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GST on Corporate Guarantees – Scope of Supply under Section 7 of CGST Act, 2017 – Petitioners had furnished corporate guarantees without any consideration to their subsidiaries to enable the subsidiaries to avail credit facilities from banks. Petitioners contended that corporate guarantee is not a supply as no consideration is paid, it is a contingent contract under Section 31 of Indian Contract Act and does not satisfy the four conditions of supply being activity, service, to related party and in course or furtherance of business - Revenue contended that corporate guarantee constitutes supply under Section 7 read with... [Read more]

GST on Corporate Guarantees – Scope of Supply under Section 7 of CGST Act, 2017 – Petitioners had furnished corporate guarantees without any consideration to their subsidiaries to enable the subsidiaries to avail credit facilities from banks. Petitioners contended that corporate guarantee is not a supply as no consideration is paid, it is a contingent contract under Section 31 of Indian Contract Act and does not satisfy the four conditions of supply being activity, service, to related party and in course or furtherance of business - Revenue contended that corporate guarantee constitutes supply under Section 7 read with Schedule I Article 2 and Entry 5(e) of Schedule II of CGST Act – Whether corporate guarantee furnished without consideration between holding company and subsidiary is a taxable supply under GST regime – HELD - A corporate guarantee constitutes a supply under Section 7 of the CGST Act read with Schedule I Article 2 and Entry 5(e) of Schedule II of the CGST Act. The furnishing of a corporate guarantee by a Holding Company for its Subsidiary without any consideration falls within the purview of supply contemplated under Schedule I Article 2 which deems supply of goods or services or both between related persons to be taxable supply even when made without consideration provided the supply is made in the course or furtherance of business - The execution of a corporate guarantee constitutes a transaction of agreeing to the obligation within Entry 5(e) of Schedule II. Although corporate guarantee is contingent in nature and involves no immediate cost, once it is executed it constitutes a legal obligation and hence an identifiable supply of service - The merger of the statutory provisions of CGST Act with the provisions of the Indian Contract Act through the prism of Schedule I and Schedule II demonstrates that corporate guarantee is embraced within the taxable supply framework – Corporate guarantees furnished by holding companies to subsidiaries constitute taxable supply under Section 7 read with Schedule I Article 2 and Entry 5(e) of Schedule II of CGST Act - GST - Valuation of Corporate Guarantees - Constitutional Validity of Rule 28(2) CGST Rules - flat 1% Valuation – Petitioners challenged the validity of Rule 28(2) of CGST Rules which prescribes deemed valuation of corporate guarantees at 1% of guarantee amount or actual consideration, whichever is higher. Petitioners contended that the flat 1% valuation is arbitrary, violative of Article 14 and 19(1)(g) of Constitution and deprives them of the right to declare actual value under Rules 30 and 31 - Revenue defended the rule on ground that it adopts Safe Harbor rule from Income Tax and represents minimum acceptable commission considering market rates of 0.5% to 3%. Petitioners further contended that actual charges on corporate guarantees are much lower at 0.25% to 0.3% – Whether flat 1% deemed valuation of corporate guarantees is constitutionally valid and whether expression whichever is higher operates arbitrary – HELD - The provision of Rule 28(2) of CGST Rules fixing deemed valuation at 1% of guarantee amount is Constitutionally valid as the concept of deeming fiction is well-recognized in taxation statutes where actual value cannot be ascertained. The Supreme Court in Wipro Limited has held that deeming fiction can be applied only when actual cost is not ascertainable - In case of corporate guarantees where parties may not specify any consideration, a uniform deeming fiction of 1% serves the purpose of ensuring certainty and avoiding litigation. However the expression “whichever is higher” is arbitrary and violative of Article 14 and 19(1)(g) of the Constitution. This expression compels the assessee to pay tax on 1% even when actual consideration charged or payable is lower than 1% thereby depriving the assessee of the flexibility available under Rules 30 and 31 to determine reasonable valuation. The expression operates without any nexus to actual cost and becomes confiscatory in nature. The expression whichever is higher shall accordingly be read down – Rule 28(2) of CGST Rules is constitutionally valid except the expression “whichever is higher” which is struck down as arbitrary and violative of Article 14 and 19(1)(g) of Constitution - GST - Retroactive Application of Rule 28(2) - Corporate Guarantees Executed Before Rule Introduction – Petitioners had executed corporate guarantees before 26 October 2023 when Rule 28(2) came into force. Revenue issued demands for the period since GST regime inception in July 2017 applying the 1% valuation retrospectively to all guarantees – Whether imposition of GST levy based on Rule 28(2) on corporate guarantees executed prior to 26 October 2023 is constitutionally valid and whether such retroactive application violates Articles 14 and 19(1)(g) – HELD - The introduction of Rule 28(2) w.e.f. 26 October 2023 is retroactive in nature as it applies to corporate guarantees executed prior to its introduction. While the legislature has competence to make laws retrospective or retroactive such power remains subordinate to fundamental rights enshrined in the Constitution. The retroactive application of Rule 28(2) to guarantees executed before 26 October 2023 imposes an unexpected financial burden on taxpayers who had arranged their affairs based on the prevailing law - The levy during pre-26 October 2023 period when no levy existed violates the principle of legal certainty and fairness as taxpayers could not have anticipated the future tax liability. The retroactive levy for extended periods is harsh and unfair particularly when corporate guarantees may span several years resulting in annual tax liabilities. The imposition of such levy also invokes the doctrine of unjust enrichment as Revenue had no legal basis to levy GST on corporate guarantees prior to introduction of Rule 28(2) – The levy of GST on corporate guarantees executed prior to 26 October 2023 is struck down as violative of Article 14 and 19(1)(g) of the Constitution on ground of excessive retroactive application. Levy is permissible from 26 October 2023 onwards only for the period during which guarantees continue to remain in force - GST - Invocation of Section 74 - Fraud and Suppression - Matter of Interpretation of Statutory Provisions – Revenue issued show cause notices under Section 74 of CGST Act alleging fraud and wilful suppression on ground that petitioners had not declared GST liability on corporate guarantees in their monthly returns – Whether invocation of Section 74 provisions for matters involving bonafide interpretation of complex statutory provisions of GST law is justified - HELD - The Section 74 requires strict showing of malafide intent such as fraud, willful misstatement or suppression with deliberate intention to evade tax. The Supreme Court in Uniworth Textiles has held that suppression of facts must mean correct information not deliberately disclosed to evade payment of duty. When facts are known to both parties omission by one to do what he might have done does not render it suppression - Mere failure to declare does not amount to willful suppression and there must be some positive act from side of assessee to find willful suppression. In the instant case both the petitioners and Revenue had contested the working of statutory provisions relating to taxability of corporate guarantees. This involved disputed interpretation of complex provisions of CGST Act read with Indian Contract Act and Transfer of Property Act. A bonafide legal position cannot automatically constitute fraud or suppression. While taxpayers cannot claim immunity by taking shelter under legal complexities they also cannot be held guilty of suppression when they take a position on complex statutory provisions which is later disputed by Revenue – The invocation of Section 74 of CGST Act against petitioners for not declaring GST on corporate guarantees is quashed as the matter involved disputed interpreta [Read less]

GST - Stock Transfer without e-way Bill - Penalty under Section 129 absent Supply - Registered person dealing in steel goods transported steel goods under Delivery Challan from its own registered premises to its own registered godown as stock transfer. The vehicle was intercepted and detained by Mobile Squad on the ground that no e-way bill accompanied the movement. Penalty was imposed under Section 129(3) of the CGST Act 2017 - Whether penalty under Section 129 is leviable on goods transported as stock transfer where no tax is payable – HELD - The phrase tax payable in Section 129(1) would contemplate that the transacti... [Read more]

GST - Stock Transfer without e-way Bill - Penalty under Section 129 absent Supply - Registered person dealing in steel goods transported steel goods under Delivery Challan from its own registered premises to its own registered godown as stock transfer. The vehicle was intercepted and detained by Mobile Squad on the ground that no e-way bill accompanied the movement. Penalty was imposed under Section 129(3) of the CGST Act 2017 - Whether penalty under Section 129 is leviable on goods transported as stock transfer where no tax is payable – HELD - The phrase tax payable in Section 129(1) would contemplate that the transaction is liable for tax and on which the tax becomes payable. A stock transfer between locations of the same registered person does not constitute a supply as defined under Section 7 of the CGST Act because it lacks two distinct entities and consideration. Section 7 requires the transaction to be between more than one person or entity, illustrative expressions such as sale, transfer, barter, exchange fortifying the requirement of existence of more than one person, and the supply must be for consideration as defined in the Act. Where a transaction does not fall within the definition of supply under Section 7, the charging Section 9 does not get attracted and hence no tax is payable - Penalty under Section 129 which is quantified with reference to tax payable on such goods cannot be imposed where no tax is payable. The contention that the phrase tax payable is only a measure for quantifying penalty without requiring proof of actual supply was rejected. The finding that the transaction was not genuine merely on the ground that e-way bill was not available lacked evidentiary basis and in the absence of any allegation or evidence regarding non-genuineness of the transaction, such finding was unsustainable - Penalty under section 129 of CGST Act is not leviable on the registered person, for transport of goods without e-way bill, when such transport was undertaken on account of stock transfer - The impugned Order-in-Appeal is set aside and the appeals are allowed [Read less]

GST - Reverse Charge Mechanism vs Forward Charge Mechanism - Services Rendered by Advocate as Insolvency Professional – Petitioner was appointed as Interim Resolution Professional by NCLT Delhi Bench for corporate debtor. Petitioner raised invoices for professional fees as Interim Resolution Professional. Resolution Professional called upon petitioner to issue GST compliant invoices claiming that GST is payable by Interim Resolution Professional. Petitioner contended that he is exempted from GST registration under Section 9(3) and (4) of CGST Act and Notifications 12/2017 and 13/2017 as Advocates are governed by reverse ... [Read more]

GST - Reverse Charge Mechanism vs Forward Charge Mechanism - Services Rendered by Advocate as Insolvency Professional – Petitioner was appointed as Interim Resolution Professional by NCLT Delhi Bench for corporate debtor. Petitioner raised invoices for professional fees as Interim Resolution Professional. Resolution Professional called upon petitioner to issue GST compliant invoices claiming that GST is payable by Interim Resolution Professional. Petitioner contended that he is exempted from GST registration under Section 9(3) and (4) of CGST Act and Notifications 12/2017 and 13/2017 as Advocates are governed by reverse charge mechanism for legal services and GST if payable is on reverse charge basis - Whether Advocates acting as Insolvency Professionals are governed by reverse charge mechanism applicable to legal services or forward charge mechanism applicable to Insolvency Professional services – HELD - Notification No. 12/2017 and No. 13/2017 dated 28.06.2017 provide that services rendered by Advocates are governed by RCM. However this applies to legal services rendered by Advocates in capacity as Advocates. Services rendered by person in capacity of Insolvency Professional are governed by separate statutory framework under Insolvency and Bankruptcy Code and IBBI Regulations. IBBI Regulations prescribe independent eligibility criteria and registration requirements for Insolvency Professionals - The Scheme of Classification of Services specifically classifies Insolvency and Receivership services under separate entry 998241 distinct from legal services entry 99821. Principle of specific description prevailing over general description applies. When Advocate renders services as Insolvency Professional the role is that of Insolvency Professional not Advocate - Taxability is determined by nature of services rendered not by professional qualification of person rendering service. As per Scheme of Classification, Insolvency and Receivership services are specifically covered under head 99824 and are not covered by Notification No. 13/2017 applicable to RCM. Thus Advocates acting as Insolvency Professionals are governed by forward charge mechanism applicable to all Insolvency Professionals as class and cannot claim benefit of reverse charge mechanism - Advocates enrolled with Bar Council who act as Insolvency Professionals shall be governed by forward charge mechanism. They shall be liable to obtain GST registration and comply with all consequential requirements under CGST Act and rules and notifications thereunder in same manner as applicable to Insolvency Professionals as class. Petitioner directed to furnish GST compliant invoices in respect of professional fee charged for services rendered as Interim Resolution Professional – Ordered accordingly [Read less]

Service Tax - Sale of Immovable Property - Liability on Advance Received for Sale of Plots – Service tax demand on amount returned to customers - Whether amount received as advance against sale of plots constitute sale of immovable property exempt from Service Tax under Section 65B(44)(a)(i) of Finance Act, 1994 – HELD - The appellant returned back amount regarding sale of flats due to non-viability of construction of residential towers. The said amount was not received in connection with rendering of any taxable service. Hence no Service Tax is payable on the amount returned back to customers - Even otherwise the amou... [Read more]

Service Tax - Sale of Immovable Property - Liability on Advance Received for Sale of Plots – Service tax demand on amount returned to customers - Whether amount received as advance against sale of plots constitute sale of immovable property exempt from Service Tax under Section 65B(44)(a)(i) of Finance Act, 1994 – HELD - The appellant returned back amount regarding sale of flats due to non-viability of construction of residential towers. The said amount was not received in connection with rendering of any taxable service. Hence no Service Tax is payable on the amount returned back to customers - Even otherwise the amount was received as advance against sale of plots for villas. As amounts have been received in connection with sale of immovable property, the said amount is not liable to Service Tax as per Section 65B(44)(a)(i) of Finance Act, 1994 - Service Tax is not payable on amount received in connection with sale of plots. Demand confirmed in impugned order on this amount is set aside - Service Tax - Construction of Residential Complex Service - Liability Where Service Tax Already Paid Before Show Cause Notice – Whether Service Tax can be demanded again when it has been already paid before issuance of Show Cause Notice – HELD - The Appellant paid Service Tax payable in respect of rendering of service namely Construction of Residential Complex Service before issuance of Show Cause Notice. Section 73 of Finance Act, 1994 provides that if Service Tax payable has been paid along with interest before issuance of Show Cause Notice, then there is no need to issue Notice to demand Service Tax. As Appellant has already paid Service Tax payable in this case along with interest, no demand should be made. The principle that once Service Tax is paid before issuance of Show Cause Notice with all applicable interest, no demand can be subsequently made, is settled law – No additional Service Tax demand can be made as full Service Tax has been paid before issuance of Show Cause Notice. The demand confirmed in impugned order on this amount is not sustainable - Penalty cannot be imposed where underlying demand itself is not valid or where no taxability exists. The case relates to bonafide legal interpretation and there was no intent to evade tax or commission of fraud or suppression of facts on part of Appellant – The penalty imposed in impugned order is set aside and the appeal is allowed [Read less]

GST - Service of Show Cause Notice on Common Portal - Sufficiency of Service – Whether mere uploading of Show Cause Notice on GST common portal without acknowledgement of receipt or filing of reply by assessee constitutes sufficient service of notice – HELD - Service of Show Cause Notice upon assessee cannot be deemed sufficient merely on account of its uploading on common portal unless its receipt is acknowledged or reply is filed - The Punjab and Haryana High Court in Luxmi Traders case examined the issue of service of notices through the common portal and held that mere uploading of an SCN, without acknowledgement o... [Read more]

GST - Service of Show Cause Notice on Common Portal - Sufficiency of Service – Whether mere uploading of Show Cause Notice on GST common portal without acknowledgement of receipt or filing of reply by assessee constitutes sufficient service of notice – HELD - Service of Show Cause Notice upon assessee cannot be deemed sufficient merely on account of its uploading on common portal unless its receipt is acknowledged or reply is filed - The Punjab and Haryana High Court in Luxmi Traders case examined the issue of service of notices through the common portal and held that mere uploading of an SCN, without acknowledgement of receipt or filing of a reply, cannot by itself be treated as sufficient service - the Petitioner is granted an opportunity to file a fresh application for revocation of cancellation of its GST registration - The Writ Petition is disposed of [Read less]

Central Excise – Cenvat Credit on Outward Freight Charges for clearance of final products - Whether outward freight charges for clearance of final products from place of removal qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and whether manufacturer is entitled to take CENVAT credit on such services - HELD – The Rule 2(l)(ii) of CENVAT Credit Rules, 2004 till 31.03.2008 expressly permitted CENVAT credit for services used for clearance of final products from place of removal and outward transportation was specifically included in the definition as abundant caution to avoid disputes. The Larger Ben... [Read more]

Central Excise – Cenvat Credit on Outward Freight Charges for clearance of final products - Whether outward freight charges for clearance of final products from place of removal qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and whether manufacturer is entitled to take CENVAT credit on such services - HELD – The Rule 2(l)(ii) of CENVAT Credit Rules, 2004 till 31.03.2008 expressly permitted CENVAT credit for services used for clearance of final products from place of removal and outward transportation was specifically included in the definition as abundant caution to avoid disputes. The Larger Bench decision in ABB Ltd v. Commissioner of Central Excise and Service Tax has conclusively held that services availed by manufacturer for outward transportation of final products from place of removal should be treated as input service enabling manufacturer to take credit of service tax paid on such services - Where factory is the place of removal, freight from factory to customer's premises would be covered by the expression in relation to clearance from place of removal. The non-inclusion of transportation costs in assessable value is no ground to deny CENVAT credit – The appellant is entitled to CENVAT credit of service tax paid on outward freight charges – The impugned order is set aside and the appeal is allowed - Limitation Period - Whether entire demand relating to period before 31.03.2008 attracts extended period of limitation and whether any suppression of facts attracts application of extended period - HELD - The Rule 2(l) of CENVAT Credit Rules itself allows taking of CENVAT credit for services from place of removal till 31.03.2008 and entire period under consideration is prior to this date. Appellant has provided all details of CENVAT credit taken in ER-1 returns filed with authorities. No suppression of fact or misstatement on part of Appellant has been made out and no mala fide intention to evade duty by taking wrong credit is discernible from facts - The entire subject matter was one of interpretation of CENVAT Credit Rules on which numerous judgments exist establishing the correct position. On such issues of interpretation, extended period cannot be invoked absent any evidence of deliberate concealment or fraudulent intent - Confirmed demand for extended period is legally not sustainable and is set aside on account of time bar. [Read less]

GST - Classification of composite supply of wind turbine generators and installation services – Composite supply or works contract involving immovable property – High held that the Turbine Generator is to be treated as movable property amounting to goods and the supply of services and such goods can only be treated as composite supply of goods and services and not execution of works being involved in immovable property - No grounds to interfere with the impugned judgment of the High Court. The Special Leave Petitions stand dismissed.

GST - Protective Order Against Arrest - Scope of Interim Relief after dismissal of Pre-Arrest Bail Application - Appellant was summoned under Section 70 of CGST Act, 2017 in connection with investigation into alleged wrongful availing and passing of Input Tax Credit. Appellant filed application for anticipatory bail before High Court which dismissed the application on ground that no order under Section 69 of CGST Act had been passed and therefore no apprehension of arrest could be established. However High Court while dismissing the application granted protection to appellant from arrest for a period of one week from date ... [Read more]

GST - Protective Order Against Arrest - Scope of Interim Relief after dismissal of Pre-Arrest Bail Application - Appellant was summoned under Section 70 of CGST Act, 2017 in connection with investigation into alleged wrongful availing and passing of Input Tax Credit. Appellant filed application for anticipatory bail before High Court which dismissed the application on ground that no order under Section 69 of CGST Act had been passed and therefore no apprehension of arrest could be established. However High Court while dismissing the application granted protection to appellant from arrest for a period of one week from date of intimation of order under Section 69 - Whether High Court can grant protective order against arrest while dismissing application for pre-arrest bail on ground that application is not maintainable - HELD - An interim relief can only be granted in aid of and as ancillary to the main relief sought in the proceedings. Once a Court finds that the main petition is not maintainable and dismisses it, the question of granting further or alternative interim relief does not arise. When an application for pre-arrest bail is dismissed on the ground that it is not maintainable or no apprehension of arrest exists, no interim protective order against arrest can be granted concurrently or subsequently as such relief would not be in aid of the main relief. The settled principle established in State of Orissa v. Madan Gopal Rungta that interim relief cannot be used as the sole or final relief when the main petition itself is dismissed remains applicable to cases of pre-arrest bail in criminal matters. Once the main application is dismissed, all interim reliefs granted during its pendency must also fall - The granting of protection from arrest for a specific period after dismissal of pre-arrest bail application is not permissible in law - The protective order granted by High Court is set aside - GST - Section 69 - Communication of Arrest Order – Commissioner did not pass any order under Section 69 of CGST Act at the time of pre-arrest bail application. Respondent contended that unless order under Section 69 is communicated to the accused he cannot apply for anticipatory bail and further that requirement of communication must be read into statute by extension of principles of natural justice and administrative action - Whether order passed under Section 69 of CGST Act must be communicated to the accused before arrest for him to seek anticipated bail and whether such communication is mandatory - HELD - An order under Section 69 of CGST Act is a sine qua non for maintaining application for anticipatory bail as it is the order that activates the alarm for apprehension of arrest and grants the status of accused to the person. The order must record reasons to believe that an offence under Section 132 of CGST Act has been committed. Such order being amenable to judicial review by Constitutional Courts must be capable of being challenged on settled principles of law. If the order is not communicated to the person sought to be arrested, he cannot apply for anticipated bail or challenge the order on its merits - Communication of the order would not obstruct the investigation but would reinforce the right of accused to seek anticipated bail - It would lead to an anomalous situation where accused can neither apply for anticipated bail till order is passed nor become aware of order to challenge it before appropriate forum if communication is not mandated. The order should be communicated through electronic means using email address and mobile number in addition to other modes permitted. Without such communication the question of arrest would not arise - The Commissioner is required to communicate the order under Section 69 of CGST Act to the respondent in the manner specified, whereafter he may pursue such remedy as advised - The criminal appeal stands disposed of [Read less]

Customs – Import of consignments of stainless steel products - Supplementary Show Cause Notice - Scope and Limitation of Fresh Proposals – Appellant received initial Show Cause Notice proposing recovery of differential Customs duty with quantum of duty demand at one amount. Subsequently a Supplementary Show Cause Notice was issued which introduced fresh proposals regarding rejection of declared value on ground of mis-declaration and denial of benefit of Notification No.46/2011-Cus dated 01.06.2011 and duty demand was substantially enhanced. Corrigenda to the SCNs were issued after considerable time lapse and were not r... [Read more]

Customs – Import of consignments of stainless steel products - Supplementary Show Cause Notice - Scope and Limitation of Fresh Proposals – Appellant received initial Show Cause Notice proposing recovery of differential Customs duty with quantum of duty demand at one amount. Subsequently a Supplementary Show Cause Notice was issued which introduced fresh proposals regarding rejection of declared value on ground of mis-declaration and denial of benefit of Notification No.46/2011-Cus dated 01.06.2011 and duty demand was substantially enhanced. Corrigenda to the SCNs were issued after considerable time lapse and were not received by Appellant even after filing replies and additional submissions. Adjudication order was passed immediately after issuance of corrigenda – Whether Supplementary Show Cause Notice introducing fresh and substantive grounds of denial of preferential exemption was issued within permissible scope of original notice and within limitation period – HELD - The Supplementary Show Cause Notice has introduced fresh and substantive ground by proposing denial of preferential exemption under Notification No.46/2011-Cus and by enhancing duty demand. Such course is beyond limited scope of supplementary notice and amounts to issuance of fresh Show Cause Notice in guise of supplementary notice. The original Show Cause Notice did not contain any proposal for denial of benefit of Notification or necessary factual foundation for such denial. Moreover Supplementary SCN was issued after one year of original Show Cause Notice. Corrigenda were issued after about two years of original SCN and approximately one year after Supplementary SCN. Appellant contended that corrigenda were not received even after filing replies and additional submissions. Impugned order has been passed in clear violation of principles of natural justice - The demands confirmed on basis of fresh proposals in Supplementary Show Cause Notice and Corrigenda are liable to be set aside on ground of limitation and not following principles of natural justice – The demands confirmed on basis of fresh proposals introduced through Supplementary Show Cause Notice are set aside - Customs - Country of Origin Certificates - Genuineness and Authentication - Retro-assessment based on Subsequent Verification – Appellant imported consignments of stainless steel products from suppliers in Malaysia and submitted Country of Origin Certificates - Goods were examined by proper officer of Customs and consignments were released after assessment and verification of COO Certificates. Subsequent to clearance by more than two years, investigation officers conducted verification and alleged COOs are fake – Whether the validity of COO Certificates can be questioned by Customs authorities at later stage – HELD - As per Rules of Origin if certificates were valid at time of import their validity cannot be questioned by Customs authorities at later stage. COOs submitted by Appellant were issued by suppliers and were authenticated by Authorized Officials of Malaysian Government whose signatures were verified by Customs officials before allowing clearance. Requirements under Notification have been met on date of import and cannot be negated by subsequent communication received from Malaysia after more than two years without details of contravention and action being taken against the issuing authority - Once COOs were found to be genuine, appellant would be eligible for benefit of Notification No.46/2011-Cus – All COO Certificates furnished by Appellant are authentic and acceptable. Appellant is eligible for benefit of exemption under Notification No.46/2011-Cus for all consignments - The findings of the Respondent with regard to levy of CVD under Notification No. 1/2017-Cus holding the goods actually of Chinese origin is not sustainable and is liable to be dropped - Customs - Classification of Imported Goods - Tariff Heading – Appellant classified goods imported namely Decorative and Design Sheet Article of Wall Panel and Decorative Design Stainless Steel Profiles under Customs Tariff Heading 7326. Department alleged that correct classification of goods should be under Customs Tariff Heading 7219 – Whether goods imported by Appellant are classifiable under CTH 7326 as claimed by Appellant and whether Department has discharged burden of producing proper evidence to support re-classification under CTH 7219 – HELD - The Proper officer has examined goods and accepted classification as declared in Bills of Entry and no objection was raised at time of clearance. If Department wants to re-classify goods imported and cleared, there must be specific reasons supported by evidence. In absence of any test report or expert opinion, finding that goods were classifiable under CTH 7219 is based merely on assumptions and presumptions and is not supported by opinion of any technical experts – The goods in question were coated with PVD (Physical Vapour Deposition) to impart desired colour. Thus, it is clear that the goods are further worked than cold rolled sheets and hence they become out of the purview of CTH 7218, 7219 or 7220 - When Department seeks different classification, it must produce proper evidence; mere assertion is not sufficient – The goods imported by appellant are appropriately classifiable under CTH 7326. Re-classification of goods under CTH 7219 is not sustainable - Customs - Valuation of Goods - Rejection of Transaction Value - Adjudicating Authority rejected declared transaction value and enhanced value on basis of contemporaneous imports – Whether declared transaction value can be rejected and re-determined without following procedure set out in Customs Valuation Rules and without evidence of undeclared payments – HELD - Valuation of goods declared by Appellant cannot be rejected and re-determined without following procedure set out in Valuation Rules. Adjudicating Authority has not followed provisions of Rule 9 of Customs Valuation Rules, 2007 for enhancement of value. There is no evidence available on record that Appellant has paid any amount over and above declared invoice prices. There is no documentary evidence available to show that Appellant has paid any amount over and above declared value. In circumstances rejection of transaction value declared by Appellant is legally not sustainable – The value declared by Appellant in Bills of Entry is acceptable and enhanced value re-determined by Revenue is set aside - Customs - Imposition of Penalties - HELD - Penalties have been imposed on allegation of mis-declaration and undervaluation of impugned goods by Appellant. Suppression of facts with intention to evade tax has not been established in this case. It has been held that allegations of mis-declaration and undervaluation of impugned goods are not sustained in view of findings regarding authenticity of COOs, proper classification of goods under CTH 7326, and acceptable declared value of goods. Therefore no penalty is imposable on Appellant for said allegations. [Read less]

Service Tax - Works Contract Service - Classification and Reconciliation of Tax Payments – Commissioner (Appeals) remanded matter for de novo adjudication directing reconsideration of classification under Works Contract Service with effect from 01.06.2007 and verification of Appellant's claim regarding payment of Service Tax on GTA services. De novo authority confirmed demand with partly re-quantification - Appellant challenged that de novo authority failed to comply with remand directions and had not properly verified reconciliation statements and tax payments – Whether de novo adjudicating authority correctly complie... [Read more]

Service Tax - Works Contract Service - Classification and Reconciliation of Tax Payments – Commissioner (Appeals) remanded matter for de novo adjudication directing reconsideration of classification under Works Contract Service with effect from 01.06.2007 and verification of Appellant's claim regarding payment of Service Tax on GTA services. De novo authority confirmed demand with partly re-quantification - Appellant challenged that de novo authority failed to comply with remand directions and had not properly verified reconciliation statements and tax payments – Whether de novo adjudicating authority correctly complied with remand directions requiring proper verification of tax payments and reconciliation of records and whether demand under GTA Service was correctly determined – HELD - After introduction of Works Contract Service with effect from 01.06.2007, composite indivisible works contracts are liable to be assessed only under Works Contract Service. The de novo proceedings recognised change in classification but do not disclose any proper reconciliation of Appellant's tax payments or basis on which surviving demand was quantified - Mere recording that documents were verified without indicating payments accepted or rejected and reasons therefor does not satisfy remand directions or requirement of reasoned adjudication. The earlier remand order specifically required verification of Appellant's claim regarding payment of Service Tax under GTA Service which necessarily required reconciliation of departmental computation. De novo order merely records that documents were verified without indicating payments accepted, payments rejected or reasons therefor. Reliance on balance sheet and ST-3 returns without reconciliation with books of account, GAR-7 challans and other contemporaneous records is insufficient to sustain demand - The extended period is held to be unavailable as proceedings originated from scrutiny of statutory records and mere discrepancies noticed during audit are insufficient to invoke extended period – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Outdoor Caterer Service - Interpretation of Substantial and Satisfying Meal within the meaning of Notification No.20/2004-ST – Appellant registered as Outdoor Caterer supplied snacks and refreshments to corporate establishments and availed benefit of Notification No.20/2004-ST as amended by Notification No.1/2006-ST by discharging Service Tax on fifty percent of gross value. Department viewed that supplies comprised only beverages and snacks and did not constitute a ‘substantial and satisfying meal’ within meaning of notification and proposed recovery of differential Service Tax by invoking extended per... [Read more]

Service Tax - Outdoor Caterer Service - Interpretation of Substantial and Satisfying Meal within the meaning of Notification No.20/2004-ST – Appellant registered as Outdoor Caterer supplied snacks and refreshments to corporate establishments and availed benefit of Notification No.20/2004-ST as amended by Notification No.1/2006-ST by discharging Service Tax on fifty percent of gross value. Department viewed that supplies comprised only beverages and snacks and did not constitute a ‘substantial and satisfying meal’ within meaning of notification and proposed recovery of differential Service Tax by invoking extended period - Whether appellant is entitled to benefit of Notification No.20/2004-ST as amended and whether expression substantial and satisfying meal must be restricted to lunch or dinner or whether beverages and light refreshments qualify as substantial and satisfying meal – HELD – The Notification No.20/2004-ST as amended neither restricts the expression substantial and satisfying meal to lunch or dinner nor prescribes any quantitative or qualitative standard for determining what would constitute such a meal. The expression must receive its ordinary commercial meaning having regard to the catering arrangement as a whole and not by dissecting individual menu items. The Department has effectively read into the notification limitations which do not exist and has denied the benefit by dissecting individual menu items instead of examining the catering service in its entirety – In the present case, although it is not disputed that VAT was paid on the value of the goods supplied, no attempt was made to identify the service component or examine whether the demand included the value of goods already subjected to VAT - The appellant's claim for the benefit of Notification No.20/2004-ST as amended cannot be denied merely because beverages formed part of the catering menu. The expression "substantial and satisfying meal" must be construed in the context of the catering arrangement as a whole and not by isolating individual items supplied thereunder – The impugned order is set aside and the appeal is allowed - Extended Period of Limitation - The dispute arises entirely from the Department's interpretation of the expression "substantial and satisfying meal" occurring in Notification No.20/2004-ST as amended. The appellant, on the other hand, entertained the view that the organised pantry and catering services rendered by it satisfied the conditions of the notification. Thus, the dispute is essentially one of interpretation of an exemption notification. It is well settled that where all primary facts are within the knowledge of the Department and the dispute concerns only the interpretation of law, the extended period cannot be invoked merely because the Department subsequently forms a different legal opinion. Mere rejection of an assessee's interpretation does not constitute suppression or wilful misstatement with intent to evade payment of tax - The Show Cause Notice covering period April 2007 to August 2009 is barred by limitation as the extended period under Section 73(1) of Finance Act 1994 is not invocable. [Read less]

Service Tax - SVLDRS Discharge Certificate - Prohibition of Reopening of matter –Appellant opted for settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme and discharge certificate was issued under Section 126 and 127 of Finance Act 2019. Revenue filed appeal challenging the Order-in-Original despite issuance of statutory discharge certificate – Whether Revenue appeal survives after issuance of discharge certificate under SVLDRS and whether Section 129 prohibits reopening of matters covered by declaration – HELD – The Section 129 of Finance Act 2019 unequivocally declares that every discharge certificat... [Read more]

Service Tax - SVLDRS Discharge Certificate - Prohibition of Reopening of matter –Appellant opted for settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme and discharge certificate was issued under Section 126 and 127 of Finance Act 2019. Revenue filed appeal challenging the Order-in-Original despite issuance of statutory discharge certificate – Whether Revenue appeal survives after issuance of discharge certificate under SVLDRS and whether Section 129 prohibits reopening of matters covered by declaration – HELD – The Section 129 of Finance Act 2019 unequivocally declares that every discharge certificate issued under Section 126 shall be conclusive regarding the matter and period covered by the declaration and the declarant shall not be liable to pay any further duty, interest or penalty and that no proceedings relating to the same matter and period shall thereafter be reopened - The SVLDRS scheme has been enacted for bringing quietus to legacy disputes. Once the statutory authorities accept the declaration and issue discharge certificate, the dispute reaches finality. The issuance of discharge certificate is not merely acknowledgment of payment but constitutes full and final statement of the tax dispute. Continuation of proceedings after issuance thereof would defeat the very object of the scheme. The legal position now stands authoritatively settled by the Bombay High Court in Astute Valuers and Consultants Pvt Ltd. – The Departmental appeal filed by the Revenue is not maintainable and is dismissed [Read less]

Customs - Classification of laser imagers - Appellant imported laser imagers classifying them under CTH 9018 90 19 ‘as other diagnostic instruments and apparatus’ while Commissioner of Customs reclassified them under residuary CTH 9033 00 00 as accessories not specified or included elsewhere in Chapter 90 – The lower authorities and CESTAT dismissed the appeal of the appellant - Whether laser imagers which are used with machines falling under CTH 9018 can be classified under CTH 9018 90 19 as diagnostic apparatus or whether they must be classified under residuary CTH 9033 00 00 as accessories suitable for use with ma... [Read more]

Customs - Classification of laser imagers - Appellant imported laser imagers classifying them under CTH 9018 90 19 ‘as other diagnostic instruments and apparatus’ while Commissioner of Customs reclassified them under residuary CTH 9033 00 00 as accessories not specified or included elsewhere in Chapter 90 – The lower authorities and CESTAT dismissed the appeal of the appellant - Whether laser imagers which are used with machines falling under CTH 9018 can be classified under CTH 9018 90 19 as diagnostic apparatus or whether they must be classified under residuary CTH 9033 00 00 as accessories suitable for use with machines falling under different tariff headings - HELD - The laser imager cannot be classified as a diagnostic apparatus under CTH 9018 90 19 as it does not possess independent diagnostic skills or capabilities and must necessarily receive inputs from diagnostic equipment to carry out its function - The laser imager is an accessory to the diagnostic equipment from which it receives inputs and is not a diagnostic instrument or apparatus in its own right. According to the definition of accessory, it is a part or sub-assembly or assembly that contributes to the effectiveness of a piece of equipment without changing its basic function. The laser imager performs the supplementary and ancillary function of transferring diagnostic data received from medical equipment onto films for preservation or further use by medical professionals and does not aid in or augment the performance of the medical equipment that it receives inputs from - According to Note 2 in Chapter 90 of the Customs Tariff, parts and accessories which are suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading are to be classified with such machines. However, the laser imagers are compatible with machines falling under multiple tariff headings including CTH 9018 and also CTH 9022 which relate to apparatus based on the use of X-rays or other ionising radiations for medical uses. Since the laser imagers can be used with machines falling under different tariff headings with different rates of tariff duties it defies logic and rationale to classify them under CTH 9018 90 19 as accessories suitable for use solely or principally with machines under CTH 9018 - The laser imagers must be classified under residuary CTH 9033 00 00 - The classification under CTH 9033 00 00 is upheld and the appeal is dismissed [Read less]

Service Tax - Intermediary Services - Nature of Consultancy Service – Providing of consultancy and guidance services to Electro Motive Diesel, USA in accordance with an agreement under which it provided various recommendations and advice - Revenue initiated proceedings proposing that respondent had provided intermediary services to EMD, USA in its business dealings with Indian Railways and therefore place of provision of service was India thereby making it taxable - Whether consultancy services provided by respondent to help a foreign company deal with Indian Railways constitutes intermediary services covered under Rule ... [Read more]

Service Tax - Intermediary Services - Nature of Consultancy Service – Providing of consultancy and guidance services to Electro Motive Diesel, USA in accordance with an agreement under which it provided various recommendations and advice - Revenue initiated proceedings proposing that respondent had provided intermediary services to EMD, USA in its business dealings with Indian Railways and therefore place of provision of service was India thereby making it taxable - Whether consultancy services provided by respondent to help a foreign company deal with Indian Railways constitutes intermediary services covered under Rule 9 of Place of Provision of Services Rules, 2012 - HELD - For a service to constitute intermediary service there must be minimum of three parties namely the supplier of principal service, the recipient of the principal service and an intermediary facilitating or arranging the supply. The concept of intermediary service involves two distinct supplies namely the main supply between two principals and an ancillary supply which is the service of facilitating or arranging the main supply between the two principals - Where an agreement exists between only two parties and the service provider provides services directly to that single party, there is no intermediary service even if the services help the recipient in dealing with some other party. The service provider must act as a go-between or facilitator between two principals for the arrangement or facilitation of the main supply - In the present case the respondent had agreement with EMD, USA only and there was no contractual relationship between respondent and Indian Railways - The respondent was not acting as a facilitator for supply between EMD and Indian Railways but was only providing advisory services to EMD as a consultant. It is well-established that intermediary services require arranging or facilitating supply between two or more principals which is distinct from providing advisory or consultancy services to a single client even if such services relate to the client's dealings with third parties - The services provided were consultancy services and not intermediary services – The impugned order is upheld and the Revenue’s appeal is dismissed [Read less]

Service Tax – Scope of Intellectual Property Rights Service - Royalty for pre-installation of Operating Software - Appellant procured license for pre-installation of operating software from Microsoft Corporation against payment of royalty under Microsoft Desktop Operating System License Agreement for OEM Customers - Department issued Show Cause Notice proposing demand of service tax alleging that activity of affixing Microsoft Windows could be treated as trademarks falling under IPR Service - Whether royalty paid for license to pre-install Microsoft Operating System in computers manufactured by appellant constitutes Inte... [Read more]

Service Tax – Scope of Intellectual Property Rights Service - Royalty for pre-installation of Operating Software - Appellant procured license for pre-installation of operating software from Microsoft Corporation against payment of royalty under Microsoft Desktop Operating System License Agreement for OEM Customers - Department issued Show Cause Notice proposing demand of service tax alleging that activity of affixing Microsoft Windows could be treated as trademarks falling under IPR Service - Whether royalty paid for license to pre-install Microsoft Operating System in computers manufactured by appellant constitutes Intellectual Property Rights Service taxable under Section 65(55b) of Finance Act, 1994 - HELD - The definition of Intellectual Property Rights under Section 65(55a) of Finance Act, 1994 includes trademarks, designs, patents or any other similar intangible property under any law in force in India but specifically excludes copyright. The transaction in the present case involved license granted by Microsoft to pre-install copyrighted software which is software owned by Microsoft and the appellant was not granted copyright but only a license to use the software. Microsoft retained the copyright and merely transferred temporary enjoyment of the copyrighted software to appellant for pre-installation in computers and subsequent sub-licensing to buyers - Since copyright is specifically excluded from the definition of IPR under Section 65(55a), transfer or license to use copyright does not constitute IPR Service. The Show Cause Notice failed to identify or specify which intellectual property right falling within Section 65(55a) was involved and did not establish how the alleged intangible property was protected, registered or recognized under Indian law - The authority cannot demand service tax under IPR Service category without specifically identifying which intellectual property falling within Section 65(55a) is involved. From 16.05.2008, Information Technology Software Services became taxable for the first time with introduction of new provision covering right to use information technology software. Since old entry relating to IPR was not modified and new entry for ITSS was created separately covering this scope, the transaction was not covered under earlier entry prior to 16.05.2008 - The demand proposed for period prior to 16.05.2008 is set aside – The appeal is allowed - Service Tax - Extended Period of Limitation - Whether demand for service tax can be raised after expiry of normal period of limitation of one year when department was fully aware of transaction during normal period and when suppression cannot be established - HELD - When department is fully aware of relevant transactions and details during the normal period of limitation as evidenced by audit, correspondence and correspondence extending beyond the normal limitation period, it is not logical or sustainable to allege that information was suppressed by the appellant with intent to evade. The burden lies on department to prove that appellant had withheld information with intent to evade tax. When appellant is disputing liability in bona fide manner and disclosing all relevant information to department, mere fact that appellant did not take registration, file returns or pay service tax on matter that was in genuine dispute cannot constitute suppression. The extended period of limitation can only be invoked when there is proof of deliberate concealment or suppression of facts with intent to evade tax and not merely because assessment action was not taken during normal period - The demand confirmed by invoking extended period of limitation is set aside as it is beyond normal period of limitation and elements of suppression with intent to evade have not been established - Service Tax - Revenue Neutral Situation - Availability of CENVAT Credit - HELD - When service received is used in manufacture of dutiable goods and CENVAT Credit of the service tax paid would be available for discharge of Central Excise duty on such dutiable goods, the entire issue assumes a revenue neutral character. In such revenue neutral situations the intention to evade tax may be considered as absent and accordingly demand for extended period of limitation cannot be sustained as element of suppression with intent to evade is absent - Revenue cannot claim suppression with intent to evade when the financial position of both revenue and assessee would remain the same due to availment of CENVAT Credit. The circumstance of revenue neutral situation where CENVAT Credit was available forms an important consideration in determining whether suppression with intent to evade tax was present - The demand based on extended period of limitation in a revenue neutral situation is set aside. [Read less]

GST - Input Tax Credit Mismatch - Procedure under Circular 183/15/2022-GST –Show Cause Notice for alleged mismatch of Input Tax Credit between FORM GSTR-3B and FORM GSTR-2A - Petitioner contended that Circular No. 183/15/2022-GST dated 27.12.2022 mandates specific procedure before raising demand on account of ITC mismatch – Whether proper officer must follow procedure prescribed in Circular 183/15/2022-GST requiring verification of conditions of Section 16 before confirming demand on ITC mismatch – HELD - The proper officer is mandated by paragraph 4 of Circular No. 183/15/2022-GST to first seek details from register... [Read more]

GST - Input Tax Credit Mismatch - Procedure under Circular 183/15/2022-GST –Show Cause Notice for alleged mismatch of Input Tax Credit between FORM GSTR-3B and FORM GSTR-2A - Petitioner contended that Circular No. 183/15/2022-GST dated 27.12.2022 mandates specific procedure before raising demand on account of ITC mismatch – Whether proper officer must follow procedure prescribed in Circular 183/15/2022-GST requiring verification of conditions of Section 16 before confirming demand on ITC mismatch – HELD - The proper officer is mandated by paragraph 4 of Circular No. 183/15/2022-GST to first seek details from registered person regarding invoices on which ITC has been availed in FORM GSTR 3B but which are not reflecting in FORM GSTR 2A and then ascertain fulfillment of conditions of Section 16 of CGST Act - The impugned orders have been passed without adhering to procedure prescribed in paragraph 4 of the Circular – Impugned assessment and appellate orders passed without following procedure prescribed in Circular No. 183/15/2022-GST are unsustainable. Petitioner is directed to file comprehensive representation along with supporting documents before adjudicating authority who shall consider and dispose representation in light of circular by passing reasoned order after affording reasonable opportunity of hearing - writ petition is disposed of [Read less]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority ... [Read more]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority – Subsequent demands were issued and confirmed by respective authorities without considering special rates of value addition fixed – Whether Appellant entitled to benefit of special rate of value addition fixed by competent authority in terms of Notification No.19 & 34/2008 – HELD – Appellant is entitled to benefit of special rate of value addition in terms of Notification No.19 & 34. The hon'ble Supreme Court in VVF Ltd. clarified that refunds are not to be granted merely as per rates already prescribed in notification and authorities should give effect to all requirements and conditions contained in amending notifications – Impugned orders were passed disregarding the special rate of valuation fixed by competent authority. The authorities are required to re-do the whole exercise of demand calculation taking into account special rates of value addition fixed by competent authority – As the demand itself is not sustainable when calculated without special rates of value addition, interest is not payable – Appeals are allowed by way of remand to appellate authority with direction to recalculate demands taking into account special rates of value addition fixed by competent authority – The appeals are allowed by remand - Central Excise – Refund and Self-Credit – Duplication of demand – Appellant availed excess self-credit as refund under exemption notification – In several appeal periods, both excess availed refund and refund taken as self-credit and utilized for subsequent clearances were demanded and confirmed simultaneously – Whether demanding both excess refund and refund taken as self-credit utilized in subsequent clearances amounts to duplication of demand and double jeopardy to assessee – HELD – On one hand self-credit availed by Appellant under exemption notification has been confirmed and on other hand excise duty paid through self-credit in subsequent clearances has also been demanded; this is erroneous practice – Department should have demanded and confirmed only one of them. Demanding both excess refund and utilization of credit amounts to causing double jeopardy to assessees – The issue of duplication of demand needs to be looked into and rectified – Appeals are allowed by way of remand with direction to consider duplication of demand and allow only one of the demands instead of both. [Read less]

Customs - Limitation - Appeal filed before wrong Forum - Appellant filed appeal against Original Import Order within the stipulated period of 60 days but inadvertently submitted the appeal papers to the office of Commissioner of Customs instead of before the Commissioner of Customs (Appeals) - Whether the period during which the appeal was pending before a wrong Forum should be excluded from the period of limitation under Section 14 of the Limitation Act, 1963 - HELD - When an appeal is filed within the stipulated time period but before a wrong Forum or wrong Commissionerate due to administrative error or inadvertence on t... [Read more]

Customs - Limitation - Appeal filed before wrong Forum - Appellant filed appeal against Original Import Order within the stipulated period of 60 days but inadvertently submitted the appeal papers to the office of Commissioner of Customs instead of before the Commissioner of Customs (Appeals) - Whether the period during which the appeal was pending before a wrong Forum should be excluded from the period of limitation under Section 14 of the Limitation Act, 1963 - HELD - When an appeal is filed within the stipulated time period but before a wrong Forum or wrong Commissionerate due to administrative error or inadvertence on the part of the appellant, the provision of Section 14 of the Limitation Act, 1963 becomes applicable to the facts of the case. The period for which the appeal was lying with the wrong Forum requires to be excluded from the period of limitation and the appeal filed before the appropriate appellate authority can be considered as filed within time - Even if delay occurs in filing before the correct Forum after being informed of the error, such delay can be condoned having regard to the fact that the original appeal was filed within time and the receiving office could have transferred the appeal papers to the proper authority instead of merely informing the appellant that the same was filed before the wrong Forum. The principle that when an appeal is filed within time but before the wrong Commissionerate the period between submission at wrong Forum and re-submission at correct Forum should be excluded for the purpose of limitation has been consistently held by Tribunal and High Courts - Appeal is allowed by way of remand to the appellate authority with a direction to decide the issue on merits - Limitation - Appeal filed through email and received through post with delay - Appellant filed appeal against Order-in-Original through email within the stipulated period of 60 days from the date of Order-in-Original and sent hard copy through speed post on the same day, but the hard copy was received by Commissioner (Appeals) through postal mail on 24.02.2025, creating a delay of 5 days from the last date for filing appeal - Whether the appeal filed through email within time is barred by limitation when hard copy received through post was delayed - HELD - When an appeal has been filed through electronic means like email within the statutory time period of 60 days and the hard copy is subsequently sent through speed post on the same day, the appeal should not be rejected merely on the ground that the hard copy was received by the appellate authority with some delay through postal mail. The submission through email on the same day as speed post establishes that the appeal was filed within time and the delay in receipt of hard copy is attributable to postal delays and not to negligence or inaction of the appellant. A delay of mere 5 days is condonable by the learned Commissioner (Appeals) and such technical delay cannot be made ground for rejection of appeal when the substantive filing was made within time - The order rejecting the appeal on the ground of limitation is not sustainable when appeal was filed through email within prescribed time - Appeal is partly allowed on the ground that there is no delay in filing of appeal - Customs - Refund of excess duty paid under protest on Bills of Entry finally assessed without challenging assessment order - Appellant importer filed 81 Bills of Entry declaring classification under Customs Tariff Heading 3824 and paid Basic Customs Duty under protest at rates applicable to CTH 3402 with an apprehension that Department may issue SCN seeking reclassification and thereby impose differential duty, interest and penalty. The Bills of Entry were finally assessed by Department as per the declaration made by the appellant under CTH 3824. Appellant filed refund application seeking refund of excess duty paid under protest which was rejected on the ground that refund can only be allowed if the assessment order is challenged before the appellate authority and re-assessment is done - Whether refund of excess duty paid under protest can be claimed without challenging the finally assessed Bills of Entry - HELD - When an importer has declared classification in a particular Customs Tariff Heading and Bills of Entry are finally assessed accordingly by Department as per the declared classification, and the importer has paid duty under protest at higher rates applicable to a different Customs Tariff Heading with an apprehension that Department may take action seeking change of classification, the importer is entitled to claim refund of excess duty paid under protest without challenging the finally assessed Bills of Entry - The duty paid under protest is a clear indication to the Department that there is no voluntary payment and the Department is required to vacate the protest by taking appropriate action like filing an appeal or issuing a demand notice. When the Department fails to do so and the assessment becomes final, the importer is entitled to refund of excess duty paid - Each Bill of Entry is a separate legal proceeding and assessment in respect of one Bill of Entry has no bearing on the assessment of other Bills of Entry. The marking of protest itself gives information to the department that there is no requirement for reassessment and the assessment cannot be said to be finalised when the assessee has marked the protest while paying duty. The Department has to initiate proceedings to vacate the protest and pass speaking order of reassessment. When the Department fails to do this, the principle of unjust enrichment cannot be invoked to deny refund of duty paid under protest - The appellant is eligible for refund of excess duty paid under protest on Bills of Entry which are finally assessed under the classification declared by the appellant notwithstanding the outcome of proceedings in respect of other Bills of Entry – The appeal is partly allowed [Read less]

GST - Jurisdiction for Assessment under Section 63, writ jurisdiction - Application to Registered Person – Authorities passed order under Section 63 of CGST Act, 2017 assessing petitioner for period 2017-2018 which is pre-registration period. Petitioner contended that Section 63 applies only for assessment of unregistered persons and not for unregistered periods and cannot be applied to registered person – Whether Section 63 which provides for assessment of unregistered person can be applied to assess registered person for pre-registration period – HELD – If a person is aggrieved by an order passed under Section 63... [Read more]

GST - Jurisdiction for Assessment under Section 63, writ jurisdiction - Application to Registered Person – Authorities passed order under Section 63 of CGST Act, 2017 assessing petitioner for period 2017-2018 which is pre-registration period. Petitioner contended that Section 63 applies only for assessment of unregistered persons and not for unregistered periods and cannot be applied to registered person – Whether Section 63 which provides for assessment of unregistered person can be applied to assess registered person for pre-registration period – HELD – If a person is aggrieved by an order passed under Section 63 of the 2017 Act, the statute provides for first appeal under Section 107 of CGST Act, which is otherwise and efficacious, alternative statutory remedy - To come to a conclusion whether the pre-registration transaction would be covered under the provisions of Section 63 for an existing registered person, some fact finding enquiries are required to be conducted. The impugned order does not demonstrate to be ex facie without jurisdiction unless a proper adjudication is made for which the first appellate authority is the appropriate and jurisdictional forum – The petition is disposed of [Read less]

GST - Section 140 of CGST Act, 2017 - Pre-deposit requirement in appeal before CESTAT - Mode of payment - Petitioner made mandatory pre-deposit required for entertaining appeal by debiting Electronic Credit Ledger using CENVAT credit transitioned under Section 140 of CGST Act, 2017 - CESTAT rejected the pre-deposit on ground that Section 35F mandates cash payment through designated CBIC portal only - Whether pre-deposit under Section 35F can be validly made by utilizing transitioned CENVAT credit debited from Electronic Credit Ledger - HELD - Section 35F of Central Excise Act, 1944 does not prescribe any exclusive mode of ... [Read more]

GST - Section 140 of CGST Act, 2017 - Pre-deposit requirement in appeal before CESTAT - Mode of payment - Petitioner made mandatory pre-deposit required for entertaining appeal by debiting Electronic Credit Ledger using CENVAT credit transitioned under Section 140 of CGST Act, 2017 - CESTAT rejected the pre-deposit on ground that Section 35F mandates cash payment through designated CBIC portal only - Whether pre-deposit under Section 35F can be validly made by utilizing transitioned CENVAT credit debited from Electronic Credit Ledger - HELD - Section 35F of Central Excise Act, 1944 does not prescribe any exclusive mode of payment and neither mandates payment in cash nor prohibits utilisation of available credit. Under pre-GST regime legal position was well settled that CENVAT credit could be utilised for mandatory pre-deposit - Section 140 of CGST Act was enacted with specific object of protecting vested rights of taxpayers in unutilised CENVAT credit and transition of credit into Electronic Credit Ledger did not create new credit but merely preserved existing credit in different form with legislative intent being continuity and not extinguishment of rights - Conjoint reading of Section 140 of CGST Act with Rule 142(3) of CGST Rules means that CENVAT credit transitioned could be utilised for payment of any tax, interest or penalty under new regime – The CBIC Instruction dated 28.10.2022 was issued to prescribe administrative procedure for cash payments and does not contain any provision prohibiting utilisation of transitioned credit and administrative instruction cannot curtail or override mode of payment recognised under statutory scheme - The Tribunal proceeded primarily on basis of administrative Instruction without adequately examining statutory scheme or binding judicial precedents. Pre-deposit being only portion of disputed demand intended to secure interest of Revenue, once amount debited from Electronic Credit Ledger and credited to Government, statutory requirement stands satisfied – The impugned order is quashed. Pre-deposit made by debiting Electronic Credit Ledger through Form GSTR-3B constitutes valid compliance of Section 35F of Central Excise Act, 1944 as made applicable to service tax matters - Writ petition is allowed [Read less]

Customs Broker Licensing Regulations, 2018 – Suspension of License – Mandatory Procedure under Regulation 16(2) – Whether the respondent authority can legally continue the suspension under Regulation 16(2) when the mandatory post-decisional hearing, which was to be held within fifteen days from the date of suspension, was conducted beyond the prescribed statutory period entirely at the instance of the respondent authority itself – HELD – The expression "shall, within fifteen days" contained in Regulation 16(2) unmistakably indicates that the timeline is mandatory and not merely directory, constituting an importan... [Read more]

Customs Broker Licensing Regulations, 2018 – Suspension of License – Mandatory Procedure under Regulation 16(2) – Whether the respondent authority can legally continue the suspension under Regulation 16(2) when the mandatory post-decisional hearing, which was to be held within fifteen days from the date of suspension, was conducted beyond the prescribed statutory period entirely at the instance of the respondent authority itself – HELD – The expression "shall, within fifteen days" contained in Regulation 16(2) unmistakably indicates that the timeline is mandatory and not merely directory, constituting an important procedural safeguard against arbitrary or prolonged suspension. The legislature has mandated that the Customs Broker shall be afforded a post-decisional hearing within fifteen days from the date of suspension, recognising that the initial suspension is ordered without granting a prior hearing on account of the urgency of the situation. The statutory safeguard cannot be diluted by administrative convenience or procedural delays attributable to the licensing authority - A timeline prescribed by law cannot be modified by administrative action. The respondent could not enlarge or extend a statutory period fixed by the delegated legislation. Acceptance of such a proposition would render the safeguard contained in Regulation 16(2) wholly illusory and would defeat the legislative intent underlying the provision. The conduct of the respondent itself, by postponing the hearing beyond the prescribed period, belies the existence of compelling urgency as would be required to invoke Regulation 16(1). The rule of law demands equal fidelity to both substantive powers and procedural safeguards – The impugned order is set aside. The continuation of suspension of the appellant's Customs Broker Licence stands revoked – The appeal is allowed [Read less]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular... [Read more]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular sheets used for exercise books graph books laboratory notebooks and notebooks from the whole of central tax leviable thereon. The legislative scheme undoubtedly creates a use-based distinction within Heading 4802 whereby uncoated paper is exempt when used for exercise books and notebooks but attracts 18% GST when used for other purposes - The expression used for in Entry No. 128 denotes a factual relationship between the goods and the specified use and at the point when the supplier effects the supply the future utilization of the paper by the purchaser has not yet occurred - The CGST Act 2017 and the Rules made thereunder and the notifications dated 17.09.2025 do not prescribe any statutory procedure mechanism or documentary requirements for determining end-use verification. However, no provision recognizes purchaser declarations purchase orders or contractual stipulations as conclusive proof of fulfillment of the end-use condition. The Authority cannot rewrite or supplement the notification by introducing additional conditions creating procedural safeguards or prescribing evidentiary standards absent from the law - The application is answered to the extent that Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) exempts uncoated paper used for exercise books and notebooks however no advance ruling can be pronounced on the procedure or manner for availing the exemption being outside the purview of Section 97(2) of the CGST Act 2017 – Ordered accordingly [Read less]

GST – West Bengal AAR - Pure Agent Service - Exclusion of Reimbursement from Value of Supply - Applicant is acting as facilitator for arranging hotel accommodation through third-party agents and charging separate facilitation fee besides recovering actual hotel cost as reimbursement without GST - Whether applicant qualifies as Pure Agent under Rule 33 of CGST Rules, 2017 and can exclude actual hotel accommodation cost from taxable value of supply - HELD – The Rule 33 and the Explanation thereto prescribe four mandatory cumulative conditions for qualifying as Pure Agent namely the supplier must enter into contractual ag... [Read more]

GST – West Bengal AAR - Pure Agent Service - Exclusion of Reimbursement from Value of Supply - Applicant is acting as facilitator for arranging hotel accommodation through third-party agents and charging separate facilitation fee besides recovering actual hotel cost as reimbursement without GST - Whether applicant qualifies as Pure Agent under Rule 33 of CGST Rules, 2017 and can exclude actual hotel accommodation cost from taxable value of supply - HELD – The Rule 33 and the Explanation thereto prescribe four mandatory cumulative conditions for qualifying as Pure Agent namely the supplier must enter into contractual agreement with recipient to act as pure agent to incur expenditure in course of supply, must neither intend to hold nor hold any title to goods or services procured, must not use for own interest the goods or services procured and must receive only actual amount incurred plus amount for services provided on own account. All four conditions must be satisfied simultaneously and cumulatively - In the present case the applicant fails to satisfy condition (a) as there is no contractual agreement between applicant and end customer authorizing applicant to incur expenditure as pure agent in course of supply of booking service - The applicant further fails condition (b) as the third-party agent issues invoice in the name of applicant not in name of end customer which creates scenario where applicant holds title to services procured from third-party agent - The applicant also fails condition (c) as by holding title to services it is using services for own interest of providing services to end customer. Further the applicant receives amount incurred for hotel room booking as well as for intermediary services of third-party agent without prior knowledge or authorization of end customer thus failing condition (d) - In absence of a contractual agreement specifically authorizing incurrence of expenditure as pure agent in course of supply, the agent loses its status as pure agent. Mere bifurcation of invoice showing reimbursement and facilitation fee separately does not confer pure agent status if mandatory conditions are not satisfied - The applicant does not qualify as pure agent and provisions of Rule 33 do not apply. Service of booking of hotel room falls under SAC 998552 for reservation services for accommodation, cruises and package tours attracting 18% GST on entire consideration - Ordered accordingly [Read less]

Service Tax - CENVAT Credit - Availment of CENVAT credit on input service invoices with address mismatch with registration certificate - Whether CENVAT credit can be denied merely on the ground that the address mentioned in input service invoices does not tally with the address in the Form-ST2 registration certificate if invoices otherwise contain all prescribed particulars - HELD - The issuance of invoices by the service provider with an address that differs from the registered address in Form-ST2 does not by itself make the invoices invalid documents for purposes of claiming CENVAT credit if the invoices contain all othe... [Read more]

Service Tax - CENVAT Credit - Availment of CENVAT credit on input service invoices with address mismatch with registration certificate - Whether CENVAT credit can be denied merely on the ground that the address mentioned in input service invoices does not tally with the address in the Form-ST2 registration certificate if invoices otherwise contain all prescribed particulars - HELD - The issuance of invoices by the service provider with an address that differs from the registered address in Form-ST2 does not by itself make the invoices invalid documents for purposes of claiming CENVAT credit if the invoices contain all other particulars required under Rule 4A of the Service Tax Rules, 1994 and Rule 9(2) of the CENVAT Credit Rules, 2004 – Dept cannot reject CENVAT credit on mere technicality of address mismatch without appreciating the substantive aspects of whether the conditions for availment of CENVAT credit have been satisfied. When an invoicing discrepancy results from administrative lapse or inadvertence in the accounting system of the service provider and not from fraudulent intent or intentional violation, such technical non-compliance cannot be the sole ground for denying CENVAT credit if the invoices otherwise fulfill all material requirements of law - The fact that audit team had accepted the invoices for a period of more than four years demonstrates that the invoices were not considered invalid during the audit process and the belated action of the authority cannot be based on mere technicality. The authority is required to record reasoned findings by addressing the contentions raised by the assessee instead of deciding the matter on mere technicalities without application of mind to the merits - The order denying CENVAT credit and imposing penalty is set aside and the matter is remanded to the authority for fresh consideration with proper application of law – The petition is allowed [Read less]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained fina... [Read more]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained finality without any legal basis and such exercise is contrary to the scheme of the statute - A subordinate authority is bound by the findings of a higher or competent authority unless such findings are set aside in accordance with law and principles of judicial discipline require that orders of higher appellate authorities must be followed unreservedly by subordinate authorities - The mere fact that the order of appellate authority is not acceptable to the department and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court - The controversy already stands adjudicated by the Division Bench and there is no reason to take a different view - The impugned show cause notices are quashed and set aside as being without jurisdiction – The writ petition is allowed [Read less]

GST - Show Cause Notice - Jurisdiction and Limitation – The earlier Show Cause Notice was quashed by writ court which granted liberty to issue fresh Show Cause Notice under Section 74 if jurisdictional ingredients of fraud or wilful misstatement or suppression of facts to evade tax exist - Petitioner challenged fresh Show Cause Notice on ground that it was issued beyond limitation period - Whether fresh Show Cause Notice under Section 74 can be issued by revenue authorities beyond normal limitation period on basis of writ court's direction and whether the Revenue lost jurisdiction due to withdrawal of earlier notice unde... [Read more]

GST - Show Cause Notice - Jurisdiction and Limitation – The earlier Show Cause Notice was quashed by writ court which granted liberty to issue fresh Show Cause Notice under Section 74 if jurisdictional ingredients of fraud or wilful misstatement or suppression of facts to evade tax exist - Petitioner challenged fresh Show Cause Notice on ground that it was issued beyond limitation period - Whether fresh Show Cause Notice under Section 74 can be issued by revenue authorities beyond normal limitation period on basis of writ court's direction and whether the Revenue lost jurisdiction due to withdrawal of earlier notice under Section 73 - HELD - The writ court's order dated 27.09.2024 quashing earlier SCN and granting specific liberty to revenue to initiate fresh proceedings under Section 74 has attained finality as neither party challenged the same before Supreme Court. The writ court's order is not shown to have reached any finding that jurisdiction to initiate proceeding under Section 74 did not exist but by making direction conditional on existence of jurisdictional ingredients of fraud or willful misstatement or suppression of facts, positive direction was issued allowing fresh adjudication - Section 75(3) of the Act provides that where any order is issued in pursuance of direction of Court, such order shall be issued within two years from communication of that direction. Though Section 75(3) contemplates remand after adjudication order, by virtue of specific writ court direction, limitation to pass fresh order existed upto two years from communication of order dated 27.09.2024. Applying this principle the impugned notice dated 22.07.2026 is issued within prescribed limitation. The fact that earlier notice under Section 73 was withdrawn does not deprive revenue of jurisdiction to issue notice under Section 74 as both sections operate in different fields – While Section 73 covers wrongly availed ITC for reasons other than fraud or wilful misstatement, Section 74 covers cases involving fraud or wilful misstatement or suppression of facts. These are distinct jurisdictional bases and proceedings under one section do not preclude proceedings under the other section - However, impugned notice is set aside due to element of prejudice discernible from observations made by adjudicating authority. Matter remitted for issuance of fresh notice if jurisdictional facts exist by different officer and proceedings to be concluded expeditiously – The Writ petition is disposed of [Read less]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequac... [Read more]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequacy of material correctness of factual findings compliance with procedure relating to personal hearing admissibility of electronic evidence denial of cross-examination and correctness of findings are matters relating to the merits of adjudication appropriately examined by the appellate authority - The procedural grievances urged by the petitioners are not uniform across the batch and to the extent they arise in individual cases require examination with reference to the respective adjudication records and the prejudice if any caused to the concerned petitioner - None of the circumstances disclosed disclose circumstances warranting bypass of the statutory appellate mechanism - The writ petitions are dismissed leaving it open to the concerned petitioners to avail the statutory remedy of appeal [Read less]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the conte... [Read more]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the contention based on Section 6(2)(b) of the CGST Act does not disclose such a jurisdictional infirmity as would warrant bypassing the statutory remedy of appeal - The order dated 06-09-2022 pertained to proceedings relating to goods seized during search whereas the order dated 11-01-2025 came to be passed after investigation and consideration of the reply - The two proceedings cannot merely on that basis be treated as parallel adjudication of the same subject matter - The availability of an alternative remedy does not render a writ petition not maintainable - The petitioner is relegated to the statutory remedy of appeal under Section 107 of the CGST Act – The writ petition is disposed of [Read less]

Customs – Duty Free Import Authorisation Scheme – Entitlement of wheat gluten to exemption from Basic Customs Duty as wheat flour – Petitioner imported Vital Wheat Gluten claiming exemption from BCD under DFIA Scheme on the basis of authorisation permitting duty-free import of wheat flour – Seizure memo was issued on the ground that wheat gluten is commercially and technically distinct from wheat flour and therefore not entitled to the benefit of exemption – Whether wheat gluten is covered by the expression wheat flour for the purposes of the DFIA Scheme and whether seizure memo based on suspended Public Notice i... [Read more]

Customs – Duty Free Import Authorisation Scheme – Entitlement of wheat gluten to exemption from Basic Customs Duty as wheat flour – Petitioner imported Vital Wheat Gluten claiming exemption from BCD under DFIA Scheme on the basis of authorisation permitting duty-free import of wheat flour – Seizure memo was issued on the ground that wheat gluten is commercially and technically distinct from wheat flour and therefore not entitled to the benefit of exemption – Whether wheat gluten is covered by the expression wheat flour for the purposes of the DFIA Scheme and whether seizure memo based on suspended Public Notice is sustainable – HELD – Wheat gluten is wheat flour with specific technical characteristics and qualifies for exemption under the DFIA Scheme. This issue had already been examined by the CESTAT which held that wheat gluten is nothing but wheat flour having specific technical characteristics and therefore is entitled to the benefit available under the DFIA Scheme. A Coordinate Bench of this Court concluded that wheat flour and wheat gluten fall under the same description for the purpose of the DFIA Scheme. These decisions have attained finality - The principal basis for issuing the impugned seizure memo is the Public Notice dated 02.11.2016 which had been suspended on 26.08.2025 prior to the import. Once the public notice stands suspended, it ceases to operate prospectively - The Circular dated 24.07.2025 clarifies that no technical correlation is required to establish between imported goods and export product in cases like the present one. The power of seizure can be exercised only when the proper officer has reason to believe that the goods are liable to confiscation and such belief must be based on relevant and legally sustainable material. It cannot be founded on material which has ceased to have legal force or which is contrary to binding judicial decisions. The respondents had no legally sustainable material before them to form the requisite reason to believe that the imported goods were liable to confiscation – The impugned seizure memo is quashed and the bank guarantee furnished by the petitioner is directed to be discharged – The writ petition is allowed [Read less]

Central Excise - Liability for payment of Clean Energy Cess on coal by producer and purchaser - Appellant tea producing companies purchased coal and were demanded to pay Clean Energy Cess on the coal purchased by them - Whether liability for payment of Central Excise Cess on coal can be passed on the purchaser who is the consumer and not the producer of coal - HELD - Section 2(f), 2(h), Section 3 and Section 4 of the Clean Energy Cess Rules, 2010 clearly provides that it is only a producer of raw coal, raw lignite and raw peat who is to pay cess on removal of the specified goods from a mine and not the purchaser. The defin... [Read more]

Central Excise - Liability for payment of Clean Energy Cess on coal by producer and purchaser - Appellant tea producing companies purchased coal and were demanded to pay Clean Energy Cess on the coal purchased by them - Whether liability for payment of Central Excise Cess on coal can be passed on the purchaser who is the consumer and not the producer of coal - HELD - Section 2(f), 2(h), Section 3 and Section 4 of the Clean Energy Cess Rules, 2010 clearly provides that it is only a producer of raw coal, raw lignite and raw peat who is to pay cess on removal of the specified goods from a mine and not the purchaser. The definition of producer under the rules means any person engaged in the production of specified goods and includes an owner or agent as defined under Section 2 of the Mines Act, 1952 - The appellants herein are all tea producing companies who have purchased coal from the seller and therefore in terms of the above provisions of the Clean Energy Cess Rules, 2010 made pursuant to Section 84 of the Finance Act, 2010, the appellants are not liable to pay any cess on the coal purchased by them. The cess liability cannot be shifted from the producer to the purchaser merely on account of the purchaser using the coal - The impugned orders by the CESTAT are set aside to the extent that appellants have been made liable to pay penalty for release of the confiscated raw coal - The demand for payment of cess by the purchasers of coal is set aside and the liability for cess payment remains only with the producer of coal - The appeals are allowed - Penalty: Whether the appellant (Tea Companies) are liable to pay penalty, due to the confiscation of their purchased coal under Section 34 of the Central Excise Act, 1944 r/w Rule 25 of the Central Excise Rule, 2002 – HELD – The Rule 25 of the Central Excise Rules, 2002 is clearly not applicable to the case of the appellants herein, as it is not the case of the respondents that they come within the meaning of producer, manufacturer, registered person of a ware house or an importer or a registered dealer of the coal purchased by them - The conditions required for paying penalty, for keeping possession of goods which has escaped payment of cess, requires the person in whose possession it is found, to have known or had reason to believe that the said goods were liable to confiscation. There is nothing records to show that the authorities had come to a definite finding that the appellants had the knowledge or had reason to believe, that the coal that they had purchased, were liable to confiscation under the Central Excise Act, 1944 or the Central Excise Rules, 2002 - There was no question of payment of fines/ penalty for the confiscated goods by the appellants-purchasers. [Read less]

Gujarat Value Added Tax Act, 2003 - Composition Permission - Reassessment based on Change of Opinion on rate of tax – Assessee engaged in restaurant business and resale of liquor obtained composition permission for restaurant business under Section 14D of VAT Act and paid normal tax rate on liquor resale purchased from outside the State as it could not be produced in the State. Audit assessment accepted this position. Subsequently reassessment notice was issued to withdraw composition benefit – Whether reassessment order initiated on change of opinion about tax rate without proper evidence is valid and whether composit... [Read more]

Gujarat Value Added Tax Act, 2003 - Composition Permission - Reassessment based on Change of Opinion on rate of tax – Assessee engaged in restaurant business and resale of liquor obtained composition permission for restaurant business under Section 14D of VAT Act and paid normal tax rate on liquor resale purchased from outside the State as it could not be produced in the State. Audit assessment accepted this position. Subsequently reassessment notice was issued to withdraw composition benefit – Whether reassessment order initiated on change of opinion about tax rate without proper evidence is valid and whether composition permission can be withdrawn when goods cannot be produced in the State due to legal constraints – HELD - After the retrospective amendment to Rule 28C(6) of the VAT Rules purchase of goods from outside the State is permissible by a dealer enjoying composition permission where such goods could not be produced in the State due to legal constraints and tax is paid at normal rate on resale - The assessee had determined the turnover of liquor separately and paid tax at normal Schedule Rate which was accepted in the Audit assessment order. The provision of Section 14D read with amended proviso to Rule 28C(6) stipulates that a dealer is entitled to the benefit of composition permission if goods are not capable of being produced in the State of Gujarat for any reason and tax is paid at normal rate on such goods. The amendment is retrospective in nature - The reassessment order ignoring the composition permission and raising demand on the entire turnover at normal rate was wrongly confirmed by the First Appellate Authority without considering merit of the case. The reassessment was carried on based on merely change of opinion about the rate of tax - The Tax Appeal by Revenue stands dismissed [Read less]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic tes... [Read more]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic test, and repurchased the certified seeds - Whether certified seeds so prepared fall within the exemption notification dated 29.04.2006 which exempts seeds of all types other than imported seeds used for sowing purpose from tax - HELD - The Government Notification dated 29.04.2006 clearly exempts seeds of all types other than imported seeds used for sowing purpose from tax - The Respondent is not importing any seeds and the seeds in question are used only for sowing purposes - The certified seeds are prepared under the research and development program of the Respondent wherein the Respondent remains present in the farms and undertakes proper research such as germination test, grow out test and genetic test to produce certified seeds which are packed and sold with compensation paid on kilo rate basis - Such seeds which are prepared through research and development program cannot be said to be seeds of business and purchase warranting levy of purchase tax under Section 9(1) of the Act - The subsequent determination order in case of M/s. King and Queen Seeds Corporation wherein the determining authority held that seeds prepared under research and development program cannot be said to be of business and purchase is applicable to the case of the Respondent - The earlier determination order in case of M/s. Green India Farm Biotech is distinguishable as no one remained present before the determining authority in that case and hence the decision taken was that purchase tax was leviable - The Revision Application filed by the Respondent challenging the revisional order which sought to levy purchase tax is allowed and the revisional order is set aside - The writ petition challenging the Tribunal's order is dismissed [Read less]

Customs - Adjudication Limitation - Scope of Expression "Where it is Possible to Do So" –Show Cause Notice issued under Section 28(4) of Customs Act, 1962 which mandated adjudication within one year from date of notice "where it is possible to do so". Petitioner contended that the expression does not confer power on adjudicating authority to keep assessment pending for unreasonable period and adjudication must be completed within one year or demonstrate that completion was impracticable – Whether the expression "where it is possible to do so" as it existed at time of issuance of Show Cause Notice permits adjudicating a... [Read more]

Customs - Adjudication Limitation - Scope of Expression "Where it is Possible to Do So" –Show Cause Notice issued under Section 28(4) of Customs Act, 1962 which mandated adjudication within one year from date of notice "where it is possible to do so". Petitioner contended that the expression does not confer power on adjudicating authority to keep assessment pending for unreasonable period and adjudication must be completed within one year or demonstrate that completion was impracticable – Whether the expression "where it is possible to do so" as it existed at time of issuance of Show Cause Notice permits adjudicating authority to keep proceedings indefinitely pending or whether it carries obligation to complete adjudication within stipulated period – HELD - The expression "where it is possible to do so" indicates that it is incumbent on officer concerned to demonstrate that it was not practicable to complete adjudication within stipulated period of one year from date of issuance of notice. The phrase "where it is possible to do so" means that adjudication is possible or practicable within one year. The expression cannot be understood as enabling or conferring power on adjudicating authority to keep assessment pending for an unreasonable period - Any attempt to construe the expression in such manner would defeat very purpose and object of prescribing limitation which is to extinguish stale demands and may render provision vulnerable to challenge on ground of being arbitrary thereby falling foul of Article 14 of Constitution. Even where no limitation is prescribed for taking any action including adjudication, it must be made within a reasonable time. Failure to complete adjudication within reasonable period would suffer from vice of arbitrariness thereby falling foul of Article 14 of Constitution – The expression "where it is possible to do so" mandates adjudication within one year from date of notice unless impracticability is demonstrated - The impugned order is set aside as barred by limitation – The petition stands disposed of - Customs - Adjudication Limitation - Applicability of Amendment to Section 28(9) via Finance Act 2018 to Proceedings Initiated Before Amendment – Petitioner contended that amendment should not apply to proceedings initiated before amendment and even if amendment applies, adjudication must be completed within two years from date of amendment – Whether amendment to Section 28(9) vide Finance Act 2018 applies to proceedings initiated prior to amendment and whether adjudication order passed beyond extended period of two years from date of amendment is sustainable – HELD - Limitation is part of procedural law and thus normally retrospective in nature with one condition superadded namely that an extended period of limitation would not revive dead claim. A claim which was time-barred before an amending Act with a larger period of limitation comes into force cannot be revived. When Show Cause Notice was issued on 05.08.2009, adjudication ought to be completed within one year i.e. by 05.08.2010 under expression "where it is possible to do so". The amendment to Section 28(9) was made after 9 years from date of notice which by itself is unreasonable to keep adjudication pending. By that time the claim had already become dead as it was barred under the law existing at time of notice. The amendment only enables adjudication to be made within period of two years from date of notice which if applied from date of amendment i.e. 29.03.2018 would expire by 29.03.2020. However impugned order is passed on 19.02.2024, almost four years thereafter. In any view the amended provision cannot rescue adjudication which had become barred by limitation under original provision – The amendment to Section 28(9) vide Finance Act 2018 does not apply to proceedings initiated prior to amendment as the claim had become dead before amendment came into force. Adjudication order passed on 19.02.2024 is barred by limitation - In any view, the delay of 14 years in adjudicating show cause notice is unreasonable, thereby suffers from the vice of arbitrariness and falls foul of Article 14 of the Constitution of India, thus unsustainable. [Read less]

GST – Tamil Nadu AAR - Classification of Compostable Bags and Packing Materials made from Polymer Blend - Applicant engaged in manufacturing compostable bags and packing materials made from blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) certified under IS/ISO 17088 standards by CIPET and certified by CPCB. Applicant classified products under Chapter heading 3923 as articles for conveyance or packing of goods attracting 18% GST - Whether compostable bags made from PLA-PBAT blend are classifiable under Chapter 39 for plastic articles or Chapter 48 for paper articles and appropriate HSN - HEL... [Read more]

GST – Tamil Nadu AAR - Classification of Compostable Bags and Packing Materials made from Polymer Blend - Applicant engaged in manufacturing compostable bags and packing materials made from blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) certified under IS/ISO 17088 standards by CIPET and certified by CPCB. Applicant classified products under Chapter heading 3923 as articles for conveyance or packing of goods attracting 18% GST - Whether compostable bags made from PLA-PBAT blend are classifiable under Chapter 39 for plastic articles or Chapter 48 for paper articles and appropriate HSN - HELD - The material composition of the compostable bag as revealed by test report is a blend of Poly Lactic Acid (PLA) and Poly Butylene Adipate Terephthalate (PBAT) which are plastic or polymer materials and not paper. Compostable bags made from polymer blends are therefore classifiable under Chapter 39 ‘Plastics and Articles Thereof’ and more specifically under Chapter heading 3923 2990 which covers articles for conveyance or packing of goods of other plastics including sacks and bags. The classification is determined by actual material composition of the goods and the test report clearly establishes the material to be plastic or polymer based and not paper based. Therefore, products should be classified under Chapter 39 HSN 3923 2990 and not under Chapter 48 - Compostable bags are classifiable under Chapter 39, specifically HSN 3923 2990 – Ordered accordingly - GST - Rate of Tax - Biodegradable Bags - Whether supplies of compostable bags made from PLA-PBAT blend and certified under IS/ISO 17088 are covered by entry for biodegradable bags in Notification 9/2025-CTR attracting concessional rate of 5% GST - HELD - Entry 319 of Notification 9/2025-CTR provides concessional rate of 5% for paper sacks and bags and biodegradable bags subject to condition that goods are biodegradable. To qualify as biodegradable bags within meaning of this notification the products must conform to IS/ISO 17899 T:2022 prescribed for biodegradable plastics under Rule 10(3) and Rule 10(4) of Plastic Waste Management Rules, 2016 as amended - The applicant's compostable bags cannot be classified as biodegradable bags for purposes of Notification 9/2025-CTR as they are specifically excluded from scope of biodegradable standards. Press release or legislative intent regarding rate reduction cannot override the statutory definitions and certification requirements prescribed under Plastic Waste Management Rules which specifically distinguish between compostable and biodegradable plastics. Compliance with statutory norms including CPCB certification under IS/ISO 17899 T:2022 is fundamental requirement and not merely procedural technicality – The supply of compostable bags are not covered by entry 319 for biodegradable bags in Notification 9/2025-CTR and 18% GST remains applicable. [Read less]