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Central Excise - Cenvat Credit on Input Services - Centralized Registration - ISD Distribution Requirement - Assessee paid service tax under Reverse Charge through its centralized registration and availed Cenvat Credit on the basis of GAR-7 challans - Department contended that since the head office was registered as an Input Service Distributor (ISD), the credit should have been distributed by the ISD unit to the manufacturing unit - Whether an assessee can avail Cenvat Credit on input services received at its manufacturing unit by paying service tax through its centralized registration and claiming credit on the basis of ... [Read more]

Central Excise - Cenvat Credit on Input Services - Centralized Registration - ISD Distribution Requirement - Assessee paid service tax under Reverse Charge through its centralized registration and availed Cenvat Credit on the basis of GAR-7 challans - Department contended that since the head office was registered as an Input Service Distributor (ISD), the credit should have been distributed by the ISD unit to the manufacturing unit - Whether an assessee can avail Cenvat Credit on input services received at its manufacturing unit by paying service tax through its centralized registration and claiming credit on the basis of GAR-7 challans, without the requirement of distribution through the ISD route – HELD - The assessee has rightly availed the Cenvat Credit on input services through its centralized registration. The service tax payment challan is a valid and admissible document for claiming credit as provided under Rule 9(1)(e) of the Cenvat Credit Rules. Distribution through ISD is not mandatory when the input services are availed only by a specific unit and not common to all units. The invoices were issued directly to the assessee's manufacturing unit, and the payment of service tax was made by the assessee itself through its centralized registration. The impugned orders have been passed on an incorrect factual understanding of the transaction - The Tribunal in M/s Luminous Power Technologies Pvt Ltd case held that service tax payment challans are valid documents for credit availment and that non-registration as ISD or non-distribution through ISD route is a procedural lapse which cannot deny the substantive right of Cenvat Credit when all material facts and conditions are satisfied – Further, the entire transaction is revenue neutral and the records are available for verification. Procedural infirmities cannot be used to deny a substantive statutory right when the underlying substance of the transaction is correct and compliant with the rules - The impugned orders are set aside and the appeals are allowed [Read less]

Service Tax - Export of Business Support Services vs. Intermediary Services, Refund of unutilized CENVAT Credit – Appellant is engaged by its overseas parent entity to provide Business Support Services including market research, vendor selection, quality inspection, trademark protection compliance, and logistics coordination for procurement of goods from India on a cost-plus mark-up basis - Whether business support services comprising market research, vendor information gathering, quality inspection and logistics coordination provided by an Indian company to its overseas principal entity qualify as 'export of services' u... [Read more]

Service Tax - Export of Business Support Services vs. Intermediary Services, Refund of unutilized CENVAT Credit – Appellant is engaged by its overseas parent entity to provide Business Support Services including market research, vendor selection, quality inspection, trademark protection compliance, and logistics coordination for procurement of goods from India on a cost-plus mark-up basis - Whether business support services comprising market research, vendor information gathering, quality inspection and logistics coordination provided by an Indian company to its overseas principal entity qualify as 'export of services' under Rule 6A of the Service Tax Rules, 1994, or constitute 'intermediary services' as defined under Rule 2(f) of the Place of Provision of Services Rules, 2012 – HELD - The critical distinction in determining intermediary services lies in the relationship between the service provider and recipient and the nature of services provided. Intermediary services require the intermediary to act as an agent, broker or facilitator arranging or facilitating services between two or more persons, which necessarily implies authority to contract with third parties on behalf of the principal - In the present case, the service provider acted as an independent contractor providing services directly to the overseas entity on a principal-to-principal basis without any tripartite arrangement with vendors. The service provider neither had authority to approve or conclude contracts on behalf of the overseas entity nor did it facilitate transactions between the overseas entity and vendors; rather, it provided information and performed quality checks upon instructions from the principal. The consideration received by the service provider was based on cost-plus mark-up and was independent of the value of goods supplied by vendors, thereby negating any element of facilitation or arrangement of supply – The appellant is entitled to refund of unutilized CENVAT Credit. The impugned order rejecting the refund claim is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of Late Payment Surcharge on Electricity Supply – Respondent is a power generation company collected late payment surcharge from distribution companies for delayed payment of electricity bills beyond the prescribed due date in accordance with Power Purchase Agreements and Central Electricity Regulatory Commission Regulations - Revenue authority sought to levy service tax on such surcharge as a declared service under Section 66E(e) of the Finance Act, 1994 - Whether late payment surcharge collected for delayed payment of electricity bills constitutes a taxable declared service under Section 66E(e)... [Read more]

Service Tax - Taxability of Late Payment Surcharge on Electricity Supply – Respondent is a power generation company collected late payment surcharge from distribution companies for delayed payment of electricity bills beyond the prescribed due date in accordance with Power Purchase Agreements and Central Electricity Regulatory Commission Regulations - Revenue authority sought to levy service tax on such surcharge as a declared service under Section 66E(e) of the Finance Act, 1994 - Whether late payment surcharge collected for delayed payment of electricity bills constitutes a taxable declared service under Section 66E(e) of the Finance Act, 1994, or forms an integral component of the exempt electricity supply – HELD - The late payment surcharge is not a separately taxable service but an integral and ancillary component of the principal supply of electricity, which is exempt from service tax under the negative list regime. The electricity generation and distribution is a goods supply exempted under Section 66D(f) of the Finance Act, and late payment surcharge is intrinsically linked to electricity supply with no independent existence. The CBIC Circular No. 214/1/2023-ST dated 28.02.2023 and Circular No. 178/10/2022-GST dated 03.08.2022, clarify that late payment charges constitute facilities naturally bundled with the main supply and must be assessed as part of the principal supply – Further, prior to the negative list regime, various Circulars issued by the Board itself clarified that late payment surcharges are penal in nature for losses caused by delayed payment and do not represent any service provided by one person to another. There is no artificial bifurcation of activities; rather, late payment surcharge is a composite supply integrated with electricity delivery such that without electricity supply there would be no surcharge - The order-in-original dropping the entire service tax demand on late payment surcharge is upheld and the Revenue appeal is dismissed [Read less]

GST - Sections 54, 140, 142 of the CGST Act, 2017 - Refund of Transitional Input Tax Credit under Section 54(3) - Upon migration to the GST regime effective from 01.07.2017, the petitioner carried forward this accumulated credit through Form GST TRAN-1, which stood reflected in the Electronic Credit Ledger. Subsequently, the petitioner accumulated Input Tax Credit on account of inverted duty structure – The petitioner filed application for refund under Section 54(3) of the CGST Acts. The tax authority sanctioned only part refund and rejected the balance claim on the ground that it represented Transitional Credit not refu... [Read more]

GST - Sections 54, 140, 142 of the CGST Act, 2017 - Refund of Transitional Input Tax Credit under Section 54(3) - Upon migration to the GST regime effective from 01.07.2017, the petitioner carried forward this accumulated credit through Form GST TRAN-1, which stood reflected in the Electronic Credit Ledger. Subsequently, the petitioner accumulated Input Tax Credit on account of inverted duty structure – The petitioner filed application for refund under Section 54(3) of the CGST Acts. The tax authority sanctioned only part refund and rejected the balance claim on the ground that it represented Transitional Credit not refundable under Section 54(3) - Whether a registered person who has carried forward the Transitional Input Tax Credit through Form GST TRAN-1 under Section 140 of the CGST Acts can claim refund of such transitional credit under Section 54(3) of the Act on account of accumulation arising from an inverted duty structure – HELD - The statutory framework governing transitional provisions, comprising of Sections 139 to 142 of the CGST Act, constitutes a complete code regulating migration from the erstwhile indirect tax regime to the GST regime. Section 140 was enacted as a beneficial provision to preserve accumulated credit and enable its utilization towards discharge of future GST liabilities. However, the legislature has consciously drawn a distinction between carry forward of ITC and refund of such credit. These are mutually exclusive remedies - A taxpayer can either seek a refund under the existing laws to be paid in cash under Section 142(3) of the CGST Act or choose to transit the credit. If the accumulated credit is carried forward, the statutory bar under the second proviso to Section 142(3) of the Act gets triggered, making refund impermissible. Taxpayers migrating to the GST regime cannot pursue both avenues concurrently or interchangeably - Merely because transitional credit is reflected in the Electronic Credit Ledger and is capable of utilization towards discharge of output tax liability under Section 49(4) of the Act does not mean such credit becomes refundable under Section 54(3). The Sections 49 and 54 operate in entirely different fields and serve distinct legislative purposes - The plain language of Section 54(3) contemplates accumulation of Input Tax Credit generated under the GST regime and does not extend to credit which merely migrated into the GST regime through the transitional mechanism; permitting refund of transitional credit under Section 54(3) would render the second Proviso to Section 142(3) of the GST Acts wholly redundant and defeat the legislative object underlying the transitional provisions – Further, the CBIC Circular No. 37/11/2018-GST clarifies that once the credit of the erstwhile regime is transitioned under the GST, no refund of such credit is granted or allowed – The prayer for refund is rejected. The prayer for re-crediting the rejected amount to the Electronic Credit Ledger is allowed - The writ petition is partly allowed [Read less]

Central Excise – Duty Exemption to Hot Rolled Patta Patti - Whether exemption from central excise duty in terms of Notification No. 12/2012-CE dated 17.03.2012 is available for hot rolled patta patti which has not undergone any process after hot rolling but before cold rolling, or whether the exemption notification requires that some process other than cold rolling must be undertaken on the goods to qualify for exemption – HELD - The exemption under Sr. No. 203 of Notification No. 12/2012-CE dated 17.03.2012 is available for hot rolled patta patti. The Instruction F. No. 96/85/2015-CX.I dated 07.12.2015 clarifies that ... [Read more]

Central Excise – Duty Exemption to Hot Rolled Patta Patti - Whether exemption from central excise duty in terms of Notification No. 12/2012-CE dated 17.03.2012 is available for hot rolled patta patti which has not undergone any process after hot rolling but before cold rolling, or whether the exemption notification requires that some process other than cold rolling must be undertaken on the goods to qualify for exemption – HELD - The exemption under Sr. No. 203 of Notification No. 12/2012-CE dated 17.03.2012 is available for hot rolled patta patti. The Instruction F. No. 96/85/2015-CX.I dated 07.12.2015 clarifies that all processes prior to the cold rolling stage are eligible for exemption from duty. The expression "pattis and pattas" in general trade parlance includes stainless steel flats, and therefore the benefit of exemption is available to the process of hot rolling of stainless steel flats. The hot rolling process takes place prior to the cold rolling process, and therefore hot rolled pattas and pattis are clearly covered under the exemption notification - The Board's clarification was worded with no room for doubt and field officers are bound by such clarifications. Where the appellant is legally eligible for the exemption notification, there is no question of penalty being imposed - The order passed by the learned Commissioner (Appeals) setting aside the demand of central excise duty and penalty, is upheld – Revenue appeal is dismissed [Read less]

Service Tax - Classification of composite cargo handling and transportation services, Liability to pay service tax under reverse charge mechanism - Whether a composite cargo handling service contract that includes transportation as an ancillary activity can be vivisected into separate goods transport agency service and cargo handling service to impose service tax liability on the service recipient under RCM - HELD - Revenue cannot split cargo handling services into transport services and other services by vivisecting a composite contract entered between service provider and service recipient. The definition of goods transp... [Read more]

Service Tax - Classification of composite cargo handling and transportation services, Liability to pay service tax under reverse charge mechanism - Whether a composite cargo handling service contract that includes transportation as an ancillary activity can be vivisected into separate goods transport agency service and cargo handling service to impose service tax liability on the service recipient under RCM - HELD - Revenue cannot split cargo handling services into transport services and other services by vivisecting a composite contract entered between service provider and service recipient. The definition of goods transport agency service under Section 65(50b) of the Finance Act, 1994 mandatorily requires that the service provider issues a consignment note - In the present case, the contractors issued only consolidated monthly invoices without any consignment note, which is a mandatory requirement for classification of service as goods transport agency service. When transportation is an ancillary or integral component of a composite cargo handling service contract, it cannot be separated and classified as a distinct GTA service. The agreement between the parties explicitly stated that the service was for cargo handling, and the service recipients were ultimately billed for the entire transaction as cargo handling services. No consignment note being issued, the service cannot be classified under GTA service category - The service tax demands confirmed by the lower authority are set aside and the appeal is allowed [Read less]

Customs - Exemption from Basic Customs Duty and IGST for diagnostic kits - Distinction between ELFA and ELISA technologies – Appellant imported varieties of diagnostic test kits based on Enzyme-Linked Fluorescent Assay (ELFA) technology and declared them as Enzyme-Linked Immunosorbent Assay (ELISA) kits claiming concessional duty rate under Notification No. 50/2017-Customs dated 30.06.2017 and corresponding IGST notification – Issue of Notice proposing rejection and reassessment of Bills of Entry, demanding differential duty and proposing confiscation and penalties - Whether diagnostic kits based on ELFA technology, wh... [Read more]

Customs - Exemption from Basic Customs Duty and IGST for diagnostic kits - Distinction between ELFA and ELISA technologies – Appellant imported varieties of diagnostic test kits based on Enzyme-Linked Fluorescent Assay (ELFA) technology and declared them as Enzyme-Linked Immunosorbent Assay (ELISA) kits claiming concessional duty rate under Notification No. 50/2017-Customs dated 30.06.2017 and corresponding IGST notification – Issue of Notice proposing rejection and reassessment of Bills of Entry, demanding differential duty and proposing confiscation and penalties - Whether diagnostic kits based on ELFA technology, which admittedly operate on enzyme-linked immunoassay principle with fluorescence-based detection instead of chromogenic detection, qualify for exemption from Basic Customs Duty and concessional IGST as specified for ELISA kits – HELD – The ELFA technology is not a distinct diagnostic methodology but an advanced technological variant that fundamentally operates on the ELISA principle itself. The foundational principle of both technologies remains enzyme-linked immunoassay based on antigen-antibody interaction. The distinction lies only in the mode of signal detection at the terminal stage - The statutory clarifications issued by the Central Drugs Standard Control Organization and National Institute of Biologicals conclusively clarified that ELISA and ELFA are one and the same. The principle established in Supreme Court judgments recognizes that interpretation of tariff entries and exemption notifications must evolve with technological developments. Exemption entries concerning scientific instruments, medical diagnostics and biotechnology products cannot be interpreted rigidly in a manner that fossilizes scientific understanding to the stage existing when the notification was drafted - The genus-species principle provides that once exemption is granted to a genus, its various forms and varieties ordinarily remain covered unless specifically excluded. Further, the exemption relates to diagnostic kits used in detection of infectious diseases and viruses, and the evident legislative object is to facilitate affordable healthcare and encourage availability of advanced diagnostic technologies. The benefit of the exemption notification cannot be denied merely because technology has progressed from colorimetric detection to fluorescence-based detection, as such denial would defeat the very object underlying the notification – Further, the CBIC Circular No. 10/2022-Customs dated 25.07.2022 supports the rationale that advancement in detection technology does not result in emergence of an altogether distinct diagnostic methodology when the foundational scientific principle remains the same - The demand of differential duty, interest, confiscation, redemption fine and penalties do not survive. The appeal is allowed - Invocation of extended period – HELD - The imported goods were ‘VIDAS diagnostic kits’ and that the identity and nature of the goods were fully available to the Department. The dispute essentially concerns the eligibility of ELFA-based kits to the exemption available to ELISA kits under the relevant Notification. The Appellant's consistent stand has been that ELFA technology operates on the ELISA principle and, therefore, the imported kits were eligible for exemption. Such understanding cannot be said to be lacking in bona fides, particularly when the issue itself required examination by specialized expert bodies such as National Institute of Biologicals (NIB) and CDSCO - Merely because the Appellant described the goods as "ELISA Kits" in the B/E while claiming exemption, it cannot automatically lead to the conclusion that there existed any deliberate intention to evade payment of duty. The present case is essentially one involving interpretation of the scope of the Exemption Notification in the context of evolving diagnostic technologies. It is well settled that where the dispute pertains to interpretation of exemption entries and all material particulars regarding the goods imported are available with the Department, the extended period cannot be invoked - Applicability of interest and penalty provisions in respect of IGST levied under Section 3(7) of the Customs Tariff Act – HELD - The relevant period in the present case is February 2018 to December 2022. During substantial part of this period, Section 3(12) of the Customs Tariff Act had not specifically incorporated the provisions relating to interest, penalty and confiscation from the Customs Act insofar as IGST was concerned. Accordingly, the interest and penalty provisions regarding IGST levied during the relevant period are not applicable. [Read less]

GST - Service of Notice/Order through Common Portal - Section 169 of the CGST Act, 2017 – Petitioner failed to verify the portal regularly and comes to know of the demand only when its bank account is attached - Whether service of notice/order through uploading on the common portal constitutes valid service – HELD – The service of notice or order through any one of the modes specified under Section 169 constitutes sufficient compliance with statutory mandate for communication, and uploading on the common portal is a valid and recognized mode of service. When the orders are statutorily required to be uploaded on the p... [Read more]

GST - Service of Notice/Order through Common Portal - Section 169 of the CGST Act, 2017 – Petitioner failed to verify the portal regularly and comes to know of the demand only when its bank account is attached - Whether service of notice/order through uploading on the common portal constitutes valid service – HELD – The service of notice or order through any one of the modes specified under Section 169 constitutes sufficient compliance with statutory mandate for communication, and uploading on the common portal is a valid and recognized mode of service. When the orders are statutorily required to be uploaded on the portal periodically and the assessee is a registered taxpayer, it is inconceivable that there was lack of knowledge of such order. Further, the petitioner's admission that the notice was uploaded on the GST portal coupled with the failure to verify it properly does not absolve it of responsibility – Further, the detailed order of the adjudicating authority that the petitioner had actually appeared and participated in the proceedings by submitting written replies regarding the discrepancy, thereby belying its claim of complete ignorance. Since the petitioner admittedly failed to file appeal within the period stipulated and provided no plausible explanation for the delay, the extraordinary jurisdiction under Article 226 cannot be exercised to circumvent this alternative remedy - The impugned order is upheld and the writ petition is dismissed [Read less]

Tamil Nadu Value Added Tax Act, 2006 - Limitation period for passing assessment order under Section 27, Validity of revival of stale proceeding - A show cause notice for assessment year 2009-2010 was issued on 10.02.2014, to which the assessee replied on 28.03.2014 requesting the respondent to await the order of the High Court in related writ petitions for assessment years 2006-2007, 2007-2008 and 2008-2009. The High Court disposed of the related writ petitions on 29.10.2014, after which a denovo assessment order was passed on 30.09.2015. Subsequently, the assessee filed appeals before the Joint Commissioner and the Sales ... [Read more]

Tamil Nadu Value Added Tax Act, 2006 - Limitation period for passing assessment order under Section 27, Validity of revival of stale proceeding - A show cause notice for assessment year 2009-2010 was issued on 10.02.2014, to which the assessee replied on 28.03.2014 requesting the respondent to await the order of the High Court in related writ petitions for assessment years 2006-2007, 2007-2008 and 2008-2009. The High Court disposed of the related writ petitions on 29.10.2014, after which a denovo assessment order was passed on 30.09.2015. Subsequently, the assessee filed appeals before the Joint Commissioner and the Sales Tax Appellate Tribunal. The respondent issued an impugned show cause notice on 22.04.2024, which was after the statutory limitation period of six years under Section 27 had expired on 14.03.2017 - Whether the respondent can issue a show cause notice and pass an assessment order for the assessment year 2009-2010 after the statutory limitation period prescribed under Section 27 of the TNVAT Act, 2006 has expired – HELD - The respondent cannot revive a stale proceeding by issuing a fresh show cause notice after the limitation period has expired. The statutory limitation of six years under Section 27 commences from the date of the original assessment order dated 15.03.2011 and expired on 14.03.2017. Although the assessee requested the respondent to keep the proceedings in abeyance pending the High Court's order, this request does not suspend or extend the statutory limitation period. The respondent was entitled to proceed with the adjudication of the SCN even while appeals were pending before the Appellate authorities. Nothing precluded the respondent from passing the order within the prescribed limitation period. The benefit of limitation must enure to the assessee, and a stale proceeding cannot be revived merely because the assessee had sought deferment of adjudication. The fact that the assessee is not required to maintain books of accounts beyond six years further supports this conclusion. The Rule prescribing maintenance of records for six years cannot be applied rigidly when there is a statutory embargo to proceed further - The impugned show cause notice is quashed and the writ petition is allowed [Read less]

Service Tax - Demand invoking extended period - Assessee had recorded all transactions in books of accounts, reported CENVAT Credit in statutory returns, and provided all necessary documents to the Department. The inquiry was conducted based on records submitted by the assessee, with the only discrepancy being difference in presentation or reconciliation of figures - Whether the extended period of limitation is invokable when all transactions were duly recorded in books of accounts, all CENVAT Credits were duly reported in statutory returns, and entire data was available with the department, with merely a difference in pre... [Read more]

Service Tax - Demand invoking extended period - Assessee had recorded all transactions in books of accounts, reported CENVAT Credit in statutory returns, and provided all necessary documents to the Department. The inquiry was conducted based on records submitted by the assessee, with the only discrepancy being difference in presentation or reconciliation of figures - Whether the extended period of limitation is invokable when all transactions were duly recorded in books of accounts, all CENVAT Credits were duly reported in statutory returns, and entire data was available with the department, with merely a difference in presentation or reconciliation of figures – HELD - Mere difference in presentation or reconciliation of figures does not constitute suppression of facts or willful misstatement with an intent to evade payment of service tax. The Department cannot invoke extended period when all transactions were transparently recorded in statutory books of accounts, all credits were properly disclosed in statutory returns filed with the department, and the entire data was available with the department. The ingredients of suppression, willful misstatement, or fraud are absent when the assessee has maintained complete transparency and provided all requisite documents during proceedings. Accordingly, the Department cannot resort to extended period of limitation merely on the basis of reconciliation differences. The demand raised under extended period is ex-facie barred by limitation and set aside - The impugned order is set aside and the Order-In-Original dropping the proceedings is upheld. The appeal filed by the assessee is allowed [Read less]

Service Tax - Penalty under Section 78 - Mandatory Nature when Extended Period Invoked - Adjudicating authority invoked the extended period under proviso to Section 73(1) on account of suppression of facts but imposed penalty under Section 78 only to the extent of short-declared tax and not equal to the entire service tax confirmed - Whether penalty under Section 78 of the Finance Act, 1994 is mandatory and must be imposed once the extended period under Section 73 is invoked on ground of suppression of facts with intent to evade payment of tax – HELD - The penalty under Section 78 is not automatically mandatory equal to ... [Read more]

Service Tax - Penalty under Section 78 - Mandatory Nature when Extended Period Invoked - Adjudicating authority invoked the extended period under proviso to Section 73(1) on account of suppression of facts but imposed penalty under Section 78 only to the extent of short-declared tax and not equal to the entire service tax confirmed - Whether penalty under Section 78 of the Finance Act, 1994 is mandatory and must be imposed once the extended period under Section 73 is invoked on ground of suppression of facts with intent to evade payment of tax – HELD - The penalty under Section 78 is not automatically mandatory equal to the entire demand once extended period is invoked, and the adjudicating authority has correctly exercised discretion in imposing lesser penalty based on the specific factual circumstances of the case. The dispute arose out of classification and adjustment of tax paid under different taxable heads rather than deliberate tax evasion. Since the respondent-assessee had rendered taxable services under multiple categories with short payment under one category being simultaneously neutralized by excess payment under another category. No revenue loss occurred to the Government since excess tax already paid under one taxable category substantially neutralized the short payment under another category, and once tax reached the exchequer, the allegation of deliberate suppression loses considerable force - The respondent had already discharged the entire differential tax liability together with interest and penalty in terms of Section 73 even before issuance of SCN, demonstrating conduct that does not support an allegation of deliberate tax evasion - The adjudicating authority has correctly distinguished between classification and payment adjustment issues on one hand and independent statutory non-compliance on the other, and has rightly applied CBEC Circular clarifying that adjustment of excess service tax paid under one taxable category against liability arising under another taxable category is permissible - The impugned Order-in-Original is upheld and the appeal filed by the Department seeking enhancement of penalty is rejected [Read less]

Customs AAR – Scope of expression "consumables" – Import of Reference Listed Drugs (RLDs), Active Pharmaceutical Ingredients (APIs), impurities, chemicals, reagents, enzyme powders, pre-filled syringes, packaging materials, vials, canisters and similar items - Applicability of Notification No. 45/2025-Customs dated 24.10.2025 to various goods proposed to be imported for use in research and development activities undertaken at DSIR-recognized facilities - Whether goods imported and utilized during the research and development stage prior to manufacture of the Exhibit Batch (also referred to as confidence building batch ... [Read more]

Customs AAR – Scope of expression "consumables" – Import of Reference Listed Drugs (RLDs), Active Pharmaceutical Ingredients (APIs), impurities, chemicals, reagents, enzyme powders, pre-filled syringes, packaging materials, vials, canisters and similar items - Applicability of Notification No. 45/2025-Customs dated 24.10.2025 to various goods proposed to be imported for use in research and development activities undertaken at DSIR-recognized facilities - Whether goods imported and utilized during the research and development stage prior to manufacture of the Exhibit Batch (also referred to as confidence building batch or scale-up batch) are eligible for the benefit of Notification No. 45/2025-Customs - HELD – Firstly, the applicant's DSIR-recognized Research and Development Centres situated at Pune and Aurangabad satisfy the institutional eligibility requirement prescribed under Notification No. 45/2025-Customs dated 24.10.2025 and qualify as eligible research institutions for the purposes of the said notification – The goods which are wholly or substantially consumed, exhausted or expended during the course of research, testing, experimentation or development activities may appropriately be regarded as consumables. The goods such as Reference Listed Drugs (RLDs), Active Pharmaceutical Ingredients (APIs), impurities, chemicals, reagents, enzyme powders and other similar materials which are consumed or substantially utilized in research, testing, analytical evaluation, formulation development, validation and stability studies, would generally fall within the scope of the term "consumables" for the purposes of Notification No. 45/2025-Customs – The subject goods, which are consumed or substantially utilized in formulation development, analytical evaluation, testing, validation, stability studies and other research activities undertaken by the applicant's DSIR-recognized R&D Centres, are covered within the scope of the expression "consumables" under Sl. No. 70 of Notification No. 45/2025-Customs and are eligible for the benefit of notification, subject to fulfilment of the conditions prescribed therein – Ordered accordingly - Whether goods imported for manufacture of the Exhibit Batch are eligible for the benefit of the notification – HELD – The benefit of Notification No. 45/2025-Customs is available only in respect of imports made by the eligible DSIR-recognized research institution for its research activities. The goods imported by the DSIR-recognized R&D Centres and thereafter transferred, supplied or moved to a manufacturing facility for manufacture of an Exhibit Batch are not eligible for the benefit of Notification No. 45/2025-Customs, as such transfer is contrary to Condition No. 24(A)(2), which prohibits transfer or sale of the imported goods for a period of five years from the date of importation – Further, the goods imported directly by a manufacturing facility for manufacture of an Exhibit Batch are not eligible for the benefit of Notification No. 45/2025-Customs, since the importing entity is not a DSIR-recognized research institution as required under the notification. [Read less]

Customs AAR - Scope of Product Under Consideration (PUC) - Whether the imported Laser Engraving Machine are liable to Anti-dumping duty under Notification No. 15/2023 Customs (ADD) dated 22nd December 2023 – HELD – In terms of Notification No. 15/2023-Customs (ADD) dated 22.12.2023, Anti-dumping duty is imposable only on Industrial Laser Machines, in fully assembled, SKD or CKD form, used for cutting, marking or welding operations - The mere classification of the imported Laser Engraving Machines under CTH 84561100 does not automatically render them liable to Anti-Dumping Duty unless they satisfy the technical, functio... [Read more]

Customs AAR - Scope of Product Under Consideration (PUC) - Whether the imported Laser Engraving Machine are liable to Anti-dumping duty under Notification No. 15/2023 Customs (ADD) dated 22nd December 2023 – HELD – In terms of Notification No. 15/2023-Customs (ADD) dated 22.12.2023, Anti-dumping duty is imposable only on Industrial Laser Machines, in fully assembled, SKD or CKD form, used for cutting, marking or welding operations - The mere classification of the imported Laser Engraving Machines under CTH 84561100 does not automatically render them liable to Anti-Dumping Duty unless they satisfy the technical, functional and commercial characteristics of Product Under Consideration (PUC) covered by the notification – The imported goods in the present case are compact DIY laser engraving machines intended for artistic, decorative, personalization and small commercial applications. The subject products are commercially distinct, technically distinct, functionally distinct and technologically distinct from the industrial laser cutting, marking and welding systems contemplated under Notification No. 15/2023-Customs (ADD). Therefore, although classifiable under CTH 84561100, the imported laser engraving machines fall outside the intended scope of the Product Under Consideration covered under Notification No. 15/2023-Customs (ADD) dated 22.12.2023 – The ADD as per Notification No. 15/2023-Customs (ADD) dated 22.12.2023 will not be imposable on the import of the subject products i.e. Laser Engraving Machines – Ordered accordingly [Read less]

Service Tax – Limitation and Condonation of Delay – Whether dismissal of appeal solely on account of non-filing of condonation of delay application is sustainable in law when the Order-in-Original contains an unambiguous misstatement of the statutory limitation period – HELD - While a preamble or administrative note in an adjudication order cannot override the statutory limitation prescribed by the parent Act. When such a misstatement induces a party to act or refrain from acting in a particular manner, the doctrine of legitimate expectation and estoppel against the Revenue assumes significance. It is the well-establ... [Read more]

Service Tax – Limitation and Condonation of Delay – Whether dismissal of appeal solely on account of non-filing of condonation of delay application is sustainable in law when the Order-in-Original contains an unambiguous misstatement of the statutory limitation period – HELD - While a preamble or administrative note in an adjudication order cannot override the statutory limitation prescribed by the parent Act. When such a misstatement induces a party to act or refrain from acting in a particular manner, the doctrine of legitimate expectation and estoppel against the Revenue assumes significance. It is the well-established principle that a party should not be made to suffer for the mistake of the authority, particularly where the mistake relates to the exercise of a statutory remedy because such mistake misleads the party into believing that a legally necessary step was in fact unnecessary. The mechanical application of the principle that limitation cannot be waived, without examination of the reasons underlying the procedural omission, is not a proper exercise of quasi-judicial discretion. Where the delay itself is traceable to a positive misstatement of law in the order under challenge, the appellate authority is duty-bound to afford the appellant an opportunity to regularise the procedural defect, as summary dismissal results in grave injustice and amounts to denial of the right of appeal – The impugned order is set aside and the appeal is restored before the Commissioner (Appeals) with directions to consider the condonation of delay application in light of the fact that the delay was directly induced by an incorrect statement of law in the Order-in-Original – The appeal is allowed [Read less]

Service Tax – Eligibility of exemption to Works Contract Services for construction of roads and drainage provided to Government Departments and local authorities, Demand based solely on Form 26AS statement – The Appellant, engaged in providing works contract services for construction of roads and drainage to various government departments and local bodies, received payments reflected in Form 26AS. A SCN was issued demanding service tax on the gross receipts along with penalties for non-registration, non-filing of returns, and suppression of facts - Whether the works contract services provided for construction of roads ... [Read more]

Service Tax – Eligibility of exemption to Works Contract Services for construction of roads and drainage provided to Government Departments and local authorities, Demand based solely on Form 26AS statement – The Appellant, engaged in providing works contract services for construction of roads and drainage to various government departments and local bodies, received payments reflected in Form 26AS. A SCN was issued demanding service tax on the gross receipts along with penalties for non-registration, non-filing of returns, and suppression of facts - Whether the works contract services provided for construction of roads and drainage to Government departments and local authorities are exempt from Service Tax under Serial No. 13(a) of Notification No. 25/2012-ST dated 20.06.2012 – HELD - The services provided by the appellant are exempt from the levy of Service Tax under Serial No. 13(a) of Notification No. 25/2012-ST dated 20.06.2012, which covers services provided by way of construction, erection, commissioning, installation, fitting out, repair, maintenance, renovation, or alteration of structures - The demand of service tax has been made on the basis of Form 26AS statement on which TDS has been deducted under Section 194-C of the Income Tax Act. The authorities below confirmed the demand merely on the basis of the gross value of service received for the work orders but failed to substantiate and examine whether such services were taxable or exempt. While the burden of proof lies with the assessee to demonstrate eligibility for exemption through clear and sufficient documentation, the fundamental requirement is that the authorities must first examine and determine whether the services are taxable or exempt before demanding tax. The demand cannot be sustained when the authorities themselves acknowledge that the services in dispute are in relation to construction of roads but proceed to deny the benefit of exemption without proper examination of the applicability of the exemption notification. The SCN and subsequent orders suffer from legal infirmities as they proceed on an incorrect premise - The impugned order and the Order-In-Original are set aside. The demand of service tax including interest and penalties is set aside – The appeal is allowed [Read less]

GST – Payment of tax during search and seizure proceedings, Voluntary payment or payment under coercion - Refund claim of amount deposited under coercion - Search and seizure proceedings on allegations of wrongful availment of input tax credit in connection with transactions with another entity. During the search proceedings, the petitioner deposited a substantial amount through Form GST DRC-03 without any prior Show Cause Notice, demand notice or determination of liability, and no acknowledgement in Form GST DRC-04 was subsequently issued by the department - Whether the amount deposited through Form GST DRC-03 during th... [Read more]

GST – Payment of tax during search and seizure proceedings, Voluntary payment or payment under coercion - Refund claim of amount deposited under coercion - Search and seizure proceedings on allegations of wrongful availment of input tax credit in connection with transactions with another entity. During the search proceedings, the petitioner deposited a substantial amount through Form GST DRC-03 without any prior Show Cause Notice, demand notice or determination of liability, and no acknowledgement in Form GST DRC-04 was subsequently issued by the department - Whether the amount deposited through Form GST DRC-03 during the course of search proceedings constitutes a voluntary payment under Section 74(5) of the CGST Act, 2017 or whether it was extracted under coercion without authority of law and hence liable to be refunded – HELD – While Section 74(5) permits voluntary payment before issuance of notice, such payment must be genuinely voluntary and not obtained through coercion. At the same time, the mere filing of Form GST DRC-03 does not, by itself, foreclose an assessee from contending that the payment was obtained under coercion - A payment made through Form GST DRC-03 during search proceedings cannot be presumed to be voluntary merely by reason of such deposit. The surrounding circumstances, including the stage at which payment was made, compliance with statutory safeguards, issuance of Form GST DRC-04, subsequent conduct of the department, and existence of material demonstrating self-ascertainment of liability, are all relevant factors for determining whether payment was genuinely voluntary or made under coercion - In the present case, the payment was obtained during ongoing search proceedings when records and electronic devices were under departmental control, no material demonstrates prior and independent self-ascertainment by the petitioner. In the absence of any material demonstrating a prior and independent determination of liability by the petitioner, the payment cannot be conclusively construed as voluntary payment within the meaning of Section 74(5) of the CGST Act – Further, the safeguards envisaged in prior judicial directions and CBIC Instruction No.01/2022-23 were not adhered to, all of which establish that the payment was not genuinely voluntary but obtained under coercion. The respondents are directed to refund the deposited amount within eight weeks, though the question of interest on refund is deferred pending final determination of actual tax liability - The writ petition is partly allowed - Grant of interest on the refunded amount – HELD - the investigation initiated against the petitioner has not yet attained finality and no final determination of tax liability has been made by the competent authority. Although this Court has come to the conclusion that the amount deposited through Form GST DRC-03 cannot be treated as a voluntary payment under Section 74(5) of the CGST Act and is therefore liable to be refunded, the question as to whether any tax, interest or penalty is ultimately payable by the petitioner is yet to be adjudicated. In the absence of a final determination of liability, it would not be appropriate for this Court to adjudicate the petitioner's claim for interest on the refunded amount. It is possible that upon conclusion of the investigation and subsequent proceedings, the respondents may determine a tax liability against the petitioner. Conversely, it may also transpire that the amount deposited by the petitioner exceeds the liability, if any, ultimately determined. The entitlement of either party to claim interest would necessarily depend upon the outcome of such determination. Therefore, this Court, at this stage, is not inclined to grant interest on the amount to be refunded. [Read less]

Central Excise - Reversal of amount equal to 6% of the value of exempted goods cleared in terms of Notification No.30/2004-CE - Rule 6(3) of CCR, 2004 – Appellant availed CENVAT credit on inputs used in the manufacture of exempted goods in May 2017 and reversed an amount equal to 6 percent of the value of such exempted goods in terms of Rule 6(3) of the CENVAT Credit Rules, 2004 – Denial of benefit of exemption notification and demand of duty at the merit rate of 12.5 percent ad valorem, along with interest and penalty - Whether the appellant who avails exemption under Notification No. 30/2004-CE, which contains a cond... [Read more]

Central Excise - Reversal of amount equal to 6% of the value of exempted goods cleared in terms of Notification No.30/2004-CE - Rule 6(3) of CCR, 2004 – Appellant availed CENVAT credit on inputs used in the manufacture of exempted goods in May 2017 and reversed an amount equal to 6 percent of the value of such exempted goods in terms of Rule 6(3) of the CENVAT Credit Rules, 2004 – Denial of benefit of exemption notification and demand of duty at the merit rate of 12.5 percent ad valorem, along with interest and penalty - Whether the appellant who avails exemption under Notification No. 30/2004-CE, which contains a condition that no CENVAT credit on inputs shall be taken, can claim the exemption benefit if the manufacturer initially takes CENVAT credit on inputs but subsequently reverses the credit equal to 6 percent of the value of exempted goods in terms of Rule 6(3) of the CENVAT Credit Rules, 2004 – HELD - The payment of an amount under Rule 6(3) is deemed to be CENVAT credit not taken for the purpose of an exemption notification - Though sub-rule (3D) was inserted with effect from 01.04.2011, it is clarificatory in nature and has retrospective effect. The reversal of 6 percent of the value of exempted goods in terms of Rule 6(3)(i) is one of the mechanisms to expunge the CENVAT credit availed by the assessee. Therefore, even after taking the credit, if the assessee reverses an amount as provided in Rule 6(3), it amounts to non-availment of CENVAT credit and the condition of the notification stands complied - The revenue authorities who themselves had initially directed the appellant to reverse the CENVAT credit at 6 percent, and subsequently initiating proceedings based on a change in interpretation is contrary to settled legal position that extended period of limitation cannot be invoked for change in opinion. The appellant is legally entitled to the exemption notification - The impugned order set aside and the appeal is allowed [Read less]

Service Tax - Eligibility for benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme – Tax liability quantification before cut-off date – Declaration under SVLDRS scheme claiming benefit on the basis of tax liability admitted during investigation proceedings - Whether the admission of tax liability by an assessee during investigation or inquiry proceedings, prior to the issuance of show-cause notice and final adjudication, amounts to quantification of duty within the meaning of the scheme and thereby renders the assessee eligible to claim benefit thereunder when the final quantified liability is determined afte... [Read more]

Service Tax - Eligibility for benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme – Tax liability quantification before cut-off date – Declaration under SVLDRS scheme claiming benefit on the basis of tax liability admitted during investigation proceedings - Whether the admission of tax liability by an assessee during investigation or inquiry proceedings, prior to the issuance of show-cause notice and final adjudication, amounts to quantification of duty within the meaning of the scheme and thereby renders the assessee eligible to claim benefit thereunder when the final quantified liability is determined after the statutory cut-off date of 30.06.2019 – HELD - The mere admission or acceptance of a portion of tax liability during investigation or inquiry does not constitute quantification for the purpose of establishing eligibility under the scheme. The definition of "quantified" under the statute means a written communication of the amount of duty payable under the indirect tax enactment, which must be the final determined amount as ascertained through the complete investigation, audit, or inquiry process - The intention of the legislature is unambiguous and specific i.e. benefit extends only to those persons whose total tax liability is fully determined before the cut-off date. If partial admissions during investigation were to constitute quantification, the statutory exclusion clause under Section 125(1)(e) would be rendered nugatory, as any assessee accepting a lesser liability during investigation could claim eligibility despite the actual liability being determined at a higher rate upon completion of proceedings. The pendency of investigation or inquiry which results in final quantification after the cut-off date disentitles the assessee from claiming the benefit. Furthermore, since the petitioner was found ineligible under the scheme, the procedural requirement to constitute a Designated Committee and afford an opportunity of hearing does not arise, as such procedural safeguards apply only after an eligible declarant is accepted into the scheme – The rejection of the declaration form by the competent authority is upheld. The writ petition is dismissed [Read less]

Service Tax - Construction Services - Residential Complex - Service tax liability on construction of individual residential houses - Whether construction of individual residential houses in tsunami affected areas undertaken for welfare organizations constitute "construction of complex" service under Section 65(91a) of the Finance Act, 1994 – HELD - The construction of individual residential houses does not attract service tax as such construction cannot be classified as "residential complex" under the statutory definition which mandates that a complex must comprise building or buildings having more than twelve residentia... [Read more]

Service Tax - Construction Services - Residential Complex - Service tax liability on construction of individual residential houses - Whether construction of individual residential houses in tsunami affected areas undertaken for welfare organizations constitute "construction of complex" service under Section 65(91a) of the Finance Act, 1994 – HELD - The construction of individual residential houses does not attract service tax as such construction cannot be classified as "residential complex" under the statutory definition which mandates that a complex must comprise building or buildings having more than twelve residential units with common areas and specified facilities. The definition is cumulative in nature and individual houses clearly fail to satisfy the primary requirement of having more than twelve residential units. Relying on the coordinate bench decisions in similar matters and the Supreme Court's pronouncement in CCE v. Larsen and Toubro that post 01-06-2007 only services simpliciter could be taxed, the Tribunal holds that for the period up to 31-03-2012, construction services rendered on individual residential units fall outside the ambit of taxable service under Section 65(105)(zzzh) - The demand confirmed in the impugned orders is set aside – The appeal is allowed - Construction Services - Police Quarters - Service tax liability on construction of police quarters - Whether construction of residential units (police quarters) rendered to Tamil Nadu Police Housing Corporation qualifies for exemption from service tax under the Mega Exemption Notification No.25/2012-ST - HELD – The construction services of residential units rendered to government organizations like the police corporation are not exigible to service tax, following the Tribunal's earlier decisions in similar cases which have held that such construction services for Government organizations do not attract service tax liability. The Commissioner (Appeals) has also allowed the appeal in the assessee's favour in a related matter. Given the similarity in facts and circumstances, the tribunal holds that the construction services rendered to the police corporation are not exigible to service tax and sets aside the demand - Construction Services - Commercial and Industrial Purpose - Service tax liability on construction of hospitals and municipal buildings - Whether construction services for hospitals and municipal corporation buildings can be classified as "commercial and industrial construction services" under Section 65(25b) of the Finance Act, 1994 – HELD - The demand of service tax on construction services rendered cannot be sustained when the revenue has failed to discharge its burden of proving that the buildings were constructed for commercial purposes with intent of making profit. The Board Circular No.80/10/2004 clarified that the leviability of service tax depends primarily upon the use of the building or civil structure and requires proving that the building was being used for purposes of making profit. The onus lies on the department to establish that the building was being used or to be used for commercial purposes, and mere assumption is insufficient. The Municipal Corporation construction was abandoned at the basement level due to a court order of stay and remained incomplete, and the department has not provided any evidence from approved building plans establishing commercial purpose. Appeals allowed - Service Tax - Extended Period of Limitation – HELD - The mere non-payment of tax without any element of intent or suppression is not sufficient to attract the extended period of limitation. For invoking extended period of limitation there must be an active and deliberate act on the part of the assessee to evade payment of tax. In the present case, the show cause notice contains no evidence of any positive or deliberate act of wilful suppression or misstatement of facts, and the statement recorded only indicates that the assessee was explained the tax implications and agreed to comply, thereby attributing ignorance rather than intent to evade. The burden of proving mala fides lies on the person alleging it, and such allegations require proof of a high order of credibility. Applying these principles, the tribunal holds that the invocation of extended period of limitation is wholly unwarranted - Renting of Immovable Property - Liability of Individual - Service tax demand on renting of immovable property - Whether service tax liability can be imposed on an individual for renting immovable property when the property actually belongs to another person who has let it out - HELD - The service tax demand on renting of immovable property cannot be made on an individual when the uncontroverted fact on record shows that the property belonged to a third person and the demand seeks only to recover rent received by the individual. Furthermore, when the leviability of service tax on such activity was susceptible to interpretational disputes and was the subject matter of litigation, resulting in the levy being effectuated through retrospective amendment, the demand is wholly barred by limitation. [Read less]

Customs - Duty drawback application - Deemed date of application - Rule 6 of Customs, Central Excise, Duties and Service Tax Drawback Rules 1995 - Whether the date of the initial informal application or the date of subsequent formal submission with complete documentation constitutes the valid date of drawback application under Rule 6 of the Drawback Rules, when the initial application lacks required documents due to genuine circumstances but is subsequently completed as directed by the Department – HELD - The initial letters constitute the valid date of refund application, not the subsequent letters. When the petitioner ... [Read more]

Customs - Duty drawback application - Deemed date of application - Rule 6 of Customs, Central Excise, Duties and Service Tax Drawback Rules 1995 - Whether the date of the initial informal application or the date of subsequent formal submission with complete documentation constitutes the valid date of drawback application under Rule 6 of the Drawback Rules, when the initial application lacks required documents due to genuine circumstances but is subsequently completed as directed by the Department – HELD - The initial letters constitute the valid date of refund application, not the subsequent letters. When the petitioner submits an initial application disclosing the essential claim for refund but lacks certain documents due to genuine circumstances arising from ports being situated in different areas, and thereafter produces all relevant documents as sought by the department, the subsequent submissions are merely covering letters enclosing additional particulars to enable processing of the original refund application - Respondents ought not to take the date of formal submission with complete documentation as the application date when the initial application clearly disclosed the claim and the delay in producing documents was caused by departmental direction seeking proper documentation. The administrative authorities must consider the substance and intent of an application rather than rigidly adhering to formal procedural defects when the applicant has acted in good faith and complied with subsequent directions - The impugned order is set aside and the matter is remanded to the original authority with directions to decide the applications filed by the petitioner – The petition is disposed of [Read less]

Central Excise - Compounded Levy Scheme – Continuation of proceedings after omission of clauses – Petitioner covered under the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 read with Rule 96ZQ of the Central Excise Rules, 1944. The assessee claimed abatement of compounded levy for the period when its processing equipment was sealed and closed for a continuous period of not less than seven days, but the claim was rejected - Proceedings under Section 3A of the Act and Rule 96ZQ of the Rules, which were omitted with effect from 11th May, 2001 and 1st March, 2001 respectively - Whether proceedings... [Read more]

Central Excise - Compounded Levy Scheme – Continuation of proceedings after omission of clauses – Petitioner covered under the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 read with Rule 96ZQ of the Central Excise Rules, 1944. The assessee claimed abatement of compounded levy for the period when its processing equipment was sealed and closed for a continuous period of not less than seven days, but the claim was rejected - Proceedings under Section 3A of the Act and Rule 96ZQ of the Rules, which were omitted with effect from 11th May, 2001 and 1st March, 2001 respectively - Whether proceedings initiated or pending under Section 3A of the CEA, 1944 and Rule 96ZQ of the CER, 1944 could be continued or concluded after the omission of these provisions with effect from 1st March, 2001 and 11th May, 2001 respectively, without any saving clause – HELD - The omission of statutory provisions amounts to repeal of an enactment and does not fall within the protection of Section 6 of the General Clauses Act, 1897, which applies only to repeals and not to omissions. After the omission of Rules 96ZQ, 96ZP and 96ZO with effect from 1st March, 2001 no proceedings could have been initiated thereunder, and after the omission of Section 3A with effect from 11th May, 2001 without any saving clause, no pending proceeding under the said Rules which had not been concluded before the omission came into effect could be concluded thereafter - The Section 3A of the Act is the charging provision and Rule 96ZQ is merely a machinery provision, and when the charging section itself is deleted without any saving clause, no recovery under the said section can be made by resorting to Rule 96ZQ. The respondent authorities, having initiated and continued proceedings under these provisions after their omission, acted without any authority of law and their actions were ultra vires and without jurisdiction - No proceedings could have been initiated or continued against the petitioner invoking Section 3A of the Act, 1944 read with Rule 96ZQ of the Rules, 1944 after the same had been omitted and repealed in the absence of any saving clause with effect from March 2001. The petition stands allowed [Read less]

GST - Sections 73 and 74 of the CGST Act, 2017 - Maintainability of writ petition challenging Show Cause Notice issued under extended period of limitation – Petitioner was issued Show Cause Notices dated 13.07.2024 under Section 74 for tax periods 2017-2018, 2018-2019, and 2019-2020 based on alleged suppression of facts and failure to cooperate during inspection and produce necessary documents - Whether the SCNs issued under Section 74 are maintainable – HELD - The impugned Show Cause Notices were issued well before the expiry of limitation prescribed under Section 74 and were preceded by an Intimation in GST DRC-01A d... [Read more]

GST - Sections 73 and 74 of the CGST Act, 2017 - Maintainability of writ petition challenging Show Cause Notice issued under extended period of limitation – Petitioner was issued Show Cause Notices dated 13.07.2024 under Section 74 for tax periods 2017-2018, 2018-2019, and 2019-2020 based on alleged suppression of facts and failure to cooperate during inspection and produce necessary documents - Whether the SCNs issued under Section 74 are maintainable – HELD - The impugned Show Cause Notices were issued well before the expiry of limitation prescribed under Section 74 and were preceded by an Intimation in GST DRC-01A dated 11.06.2024. The failure of the petitioner to reply to the intimation for tax periods 2018-2019 and 2019-2020 itself invites invocation of Section 74 machinery in view of the definition of suppression in Explanation-2 to Section 74, which came to be deleted only later by virtue of Finance (No.2) Act, 2024 (15/2024) dated 16.08.2024 - Even if Section 74 was wrongly invoked, it is incumbent upon the petitioner to establish its case by filing a detailed reply in Form GST DRC-06. The disputed questions of facts cannot be decided in a summary proceeding under Article 226. Furthermore, each tax year is an independent block and if ingredients exist to invoke extended period of limitation, such proceedings can be initiated under Section 74 and cannot be scuttled under Article 226 – The challenge to the impugned Show Cause Notices is rejected. However, liberty is given to the Petitioner to file a reply to the respective Show Cause Notices – The writ petitions are dismissed [Read less]

GST - Invocation of extended period of limitation under Section 74 of CGST Act, 2017; requirement of "reasons to believe" versus "where it appears"; procedural compliance in assessment proceedings - Tax liability for discrepancies between GSTR-3B versus GSTR-2A, GSTR-7 versus GSTR-3B, and GSTR-9 versus Form 26AS - Whether the authorities can invoke the machinery under Section 74 of the Act by using the expression "where it appears" without furnishing explicit reasons to believe in fraud, wilful misstatement, or suppression of facts - HELD - Since the records before the authorities revealed short-payments of tax as compared... [Read more]

GST - Invocation of extended period of limitation under Section 74 of CGST Act, 2017; requirement of "reasons to believe" versus "where it appears"; procedural compliance in assessment proceedings - Tax liability for discrepancies between GSTR-3B versus GSTR-2A, GSTR-7 versus GSTR-3B, and GSTR-9 versus Form 26AS - Whether the authorities can invoke the machinery under Section 74 of the Act by using the expression "where it appears" without furnishing explicit reasons to believe in fraud, wilful misstatement, or suppression of facts - HELD - Since the records before the authorities revealed short-payments of tax as compared to the amounts mentioned in Form 26AS and GSTR-7, the authorities are entitled to invoke the machinery under Section 74 of the CGST Act as the expression used therein is "where it appears" and not "reasons to believe". The SCNs clearly referred to Section 74 and the expression "willful suppression of facts" was used in both notices - The statutory language "where it appears" provides a broader scope for invocation compared to the stricter "reasons to believe" standard applicable under the Income Tax Act. However, the revenue abstract to the notice for the tax period 2020-2021 erroneously recorded the exempted turnover as the tax liability instead of the actual tax liability, and the impugned order inadvertently recorded the exempted turnover from an incorrect tax period, resulting in an erroneous calculation of total tax liability. Additionally, the petitioner's reply to the show cause notice was insufficient and did not effectively address the allegations raised - The matters are remanded back to the respondents to pass fresh orders on merits after affording opportunity of personal hearing to the petitioner, who shall file detailed replies and necessary documents to defend their case – The petitions are disposed of [Read less]

GST - Jurisdictional facts and foundational prerequisites for Invocation of Extended Period of Limitation in GST proceedings - The Proper Officers had invoked the extended period of limitation of five years under Section 74 without explicitly specifying or providing material evidence of fraud, wilful misstatement, or suppression of facts to evade tax as required under the statute - Whether the Proper Officer can validly invoke the extended period of limitation under Section 74 of the CGST Act without establishing jurisdictional or foundational facts of fraud, wilful misstatement, or suppression of facts with intent to evad... [Read more]

GST - Jurisdictional facts and foundational prerequisites for Invocation of Extended Period of Limitation in GST proceedings - The Proper Officers had invoked the extended period of limitation of five years under Section 74 without explicitly specifying or providing material evidence of fraud, wilful misstatement, or suppression of facts to evade tax as required under the statute - Whether the Proper Officer can validly invoke the extended period of limitation under Section 74 of the CGST Act without establishing jurisdictional or foundational facts of fraud, wilful misstatement, or suppression of facts with intent to evade tax, and whether such jurisdictional facts must be recorded and communicated to the assessee in the Show Cause Notice – HELD - The expression "where it appears" in Section 73 and Section 74 of the CGST Act imports only a prima facie view and not conclusive proof, requiring a lesser degree of probability than proof, but this does not eliminate the necessity of jurisdictional facts. The existence of fraud, wilful misstatement, or suppression of facts to evade tax constitutes mandatory jurisdictional or foundational facts that must be established before invoking the extended period of limitation. These jurisdictional facts are sine qua non for the Proper Officer to assume jurisdiction to issue a SCN under Section 74 - The satisfaction of the Proper Officer must be based on objective material and relevant facts, and such satisfaction should be explicitly expressed and recorded on the face of the Notice. Mere impression, appearance, or assumption in the mind of the Proper Officer regarding the commission of these offences is insufficient. The Proper Officer cannot invoke Section 74 arbitrarily or without rendering a finding that the alleged short-payment of tax was occasioned by fraud, wilful misstatement, or suppression of facts to evade tax - The SCN must put the assessee to notice of the specific allegations of fraud, wilful misstatement, or suppression of facts to provide him with a reasonable opportunity to meet the case and defend himself, as failure to do so violates the principles of natural justice - The GST Council's amendment to Section 67 of the Second Draft GST Model Law during the 8th GST Council Meeting, by inserting the phrase "where it appears to the Proper Officer" was based on an erroneous assumption regarding due process of law. The deliberations show that the GST Council was under the mistaken impression that the original draft did not provide adequate due process, when in fact the original draft prescribed a higher threshold for invoking the extended period of limitation. This amendment inadvertently diluted the safeguards originally contemplated. The Rules and procedures framed under the GST Act, particularly Rule 142 and the pre-notice intimation requirements in Form DRC-01A, provide necessary safeguards that must be strictly adhered to before invoking Section 74 - Where the Proper Officer fails to specify the requisite ingredients or foundational facts in the SCN, the notice becomes arbitrary and liable to be quashed. The burden of establishing the jurisdictional facts rests on the revenue, and mere allegation or assumption cannot substitute for concrete material evidence of fraud, wilful misstatement, or suppression of facts - The Show Cause Notices issued by the Proper Officers invoking Section 74 without explicitly specifying jurisdictional facts of fraud, wilful misstatement, or suppression of facts to evade tax, or without providing adequate material evidence of such facts, are quashed as being without jurisdiction and violative of the principles of natural justice. The Proper Officer is required to spell out the specific allegations and provide concrete material evidence supporting the invocation of Section 74 in the Show Cause Notice itself. The extended period of limitation cannot be invoked on mere appearance or assumption – Ordered accordingly [Read less]

Customs - Misclassification of Aluminium Products – Reclassification from Profiles to Tubes - When imported goods are declared as aluminium profiles under CTH 7604 but examination reveals they are aluminium tubes mixed with profiles, reclassification to CTH 7608 for tubes is justified – HELD – The samples are drawn during examination and catalogues filed by the importer clearly indicate the presence of rectangular tubes with specific section numbers having hollow cross-sections with uniform dimensions, such goods are rightly classifiable as aluminium tubes and pipes under CTH 7608 2000 rather than aluminium profiles ... [Read more]

Customs - Misclassification of Aluminium Products – Reclassification from Profiles to Tubes - When imported goods are declared as aluminium profiles under CTH 7604 but examination reveals they are aluminium tubes mixed with profiles, reclassification to CTH 7608 for tubes is justified – HELD – The samples are drawn during examination and catalogues filed by the importer clearly indicate the presence of rectangular tubes with specific section numbers having hollow cross-sections with uniform dimensions, such goods are rightly classifiable as aluminium tubes and pipes under CTH 7608 2000 rather than aluminium profiles under CTH 7604 2990. The examination report and visual inspection conducted in the presence of witnesses and the importer's representative establish the true nature of the goods. Therefore, differential duty demand on account of reclassification for the consignment where detailed examination was conducted and samples were drawn stands upheld – Further, since the goods were mis-declared both on account of classification and valuation, the confiscation of goods is upheld though redemption fine is reduced to a reasonable amount under section 125 of the Customs Act, 1962 – The appeal is partly allowed - Undervaluation Based on Recovered Parallel Invoices – HELD - When investigations unearth parallel invoices for the same quantity and description of imported goods showing higher value than the declared value, the revenue authority is justified in rejecting the declared value and enhancing it based on recovered invoices - The difference between the declared value and the actual value as per recovered invoices constitutes sufficient evidence of misrepresentation, thereby justifying the differential duty demand on account of valuation along with interest - Invocation of Extended Period for Past Imports – Impermissibility of Multiple Show Cause Notices Based on Same Investigations – HELD - When show cause notices have already been issued invoking extended period of limitation based on investigations, the authority cannot issue another show cause notice based on the same investigations and documents recovered for a previous show cause notice without independent evidence proving that the past consignments were also misclassified or undervalued. Once the facts are known to the authorities at the time of first show cause notice, issuing subsequent show cause notices based on the same facts and documents cannot be justified as suppression of facts. Therefore, the demand of differential duty for past imports where extended period was invoked through an earlier show cause notice, cannot be sustained, and such demand is set aside except to the extent of duty payable on freight charges for the normal period - Reclassification Without Examination and Sampling in Subsequent Consignments – HELD - The subsequent consignments are sought to be reclassified on the same basis as an intercepted consignment without conducting detailed examination, drawing samples, or specifying which particular items are to be reclassified, the reclassification cannot be sustained. In the absence of physical examination, representative sampling, or documentary evidence specific to each consignment showing that the goods imported were tubes instead of profiles as declared, merely assuming similar misclassification based on the pattern found in one consignment is insufficient. Therefore, the demand for differential duty on account of reclassification for subsequent B/E is set aside along with redemption fine and all related penalties - Penalty on Third Party – HELD - A third party who is the General Manager of the foreign supplier cannot be held liable for penalty under the Customs Act for facilitating transfer of differential amounts between the importer and supplier, as such person is not engaged in violation of Customs Act provisions but merely acting in capacity of a representative of the supplier. The General Manager of the foreign supplier, though involved in collecting and forwarding differential amounts based on parallel invoices, cannot be construed as the person violating the provisions of the Customs Act, as the violation pertains to the importer's misclassification and undervaluation. Therefore, penalty imposed on such third party is set aside as there exists no justification for imposing customs penalties on a person who is not the party to the customs transaction or directly engaged in the import declaration. [Read less]

Central Excise - Deductibility of Stowing Excise Duty from Transaction Value of coal for computing excise duty - The appellant collected Stowing Excise Duty from its customers. Revenue contended that Stowing Excise Duty is includable in the assessable value of coal cleared, thereby attracting additional excise duty - Whether Stowing Excise Duty constitutes a "tax" under Section 4(3)(d) of the Central Excise Act, 1944 and therefore is deductible from the transaction value, or whether it is exigible to excise duty – HELD - The Stowing Excise Duty is a duty of excise itself and is deductible under the exclusion of "other ta... [Read more]

Central Excise - Deductibility of Stowing Excise Duty from Transaction Value of coal for computing excise duty - The appellant collected Stowing Excise Duty from its customers. Revenue contended that Stowing Excise Duty is includable in the assessable value of coal cleared, thereby attracting additional excise duty - Whether Stowing Excise Duty constitutes a "tax" under Section 4(3)(d) of the Central Excise Act, 1944 and therefore is deductible from the transaction value, or whether it is exigible to excise duty – HELD - The Stowing Excise Duty is a duty of excise itself and is deductible under the exclusion of "other taxes" provided under Section 4(3)(d) of the Act. Since Stowing Excise Duty is already a duty component, it cannot be subjected to further excise duty - No additional duty is imposed on Stowing Excise Duty as it constitutes a valid deduction from the transaction value – The appeal is disposed of - Deductibility of Royalty from Transaction Value of coal for computing excise duty - Revenue contended that Royalty should be included in the assessable value, thereby attracting additional excise duty - Whether Royalty is in the nature of a "tax" under Section 4(3)(d) of the Central Excise Act, 1944 and therefore deductible from the transaction value, or whether it is exigible to excise duty – HELD - Royalty is not in the nature of tax. Since Royalty does not fall within the exclusion of "other taxes" under Section 4(3)(d) of the CEA Act, it is not deductible from the transaction value and is therefore exigible to excise duty - Demand of duty on account of Royalty is confirmed for the period falling within the normal period of limitation, but no interest is imposed on such demand based on the Supreme Court precedent in Mineral Area Development Authority. [Read less]