Excise - Refund of duty paid on ambulances under "Arogya Kavacha" scheme – Appellant signed an MoU with the Government of Karnataka to run the "Arogya Kavacha" ambulance service, under which the appellant ordered vehicles from various manufacturers, which were then sent to a fabricator for conversion into ambulances - Dept of the view that the fabrication activities by fabricator amounted to "manufacture" and liable to duty. The fabricator-M/s BHPL paid the duty under protest and the appellant later filed a claim for refund of the duty paid claiming that they have paid the duty on behalf of the Government of Karnataka and M/s BHPL - Whether the appellant is eligible to claim the refund of the central excise duty paid, even though it is not the manufacturer or buyer of the vehicles - HELD - The appellant is neither the manufacturer nor the buyer/owner of the vehicles, and thus does not fulfill the eligibility conditions for claiming the refund under the Central Excise law and the relevant notification. The law recognizes only the manufacturer or the buyer as eligible for claiming refund, and the appellant could not establish its status as either - The conditions prescribed in the statute or notification for claiming an exemption or refund must be strictly complied with, and the burden is on the claimant to prove its eligibility. In the present case, the appellant failed to fulfill the mandatory conditions laid down in the notification for claiming the refund – Further, the MOU also doesn’t appear to recognize the appellants as owners of the vehicles. The MoU doesn’t mention of the reimbursement of taxes, if any paid by the appellant. If the appellant has undertaken the activity as per MOU or as part of Corporate Social Responsibility, they cannot enrich themselves at the cost of the Government - The appellant could not produce any evidence to show that they are the buyers or owners or the consumers of the vehicles who have borne the incidence of duty and have not passed on to others – the appellants are neither a manufacturer nor buyer nor the owners of vehicles and thus have not fulfilled the substantive conditions for refund – The impugned order is confirmed and the appeal is dismissed [Read less]

Customs - Mis-declaration of imported goods, Declaration of goods as per the documents supplied by the foreign exporter, Redemption fine and penalty, Valuation – Appellant imported Heavy Melting scrap and opted for first check. The Department alleged that 90% of the consignment was of re-rollable material scrap - The case was adjudicated by imposing redemption fine and penalty - Whether there was mis-declaration on the part of the appellant regarding the quality and quantity of the imported goods when the goods were declared as per the documents supplied by the foreign exporter - HELD – There is no evidence to suggest ... [Read more]

Customs - Mis-declaration of imported goods, Declaration of goods as per the documents supplied by the foreign exporter, Redemption fine and penalty, Valuation – Appellant imported Heavy Melting scrap and opted for first check. The Department alleged that 90% of the consignment was of re-rollable material scrap - The case was adjudicated by imposing redemption fine and penalty - Whether there was mis-declaration on the part of the appellant regarding the quality and quantity of the imported goods when the goods were declared as per the documents supplied by the foreign exporter - HELD – There is no evidence to suggest mis-declaration on the part of the appellant. The quantity declared was marginally different and could be attributed to the weighments scale correction. Further, the report given by the Chartered Engineer suggested that the imported scrap contained re-rollable material, and the fact that the appellant had opted for first check having declared the contents of the consignment as per import documents stands in favor of the appellant - a scrap is a scrap irrespective of its origin, and what is scrap to someone may not be the same to the other. As the Department did not allege that the imported goods were used as such and not melted, the allegation of mis-declaration did not survive - As regards the value of imported goods, there is no allegation and evidence thereof that the appellants have paid the differential value to the foreign suppliers over and above the value declared in the documents. In the absence of evidence to that effect, it cannot be alleged that there was under-valuation of the imported goods. The allegation of mis-declaration is incorrect - the appeal partially allowed by setting aside the redemption fine and penalty imposed - Whether the imposition of redemption fine and penalty was justified - HELD - In the absence of evidence that the appellants had paid the differential value to the foreign suppliers over and above the value declared in the documents, the allegation of under-valuation of the imported goods could not be sustained. The Tribunal accepted the appellant's argument that the enhanced prices were accepted as the clearance was being delayed, and the Revenue did not provide any evidence to the contrary. Therefore, the impugned order imposing redemption fine and penalty was not maintainable. [Read less]

Service Tax - Demand of service tax on commission paid to overseas commission agent, extended period of limitation - Appellant paid commission to their overseas commission agent on export of goods and on overseas sales promotion – Whether the demand of service tax under the category of "Management or Business Consultants Service", which was not proposed in the show cause notice, is sustainable – HELD - The Adjudicating Authority had admitted that the service covered by the invoices was not under the category of "Business Auxiliary Service," but still confirmed the demand under the Reverse Charge Mechanism. The Commissi... [Read more]

Service Tax - Demand of service tax on commission paid to overseas commission agent, extended period of limitation - Appellant paid commission to their overseas commission agent on export of goods and on overseas sales promotion – Whether the demand of service tax under the category of "Management or Business Consultants Service", which was not proposed in the show cause notice, is sustainable – HELD - The Adjudicating Authority had admitted that the service covered by the invoices was not under the category of "Business Auxiliary Service," but still confirmed the demand under the Reverse Charge Mechanism. The Commissioner (Appeals) then classified the service under "Management or Business Consultants Service," which was not even proposed in the show cause notice. The demand of service tax under a category not proposed in the show cause notice is not permissible in law. Therefore, levy of interest and imposition of penalty to this extent is also not sustainable and set-aside – The appeal is allowed - Whether the demand of service tax beyond the normal period of limitation is sustainable in the absence of any finding of fraud or collusion or wilful mis-statement or suppression of facts – HELD - The entire transactions were duly recorded in the books of accounts presented for audit. The Adjudicating Authority did not give any findings on how the extended period of limitation of five years could be invoked. The Commissioner (Appeals) also failed to rebut this basic fact - The demand of service tax beyond the normal period is not sustainable in the absence of any findings on the invocation of the extended period. [Read less]

Customs – Regulation 10 of Customs Brokers’ Licensing Regulations, 2018 – Revocation of licence – Forfeiture of security deposit – Directorate General of Analytics and Risk Management (DGARM) of Central Board of Indirect taxes and Customs analysed the data and identified risky exporters involved in execution of fraudulent exports – DGARM also found that exports by these exporters were handled by certain Customs Brokers including Appellant – After following due process of law, Commissioner revoked Customs Broker licence of Appellant and forfeited its security deposit – Whether Appellant has violated provisio... [Read more]

Customs – Regulation 10 of Customs Brokers’ Licensing Regulations, 2018 – Revocation of licence – Forfeiture of security deposit – Directorate General of Analytics and Risk Management (DGARM) of Central Board of Indirect taxes and Customs analysed the data and identified risky exporters involved in execution of fraudulent exports – DGARM also found that exports by these exporters were handled by certain Customs Brokers including Appellant – After following due process of law, Commissioner revoked Customs Broker licence of Appellant and forfeited its security deposit – Whether Appellant has violated provisions of Regulations 10(d), 10 (e) and 10(n) of the Regulations – HELD – Regulation 10(d) of the Regulations mandates Customs Broker to advise his client to follow the Rules and if client fails to do so, to report to Assistant Commissioner. There is nothing in records to prove that Appellant had not advised its clients to follow the Rules. Regulation 10(e) of the Regulations mandates Customs Broker to exercise due diligence in ensuring correctness of information which he provides to client. There is nothing in facts of this case to show that Appellant had imparted any incorrect information to its clients. Regulation 10(n) of the Regulations requires Customs Broker to verify correctness of Importer Exporter Code (IEC) number and Goods and Services Tax Identification Number (GSTIN). Verification of certificates part of obligation under Regulation 10(n) of the Regulations on Customs Broker is fully satisfied as long as it satisfies itself that IEC and GSTIN were issued by concerned officers. Onus on Customs Broker cannot extend to verifying that the officers correctly issued IEC or GSTIN Registration. There is nothing on record to show that either of these documents were fake or forged. There is no evidence that Appellant had violated Regulations 10(d), 10(e) and 10(n) of the Regulations. Impugned order cannot be sustained and needs to be set aside – Appeal allowed [Read less]

Service Tax – Taxability of Construction of dams and power houses, Limitation period for refund claims – Appellant executed construction work related to dams, including the Nagarjuna Sagar Tail Pond project and the construction of the Almaty Dam Power House. During an audit, the revenue authorities insisted that the appellant was liable to pay service tax for these construction activities, as they were not considered part of the dam construction. The appellant paid the demanded service tax along with interest. Thereafter, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Commi... [Read more]

Service Tax – Taxability of Construction of dams and power houses, Limitation period for refund claims – Appellant executed construction work related to dams, including the Nagarjuna Sagar Tail Pond project and the construction of the Almaty Dam Power House. During an audit, the revenue authorities insisted that the appellant was liable to pay service tax for these construction activities, as they were not considered part of the dam construction. The appellant paid the demanded service tax along with interest. Thereafter, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Commissioner (Appeals) - Whether the construction activity related to dams is exempt from payment of service tax – HELD - The Tribunal relied on the decisions in the cases of Continental Constructions Ltd. v. Commissioner of Service Tax, M/s C P Systems Pvt. Ltd. v. Commissioner of Service Tax, and M/s MCM Service Pvt. Ltd. v. Commissioner of Service Tax, wherein it was held that the construction of power houses and other structures that are integral to the dam project are also exempt from service tax, as they are considered part of the dam construction - The exclusion of dams and tunnels from the definition of "Commercial or Industrial Construction Services" would cover all the works related to the civil construction of dams and tunnels, including the construction of power houses. Therefore, the construction activities undertaken by the appellant are exempt from service tax - The impugned order is set aside and the appeal is allowed on merit. The original authority is directed to process the refund claim as per Section 11B of the Central Excise Act, 1944 – Ordered accordingly - Whether the amount paid as service tax based on the audit instructions can be considered as a deposit – HELD - In the present case the service tax has been paid under the respective heads accepting the observations of the audit. Once the tax is paid under the relevant provisions of the law, it cannot be considered as a deposit, and the refund can only be claimed under the provisions of Section 11B of the Central Excise Act, 1944, as made applicable to service tax. The tax paid by the appellant cannot be treated as a deposit, and the refund claim has to be filed within the time limit prescribed under the law. [Read less]

GST - Work Contracts executed in VAT Regime, Mismatch between GSTR-3B and Form 26AS, Jurisdiction of GST authorities – Proceedings under Section 73 of the CGST Act alleging mismatch in GSTR-3B and Form 26AS. An ex-parte order was passed levying tax, penalty, and interest on the petitioner - Whether the GST authorities have jurisdiction to initiate proceedings and levy tax, interest, and penalty on the payments received by the petitioner for the work contracts executed prior to the implementation of the GST regime - HELD - The GST authorities have exceeded their jurisdiction in initiating the present proceedings under Sec... [Read more]

GST - Work Contracts executed in VAT Regime, Mismatch between GSTR-3B and Form 26AS, Jurisdiction of GST authorities – Proceedings under Section 73 of the CGST Act alleging mismatch in GSTR-3B and Form 26AS. An ex-parte order was passed levying tax, penalty, and interest on the petitioner - Whether the GST authorities have jurisdiction to initiate proceedings and levy tax, interest, and penalty on the payments received by the petitioner for the work contracts executed prior to the implementation of the GST regime - HELD - The GST authorities have exceeded their jurisdiction in initiating the present proceedings under Section 73 of the GST Act as the work contracts were awarded to the petitioner for the assessment years 2015-16 and 2016-17, which were prior to the implementation of the GST regime. The payments were received at a later stage, after the GST regime was in place. The petitioner had already paid VAT on these payments. Merely because the payments were received after the implementation of the GST regime, the GST authorities cannot assume jurisdiction to levy tax, interest, and penalty on these payments, as they were related to the work contracts executed under the VAT regime. The proper course of action for the GST authorities would have been to inform the assessing authority under the VAT Act, who should have then looked into the matter – There is no provision under the GST Act or Rules which empowers for assuming jurisdiction for levying tax, interest and penalty on the amount received subsequently for no services rendered under the GST regime but for the work executed under the VAT regime - The impugned orders passed by the GST authorities are set aside and the authorities are directed to refund any amount deposited by the petitioner, along with interest – The writ petition is allowed [Read less]

Central Excise – Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Demand of short-paid duty – Dropping of demand – Respondent is engaged in manufacture of rolled products of Aluminium – Revenue alleged that Respondent had undervalued assessable value of their excisable finished product cleared to their sister units – On basis of said allegation, department issued show cause notice proposing to demand short paid excise duty from Respondent – Additional Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) dro... [Read more]

Central Excise – Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Demand of short-paid duty – Dropping of demand – Respondent is engaged in manufacture of rolled products of Aluminium – Revenue alleged that Respondent had undervalued assessable value of their excisable finished product cleared to their sister units – On basis of said allegation, department issued show cause notice proposing to demand short paid excise duty from Respondent – Additional Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) dropped demand confirmed in Order-in-Original – Whether cost of production as per CAS-4 adopted by Respondent has to be arrived at on basis of actual cost of inputs, fabrication, etc. or on basis of notional transfer price adopted by Respondent for its internal profitability assessment of units – HELD – Respondent’s Cas-4 value is based on actual landed cost of materials/inputs as well as actual fabrication cost and other manufacturing costs which have been incurred by Respondent and it does not include any notional values. CAS-4 value arrived at is increased by 10% as per mandate of Rule 8 of the Rules to arrive at assessable value. Revenue seeks to treat notional transfer price as costs to arrive at CAS-4 value. Transfer price recorded in books of accounts of units should not be adopted as cost of raw material for purpose of CAS-4 certificate, in as much as, such price is only a notional value for internal accounting purposes and such notional value is neither recorded nor its impact is captured in financial statements of Respondent. Impugned order passed by lower appellate authority is affirmed – Appeal dismissed [Read less]

GST – Negative Blocking of Electronic Credit Ledger under Rule 86A of CGST Rules, 2017 - Whether Rule 86A permits the Commissioner or an authorized officer to block a taxpayer's ECL by an amount exceeding the credit available in the ECL at the time of issuing the order – HELD - The plain language of Rule 86A does not permit the blocking of ECL in excess of the available ITC. The availability of ITC in the ECL is a condition precedent for the exercise of power under Rule 86A. Without the ITC being available in the ECL, the authorities cannot create a 'negative blocking' or an artificial negative balance in the ECL - The... [Read more]

GST – Negative Blocking of Electronic Credit Ledger under Rule 86A of CGST Rules, 2017 - Whether Rule 86A permits the Commissioner or an authorized officer to block a taxpayer's ECL by an amount exceeding the credit available in the ECL at the time of issuing the order – HELD - The plain language of Rule 86A does not permit the blocking of ECL in excess of the available ITC. The availability of ITC in the ECL is a condition precedent for the exercise of power under Rule 86A. Without the ITC being available in the ECL, the authorities cannot create a 'negative blocking' or an artificial negative balance in the ECL - The impugned order/entry blocking the petitioner's ECL in excess of the available ITC is unsustainable and set it aside. Respondents are at liberty to undertake and resort to remedy available for recovery in accordance with law – The writ petition is allowed [Read less]

GST - Maintainability of Writ Petition challenging order under Section 73 of the CGST Act, 2017, Limitation for filing appeal, Availability of alternative remedy - Whether the writ petition filed by the petitioner challenging the order under Section 73 is maintainable, considering the availability of alternative remedy of appeal under the Act – HELD - The order impugned was passed on 22nd October, 2024, whereas the writ petition was filed on 23rd October, 2025, thereby indicating an inordinate delay of around one year on the part of the petitioner in approaching the Court. The Section 107 of the GST Act provides for an ... [Read more]

GST - Maintainability of Writ Petition challenging order under Section 73 of the CGST Act, 2017, Limitation for filing appeal, Availability of alternative remedy - Whether the writ petition filed by the petitioner challenging the order under Section 73 is maintainable, considering the availability of alternative remedy of appeal under the Act – HELD - The order impugned was passed on 22nd October, 2024, whereas the writ petition was filed on 23rd October, 2025, thereby indicating an inordinate delay of around one year on the part of the petitioner in approaching the Court. The Section 107 of the GST Act provides for an alternative remedy of appeal against any order passed by an adjudicating authority, and the petitioner had not explained the reason for the delay in not availing the statutory remedy - The existence of an alternative remedy is a sufficient ground for the Court to refuse to exercise its jurisdiction under Article 226, unless the unconstitutionality or illegality of the order is so apparent that the Court may interfere - the petitioner had attempted to circumvent the process of alternative remedy only to bypass the rigors of the conditions prescribed for filing an appeal under the GST Act - the present writ petition is not at all “maintainable”, much less “entertainable”. Further, rejection of claim of input tax credit essentially sets up disputed question of fact for adjudication by the authority conferred with power under the statute – The writ petition is dismissed [Read less]

Customs - Duty evasion, CESTAT appeal, Pre-deposit requirement - Petitioners were alleged to be involved in the evasion of customs duty by undervaluing the imports of sanitary and bathroom fittings through their companies. Pursuant to the show cause notice, the OIO was passed imposing various penalties on the petitioners. The petitioners filed appeals before the CESTAT, but the same were dismissed for non-compliance of the pre-deposit requirement - Whether the amounts already deposited by the petitioners, including the amounts paid under protest during the investigation, can be considered for the purpose of pre-deposit und... [Read more]

Customs - Duty evasion, CESTAT appeal, Pre-deposit requirement - Petitioners were alleged to be involved in the evasion of customs duty by undervaluing the imports of sanitary and bathroom fittings through their companies. Pursuant to the show cause notice, the OIO was passed imposing various penalties on the petitioners. The petitioners filed appeals before the CESTAT, but the same were dismissed for non-compliance of the pre-deposit requirement - Whether the amounts already deposited by the petitioners, including the amounts paid under protest during the investigation, can be considered for the purpose of pre-deposit under Section 129E of the Customs Act, 1962 – HELD - The amounts deposited by the petitioners, including the amounts paid under protest during the investigation, cannot be completely ignored and a fresh deposit cannot be called for, only to deprive the petitioners of their legal appellate remedy. The amounts paid under protest should be taken into consideration for the purpose of pre-deposit, in the absence of any statutory language to the contrary. The provisions of a taxing statute must be construed strictly and literally, and there is no room for intendment. Since Section 129E of the Customs Act, 1962 does not expressly exclude the amounts deposited prior to the assessment, the same should be considered for the purpose of pre-deposit - the impugned order of the CESTAT is set aside and the Tribunal is directed that the petitioners' appeals be heard on merits, considering the substantial amounts already deposited with the Department – The petition is allowed [Read less]

Customs – Import of goods – Classification – Appellant imported multifunctional audio & video equipment by classifying same under Customs Tariff Item (CTI) 8518 4000 of First Schedule to the Act – Department had objected to classification adopted by Appellant and proposed for re-classification under CTI 8527 9100 by issue of show cause notice – Commissioner re-classified imported goods under CTI 8527 9100 and confirmed demand of differential duty – Whether goods imported by Appellant merits classification under CTI 8518 4000 as claimed by Appellant or under CTI 8527 9100 as determined by Commissioner for decidi... [Read more]

Customs – Import of goods – Classification – Appellant imported multifunctional audio & video equipment by classifying same under Customs Tariff Item (CTI) 8518 4000 of First Schedule to the Act – Department had objected to classification adopted by Appellant and proposed for re-classification under CTI 8527 9100 by issue of show cause notice – Commissioner re-classified imported goods under CTI 8527 9100 and confirmed demand of differential duty – Whether goods imported by Appellant merits classification under CTI 8518 4000 as claimed by Appellant or under CTI 8527 9100 as determined by Commissioner for deciding appropriate levy of customs duty – HELD – Chapter heading 8518 deals with sound amplifiers and loud speakers, which receive input and by changing frequency of sound to be amplified, produce much higher level of output with other features such as equalization, tone-control, mixing effects etc. Chapter heading 8527 deals with products of reception apparatus for radio broadcasting, which have separate mechanism for reception and broadcasting facility. In terms of CBEC clarification, imported products are classifiable with respect to its principal function of amplification of input sounds, i.e. under category of audio frequency amplifiers and electric sound amplifiers under CTI 8518 4000. Impugned goods are classifiable under CTI 8518 4000 of First Schedule to the Act as claimed by Appellant. Impugned order classifying imported goods under heading 8527 9100 does not stand scrutiny of law and therefore is not legally sustainable. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Service Tax – Renting of property – Receipt of lease rent – Demand of tax – Appellant is registered with Service Tax Department for provision of various services – Department issued show cause notice to Appellant by proposing demand of Service Tax in respect of lease rent – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on lease rent amount – HELD – Main contention of Appellant is that commercial lump sum lease rent received against vacant plot was not charg... [Read more]

Service Tax – Renting of property – Receipt of lease rent – Demand of tax – Appellant is registered with Service Tax Department for provision of various services – Department issued show cause notice to Appellant by proposing demand of Service Tax in respect of lease rent – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on lease rent amount – HELD – Main contention of Appellant is that commercial lump sum lease rent received against vacant plot was not chargeable to service tax, as same was nothing but a premium amount received against land. Premium amount received by Appellant was for obtaining lease of immovable property and same was normally termed as capital receipt, whereas, lease rent was made for use and occupation of property leased and same was said to be revenue receipt. Nature of amount received as premium and that received as lease rent is different. Premium amount received by Appellant against allotment of vacant land was not chargeable to service tax, however, lease rent received by Appellant was for service of Renting of Immovable Property and chargeable to service tax. Impugned order is upheld – Appeal dismissed [Read less]

Central Excise – EOU to DTA clearance – Payment of Education Cess and Secondary & Higher Education Cess – Appellant-EOU, cleared goods to the DTA – The Revenue of the view that the EC&SHEC must be taken into account twice - once after calculating the Basic Customs Duty and duty under Section 3(1) of CEA, 1944, and again after including Special Additional Duty under Section 3(5) of the Customs Tariff Act - Whether the Education Cess and Secondary & Higher Education Cess should be taken into account twice while calculating the duty payable on clearances made by the EOU to the DTA - HELD - The issue is no longer res i... [Read more]

Central Excise – EOU to DTA clearance – Payment of Education Cess and Secondary & Higher Education Cess – Appellant-EOU, cleared goods to the DTA – The Revenue of the view that the EC&SHEC must be taken into account twice - once after calculating the Basic Customs Duty and duty under Section 3(1) of CEA, 1944, and again after including Special Additional Duty under Section 3(5) of the Customs Tariff Act - Whether the Education Cess and Secondary & Higher Education Cess should be taken into account twice while calculating the duty payable on clearances made by the EOU to the DTA - HELD - The issue is no longer res integra and has been decided in favor of the appellant in Sarla Performance Fibres Ltd. case - the Education Cess and Secondary & Higher Education Cess are in the nature of a surcharge, which results in the enhancement of the tax. Once the aggregate of customs duties is determined, and the EC and SHEC are added to it, the measure of excise duty is complete. There cannot be an enhancement of the duty twice - The calculation of the aggregate of customs duties, including the Education Cess and Secondary & Higher Education Cess, is sufficient, and there is no need to add them again separately - the Education Cess and Secondary & Higher Education Cess should be taken into account only once while calculating the duty payable on clearances made by the EOU to the DTA - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand based on difference in ST-3 Returns and Income Tax Return – HELD - it is now settled in law that demand could not be made only on the basis of differences between ITR/TDS and ST-3 returns. It is necessary to investigate the causes of differences and then arrive at a finding with regards to the differences in the two - The exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof. Unless these four elements have been connected logically, demand of service tax cannot be confirmed merely on the basis of figures reflected in other statut... [Read more]

Service Tax - Demand based on difference in ST-3 Returns and Income Tax Return – HELD - it is now settled in law that demand could not be made only on the basis of differences between ITR/TDS and ST-3 returns. It is necessary to investigate the causes of differences and then arrive at a finding with regards to the differences in the two - The exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof. Unless these four elements have been connected logically, demand of service tax cannot be confirmed merely on the basis of figures reflected in other statutory records - Be it pre or post-Negative List regime, the Department is under obligation to prove that the appellants have rendered such and such service and to such and such persons and that the consideration was received towards the rendering of such service. Without doing the same, demand merely on the basis of figures does not survive – the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Works contract services, Statutory activities, liability of sub-contractor - Appellant was providing taxable services of construction of residential complex, laying of pipelines, construction of electric substations and laying of cables for Noida, HUDA and Ghaziabad Development Authority (GDA) - Whether the services provided by the appellant for laying of pipelines, construction of underground reservoirs and ranney wells for Noida and HUDA are exempt from service tax – HELD - Demand has been confirmed upon the appellant in respect of the services provided to Noida for laying of pipelines under the Ganga Jal... [Read more]

Service Tax - Works contract services, Statutory activities, liability of sub-contractor - Appellant was providing taxable services of construction of residential complex, laying of pipelines, construction of electric substations and laying of cables for Noida, HUDA and Ghaziabad Development Authority (GDA) - Whether the services provided by the appellant for laying of pipelines, construction of underground reservoirs and ranney wells for Noida and HUDA are exempt from service tax – HELD - Demand has been confirmed upon the appellant in respect of the services provided to Noida for laying of pipelines under the Ganga Jal Water Scheme construction of underground reservoirs etc. The period of demand is prior and post to 01.07.2012 - The Larger Bench in Lanco Infratech case has held that laying of pipelines/conduits for lift irrigation systems for transmission of water or for sewerage disposal undertaken for Government/Government undertakings is classifiable as Commercial or Industrial Construction Service (CICS) - In terms of the above decision of the Larger Bench, the services provided by the appellant are in nature of Commercial and Industrial construction services as has been held in the impugned order - the services provided to the statutory authorities or Government will not be exempt from payment of service tax, till it can be shown that the services provide are strictly falling within the purview of exemption notification - Whether the services provided by the appellant for construction of electric substations and laying of cables for UPPCL, which is a commercial undertaking of the Uttar Pradesh Government, are exempt from service tax – HELD - The UPPCL is a commercial undertaking engaged in production and distribution of electricity to public at large as well as to commerce and industry, and therefore the services provided by the appellant for construction of electric substations and laying of cables are not exempt from service tax. The Tribunal relied on the decisions of the Supreme Court and High Courts which held that the statutory activities of the government authorities have to be examined activity-wise and services provided for commercial activities are not exempt - Whether the appellant can claim exemption from service tax on the ground that the main contractor has already paid the service tax – HELD - The sub-contractor is liable to pay service tax even if the main contractor has discharged the service tax liability. The Cenvat Credit Rules allow the service recipient (i.e. main contractor) to take credit of the service tax paid at the preceding stage, and therefore there is no question of double taxation. The Tribunal overruled the contrary decisions relied upon by the appellant - Whether the extended period of limitation is correctly invoked in the present case – HELD - The Tribunal upheld the invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994. The appellant had resorted to suppression and mis-declaration of facts with a clear intention to evade payment of service tax, and therefore the extended period is rightly invoked. The Tribunal relied on various decisions which held that a bona fide belief has to be based on reasonable facts and evidence, which was lacking in the present case - Whether the penalties imposed under Sections 77, 78 of the Finance Act, 1994 are justified – HELD - The Tribunal upheld the penalties imposed on the appellant under Sections 77 and 78 of the Finance Act, 1994. The appellant had contravened the various provisions of the Act by not maintaining records, not determining and depositing the service tax by the due date, and not filing appropriate returns. The Tribunal relied on the Supreme Court decision in Gujarat Travancore Agency case which held that the element of mens rea is not required to be proved for imposition of penalties under such provisions. [Read less]

Delhi Value Added Tax Act, 2004 - Jurisdiction of VATO (Audit) to pass Assessment orders, delegation of powers - The VATO (Audit) had passed assessment orders determining tax, interest and penalty under Sections 32 and 33 of the DVAT Act, 2004, even though the jurisdictional VATO was different - Whether the VATO (Audit) was empowered under the DVAT Act to pass the assessment orders – HELD - In the cases of Capri Bathaid Pvt. Ltd. and Larsen & Toubro Ltd., it was held that the VATO (Audit) cannot pass assessment orders as they are not the jurisdictional VATO. Prior to April 2016, no specific authorizations were given to V... [Read more]

Delhi Value Added Tax Act, 2004 - Jurisdiction of VATO (Audit) to pass Assessment orders, delegation of powers - The VATO (Audit) had passed assessment orders determining tax, interest and penalty under Sections 32 and 33 of the DVAT Act, 2004, even though the jurisdictional VATO was different - Whether the VATO (Audit) was empowered under the DVAT Act to pass the assessment orders – HELD - In the cases of Capri Bathaid Pvt. Ltd. and Larsen & Toubro Ltd., it was held that the VATO (Audit) cannot pass assessment orders as they are not the jurisdictional VATO. Prior to April 2016, no specific authorizations were given to VATO officers to conduct audits and assessments outside their jurisdictions. Additionally, the mandatory Form DVAT-50 authorizing officers to exercise powers under Chapter X of the DVAT Act was not issued until October 2014 - In the absence of the necessary jurisdiction and authorization, the assessments passed by the VATO (Audit) in these cases were not valid - The assessment orders are quashed as the VATO (Audit) lacked the necessary jurisdiction and authorization to pass these assessments under the DVAT Act – The appeals stand disposed of [Read less]

Central Excise - Area-based exemption, fixation of special rate of value addition – Respondent-assessee is a manufacturer of 'Mosquito Repellents' and 'Cleaning Preparations' - Whether the respondents are eligible to be given the special rate of value addition for their manufactured products, in terms of the Area Based Exemption granted under certain Exemption Notifications – Maintainability of Revenue appeal before the High Court – HELD - The present appeals are not maintainable before it, as the issue raised pertains to the exemptions pertaining to the rate of value addition, in terms of the Exemption Notifications... [Read more]

Central Excise - Area-based exemption, fixation of special rate of value addition – Respondent-assessee is a manufacturer of 'Mosquito Repellents' and 'Cleaning Preparations' - Whether the respondents are eligible to be given the special rate of value addition for their manufactured products, in terms of the Area Based Exemption granted under certain Exemption Notifications – Maintainability of Revenue appeal before the High Court – HELD - The present appeals are not maintainable before it, as the issue raised pertains to the exemptions pertaining to the rate of value addition, in terms of the Exemption Notifications. Such an order of the Appellate Tribunal would be governed by Sections 35G and 35L of the Central Excise Act, 1944, which provide that an appeal against an order relating to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment, shall lie directly to the Supreme Court and not the High Court - The disputes regarding the applicability of exemption notifications, which would have a bearing on the rate of duty or valuation of goods, fall under the exclusive jurisdiction of the Supreme Court under Sections 35G and 35L of the CEA – The appeals are not maintainable and the same are dismissed [Read less]

GST – Deposit of amount more than tax demand, Waiver of pre-deposit condition for filing of appeal - Appellate Authority had dismissed the petitioner's appeals solely on the ground of non-compliance with the pre-deposit requirement under Section 107(6)(b) of the CGST Act, 2017, despite the fact that the petitioner had already deposited an amount exceeding the total tax demand - Whether the condition of pre-deposit can be waived considering the fact that the petitioner had already deposited an amount more than the total tax demand – HELD – The amount paid by the petitioner is in excess of the total tax demand assessed... [Read more]

GST – Deposit of amount more than tax demand, Waiver of pre-deposit condition for filing of appeal - Appellate Authority had dismissed the petitioner's appeals solely on the ground of non-compliance with the pre-deposit requirement under Section 107(6)(b) of the CGST Act, 2017, despite the fact that the petitioner had already deposited an amount exceeding the total tax demand - Whether the condition of pre-deposit can be waived considering the fact that the petitioner had already deposited an amount more than the total tax demand – HELD – The amount paid by the petitioner is in excess of the total tax demand assessed by the respondents. Since the revenue is already secured, there is no revenue loss to the Government, and the condition of 10% pre-deposit is exempted in the given factual matrix, as it is a revenue-neutral condition - Since the petitioner had already deposited an amount more than the total tax demand, there is no need to insist on the pre-deposit requirement – The writ petition is disposed of [Read less]

GST - Statutory requirement for pre-deposit under GST Act - Petitioner contended that the appeal could not be filed as the petitioner was unable to access the portal to deposit the pre-requisite amount under Section 107(6) of the CGST Act, 2017 – Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) pre-deposit requirement is justified, even though the appeal was also decided on merits – HELD - The prior decisions relied upon by the petitioner were distinguishable on facts, as in those cases the appeals were dismissed solely on technical grounds without consideri... [Read more]

GST - Statutory requirement for pre-deposit under GST Act - Petitioner contended that the appeal could not be filed as the petitioner was unable to access the portal to deposit the pre-requisite amount under Section 107(6) of the CGST Act, 2017 – Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) pre-deposit requirement is justified, even though the appeal was also decided on merits – HELD - The prior decisions relied upon by the petitioner were distinguishable on facts, as in those cases the appeals were dismissed solely on technical grounds without considering the merits. In the present case, the appellate authority had dismissed the appeal on two grounds, for non-compliance with Section 107(6) and also on merits - Once the appellate authority has decided the case on merits, the High Court should be slow and circumspect in interfering with such an order, unless the findings are per se illegal, irrational or unreasonable. Even if one of the grounds is found to be perverse, the other ground justifying the ultimate conclusion should not be defeated. If the Court were to accept the petitioner's contention and remand the matter, it would only result in a duplication of the process, as the authority would have to permit the petitioner to comply with the pre-deposit requirement and then reaffirm its decision on merits - The findings of the appellate authority on merits is sustained and the petition is dismissed [Read less]

UPVAT Act, 2008 - Reassessment proceedings, Reversal of Input Tax Credit – Petitioner claimed ITC on sales made against Form-I during regular assessment proceedings. The assessment orders accepted the petitioners' claims. Subsequently, the revenue authorities sought to initiate reassessment proceedings to reverse the allowed ITC - Whether the reassessment proceedings initiated by the revenue authorities to reverse the ITC claimed by the petitioners is within jurisdiction under Section 29 of the UP Act, 2008 – HELD - The scope of reassessment proceedings under Section 29 is limited to cases where the "turnover of purcha... [Read more]

UPVAT Act, 2008 - Reassessment proceedings, Reversal of Input Tax Credit – Petitioner claimed ITC on sales made against Form-I during regular assessment proceedings. The assessment orders accepted the petitioners' claims. Subsequently, the revenue authorities sought to initiate reassessment proceedings to reverse the allowed ITC - Whether the reassessment proceedings initiated by the revenue authorities to reverse the ITC claimed by the petitioners is within jurisdiction under Section 29 of the UP Act, 2008 – HELD - The scope of reassessment proceedings under Section 29 is limited to cases where the "turnover of purchase" or "turnover of sale" of the dealer has escaped assessment or has been under-assessed, or where a wrong/lower rate of tax has been applied. The computation of ITC, being an allowance distinct from the assessment of turnover and tax liability, does not fall within the purview of Section 29 - The Assessing Authority's jurisdiction to examine the correctness of ITC is confined to the regular assessment proceedings under Sections 25, 26, and 28 of the UPVAT Act, and not through the reassessment mechanism under Section 29 - The revenue authorities had acted without jurisdiction in initiating the reassessment proceedings solely to reverse the ITC claimed by the petitioners - The impugned reassessment orders is quashed and the petitions are allowed [Read less]

GST – Refund of Unutilized Input Tax Credit, Non-submission of FIRC, Rejection of Refund Claim, Consideration of Chartered Accountant's Certificate - Petitioner had obtained permission from the RBI to operate on a gearing account basis with its other offices worldwide, allowing it to receive foreign currency on exports after making payments in foreign currency - Refund applications under Section 54 of the CGST seeking refund of unutilized input tax credit - Whether the petitioner is entitled to the refund of unutilized input tax credit based on the Chartered Accountant's Certificate submitted by the petitioner – HELD -... [Read more]

GST – Refund of Unutilized Input Tax Credit, Non-submission of FIRC, Rejection of Refund Claim, Consideration of Chartered Accountant's Certificate - Petitioner had obtained permission from the RBI to operate on a gearing account basis with its other offices worldwide, allowing it to receive foreign currency on exports after making payments in foreign currency - Refund applications under Section 54 of the CGST seeking refund of unutilized input tax credit - Whether the petitioner is entitled to the refund of unutilized input tax credit based on the Chartered Accountant's Certificate submitted by the petitioner – HELD - The Chartered Accountant's Certificate submitted by the petitioner should be considered by the authorities as an authentic document, and the authorities cannot reject the refund claim solely on the ground that the petitioner did not submit the FIRC - In the present case, the Chartered Accountant's Certificate clearly shows that the petitioner has received the convertible foreign exchange for the export of services. Therefore, the authorities were not justified in rejecting the refund claim solely on the ground that the petitioner did not submit the FIRC, as required by the Circular No.125/44/2019 - The impugned orders rejecting the petitioner's refund claims are set aside and the respondent authorities are directed to process the refund claims of the petitioner in accordance with the law, without insisting on the submission of FIRC and accepting the Chartered Accountant's Certificate – The petition is allowed [Read less]

GST - Refund of unutilized input tax credit, Production of eBRCs/FIRCs, Intermediary services – Petitioner sought refund of unutilized input tax credit on account of export of services without payment of tax. The respondents initially sanctioned the refund, but later set aside the refund orders and rejected the refund claims, alleging non-production of eBRCs/FIRCs and holding that the services provided by the petitioner were in the nature of 'intermediary services' - Whether the respondents were justified in setting aside the refund orders on the ground of non-production of eBRCs/FIRCs by the petitioner – HELD - The re... [Read more]

GST - Refund of unutilized input tax credit, Production of eBRCs/FIRCs, Intermediary services – Petitioner sought refund of unutilized input tax credit on account of export of services without payment of tax. The respondents initially sanctioned the refund, but later set aside the refund orders and rejected the refund claims, alleging non-production of eBRCs/FIRCs and holding that the services provided by the petitioner were in the nature of 'intermediary services' - Whether the respondents were justified in setting aside the refund orders on the ground of non-production of eBRCs/FIRCs by the petitioner – HELD - The respondents erred in setting aside the refund orders on the ground of non-production of eBRCs/FIRCs, as the material on record clearly showed that the petitioner had produced the eBRCs/FIRCs along with its replies - This Court in its earlier judgment in M/s. Nokia Solutions and Networks India Pvt. Ltd., held that mere non-submission of eBRCs/FIRCs along with the refund application would not be a ground to reject the refund claim, if the details were available on record. The respondents had failed to appreciate the petitioner's submissions and the documentary evidence provided - the impugned Orders and notices are quashed and set aside – The writ petition is allowed [Read less]

GST - Rectification of bonafide errors in GSTR-1 Return - Petitioner filed GSTR-1 returns for the tax period June 2022 to September 2022 and due to an inadvertent error, the petitioner uploaded the GSTIN of supplier in Kerala instead of the Tamil Nadu branch, which resulted in supplier being unable to avail the ITC. After becoming aware of the error, the petitioner requested the respondent authorities to allow rectification of the GSTR-1 returns, but the request was not granted - Whether the petitioner should be permitted to rectify the GSTR-1 returns despite the time limit prescribed under the law having expired - HELD - ... [Read more]

GST - Rectification of bonafide errors in GSTR-1 Return - Petitioner filed GSTR-1 returns for the tax period June 2022 to September 2022 and due to an inadvertent error, the petitioner uploaded the GSTIN of supplier in Kerala instead of the Tamil Nadu branch, which resulted in supplier being unable to avail the ITC. After becoming aware of the error, the petitioner requested the respondent authorities to allow rectification of the GSTR-1 returns, but the request was not granted - Whether the petitioner should be permitted to rectify the GSTR-1 returns despite the time limit prescribed under the law having expired - HELD - In cases where there is a bonafide and inadvertent error in filing GSTR-1 returns and where there is no loss of revenue to the government, the technicalities should not come in the way of the assessee rectifying the error. The GST regime is largely based on the electronic domain and there can be inadvertent human errors, which should be recognized and permitted to be corrected by the department, as long as there is no loss of revenue. The incorrect particulars in GSTR-1 returns can have a cascading effect, not only on the assessee but also on third parties, and therefore, the law should be interpreted in a manner that allows for rectification of such errors - The respondents are directed to permit the petitioner to carry out necessary amendments to the GSTR-1 returns – The petitions are partly allowed [Read less]

GST - Belated claim of input tax credit, Recovery proceedings - Intimation of reversal of input tax credit belatedly beyond the limitation prescribed under Section 16(4) of the CGST Act. As the petitioner failed to reverse the same, the impugned order was passed - Whether the impugned order and the consequent recovery notice in DRC-13 for recovery of interest on the belated availing of the ITC on IGST are valid – HELD - The belated availing of the ITC on IGST has been regularized by the statutory intervention through the insertion of Section 16(5) to the CGST Act. The impugned order and the consequent recovery notice in ... [Read more]

GST - Belated claim of input tax credit, Recovery proceedings - Intimation of reversal of input tax credit belatedly beyond the limitation prescribed under Section 16(4) of the CGST Act. As the petitioner failed to reverse the same, the impugned order was passed - Whether the impugned order and the consequent recovery notice in DRC-13 for recovery of interest on the belated availing of the ITC on IGST are valid – HELD - The belated availing of the ITC on IGST has been regularized by the statutory intervention through the insertion of Section 16(5) to the CGST Act. The impugned order and the consequent recovery notice in DRC-13 are arbitrary and not in accordance with the law and set aside - The Writ Petition is disposed of [Read less]

Service Tax – Sections 66 and 73 of Finance Act, 1994 – Distribution of electricity – Demand of tax – Sustainability – Appellant is engaged in distribution of electricity in licensed area of State – Revenue issued show cause notice to Appellant by invoking extended period of limitation as provided under Section 73 of the Act on ground of fraud, willful mis-statement and suppression of facts to escape payment of tax – Adjudicating Authority confirmed demand as proposed in show cause notice along with interest and penalty – Whether demand confirmed in impugned order against Appellant is sustainable – HELD �... [Read more]

Service Tax – Sections 66 and 73 of Finance Act, 1994 – Distribution of electricity – Demand of tax – Sustainability – Appellant is engaged in distribution of electricity in licensed area of State – Revenue issued show cause notice to Appellant by invoking extended period of limitation as provided under Section 73 of the Act on ground of fraud, willful mis-statement and suppression of facts to escape payment of tax – Adjudicating Authority confirmed demand as proposed in show cause notice along with interest and penalty – Whether demand confirmed in impugned order against Appellant is sustainable – HELD – While issuing show cause notice, Revenue had simply gone by income shown in Profit & Loss accounts and Balance Sheet of Appellant and had treated entire income during financial years as income of Appellant. Very fact that transmission and distribution of electricity had been enjoying full exemption right from 2010 had not been considered at all by Revenue while framing allegation and quantifying the demand. Amended Section 66 of the Act clearly point out the legislative intent to grant full waiver of tax for providers of service towards transmission and distribution of electricity. Appellant have taken up the work of bifurcation of demand under 18 different heads, which had been properly certified by Chartered Accountant. Some of incomes like insurance claim received, interest from bank and interest on refund of income tax are outright not liable for any Service Tax payment. Other likely taxable income, but exempted, had been listed by Appellant within 18 categories, which tallies with certificate issued by Chartered Accountant. Revenue had failed to quantify demand properly, which had been done on a lumpsum basis, wherein several non-taxable incomes were also included. Demand confirmed against Appellant is set aside – Appeals allowed [Read less]

GST - Non-payment of tax by supplier, Recovery of input tax credit from purchasing dealer, obligation to initiate proceedings against supplier before proceeding against recipient - Petitioner had effected certain purchases covered by invoices issued by the suppliers [2nd and 3rd respondents] and claimed ITC based on these invoices. However, the suppliers failed to furnish the details of the supplies made to the petitioner and did not pay the tax covered by the invoices - Whether the proceedings could have been initiated against the petitioner without first initiating proceedings against the suppliers as mandated under Sect... [Read more]

GST - Non-payment of tax by supplier, Recovery of input tax credit from purchasing dealer, obligation to initiate proceedings against supplier before proceeding against recipient - Petitioner had effected certain purchases covered by invoices issued by the suppliers [2nd and 3rd respondents] and claimed ITC based on these invoices. However, the suppliers failed to furnish the details of the supplies made to the petitioner and did not pay the tax covered by the invoices - Whether the proceedings could have been initiated against the petitioner without first initiating proceedings against the suppliers as mandated under Section 42 of the CGST Act, 2017 - HELD - The proceedings initiated against the petitioner are not legally sustainable as no proceedings were initiated against the suppliers before issuing the show cause notice to the petitioner - In terms of sub-section (3) of Section 42, there is obligation imposed upon the assessing authority, to issue a notice communicating the discrepancy, to both supplier and purchasing dealer. However, before issuing show cause notice to the petitioner, no such proceedings have been followed - Further, only in the absence of the supplier failing to rectify the discrepancy, the output tax liability can be imposed upon the recipients. Therefore, going by the scheme contemplated under Section 42, as it stood at the relevant time, no proceedings should have been initiated against the petitioner without issuing a notice to the supplier - The Calcutta High Court in Suncraft Energy Pvt. Ltd. case has held that the recovery proceedings can be initiated against the recipient (purchaser) only if the proceedings initiated against the supplier did not materialize, except in cases of collusion between the recipient and supplier. Since no such proceedings were initiated against the suppliers in the present case, the notice issued to the petitioner is not sustainable - The show cause notice issued to the petitioner are quashed and set aside - The writ petition is disposed of [Read less]

Service Tax – Sections 73(1) and 78 of Finance Act, 1994 – Imposition of penalty – Sustainability – During course of audit, department noticed that Appellant did not discharge service tax liability towards Rent-a-Cab service and Legal Consultancy service under reverse charge mechanism – Pursuant to audit objections, Appellant paid applicable service tax along with interest – Deputy Commissioner imposed penalty under Section 78 of the Act by invoking extended period of limitation under proviso to Section 73(1) of the Act – Commissioner (Appeals) upheld penalty imposed under Section 78 of the Act – Whether pe... [Read more]

Service Tax – Sections 73(1) and 78 of Finance Act, 1994 – Imposition of penalty – Sustainability – During course of audit, department noticed that Appellant did not discharge service tax liability towards Rent-a-Cab service and Legal Consultancy service under reverse charge mechanism – Pursuant to audit objections, Appellant paid applicable service tax along with interest – Deputy Commissioner imposed penalty under Section 78 of the Act by invoking extended period of limitation under proviso to Section 73(1) of the Act – Commissioner (Appeals) upheld penalty imposed under Section 78 of the Act – Whether penalty under Section 78 of the Act can be imposed in respect to service tax discharged by Appellant along with interest prior to issuance of show cause notice – HELD – Alleged short payment of tax had been pointed out during course of audit of records of Appellant. Appellant bonafidely believed that they were not liable to discharge service tax liability on impugned services. Appellant had maintained regular books of accounts and all transactions are recorded in usual manner in ordinary course of business. Appellant had provided all necessary information called for during course of audit and promptly paid service tax along with interest before issuance of show cause notice. Invocation of extended period is not justified in absence of any strong allegation or positive act, pointing towards fraud, collusion, or any willful statement or suppression of facts with intent to evade payment of tax. Since case is being covered by provisions of Section 73(3) of the Act, no penalty can be imposed under Section 78 of the Act. Penalty imposed on Appellant under Section 78 of the Act is unsustainable. Impugned order deserves to be set aside – Appeal allowed [Read less]

Customs – Section 111(o) of Customs Act, 1962 – Import of goods – Order of confiscation – Sustainability – Appellant imported goods against advance authorization scheme – As a consequence of non-compliance of pre-import condition, Commissioner confirmed demand of differential duty and ordered for confiscation of imported goods under Section 111(o) of the Act – Whether order of confiscation of imported goods under Section 111(o) of the Act is sustainable – HELD – As per Section 111(o) of the Act, goods shall be liable for confiscation in event the condition subject to which the goods are exempted from duty... [Read more]

Customs – Section 111(o) of Customs Act, 1962 – Import of goods – Order of confiscation – Sustainability – Appellant imported goods against advance authorization scheme – As a consequence of non-compliance of pre-import condition, Commissioner confirmed demand of differential duty and ordered for confiscation of imported goods under Section 111(o) of the Act – Whether order of confiscation of imported goods under Section 111(o) of the Act is sustainable – HELD – As per Section 111(o) of the Act, goods shall be liable for confiscation in event the condition subject to which the goods are exempted from duty is not observed. Impugned condition inserted vide Notification of October 2017 was omitted vide Notification of January 2019, owing to which, integrated tax was liable to discharged thereon. Joint Director General of Foreign Trade by Trade Notice No.7 of 2023-24 clarified that all imports made under Advance Authorization Scheme which could not meet pre-import condition may be regularized by making payments as prescribed in Customs Circular No.16/2023. Appellant had discharged integrated tax along with interest thereon. Once Appellant pays integrated tax, issue would be regularized. In such circumstances, recourse in impugned order to confiscation under Section 111(o) of the Act as a consequence of imports in breach of condition of ‘pre-import’ does not sustain. Order under challenge is set aside – Appeal allowed [Read less]

GST – Kerala AAR - Exemption under GST, Governmental Authority, Government Department - Applicant provides services to the Kerala Development and Innovation Strategic Council (K-DISC), which functions under the aegis of the Kerala Government - Whether the services provided to K-DISC are eligible for GST exemption under Entry 72 of Notification No. 12/2017-Central Tax (Rate) – HELD - The K-DISC, being a society registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Act, 1955 and functioning under the administrative control of the Government of Kerala, cannot be considered as the "State Gove... [Read more]

GST – Kerala AAR - Exemption under GST, Governmental Authority, Government Department - Applicant provides services to the Kerala Development and Innovation Strategic Council (K-DISC), which functions under the aegis of the Kerala Government - Whether the services provided to K-DISC are eligible for GST exemption under Entry 72 of Notification No. 12/2017-Central Tax (Rate) – HELD - The K-DISC, being a society registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Act, 1955 and functioning under the administrative control of the Government of Kerala, cannot be considered as the "State Government" or a "Government Department" for the purposes of the CGST Act or the exemption notification. While K-DISC may qualify as a "Governmental Authority" or "Government Entity," the exemption under Entry 72 is restricted to services provided to the Central Government, State Government, or local authority. The scope of exemption for services provided to Governmental Authorities and Entities was earlier broader but has been subsequently curtailed by amendments. Consequently, the services provided by ICTAK to K-DISC are not eligible for exemption under Entry 72 – Ordered accordingly - Eligibility of ICTAK to claim ITC on the GST charged by sub-contractors for providing services to K-DISC – HELD - The applicant is eligible to claim full ITC on the GST charged by sub-contractors on goods and services used for providing taxable training and skill development services to K-DISC, subject to fulfillment of the conditions prescribed under the CGST Act and Rules. The input services procured from sub-contractors are directly connected to applicant’s business activity and satisfy the basic condition for ITC entitlement under Section 16(1) of the CGST Act. Since the services provided to K-DISC have been held to be taxable, the entire input tax incurred on such procurements is eligible for full credit, subject to the provisions of Sections 16(2), 17(2), and 17(5) of the CGST Act. [Read less]

GST – Kerala AAR - Input tax credit on invoices issued for the periods prior to supplier (landlord) obtaining GST registration, Time limit for availing ITC - Applicant operates hospitals in rented premises. The landlord was unregistered under GST until June 15, 2022, during which time rent was paid without GST. After obtaining GST registration, the landlord issued two tax invoices dated June 30, 2022, covering the periods from April 1, 2021, to March 31, 2022, and from April 1, 2022, to June 30, 2022. The invoices were marked as B2C, without mentioning the applicant's GSTIN, but appeared as B2B supplies in the applicant'... [Read more]

GST – Kerala AAR - Input tax credit on invoices issued for the periods prior to supplier (landlord) obtaining GST registration, Time limit for availing ITC - Applicant operates hospitals in rented premises. The landlord was unregistered under GST until June 15, 2022, during which time rent was paid without GST. After obtaining GST registration, the landlord issued two tax invoices dated June 30, 2022, covering the periods from April 1, 2021, to March 31, 2022, and from April 1, 2022, to June 30, 2022. The invoices were marked as B2C, without mentioning the applicant's GSTIN, but appeared as B2B supplies in the applicant's GSTR-2A - Whether the applicant is eligible to claim ITC on the GST charged in the invoices issued by the landlord for the periods prior to the landlord obtaining GST registration – HELD – During the period prior to June 2022, the landlord was an unregistered person, and therefore, the invoices issued cannot be considered valid tax invoices for the purpose of availing ITC under Section 16(2)(a) of the CGST Act, 2017. Additionally, the invoices covering the period from April 2021 to March 2022 were issued on June 30, 2022, which is well beyond the 30-day time limit prescribed under Rule 47 of the CGST Rules for the issuance of invoices for services – Further, even under Section 31(3)(a) of the CGST Act, which allows a newly registered person to issue revised invoices within one month from the date of registration, the landlord could not retrospectively issue valid GST invoices for supplies made prior to June 15, 2022 - However, the applicant is eligible to claim ITC on the portion of GST paid for the rent pertaining to June 2022, as the landlord was a registered supplier during that month, and the invoice dated June 30, 2022, was issued within the time prescribed under Rule 47. The applicant can avail such ITC, provided it was claimed on or before November 30, 2023, as per the time limit specified in Section 16(4) of the CGST Act - Ordered accordingly [Read less]

GST – Kerala AAR - Manpower Recruitment Services, COVID-19 lockdown payments, GST Applicability – Applicant is a charitable society that provides manpower services to Government Departments and undertakings. During the COVID-19 lockdown, one of service recipient made interim payments to the outsourced workers supplied by the applicant even though the workers did not perform any duties during that period - Whether GST is applicable on the interim payments received by KSESL from VSSC during the COVID-19 lockdown period, when no services were actually rendered by the outsourced workers – HELD - The services provided by ... [Read more]

GST – Kerala AAR - Manpower Recruitment Services, COVID-19 lockdown payments, GST Applicability – Applicant is a charitable society that provides manpower services to Government Departments and undertakings. During the COVID-19 lockdown, one of service recipient made interim payments to the outsourced workers supplied by the applicant even though the workers did not perform any duties during that period - Whether GST is applicable on the interim payments received by KSESL from VSSC during the COVID-19 lockdown period, when no services were actually rendered by the outsourced workers – HELD - The services provided by the applicant fall under the category of Manpower Recruitment Services, which is a taxable supply under the CGST Act. The fact that the entire amount was paid to the employees does not affect the taxability of the supply, as GST is applicable on the total consideration received for manpower services - The Government's directives, which treated the lockdown period as "on duty" and mandated the payment of wages, did not convert the nature of the payments from contractual consideration to ex gratia or compensation. The payments were still linked to the existing employment relationship and the supply of manpower services, and therefore subject to GST - In the absence of any specific GST exemption, the full amount of the interim payments received by the applicant from the service recipient during the lockdown period is subject to GST at the applicable rate – Ordered accordingly [Read less]

GST – Kerala AAR - Applicant conducts two courses- Junior Diploma in Co-operation (JDC) and Higher Diploma in Co-operation and Business Management (HDC & BM) - which are recognized qualifications under the Kerala Co-operative Law for various posts in co-operative societies - Whether the services provided by the applicant in relation to the JDC and HDC & BM courses are eligible for GST exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – HELD - The applicant falls under the definition of "educational institution" as per clause (ii) of paragraph 2(y) of the said Notification, as... [Read more]

GST – Kerala AAR - Applicant conducts two courses- Junior Diploma in Co-operation (JDC) and Higher Diploma in Co-operation and Business Management (HDC & BM) - which are recognized qualifications under the Kerala Co-operative Law for various posts in co-operative societies - Whether the services provided by the applicant in relation to the JDC and HDC & BM courses are eligible for GST exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – HELD - The applicant falls under the definition of "educational institution" as per clause (ii) of paragraph 2(y) of the said Notification, as the JDC and HDC & BM courses conducted by the applicant are part of a curriculum for obtaining qualifications recognized by the Kerala Co-operative Societies Act and Rules. In the similar situations where institutes impart education leading to qualifications recognized by law have been consistently held eligible for GST exemption under this entry - The services rendered by the applicant to the students enrolled in the HDC & BM and JDC courses are services provided by an educational institution to its students in the course of imparting education, and hence are eligible for full exemption from GST under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – Ordered accordingly [Read less]

GST – Kerala AAR - Registration, Applicability of GST on application/examination fees – Applicant is a statutory autonomous institution established to conduct examinations for selection of candidates to various posts in Devaswom Boards across Kerala. The Board collects application/examination fees from candidates and utilizes the funds to meet various expenses related to the recruitment process - Whether the applicant-Kerala Devaswom Recruitment Board is required to obtain GST registration – HELD - The Board is a taxable service provider and is liable to be registered under the CGST Act if the aggregate value of its ... [Read more]

GST – Kerala AAR - Registration, Applicability of GST on application/examination fees – Applicant is a statutory autonomous institution established to conduct examinations for selection of candidates to various posts in Devaswom Boards across Kerala. The Board collects application/examination fees from candidates and utilizes the funds to meet various expenses related to the recruitment process - Whether the applicant-Kerala Devaswom Recruitment Board is required to obtain GST registration – HELD - The Board is a taxable service provider and is liable to be registered under the CGST Act if the aggregate value of its taxable supply of services exceeds the threshold limit prescribed under Section 22 of the CGST Act, or if the Board falls under any of the categories specified under Section 24 of the Act. The services provided by the Board in conducting examinations for recruitment to various posts in the Devaswom Boards constitute a taxable supply under the CGST Act – Ordered accordingly - Whether GST is applicable on the application/examination fees collected from candidates – HELD - The fees collected from candidates represent consideration for the services supplied by the Board in conducting recruitment examinations and related processes. Accordingly, the application/examination fees are chargeable to GST under Section 9 of the CGST Act. The relationship between the payment of fees by candidates and the services rendered by the Board is one of reciprocal obligation- quid pro quo, which brings the transaction within the scope of a supply of service for consideration as contemplated under the CGST Act - Whether the activity of conducting examinations is a taxable supply under GST – HELD - The services provided by the Board to candidates in connection with the recruitment of eligible persons to various posts in the Devaswom Boards constitute a taxable supply under Section 2(108) of the CGST Act, 2017. The Board's activities, though categorized as a "Governmental authority," do not fall under any of the functions entrusted to a Panchayat or a Municipality under the Constitution, and instead the Board is engaged as an independent recruitment service provider. Therefore, the services provided by the Board in conducting examinations are not exempt from GST under the relevant Notification. [Read less]

Goa Value Added Tax Act, 2005 - Validity of Rule 3 of the Green Cess Rules - Green Cess Act, Reassessment, Reasons to believe - Notices under the Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013 proposing to reassess the petitioners for past assessment years and demanding payment of Green Cess - Petitioners challenged the show cause notices on the grounds that they are merely service providers at the port and do not import or bring the goods causing pollution into the state, and hence cannot be subjected to the Green Cess; and that the power of reassessment is being exercised without any "reason... [Read more]

Goa Value Added Tax Act, 2005 - Validity of Rule 3 of the Green Cess Rules - Green Cess Act, Reassessment, Reasons to believe - Notices under the Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013 proposing to reassess the petitioners for past assessment years and demanding payment of Green Cess - Petitioners challenged the show cause notices on the grounds that they are merely service providers at the port and do not import or bring the goods causing pollution into the state, and hence cannot be subjected to the Green Cess; and that the power of reassessment is being exercised without any "reasons to believe" and is time-barred - Whether the petitioners, being mere service providers at the port and not the importers/owners of the goods causing pollution, can be subjected to the levy of Green Cess – HELD - The charging Section 4 of the Green Cess Act imposes the cess on "every person carrying out" the activities of handling, utilization, consumption, combustion, transportation or movement of the specified products/substances causing pollution. However, Rule 3(1) of the Rules clearly casts the liability to pay Green Cess on "every person who brings or causes to be brought within the State any product and/or substance at the entry point". The petitioners, being merely service providers at the port and not the importers or owners of the goods causing pollution, do not fall within the ambit of Rule 3(1) and hence cannot be subjected to the Green Cess – Further, the impugned show cause notices for reassessment are invalid as they do not fulfil the jurisdictional pre-condition of communicating the "reasons to believe" that the petitioners' turnover has escaped assessment. The power of reassessment under Section 31 of the GVAT Act, 2005, made applicable to the Green Cess proceedings, can only be exercised if the assessing authority has "reasons to believe" about the escapement of assessment. Mere change of opinion by the authority is not a valid ground to reopen the concluded assessments, and the show cause notices do not disclose any tangible material or grounds for the "reasons to believe". Therefore, the reassessment proceedings initiated through the impugned show cause notices are arbitrary and without jurisdiction - the impugned show cause notices are quashed and set aside, as they are not the persons liable to pay the Green Cess under the Act and Rules. However, the challenge to the validity of Rule 3 of the Green Cess Rules was dismissed – The writ petitions are partly allowed - Whether the delegation of power to the executive under Section 4(2) of the Green Cess Act to frame rules for assessment, levy and collection of cess is excessive and ultra vires the Act – HELD - The delegation of power under Section 4(2) of the Green Cess Act to the executive to frame rules for assessment, levy and collection of cess is not excessive or ultra vires the Act. The Act has provided the basic legislative policy and framework by prescribing the nature of activities on which the cess is to be levied, the maximum rate of cess, and has left the procedural aspects to be dealt with by the Rules. The Rules framed under Section 4(2) have provided the detailed mechanism for assessment, payment, filing of returns etc. by the persons liable to pay the cess. As long as the Rules do not contradict or go beyond the statutory provisions, the delegation of procedural aspects to the executive is permissible and does not suffer from the vice of excessive delegation. [Read less]

GST - Kerala AAR – Applicant is designated as the State Skill Development Mission (SSDM) and conducts various skill development initiatives, including Centers of Excellence (CoEs), accreditation of skill training courses, and skill development programs for other Departments - Whether the share of fees received by KASE from its skill training partners and the fees collected from its own skill training institutes are exempt from GST – HELD - The share of fees received by applicant-KASE from its skill training partners is not eligible for exemption under Notification No. 12/2017-Central Tax (Rate), as the applicant has no... [Read more]

GST - Kerala AAR – Applicant is designated as the State Skill Development Mission (SSDM) and conducts various skill development initiatives, including Centers of Excellence (CoEs), accreditation of skill training courses, and skill development programs for other Departments - Whether the share of fees received by KASE from its skill training partners and the fees collected from its own skill training institutes are exempt from GST – HELD - The share of fees received by applicant-KASE from its skill training partners is not eligible for exemption under Notification No. 12/2017-Central Tax (Rate), as the applicant has not demonstrated that the outsourced training partners are themselves NSDC-approved and that the services are directly linked to NSDC schemes or NSQF-aligned qualifications approved by NCVET. Therefore, the share of fees received from such partners is liable to GST - Regarding the fees collected by applicant from its own training institutes, while the applicant has an MoU with NSDC, it has not provided evidence to establish that the courses offered are in relation to any NSDC scheme or NSQF-aligned qualifications approved by NCVET. Additionally, the courses do not qualify for exemption under Entry 66 of the Notification, as applicant did not demonstrate that the courses are part of a curriculum leading to qualifications recognized by law. Consequently, the fees collected by applicant from its own training institutes are also liable to GST – Ordered accordingly - Whether KASE is eligible to claim input tax credit on expenses incurred using Government grants – HELD - In the absence of specific details regarding the inputs and their use, the Authority is unable to provide a conclusive ruling. However, it is clarified that the source of funds, such as government grants, does not, by itself, restrict ITC eligibility, provided the inputs are used for making taxable supplies and the conditions under Section 16 of the CGST Act are satisfied. [Read less]

GST – Kerala AAR - Classification of rental services without operator – Applicant operates a self-drive "Rent a Cab" service without drivers. The vehicles are GPS-enabled, allowing the company to retain control over their use - Whether the services rendered by the applicant fall under Chapter 99, Heading 9973 and Service Code 997311 – HELD - the applicant’s service falls squarely under “leasing or renting of goods” as contemplated in Serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - The 2019 amendments to the GST rate structure expressly excluded "without operator... [Read more]

GST – Kerala AAR - Classification of rental services without operator – Applicant operates a self-drive "Rent a Cab" service without drivers. The vehicles are GPS-enabled, allowing the company to retain control over their use - Whether the services rendered by the applicant fall under Chapter 99, Heading 9973 and Service Code 997311 – HELD - the applicant’s service falls squarely under “leasing or renting of goods” as contemplated in Serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - The 2019 amendments to the GST rate structure expressly excluded "without operator" rental services from Heading 9966 and placed them under Heading 9973. Within 9973, passenger cars are considered "other goods" rather than machinery/equipment, and the residual code 997329 is the most appropriate classification - The applicant's services are correctly classifiable under Chapter 99, Heading 9973, Service Code 997329 ("Leasing or rental services concerning other goods, n.e.c.") and not under SAC 997311 – The serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate), which covers "Leasing or renting of goods", is the applicable entry for the applicant's services, and not the residual 17(viii) entry. 17(viia) prescribes the same GST rate as applicable to the supply of like goods, rather than 18% rate. The specific provision of 17(viia) takes precedence over the general 17(viii) entry as per the interpretative principle of generalia specialibus non derogant - The applicant's services are correctly classifiable under SAC 997329 under Heading 9973, and the applicable GST rate is the same as the rate on supply of like goods under Serial No. 17(viia) of the Notification, and not the 18% rate under 17(viii) – Ordered accordingly [Read less]