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GST - Availment of Ineligible Input Tax Credit - Suppression of Facts under Section 74 - Ineligible self-assessed ITC and contravention of Sections 16(2) and 42(1) - Department issued a show-cause notice under Section 74(1) of the CGST Act, 2017 proposing recovery of excess input tax credit as alleged suppression of facts - Whether the mere act of the taxpayer in taking ineligible self-assessed input tax credit in their electronic credit ledger in terms of Section 42(1) of the CGST Act would amount to suppression of facts before the Department, which would fall within the scope of Section 74(1) of the CGST Act - HELD - Sec... [Read more]

GST - Availment of Ineligible Input Tax Credit - Suppression of Facts under Section 74 - Ineligible self-assessed ITC and contravention of Sections 16(2) and 42(1) - Department issued a show-cause notice under Section 74(1) of the CGST Act, 2017 proposing recovery of excess input tax credit as alleged suppression of facts - Whether the mere act of the taxpayer in taking ineligible self-assessed input tax credit in their electronic credit ledger in terms of Section 42(1) of the CGST Act would amount to suppression of facts before the Department, which would fall within the scope of Section 74(1) of the CGST Act - HELD - Section 74(1) of the CGST Act can be invoked only in cases where there is fraud or willful misstatement or suppression of facts to evade tax on the part of the taxpayer. The mere act of taking input tax credit without verifying the eligibility thereof, in the absence of any statutory presumption or evidence to establish that the taxpayer knew that a particular input tax credit was not eligible, will not amount to suppression of facts. Every act of transgression of Section 16(2) or Section 42(1) of the CGST Act cannot be termed as a violation inviting proceedings under Section 74 unless clear and categorical evidence has been adduced to the effect that the said transgression was the result of fraud, willful misstatement or suppression of facts with an intent to evade tax - Mere contravention of Section 16(2) and Section 42(1) of the Act cannot be considered the reason for fraud or willful misstatement or suppression of facts. The Department failed to adduce any material evidence of fraud or willful misstatement or suppression of facts in the show-cause notice as required by Board Instruction No. 05/2023-GST dtd. 13.12.2023 - The taxpayer had already disclosed the invoice-wise reconciliation explaining the alleged input tax credit difference through GSTR-9C annual return filings and uploaded the required documents on the GST portal, thereby disclosing the facts - In the absence of any evidence to the contrary, the mere act of the taxpayer in taking ineligible self-assessed input tax credit would not amount to suppression of facts under Section 74(1) of the CGST Act - The impugned order-in-appeal is set aside and the appeals are allowed - GST - Suppression of Facts under Section 74 - Failure to Reply to Audit Enquiry and Final Audit Report - Natural Justice and Procedural Regularity - Whether failure to furnish information and reply to audit enquiry and final audit report by the taxpayer would amount to suppression of facts in terms of Section 74 of the CGST Act and whether grounds of appeal can be raised at the appellate stage which were not part of the original show-cause notice - HELD - Raising additional grounds at the appellate stage which are not found in the show-cause notice is against the fundamental principles of natural justice and the appellate authority ought to have rejected such grounds. The expression suppression under Explanation 2 to Section 74 means non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under the Act or rules, or failure to furnish any information on being asked for in writing by the proper officer. However, such suppression must be willful and with intent to evade tax. Mere failure to reply to the audit enquiry and final audit report cannot amount to suppression of facts when the underlying data and reconciliation information had already been disclosed through statutory filings on the GST portal in GSTR-9C returns - Failure to provide information in response to an audit observation does not constitute suppression under Section 74 where all relevant facts were already available on the common portal. No statutory obligation exists for a taxpayer to furnish written replies to the final audit report - The order-in-appeal violated natural justice by introducing new grounds not part of the original notice and did not discuss or dislodge the factual findings of the adjudicating authority that the reconciliation had been disclosed through GSTR-9C annual return filings - In the absence of any evidence to the contrary, mere failure to reply to the audit enquiry and final audit report by the taxpayer would not amount to suppression of facts in terms of Section 74 of the CGST Act. The order-in-appeal suffered from non-application of mind and violation of natural justice principles. The impugned order is set aside and the appeals are allowed [Read less]

GST - Input Tax Credit - Eligibility under Section 16(5) - Belated filing of GSTR-3B Returns - Notwithstanding the disallowance under Section 16(4) for belated filing of returns, the appellant contended that the newly inserted Section 16(5) of the CGST/KGST Act, made effective from 1-7-2017, provides relief for taxpayers who file all GST returns up to 30-11-2021 for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, and since the appellant had filed the returns on 31-7-2018 and 16-6-2019, well before the prescribed deadline, the denial of input tax credit was unsustainable - Whether the deceased appellant is eligib... [Read more]

GST - Input Tax Credit - Eligibility under Section 16(5) - Belated filing of GSTR-3B Returns - Notwithstanding the disallowance under Section 16(4) for belated filing of returns, the appellant contended that the newly inserted Section 16(5) of the CGST/KGST Act, made effective from 1-7-2017, provides relief for taxpayers who file all GST returns up to 30-11-2021 for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, and since the appellant had filed the returns on 31-7-2018 and 16-6-2019, well before the prescribed deadline, the denial of input tax credit was unsustainable - Whether the deceased appellant is eligible for input tax credit having regard to Section 16(5) of the CGST/KGST Act inserted vide Section 118 of the Finance Act, 2024 - HELD - Section 16(5) was inserted in the CGST/KGST Act vide Section 118 of the Finance (No. 2) Act, 2024, with effect from 1st day of July, 2017, providing that notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return filed up to the thirtieth day of November, 2021 - The appellant filed all GST returns on 31-7-2018 for the period July-2017 to Feb-2017 and on 16-6-2019 for the month of March-2018, well before the prescribed date of 30-11-2021 under Section 16(5). The belatedly filed GST returns pertain to the period 2017-18, which is covered under the newly inserted Section 16(5) - The appellant, whether or not deceased, is eligible to the input tax credit claimed in the respective GST returns during the period 2017-18. The Circular No. 237/31/2024-GST dated 15-10-2024 clarifies that the adjudicating and appellate authorities should take cognizance of the retrospectively inserted Section 16(5) while passing orders - The impugned order-in-appeal denying the input tax credit is set aside and the appeal is allowed - GST - Recover the tax demand from the deceased appellant - Procedure under Section 93(1)(b) - Liability of Legal Representative on death of Taxpayer - Discontinued Business - Post-death proceedings - The appellant proprietor had died on 5-9-2024 after the impugned order-in-appeal was passed on 8-12-2022, and the legal heir filed the present appeal on 26-3-2026 claiming to be the legal representative. The respondent sought to recover the tax demand from the deceased appellant without issuing any notice to the legal heir – Whether proceedings could be validly continued against the deceased proprietor without fresh proceedings against the legal representative - HELD - Section 93(1)(b) of the CGST Act provides that if the business carried on by the person is discontinued, whether before or after death, the legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person. Assessment proceedings cannot validly continue against a deceased proprietor; the required statutory liability attaches to the legal representative, and proceedings must be initiated against the appropriate legal representative after notice and hearing - Where adjudication fails to examine whether heirs continued the business or whether an estate is available for recovery, the statutory basis for liability remains unaddressed - Recovery against the legal heir is permissible in a discontinued business only to the extent confined to the inherited estate. The respondent has no legal basis to recover any dues from the deceased appellant in the absence of any process under Section 93(1)(b) of the CGST Act - The impugned order is set aside as unsustainable in the absence of any action by the respondent under Section 93(1)(b) and the appeals are allowed [Read less]

Service Tax - Intellectual Property Right Service - Permanent Transfer of Know-How and Intangible Assets - Definition of IPR under Finance Act, 1994 - Appellant, a manufacturing company engaged in rubber-industry equipment, entered into an Asset Sale and Purchase Agreement with a foreign entity for sale of plant and equipment, raw material, customer records, know-how, supplier records, domain names and brand with specified allocation of purchase price. The Appellant treated a portion of the consideration as referable to intangible assets outside the scope of service tax. The Revenue sought to tax a portion of the considera... [Read more]

Service Tax - Intellectual Property Right Service - Permanent Transfer of Know-How and Intangible Assets - Definition of IPR under Finance Act, 1994 - Appellant, a manufacturing company engaged in rubber-industry equipment, entered into an Asset Sale and Purchase Agreement with a foreign entity for sale of plant and equipment, raw material, customer records, know-how, supplier records, domain names and brand with specified allocation of purchase price. The Appellant treated a portion of the consideration as referable to intangible assets outside the scope of service tax. The Revenue sought to tax a portion of the consideration as Intellectual Property Right Service under Sections 65(55a) and 65(55b) of the Finance Act, 1994, contending that the know-how transfer was temporary and the continuing royalty payments for five years negated permanency - Whether know-how constitutes an intellectual property right recognised under any law in force in India, whether the transaction constitutes a permanent or temporary transfer of intellectual property right, and whether the demand of service tax with penalties is sustainable - HELD - Know-how is not an intellectual property right recognised under any law in force in India within the meaning of Section 65(55a) of the Finance Act, 1994, as it is neither registrable nor recognised as a distinct species of intellectual property under any statute presently in force in India. Such position is well settled by consistent decisions of the Tribunal including Hyundai Motor India Ltd., Chambal Fertilizers and Chemicals Ltd., and Munjal Showa Ltd., affirmed by the Supreme Court. Permanent transfer of intellectual property right does not amount to rendering of service as per CBIC Circular 80/10/2004-ST. On a conjoint reading of the entire agreement including recitals and clauses, it is evident that the transaction constituted an absolute and permanent transfer of assets free and clear of encumbrances with title, property and risk passing to the appellant on completion. The restraint on the transferor from using or disclosing the know-how post-completion is characteristic of an absolute transfer and wholly inconsistent with any residual right retained. The know-how royalty for five years is properly understood as deferred consideration for a sale completed on the completion date, not a continuing licence. The mode and timing of payment of consideration does not qualify the nature of the transfer itself. The demand of service tax is not sustainable and is set aside entirely. Penalties under Sections 77 and 78 are equally unsustainable as they are premised on a non-existent obligation to register and the appellant's bona fide and arguable interpretation of law coupled with its correspondence with the department since 2010-11 constitute reasonable cause under Section 80 warranting waiver of penalties - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Reverse Charge Mechanism - Taxability of Services Provided by Government - Point of Taxable Event - Natural Resource Extraction - Appellant is engaged in exploration and production of Coal Bed Methane pursuant to contract dated 26.07.2002 executed with Ministry of Petroleum and Natural Gas, Government of India. Under said contract, appellant is required to pay Royalty to Government of a State and Production Level Payment to Government of India. Department issued Show Cause Notice alleging that Royalty and Production Level Payment paid during period 01.04.2016 to 30.06.2017 were liable to service tax under Rev... [Read more]

Service Tax - Reverse Charge Mechanism - Taxability of Services Provided by Government - Point of Taxable Event - Natural Resource Extraction - Appellant is engaged in exploration and production of Coal Bed Methane pursuant to contract dated 26.07.2002 executed with Ministry of Petroleum and Natural Gas, Government of India. Under said contract, appellant is required to pay Royalty to Government of a State and Production Level Payment to Government of India. Department issued Show Cause Notice alleging that Royalty and Production Level Payment paid during period 01.04.2016 to 30.06.2017 were liable to service tax under Reverse Charge Mechanism. Appellant filed detailed reply contesting proposed demand. Principal Commissioner confirmed demand along with applicable interest and penalties - Whether appellant is liable to pay Service Tax under Reverse Charge Mechanism on Royalty and Production Level Payment paid to Government for natural resource extraction when agreement for mining was entered prior to 01.04.2016 - HELD - Prior to 01.04.2016, all services provided by Government or local authority were covered under negative list of services and accordingly not subjected to service tax. With effect from 01.04.2016, section 66D of Finance Act was amended and any service provided by Government to a business entity was excluded from negative list and became chargeable to service tax. For purposes of levying service tax, taxable event is construed as time when service is provided or agreed to be provided. To determine whether levy of service tax is applicable on particular activity, it is necessary to determine point of time when such activity is provided or agreed to be provided. For assignment of right to use natural resource or quarry or mining right, if agreement between parties was executed prior to 01.04.2016, services were received prior to 01.04.2016 when such services from Government were not subject to tax. Since the agreement for natural resource extraction was executed on 26.07.2002, which was prior to 01.04.2016, appellant would not be liable to pay service tax on payments made after 01.04.2016. Point of Taxation Rules deal with date on which payment of service tax has to be made and do not determine whether service is taxable or not, hence such rules would not be applicable to determine taxability of service received prior to 01.04.2016 - Impugned order is not sustainable in law and is set aside - Appeal is allowed with consequential relief [Read less]

Service Tax - Business Auxiliary Services - Commission Agent Services - Collective Investment Scheme - Appellants were commission agents for a company operating holiday options schemes with fixed tenure, engaged in promotion and marketing of holiday options and collection of advance payments. The Revenue sought to levy service tax on the commission received by the appellants as Business Auxiliary Services under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994, contending that the services provided by the appellants as commission agents in promotion and marketing of holiday options fell within the taxa... [Read more]

Service Tax - Business Auxiliary Services - Commission Agent Services - Collective Investment Scheme - Appellants were commission agents for a company operating holiday options schemes with fixed tenure, engaged in promotion and marketing of holiday options and collection of advance payments. The Revenue sought to levy service tax on the commission received by the appellants as Business Auxiliary Services under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994, contending that the services provided by the appellants as commission agents in promotion and marketing of holiday options fell within the taxable category of BAS. The Appellate Authority confirmed the demand of service tax and imposed penalties for contravention of various statutory provisions including failure to register, failure to file returns, and suppression of facts with intent to evade service tax payment - Whether the appellants were liable to pay service tax on their commission receipts and whether the demand and penalties are sustainable in light of the finding by the Securities and Exchange Board of India (SEBI) that the scheme constituted a collective investment scheme - HELD - The scheme operated by the company was examined by SEBI which held that the scheme was a collective investment scheme in terms of Section 11AA (1) and (2) of SEBI Act and the company had not obtained registration under Section 12(B) of SEBI Collective Investment Scheme Regulation. Since the scheme is an investment scheme and not a taxable service scheme, the appellants are not liable to pay service tax on the services availed by them from the company. The classification of the commission agents' services under the Business Auxiliary Services category and the demand of service tax thereupon are not sustainable in light of the SEBI's determination that the underlying scheme was an investment scheme falling outside the scope of taxable services. The demand of service tax and the penalties imposed on the appellants are set aside in entirety. The appellants are entitled to refund of the amount already paid by them - The appeals are allowed with consequential relief as per law [Read less]

Service Tax – Payment of differential service tax along with interest before adjudication order, exemption from levy of penalties under Sections 76 and 77 of the Finance Act, 1994 - Appellant was engaged in construction of residential and commercial projects. During FY 2011-12 there were various projects under construction. Certain projects had construction commenced before 01.06.2007 and were on-going - Appellant continued to pay tax on on-going projects as per new the Composition Scheme. Department disallowed benefit of new scheme for on-going projects and raised demand for differential service tax. Appellant paid diff... [Read more]

Service Tax – Payment of differential service tax along with interest before adjudication order, exemption from levy of penalties under Sections 76 and 77 of the Finance Act, 1994 - Appellant was engaged in construction of residential and commercial projects. During FY 2011-12 there were various projects under construction. Certain projects had construction commenced before 01.06.2007 and were on-going - Appellant continued to pay tax on on-going projects as per new the Composition Scheme. Department disallowed benefit of new scheme for on-going projects and raised demand for differential service tax. Appellant paid differential service tax along with applicable interest and reversed Cenvat credit prior to passing of Order-in-Original - Whether penalties under Sections 76 and 77 can be imposed when entire differential service tax along with interest was paid by Appellant before adjudication order - HELD - The issue involved interpretation and applicability of valuation scheme which attained final clarity only after pronouncement of judgment by Supreme Court in Nagarjuna Construction Company Limited v. Union of India. Under such circumstances there was reasonable cause on part of Appellant for initial non-payment of differential tax - Appellant held bona fide belief that it was entitled to benefit of Composition Scheme even in respect of on-going projects. After pronouncement of judgment by Apex Court when legal position became clear, Appellant immediately paid differential amount of service tax along with applicable interest and also reversed Cenvat credit. Appellant is fully entitled to benefit of Section 80 of Finance Act 1994 which statutorily provides that no penalty under Section 76 or Section 77 shall be imposed if appellant proves that there was reasonable cause for said failure - The penalties imposed upon appellant under Sections 76 and 77 of Finance Act 1994 are not sustainable in law and accordingly set aside - The appeal is allowed - Service Tax - Revenue contended that learned Adjudicating Authority did not properly examine entire case and arrived at conclusion solely on basis of Chartered Accountant certificate placed on record by Appellant. Revenue alleged that learned Commissioner did not examine nature of income from activities other than construction and did not examine project-wise computations - Whether learned Adjudicating Authority properly examined entire case and verified computations project-wise or improperly relied solely on CA certificate without cross-examination - HELD - The ld. Commissioner has thoroughly examined records and recorded proper findings on all grounds raised by Revenue. The ld. Commissioner properly considered CENVAT Register, GAR-7 challans and reversal of CENVAT credit and reconciliation charts submitted by Appellant along with CA certificate - The learned Commissioner has categorically observed in order that he has carefully gone through facts, merits and circumstances of case on record. In order to clear any remaining doubts, appellant filed another CA certificate which clearly explained precise nature of said income. No infirmity found in order passed by learned Commissioner - The order of learned Commissioner is upheld and Revenue's appeal is dismissed [Read less]

Service Tax – 100% EOU – Vague SCN, Demand under Business Auxiliary Service - Appellant engaged in providing Transcription Service to Doctors in USA - Show Cause Notice invoking extended period of limitation - Appellant contended demand is wholly barred by limitation - On merits Appellant argued activity was telecommunication service which is taxable only when provided by person licensed under Indian Telegraph Act and foreign entity Ecostentel is not licensed. - Whether demand is wholly barred by limitation and whether demand for service tax on Business Auxiliary Service is sustainable on merits - HELD - Burden to prov... [Read more]

Service Tax – 100% EOU – Vague SCN, Demand under Business Auxiliary Service - Appellant engaged in providing Transcription Service to Doctors in USA - Show Cause Notice invoking extended period of limitation - Appellant contended demand is wholly barred by limitation - On merits Appellant argued activity was telecommunication service which is taxable only when provided by person licensed under Indian Telegraph Act and foreign entity Ecostentel is not licensed. - Whether demand is wholly barred by limitation and whether demand for service tax on Business Auxiliary Service is sustainable on merits - HELD - Burden to prove allegation of fraud collusion or suppression lies very heavily upon Revenue. SCN alleges Ecostentel rendered Business Auxiliary Service under Section 65(105)(zzb) but does not put appellant to notice of statutory definition of Business Auxiliary Service as provided in Section 65(19) or under which limb of definition Appellant falls - SCN does not rely on any inculpatory statement or agreement bringing out relationship or nature of service as falling under Business Auxiliary Service. SCN has not let in any evidence of any positive act of fraud suppression or wilful misstatement with intent to evade payment of duty. Revenue has failed to adduce any evidence establishing that Appellant engaged in wilful or deliberate suppression of material facts. Nothing on record suggests Appellant acted with any intention to mislead authorities or evade payment of service tax. SCN is bereft of reasons justifying invocation of extended period of limitation - Impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Customs House Agent Service – Taxability of Reimbursable Expenses - Whether reimbursable expenses recovered by Customs House Agent are includible in taxable value of CHA service under Section 67 of Finance Act 1994 read with Rule 5 of Service Tax Determination of Value Rules 2006 for period prior to 14.05.2015 - HELD - During relevant period Section 67 of Finance Act 1994 provided that where service tax was chargeable on any taxable service with reference to its value, such value shall be gross amount charged by service provider for such service. The controversy is whether Rule 5 could enlarge charging prov... [Read more]

Service Tax - Customs House Agent Service – Taxability of Reimbursable Expenses - Whether reimbursable expenses recovered by Customs House Agent are includible in taxable value of CHA service under Section 67 of Finance Act 1994 read with Rule 5 of Service Tax Determination of Value Rules 2006 for period prior to 14.05.2015 - HELD - During relevant period Section 67 of Finance Act 1994 provided that where service tax was chargeable on any taxable service with reference to its value, such value shall be gross amount charged by service provider for such service. The controversy is whether Rule 5 could enlarge charging provision contained in Section 67 so as to include reimbursable expenditure - The judgment of Delhi High Court in Intercontinental Consultants and Technocrats case held that Rule 5 insofar as it sought to include expenditure or costs incurred by service provider, travelled beyond Sections 66 and 67 of Finance Act 1994 and delegated legislation cannot enlarge charging provision. This judgment was affirmed by Supreme Court in Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd. wherein it was held that prior to amendment of Section 67 effective 14.05.2015, expenditure or costs incurred in providing taxable service could not be included in taxable value by virtue of Rule 5 one. The amended provision came into effect only from 14.05.2015 and has no application to period involved in present appeal - For period prior to 14.05.2015, genuine reimbursable expenses incurred on behalf of clients cannot be included in taxable value under Section 67. Mere recovery of such amounts from clients cannot make them taxable consideration - The impugned inclusion of reimbursable expenses in taxable value is unsustainable. Demand of service tax together with interest and penalties is set aside and the appeal is allowed [Read less]

Service Tax - Commission on DTH Recharge Voucher Distribution – Demand under Business Auxiliary Services - Appellant engaged in distribution of recharge vouchers of DTH operator, receiving commission on each voucher sold. The recharge vouchers carried a predetermined maximum retail price which included the commission payable to Appellant and all taxes, on which the DTH operator was discharging service tax. The Department took the view that appellant was required to discharge service tax on the commission as it amounted to consideration for service of distributing activation and recharge vouchers - Whether Appellant was l... [Read more]

Service Tax - Commission on DTH Recharge Voucher Distribution – Demand under Business Auxiliary Services - Appellant engaged in distribution of recharge vouchers of DTH operator, receiving commission on each voucher sold. The recharge vouchers carried a predetermined maximum retail price which included the commission payable to Appellant and all taxes, on which the DTH operator was discharging service tax. The Department took the view that appellant was required to discharge service tax on the commission as it amounted to consideration for service of distributing activation and recharge vouchers - Whether Appellant was liable to discharge service tax on commission received from DTH operators and whether penalty imposed was sustainable - HELD - Where service tax has been paid on the MRP by the main operator, the commission agent or distributor need not pay service tax on commission received by him because commission forms part of M.R.P. on which service tax has already been discharged. Levying service tax on commission separately would amount to double taxation. The issue is settled in Appellant's favour following the ratio of decisions in Kumar's Electronics and other similar cases. The issue is no longer res integra - The impugned order to the extent it upholds the demand imposed on Appellant under BAS along with interest and equivalent penalty is not sustainable and is set aside - The appeal is allowed [Read less]

Customs - Classification of goods declared as 'Lead Concentrate'- Lead Concentrate Vs Lead Scrap/Waste - Appellant imported lead-bearing powder material declaring the same as Lead Concentrate under CTH 2607. Department contended that the imported goods should have been classified as Lead Waste and Scrap under CTH 7802 based on ground that goods originated from used lead acid batteries and lacked silver and gold traces - Adjudicating Authority confirmed demand for differential customs duty, interest and penalties including confiscation and redemption fine under Section 111 of Customs Act - Whether imported goods are classif... [Read more]

Customs - Classification of goods declared as 'Lead Concentrate'- Lead Concentrate Vs Lead Scrap/Waste - Appellant imported lead-bearing powder material declaring the same as Lead Concentrate under CTH 2607. Department contended that the imported goods should have been classified as Lead Waste and Scrap under CTH 7802 based on ground that goods originated from used lead acid batteries and lacked silver and gold traces - Adjudicating Authority confirmed demand for differential customs duty, interest and penalties including confiscation and redemption fine under Section 111 of Customs Act - Whether imported goods are classifiable as Lead Concentrate under CTH 2607 00 00 or as Lead Waste and Scrap under CTH 7802 00 90 - HELD - Tariff classification is determined by the nature and characteristics of goods as imported, not by the identity of importer, the furnaces he operates, or metallurgical processes he is licensed to perform. Multiple test reports from Government laboratories show that lead in samples was predominantly in form of lead oxide and lead sulphate compounds with metallic lead present only in very small quantities in fine particle form - The composition ranging from 60.2 to 68.66 percent lead is consistent with specification of lead concentrate. One test report from Customs Laboratory JNCH Nhava Sheva explicitly described samples as having composition of lead concentrate - Lead oxide is classifiable under Chapter heading 2824 and sulphates of metals are classifiable under heading 2833. Only lead in primary metallic form falls under Chapter 78. Since lead in samples was not in primary metallic form but in oxide and sulphate form comprising approximately 87 to 92 percent of material, classification under Chapter 78 is not sustainable - Conflicting laboratory reports must be analyzed on basis of which report provides detailed scientific analysis and composition data - Kandla Laboratory reports and JNCH reports described goods as having characteristics of lead concentrate. While CRCL opined samples were washed and dried electrode paste, it did not actually report them as lead scrap. Absence of silver cannot be deciding factor and absence of gold or silver cannot preclude classification as concentrate - Pre-Shipment Inspection Certificates themselves describe goods as lead concentrate in description column despite heading referring to metallic scrap. These certificates were issued to certify absence of hazardous materials, not to determine tariff classification. Load Port Customs export documents represent declarations by foreign exporters in foreign nomenclature for foreign regulatory purposes and are not binding on Indian Customs authorities – The burden of proof to establish classification rests on Revenue when customs authorities seek to classify goods differently from assessee's declared classification. In self-assessment regime applicable to imports, classification submitted by assessee must be accepted unless revenue discharges burden of proof through conclusive scientific evidence - When all scientific reports are analyzed, majority and more detailed reports favor classification as lead concentrate, classification under CTH 7802 has absolutely no merit. Confiscation is not sustainable as goods have been cleared for home consumption and do not remain imported goods as defined under Section 2(25) of Customs Act - The impugned order classifying goods under Chapter 78 is set aside. The goods are classifiable as Lead Concentrate under CTH 2607 00 00 - The appeals are allowed [Read less]

Customs – Refund of Redemption Fine - Interest on Delayed Refund - Appellant filed refund claim for redemption fine on 23.08.2023. Respondent sanctioned refund but rejected claim for interest under Section 27A of Customs Act on ground that interest is not payable as matter was sub-judice before Commissioner (Appeals) and refund was sanctioned within three months from date of application - Whether Appellant is entitled to interest on refund of redemption fine deposited during adjudication proceedings even though matter was pending appeal and refund was sanctioned within three months from refund application date - HELD - A... [Read more]

Customs – Refund of Redemption Fine - Interest on Delayed Refund - Appellant filed refund claim for redemption fine on 23.08.2023. Respondent sanctioned refund but rejected claim for interest under Section 27A of Customs Act on ground that interest is not payable as matter was sub-judice before Commissioner (Appeals) and refund was sanctioned within three months from date of application - Whether Appellant is entitled to interest on refund of redemption fine deposited during adjudication proceedings even though matter was pending appeal and refund was sanctioned within three months from refund application date - HELD - After decision of CESTAT, neither confiscation was sustainable nor any fine was payable and whatever amount was paid was never legally due. Provisions of Section 11B of CEA, 1944 and Section 27A of Customs Act 1962 are pari materia. When amount has been refunded which was never legally payable, interest is compensatory in nature and Department is liable to pay interest for period during which Department retained amount of Appellant - The decision relied in impugned order pertains to grant of interest under Section 27A of Customs Act 1962, whereas in present appeals it is revenue deposit which Appellant was compelled to pay in order to redeem goods. Following Division Bench of CESTAT Allahabad in M/s Parle Agro Pvt. Ltd. upheld by Allahabad High Court and M/s Riba Textiles Ltd., the grant of interest at 12 percent per annum is appropriate - Interest is granted at rate of 12 percent per annum on refund of amount deposited during investigation and adjudication from date of deposit till date of actual payment - Appellant is entitled to interest at 12 percent per annum from date of revenue deposit till date of actual payment – The appeals are allowed [Read less]

GST - Refund of Input Tax Credit - Transitional Credit from erstwhile VAT Regime - Inclusion in Refund Claim – Petitioner filed GST TRAN-1 form for transitioning excess input tax credit from its VAT ledger to the Electronic Credit Ledger. Transitional credit was credited to ECL on 27.12.2017. Petitioner filed refund claim for November 2017 including the transitional credit of SGST - Assessing authority rejected on the ground that transitional credit is not a credit earned during the relevant period and does not qualify as Net ITC under Rule 89(4) of the CGST Rules, 2017 - Whether transitional credit carried forward from ... [Read more]

GST - Refund of Input Tax Credit - Transitional Credit from erstwhile VAT Regime - Inclusion in Refund Claim – Petitioner filed GST TRAN-1 form for transitioning excess input tax credit from its VAT ledger to the Electronic Credit Ledger. Transitional credit was credited to ECL on 27.12.2017. Petitioner filed refund claim for November 2017 including the transitional credit of SGST - Assessing authority rejected on the ground that transitional credit is not a credit earned during the relevant period and does not qualify as Net ITC under Rule 89(4) of the CGST Rules, 2017 - Whether transitional credit carried forward from erstwhile VAT regime to Electronic Credit Ledger can be included in refund claim and whether a writ petition can be entertained after expiry of statutory period for filing an appeal - HELD - As per Section 140 of the CGST Act read with Rule 117 of the CGST Rules, the unutilised input tax credit in erstwhile regime as on 30.06.2017 shall be available as opening balance as on 01.07.2017 in the Electronic Credit Ledger. The adjudicating authority can allow refund only if it is proved that the amount claimed was credited into the Electronic Credit Ledger as on 01.07.2017 - The petitioner failed to produce satisfactory material to prove the credit balance was as on 01.07.2017, hence no reason to interfere with the order. The jurisdiction of High Court under Article 226 of the Constitution is not so wide as to resurrect a cause of action which has become unenforceable due to law of limitation. If a petitioner has disabled himself from availing statutory remedy by not doing so within prescribed time, he cannot be permitted to invoke writ jurisdiction. A writ petition filed after expiry of the period prescribed for filing statutory appeal cannot be entertained as a matter of course. The maxim interest reipublicae ut sit finis litium applies when issue is finally decided by competent forum and attained finality - The writ petition is dismissed for being belated and the order of the adjudicating authority rejecting the refund claim is upheld - The writ petition is dismissed [Read less]

Central Excise - Admissibility of credit on inputs procured from units availing area-based exemption - Rule 12 of the CENVAT Credit Rules, 2004 - Notification No. 01/2010 dated 06.02.2010 - Period prior to amendment effective 20.01.2014 - Appellant manufacturer availed CENVAT credit on inputs procured from units situated in Jammu and Kashmir which were availing area-based exemption under Notification 01/2010, during the period 01.08.2012 to 19.01.2014 - Credit was disallowed by lower authorities on the ground that such credit was not admissible prior to the amendment in Rule 12 effective 20.01.2014 - Whether CENVAT credi... [Read more]

Central Excise - Admissibility of credit on inputs procured from units availing area-based exemption - Rule 12 of the CENVAT Credit Rules, 2004 - Notification No. 01/2010 dated 06.02.2010 - Period prior to amendment effective 20.01.2014 - Appellant manufacturer availed CENVAT credit on inputs procured from units situated in Jammu and Kashmir which were availing area-based exemption under Notification 01/2010, during the period 01.08.2012 to 19.01.2014 - Credit was disallowed by lower authorities on the ground that such credit was not admissible prior to the amendment in Rule 12 effective 20.01.2014 - Whether CENVAT credit on inputs procured from manufacturers availing exemption under Notification No. 01/2010 was admissible before the formal amendment to Rule 12 of the CENVAT Credit Rules, 2004 – HELD - The scheme of CENVAT credit is to be read in a harmonious manner and not in isolation. CENVAT credit is admissible to a manufacturer or service provider when the conditions prescribed in the CENVAT Credit Rules are satisfied, namely the input has suffered duty, the input is used in manufacture of final product or provision of output service, and credit is received under the cover of prescribed invoice or document - In the present case, all these conditions were satisfied by the Appellant. There was no express prohibition in the CENVAT Credit Rules prior to the amendment to Rule 12 preventing credit on inputs from exempted units - The amendment to Rule 12 effective 20.01.2014 providing express permission for such credit cannot be construed to mean that credit was only admissible from that date. The fact that permission was formally inserted at a later date does not negate the availability of credit when the conditions for credit were satisfied and no express prohibition existed - The appeal is allowed and the credit is admissible to the appellant [Read less]

Central Excise - Refund of excess excise duty - Doctrine of unjust enrichment - Turnover discount and cash discount - Whether refund of excess excise duty paid on account of cash and turnover discount agreed upon in advance but quantified subsequently is barred by the doctrine of unjust enrichment – HELD - The Appellant issued cum-duty credit notes to the buyers and dealers, thereby refunding the excess duty received on account of various discounts offered. The duty incidence was borne by the Appellant and not passed on to the dealers or ultimate consumers. Certificates issued by a chartered accountant and dealers confir... [Read more]

Central Excise - Refund of excess excise duty - Doctrine of unjust enrichment - Turnover discount and cash discount - Whether refund of excess excise duty paid on account of cash and turnover discount agreed upon in advance but quantified subsequently is barred by the doctrine of unjust enrichment – HELD - The Appellant issued cum-duty credit notes to the buyers and dealers, thereby refunding the excess duty received on account of various discounts offered. The duty incidence was borne by the Appellant and not passed on to the dealers or ultimate consumers. Certificates issued by a chartered accountant and dealers confirm that duty burden was not shifted - The issue had been settled in favor of the Appellant in an earlier period in the same case where this Tribunal held that Appellant was entitled for refund claim as the appellant had issued credit notes to the buyers and dealers who had availed the scheme by way of turnover discount and cash discount. No principle of unjust enrichment applies when the duty incidence is borne by the person claiming refund and not by any consumer in the chain - The impugned Order-in-Original and Order-in-Appeal are set aside - The appeals are allowed [Read less]

GST – Transportation of goods without E-way Bill, Subsequent generation and production of E-way Bill - Intention to Evade Tax - Goods were accompanied by tax invoice and other documents. E-way Bill was subsequently generated and produced during submission of reply before seizing officer. Proper Officer imposed tax and penalty confirming violation of Rule 138(1) of the CGST Rules, 2017 - Appellate Authority allowed appeal on ground that E-way Bill was subsequently produced and no discrepancy existed in accompanying documents - Whether absence of E-way Bill at time of transportation can be cured by subsequent generation an... [Read more]

GST – Transportation of goods without E-way Bill, Subsequent generation and production of E-way Bill - Intention to Evade Tax - Goods were accompanied by tax invoice and other documents. E-way Bill was subsequently generated and produced during submission of reply before seizing officer. Proper Officer imposed tax and penalty confirming violation of Rule 138(1) of the CGST Rules, 2017 - Appellate Authority allowed appeal on ground that E-way Bill was subsequently produced and no discrepancy existed in accompanying documents - Whether absence of E-way Bill at time of transportation can be cured by subsequent generation and production of E-way Bill - HELD – E-way Bill is integral part of statutory mechanism for monitoring movement of taxable goods under GST regime. Generation of E-way Bill is mandatory online process conducted at time of dispatch of goods whereas tax invoice is issued manually by taxpayer - Absence of E-way Bill at time of transportation where goods are generated subsequently after interception indicates clear intention to evade tax as it prevents electronic monitoring through outward supply records which would otherwise prevent manipulation of books of accounts - Short distance inter-State transportation without E-way Bill further highlights trader's intent to evade tax - Mere production of E-way Bill subsequently after interception and during penalty proceedings does not satisfy mandatory requirement of Rule 138(1) which prescribes generation before commencement of movement - Present case involves deliberate non-compliance with online E-way Bill generation process at time of dispatch indicating intention to evade tax and circumvent statutory monitoring mechanism - First Appellate Authority erred in treating violation as merely procedural lapse – The original order imposing tax and penalty under Section 129(3) of CGST Act 2017 is restored. Order by First Appellate Authority is quashed – The Revenue appeal is allowed [Read less]

GST - Section 16(2) of CGST Act, 2017 - Refund of Accumulated Input Tax Credit on export of goods - Validity of Supply Chain in the absence of Toll Plaza Movement receipts – Cancelled second-level supplier in Bill-to-Ship-to Model - Respondent claimed refund of accumulated ITC. Adjudicating Authority rejected refund claiming discrepancies in inward supply chain including non-crossing of vehicles through toll gates in declared dispatch State, procurement of goods from second-level suppliers with cancelled registrations, and possible illegal transactions in regulated petroleum commodity – Appellate Authority allowed refu... [Read more]

GST - Section 16(2) of CGST Act, 2017 - Refund of Accumulated Input Tax Credit on export of goods - Validity of Supply Chain in the absence of Toll Plaza Movement receipts – Cancelled second-level supplier in Bill-to-Ship-to Model - Respondent claimed refund of accumulated ITC. Adjudicating Authority rejected refund claiming discrepancies in inward supply chain including non-crossing of vehicles through toll gates in declared dispatch State, procurement of goods from second-level suppliers with cancelled registrations, and possible illegal transactions in regulated petroleum commodity – Appellate Authority allowed refund and set aside adjudication order - Revenue preferred appeals before GSTAT - Whether toll plaza receipts are mandatory for proving physical movement of goods and whether ITC can be denied for supply chain deficiencies and procedural discrepancies - HELD – The Toll plaza receipts are not mandatory requirement under GST law for proving actual physical movement of goods and transportation. Section 16 of CGST Act only prescribes receipt of goods, valid tax invoice, E-way Bill and payment of tax as conditions for ITC eligibility. Where respondent has produced valid transportation documents including E-way Bills, bilty copies, tax invoices, shipping bills, Export General Manifest, transporter certificates etc, toll plaza data alone cannot override substantive documentary evidence of actual supply and movement – Further, there is no provision in the GST law that the goods should necessarily start from the registered place of the supplier. The supplier shall supply the goods as per the instructions of the receiver/ exporter to the place of export in Bill-To-Ship-To Model - The respondent has complied all the conditions under clauses (a) to (d) of sub-section (2) of Section 16 and eligible to ITC – The Revenue appeals are dismissed - Validity of denial of ITC on ground of cancellation of GST registration of the second line of suppliers – HELD - The ITC cannot be denied based on cancellation of registrations of second-level suppliers when direct supplier's registration is active and valid - The actual supplier having valid registration and still exists in the GST portal. There is no connection between the respondent and the second line of suppliers. The respondent is not liable for any kind of irregularity committed by the second-level suppliers - Raising of additional grounds first time before the Tribunal – HELD - Merely on the basis of information given before the Appellate stage and without any prayer for additional evidence cannot be allowed. The Rule 45(1) of GSTAT (Procedure) Rules 2025 and Rule 112(1) of CGST Rules, 2017 bar the additional evidence to be recorded except in exceptional circumstances – The new grounds and allegations raised by Revenue for first time before GSTAT stage including licensing requirements for bitumen, investigation by DGGI, and allegations of similar modus operandi are additional evidence barred under Rule 45(1) of GSTAT Procedure Rules 2025 and Rule 112(1) of CGST Rules 2017 - Respondent has complied with all conditions under Section 16(2) of CGST Act for ITC eligibility. [Read less]

GST – Validity of invoking different provisions in Show Cause Notice and Order-in-Original - Rule 27 And Rule 28 of the CGST Rules, 2017 - Procedural Defect - Show Cause Notice issued invoking Rule 28(a) of CGST Rules for determination of value of excavated soil and seeking to recover tax along with interest and penalty - Adjudicating authority admitted that Rule 28(a) of CGST Rules as mentioned in Show Cause Notice was incorrectly invoked. However simultaneously authority invoked Rule 27(c) of CGST Rules and confirmed demand by resorting to different valuation for determination of value of services - Petitioner was neve... [Read more]

GST – Validity of invoking different provisions in Show Cause Notice and Order-in-Original - Rule 27 And Rule 28 of the CGST Rules, 2017 - Procedural Defect - Show Cause Notice issued invoking Rule 28(a) of CGST Rules for determination of value of excavated soil and seeking to recover tax along with interest and penalty - Adjudicating authority admitted that Rule 28(a) of CGST Rules as mentioned in Show Cause Notice was incorrectly invoked. However simultaneously authority invoked Rule 27(c) of CGST Rules and confirmed demand by resorting to different valuation for determination of value of services - Petitioner was never offered any opportunity to meet determination of value under Rule 27(c) of CGST Rules which was invoked and relied upon by adjudicating authority - Whether Show Cause Notice and Order-in-Original can proceed on different and contradictory legal grounds without affording opportunity of hearing to assessee on new ground of valuation - HELD - Invocation of different provision in Show Cause Notice as well as in impugned order is admitted factual position not in dispute. Show Cause Notice failed to allege or even indicate that alleged supply of soil was to any related persons so Rule 28(a) was incorrectly invoked - Adjudicating authority admitted that Rule 28(a) was incorrectly invoked in Show Cause Notice. However simultaneously authority invoked Rule 27(c) of CGST Rules and confirmed demand by resorting to different valuation for determination of value of services. Petitioner was never offered any opportunity to meet with determination of value under Rule 27(c) which was invoked and relied upon by adjudicating authority - Impugned order does not approve Rule 28(a) which was invoked in SCN but invokes Rule 27(c) at adjudication stage without affording hearing to assessee. This causes grave prejudice to Petitioner as it was unable to meet the new grounds raised for first time in adjudication order – The impugned order and Show Cause Notice are quashed and set aside. It is open for Revenue to initiate fresh proceedings by issuing fresh SCN to Petitioner on proper legal grounds with opportunity of hearing - The petition is allowed [Read less]

GST - Reliance on AI-Generated Case Laws - Procedural Defect – Respondent-State Tax Officer passed order cancelling Petitioner's GST registration by relying upon AI-generated case laws which were non-existent or irrelevant – Permissibility of use of AI is in issuing adjudication orders – HELD – The order passed by State Tax Officer by placing reliance exclusively on AI generated case laws citing non-existent and irrelevant judgments is fundamentally defective and suffers from procedural defect. Use of Artificial Intelligence to generate and cite case laws without independent verification and human oversight is impe... [Read more]

GST - Reliance on AI-Generated Case Laws - Procedural Defect – Respondent-State Tax Officer passed order cancelling Petitioner's GST registration by relying upon AI-generated case laws which were non-existent or irrelevant – Permissibility of use of AI is in issuing adjudication orders – HELD – The order passed by State Tax Officer by placing reliance exclusively on AI generated case laws citing non-existent and irrelevant judgments is fundamentally defective and suffers from procedural defect. Use of Artificial Intelligence to generate and cite case laws without independent verification and human oversight is impermissible and renders order unsustainable - Additional Commissioner of State Tax issued administrative instructions to all Joint Commissioners of State Tax prescribing procedure for use of Artificial Intelligence tools. Such instructions shall be scrupulously followed, and any violation of the instructions would amount to contempt of this Court – The Show Cause Notice, Order of cancellation, Order rejecting revocation application and the Appellate Order are quashed and set aside. Respondent authority shall issue fresh notice to petitioner and the petitioner shall fully co-operate with the proceedings – The petition stands disposed of [Read less]

Service Tax - Refundability of service tax paid on advance received for project agreement terminated before rendering of services - Appellant entered into contract with NTPC Limited for development and operation of coal project in Jharkhand and received contractual advance secured by bank guarantee; the contract was terminated prior to commencement of services and entire advance was recovered by NTPC through encashment of the bank guarantee - Whether service tax paid on such advance is refundable and whether the refund claim is barred by limitation under Section 11B of Central Excise Act, 1944 - HELD - As the appellant was... [Read more]

Service Tax - Refundability of service tax paid on advance received for project agreement terminated before rendering of services - Appellant entered into contract with NTPC Limited for development and operation of coal project in Jharkhand and received contractual advance secured by bank guarantee; the contract was terminated prior to commencement of services and entire advance was recovered by NTPC through encashment of the bank guarantee - Whether service tax paid on such advance is refundable and whether the refund claim is barred by limitation under Section 11B of Central Excise Act, 1944 - HELD - As the appellant was not liable to pay service tax since no service was actually rendered under the contract and the contract was terminated before any services could be rendered, the amount paid as service tax on advance received by the appellant is in the nature of deposit and not governed by limitation under Section 11B of the Central Excise Act, 1944 - The provisions of Section 11B apply only to duty of excise and refund of duty and not to amounts collected without authority of law. Where service tax is paid on taxable services which are not provided, the same is refundable as the payment does not partake the character of service tax payable in law - The cause of action arose on termination of contract and recovery of the advance through encashment of the bank guarantee. Since the taxable service was never rendered and the underlying consideration itself stood extinguished, the limitation contained in Section 11B, a provision designed for refund of excise duty on completed taxable events, cannot be invoked to defeat the refund claim - The appellant has borne the incidence of service tax paid by them and therefore refund cannot be denied on ground of limitation - The appellant is entitled to refund of service tax – The appeal is allowed [Read less]

Service Tax - Cenvat Credit - Eligibility of ancillary input services such as rent-a-cab, outdoor catering, event management, cleaning and photography services - Whether cenvat credit can be denied on the ground of lack of nexus between the input services and the output services - HELD - Cenvat credit cannot be denied on the ground of lack of nexus with the output services. The Tribunal has been consistently holding in a number of cases that services such as rent-a-cab service, outdoor catering service, event management service, cleaning service and photography service are input services on which cenvat credit can be avail... [Read more]

Service Tax - Cenvat Credit - Eligibility of ancillary input services such as rent-a-cab, outdoor catering, event management, cleaning and photography services - Whether cenvat credit can be denied on the ground of lack of nexus between the input services and the output services - HELD - Cenvat credit cannot be denied on the ground of lack of nexus with the output services. The Tribunal has been consistently holding in a number of cases that services such as rent-a-cab service, outdoor catering service, event management service, cleaning service and photography service are input services on which cenvat credit can be availed. The question of denying the credit on the ground of nexus is not sustainable – Further, Cenvat credit cannot be denied solely for non-production of documents; the matter is remanded for verification and extending the benefit of cenvat credit if the appellant is otherwise eligible and produces the requisite documents to substantiate the claim - Appeal is partially allowed by way of remand [Read less]

Customs - Classification of Brass Scrap and determination of country of origin - Customs Tariff Headings 74040022 and 98060000 - Notification No. 05/2019-Customs dated 16.02.2019 - Bill of Entry for brass scrap declared as originating from UAE when actual country of origin was Pakistan - Whether the country of origin of goods imported under the disputed Bills of Entry was UAE or Pakistan and whether goods should be classified under correct tariff item based on actual country of origin – HELD - The country of origin of the goods has been established to be Pakistan and not UAE as declared by the Appellant. Container number... [Read more]

Customs - Classification of Brass Scrap and determination of country of origin - Customs Tariff Headings 74040022 and 98060000 - Notification No. 05/2019-Customs dated 16.02.2019 - Bill of Entry for brass scrap declared as originating from UAE when actual country of origin was Pakistan - Whether the country of origin of goods imported under the disputed Bills of Entry was UAE or Pakistan and whether goods should be classified under correct tariff item based on actual country of origin – HELD - The country of origin of the goods has been established to be Pakistan and not UAE as declared by the Appellant. Container numbers and seal numbers reflected in screenshots of the Electronic Data Interchange systems matched with the printouts of Pakistan International Container Terminal website. The statements recorded under Section 108 of the Customs Act from the Senior Manager of the delivery agent and the Directors of the Appellant confirm that goods originated from Pakistan - The goods declared as Brass Scrap are correctly classifiable under Customs Tariff Heading 98060000 as per Notification No. 05/2019-Customs dated 16.02.2019 which prescribes levy of customs duty at 200 percent on all goods originating from the Islamic Republic of Pakistan - The pre-shipment inspection certificates issued for the goods were issued without actual inspection and without unloading of goods at the intermediate port, thereby establishing the misrepresentation of country of origin - The impugned Order-in-Original is upheld confirming the demand for differential customs duty and the appeals filed by the appellant are dismissed [Read less]

Customs - Classification of imported aluminum hollow profiles and availability of concessional duty notification - Customs Tariff Items 76042100 and 76169990 - Appellant manufacturer of Solar Photovoltaic Modules classifiable under HSN 8541 imported aluminum hollow profiles declared under CTI 76042100 but described in commercial invoices as aluminum solar frames - Appellant availed benefit of Serial No. 39 of Notification No. 24/2005-Cus for goods covered by Serial No. 23 thereof – The goods were cleared under continuity bonds and end-use certificates were issued by competent GST authorities; Revenue auditor proposed rec... [Read more]

Customs - Classification of imported aluminum hollow profiles and availability of concessional duty notification - Customs Tariff Items 76042100 and 76169990 - Appellant manufacturer of Solar Photovoltaic Modules classifiable under HSN 8541 imported aluminum hollow profiles declared under CTI 76042100 but described in commercial invoices as aluminum solar frames - Appellant availed benefit of Serial No. 39 of Notification No. 24/2005-Cus for goods covered by Serial No. 23 thereof – The goods were cleared under continuity bonds and end-use certificates were issued by competent GST authorities; Revenue auditor proposed reclassification under CTH 76169990 and raised demand for differential duty. - Whether the imported aluminum hollow profiles retain the character of profiles classifiable under CTI 76042100 or have been transformed into finished articles classifiable under CTH 76169990, and whether the Appellant is entitled to the concessional rate of duty under Notification No. 24/2005-Cus notwithstanding the intended use of the goods – HELD - The imported goods are aluminum extrusions or profiles of uniform cross-section that have not been converted into finished, ready-to-use frames having the essential character of articles which would necessitate classification under Heading 7616. The goods continue to fall under Customs Tariff Item 76042100 under Heading 7604 which specifically covers aluminum bars, rods and profiles. Heading 7616 is a residual heading covering other articles of aluminum not more specifically covered elsewhere and cannot be invoked merely because goods are described in invoices as solar frames or are intended for use as solar panel frames. Rule 3 of the General Rules of Interpretation mandates that the heading which provides the most specific description shall be preferred to headings providing a more general description. The determination of classification should be based on the actual character and description of the goods as imported, not their intended use - The exemption under Notification No. 24/2005-Cus is available if goods are intended to be used in the manufacture of goods listed in the Notification. The exemption cannot be denied on the basis of possible use of the imported goods for multiple purposes - The end-use certificates issued by the jurisdictional GST authorities establish that the goods were intended for use in manufacture of Solar Photovoltaic Modules and the Revenue cannot disbelieve the certificates issued by other wings of its own department without adducing specific reasons. The exemption was admissible during the currency of Notification No. 24/2005-Cus for bills of entry filed on or before 31.03.2022 - The imported goods are correctly classifiable under CTI 76042100. The Appellant is eligible for the exemption as per Notification No. 24/2005-Cus dated 01.03.2005 for the bills of entry filed before 01.04.2022 – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Larger Bench Order - Rule 3 Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 - Works Contract Service, Composition Scheme - Point of Taxation - Appellant provided works contract services to Ministry of Defence, Govt of India and exercised option to pay service tax under the Works Contract Composition Scheme at the rate prevailing at the commencement of contract. When the rate was subsequently revised upward, Appellant continued discharging service tax liability at the original rate for ongoing contracts - Department demanded service tax at the enhanced rate for invoices raised afte... [Read more]

Service Tax – Larger Bench Order - Rule 3 Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 - Works Contract Service, Composition Scheme - Point of Taxation - Appellant provided works contract services to Ministry of Defence, Govt of India and exercised option to pay service tax under the Works Contract Composition Scheme at the rate prevailing at the commencement of contract. When the rate was subsequently revised upward, Appellant continued discharging service tax liability at the original rate for ongoing contracts - Department demanded service tax at the enhanced rate for invoices raised after the rate revision - Whether when opting for Works Contract Composition Scheme, an assessee continues to pay at the same rate applicable at time of opting for scheme till completion of contract, or whether revised rate applies to invoices raised after rate revision - HELD – The Rule 3(1) of Composition Scheme provides that the option to avail composition scheme shall be applicable for entire works contract and shall not be withdrawn until completion of said works contract, however the rule does not stipulate that tax rate prevailing at time of opting into scheme will continue until completion of same works contract whether under composition scheme or otherwise. The Point of Taxation Rules, 2011 answer the question by providing that point of taxation shall be the time when invoice for service provided or agreed to be provided is issued or when payment is received, whichever is earlier, and in cases where there is a change in effective rate of tax, the point of taxation shall be determined in the manner specified in Rule 4 of Point of Taxation Rules, 2011 - The rate of tax shall be the rate as on the point of taxation and not the rate prevailing at the time of exercising the option - The Point of Taxation Rules, 2011 were not brought to attention of Calcutta High Court either before Single Bench or Division Bench in the case of L&T and hence those decisions did not consider these Rules. Before Point of Taxation Rules, 2011, service tax was to be paid as applicable when taxable event, viz., rendition of service had taken place, and after these Rules were notified, the earliest of the three events- rendering service, issuing invoice or receiving advance is the point of taxation and rate of tax prevalent at that point would apply - The referred question is answered affirming that rate of tax shall be determined in accordance with Point of Taxation Rules, 2011 and the rate applicable at point of taxation shall be the rate for paying service tax under Works Contract Composition Scheme – Ordered accordingly [Read less]

Service Tax – Removal of Overburden, Disposal by Way of Sale - Characterization as Service Vs Sale - Mining lessee authorized appellant to dispose of accumulated overburden from mining lease area on payment of applicable royalty and short term permit fee. Appellant admitted that overburden was provided free of cost - Appellant subsequently sold boulder collected from overburden to third parties and charged consideration. Department contended that removal and disposal of overburden by Appellant constituted rendering of taxable service to JSL classifiable as Business Auxiliary Service for which no amount was paid by JSL di... [Read more]

Service Tax – Removal of Overburden, Disposal by Way of Sale - Characterization as Service Vs Sale - Mining lessee authorized appellant to dispose of accumulated overburden from mining lease area on payment of applicable royalty and short term permit fee. Appellant admitted that overburden was provided free of cost - Appellant subsequently sold boulder collected from overburden to third parties and charged consideration. Department contended that removal and disposal of overburden by Appellant constituted rendering of taxable service to JSL classifiable as Business Auxiliary Service for which no amount was paid by JSL directly but consideration was amount received by Appellant from its customers on sale of boulders - Whether transaction of removing overburden constitutes sale or rendering of service, whether royalty and permit fees were subject to service tax, and whether extended period of limitation was validly invoked - HELD - Mere allocation of export quotas does not create vested rights. Transaction between JSL and Appellant is not one of sale as no consideration or price exists for sale of overburden. Invoices are accounting jugglery and camouflage to hide activity of service. Lifting and disposal of overburden by Appellant is rendering of service to JSL for which no amount was paid directly but consideration received by Appellant from its customers on sale of boulders represents amount which Appellant should have received from JSL for providing service - Under mining laws JSL was responsible for removal of overburden and if JSL had hired Appellant to do so, JSL would have paid service charges. There is no justification why Appellant would lift and remove overburden without charging any amount. This reflects understanding between parties to evade liability of service tax. No quarrel with proposition that to be classified as service there must be activity carried out by one person for another for consideration - Revenue correctly treats amount received by Appellant from its customers for further sale to them as consideration received by Appellant for rendering service to JSL for disposal of overburden. Amount charged by Appellant from its customers is actually amount which Appellant should have received from JSL for providing service and same should form gross amount as per Section 67 of Act - Service tax on royalty and permit fees for removal of overburden is payable as periodic charges made by business entities to Government are not exempted though assignment of right to use natural resources prior to 01.04.2016 are exempt from one time charges only - Appellant suppressed true nature of relationship and transaction between it and JSL. Invoices are nothing but camouflage. Ingredients specified under proviso to Section 73(1) are fully satisfied and extended period of limitation has been validly invoked – The appellant is liable to pay service tax on amount received against sale of overburden and service tax on royalty and permit fees paid to Government – The appeals are dismissed [Read less]

Service Tax – Refund of unutilized Cenvat Credit - Appellant is 100% export unit engaged in providing Business Support Services and Information Technology Software Services to overseas entities - Appellant availed Cenvat credit in respect of General Insurance Services, Works Contract Services and Commercial or Industrial Construction Services - Lower authority partially rejected refund claims on ground of lack of nexus with exported output services - Whether refund of Cenvat credit can be denied when availment of credit was not challenged by Department under Rule 14 of Cenvat Credit Rules, and whether General Insurance S... [Read more]

Service Tax – Refund of unutilized Cenvat Credit - Appellant is 100% export unit engaged in providing Business Support Services and Information Technology Software Services to overseas entities - Appellant availed Cenvat credit in respect of General Insurance Services, Works Contract Services and Commercial or Industrial Construction Services - Lower authority partially rejected refund claims on ground of lack of nexus with exported output services - Whether refund of Cenvat credit can be denied when availment of credit was not challenged by Department under Rule 14 of Cenvat Credit Rules, and whether General Insurance Services, Works Contract Services and Commercial or Industrial Construction Services are eligible input services - HELD - It is settled principle of law that availment of Cenvat credit, its utilisation and its refund are different aspects provided under Credit Rules. It is nowhere provided under Rule 5 of CCR, 2004 that eligibility of Cenvat credit can be determined by Department at time of seeking refund by assessee. When availment of Cenvat credit was not challenged by Department in first place under Rule 14 of Credit Rules, refund of same cannot be denied to appellant now under Rule 5 of Credit Rules. Each of the input services on which refund has been denied falls under definition of input service and each has been held to be input service by many decisions of Tribunal and Courts. The denial of refund on ground of lack of nexus is not sustainable - The impugned order is set aside and the appeal is allowed [Read less]

GST – Levy of Penalty under Section 129(3) of the CGST Act on transit of goods without E-way Bill - Procedural Lapse – The vehicle carrying goods covered by genuine tax invoices was intercepted without E-way Bill. E-way Bill was generated nine minutes after interception and immediately produced before authority. Proper Officer imposed penalty under Section 129(3) on ground of movement of goods without E-way Bill - Whether penalty under Section 129(3) can be imposed for procedural lapse in generating E-way Bill when E-way Bill is generated immediately after interception in absence of any material indicating tax evasion ... [Read more]

GST – Levy of Penalty under Section 129(3) of the CGST Act on transit of goods without E-way Bill - Procedural Lapse – The vehicle carrying goods covered by genuine tax invoices was intercepted without E-way Bill. E-way Bill was generated nine minutes after interception and immediately produced before authority. Proper Officer imposed penalty under Section 129(3) on ground of movement of goods without E-way Bill - Whether penalty under Section 129(3) can be imposed for procedural lapse in generating E-way Bill when E-way Bill is generated immediately after interception in absence of any material indicating tax evasion intent - HELD – The procedural lapse in not generating E-way Bill prior to interception is admitted. However lapse occurred in background of genuine transaction fully supported by purchase and sale invoices, challans, ledger accounts and bank records. E-way Bill was generated within approximately nine minutes and immediately produced before authority. No independent material on record demonstrating suppression, clandestine movement, undervaluation, fake documentation or any positive circumstance indicating tax evasion – The goods (Motorcycles) are highly identifiable goods bearing engine and chassis numbers and subject to R.T.O. registration making transaction completely traceable. Peculiar facts of case indicate bona fide procedural lapse rather than act forming part of attempt to evade tax - The invocation of Section 129 penalty requires element of intent to evade tax, technical violations of E-way Bill requirements without intent to evade tax cannot warrant punishment – The impugned penalty order is set aside and the appeal is allowed [Read less]

GST - Section 74 of the CGST Act, 2017 - Fraud and Suppression of Facts - Allegation must be in Notice – Show Cause Notice under Section 74 alleging fraud or concealment of facts but SCN contains only bland statement without specifying how fraud was inferred or how concealment was detected – While the extended period of limitation fell on 28.02.2025, SCN issued on 13.06.2025 - Whether Show Cause Notice issued under Section 74 alleging fraud or suppression of facts without detailed specifications in notice itself is valid when notice is barred by limitation under Section 73, and whether allegations of fraud and concealm... [Read more]

GST - Section 74 of the CGST Act, 2017 - Fraud and Suppression of Facts - Allegation must be in Notice – Show Cause Notice under Section 74 alleging fraud or concealment of facts but SCN contains only bland statement without specifying how fraud was inferred or how concealment was detected – While the extended period of limitation fell on 28.02.2025, SCN issued on 13.06.2025 - Whether Show Cause Notice issued under Section 74 alleging fraud or suppression of facts without detailed specifications in notice itself is valid when notice is barred by limitation under Section 73, and whether allegations of fraud and concealment must be contained in notice or can be supplemented by counter affidavit - HELD - When authority issues notice or order, requirements to make notice or order valid should be contained in such notice or order and cannot be supplanted by counter affidavit in Court where notice or order is alleged to be invalid for reason of non-application of mind. SCN is beyond the time of three years provided under Section 73 for determination of tax short paid for any reason other than fraud, willful misstatement or suppression of facts - Notice can only be issued under Section 74 when there is fraud or willful misstatement or suppression of facts alleged and allegation has to come out from notice itself. Bare reading of notice indicates that but for bland statement of fraud or concealment of facts, nothing is stated as to how fraud was inferred or concealment of facts was detected - What is required for extended time to be applied are allegations which lead to inference of fraud or concealment as attempted by assessee resulting in suppression of facts, should emanate from notice itself. It cannot be mechanical use of words fraud, willful misstatement or suppression of facts without listing out aspects which persuades assessing officer to conclude that there has been employed either of these surreptitious devices by assessee - Extended period of limitation under Section 74 cannot be initiated without specific, detailed and clear allegations of fraud or suppression of facts in notice itself – The Show Cause Notice and the impugned order of High Court is set aside. Respondent-State is directed to desist from taking any further proceedings in pursuance of SCN. No further proceedings can be initiated as SCN is barred by limitation under Section 73 and the requirements to invoke Section 74 are not satisfied – The appeal is allowed [Read less]

GST - Section 17(5)(d) of the CGST Act, 2017 - Eligibility to Input Tax Credit on Telecommunication Towers – Revenue review petition in Bharti Airtel case – HELD - Having examined the impugned order in light of the grounds raised, there is no error apparent on the face of the record, in the order impugned, that would justify its reconsideration – There is no merit in the review petitions. The Review Petitions are dismissed

Sales Tax - Distinction between Lease and Sale of Goods - Agreements for Extraction of Forest Products - Nature of Royalty - Petitioner, a paper manufacturing company, entered into agreements with the State Forest Department for extraction of pine and eucalyptus wood against payment of royalty. The petitioner contended that the agreements constituted a lease of immovable property and not a sale of goods, and therefore no sales tax was exigible on the royalty paid. The petitioner further contended that the Forest Department, not being a registered dealer under the Sales Tax Act, could not collect or realise sales tax. The p... [Read more]

Sales Tax - Distinction between Lease and Sale of Goods - Agreements for Extraction of Forest Products - Nature of Royalty - Petitioner, a paper manufacturing company, entered into agreements with the State Forest Department for extraction of pine and eucalyptus wood against payment of royalty. The petitioner contended that the agreements constituted a lease of immovable property and not a sale of goods, and therefore no sales tax was exigible on the royalty paid. The petitioner further contended that the Forest Department, not being a registered dealer under the Sales Tax Act, could not collect or realise sales tax. The petitioner also relied upon the judgment in Titaghur Paper Mills to support its contention - Whether the agreements in question constitute a sale and purchase of goods exigible to sales tax, and whether the judgment of the Supreme Court in Titaghur Paper Mills supports the petitioner's contention - HELD - The agreements dated 17.03.1967 and 01.10.1974 are in pith and substance agreements for the sale and purchase of wood where the standing trees had to be severed and removed by the buyer as per the manner and conditions prescribed in the agreements. The term royalty used in the agreements is referable to the sale consideration at the rate mentioned in consideration of the wood extracted by the petitioner at the point of extraction. The purchase of standing trees agreed to be severed constitutes the taxable event as held in Titaghur Paper Mills. The transaction undertaken by the State for sale and purchase of wood falls within the definition of dealer as contained in Section 2(c) of the Act of 1948, and as per the agreements, the petitioner was required to pay sales tax and other taxes at the rates enforced from time to time. The Titaghur Paper Mills judgment does not support the petitioner as it expressly provides that agreements whereby wood and timber are extracted by severing such wood and timber from trees are exigible to sales and purchase tax. The petitioner's argument regarding non-applicability of sales tax is unsustainable - The writ petition is dismissed [Read less]

Customs - Refund of Duty - Rate of Interest on Delayed Refund - Commencement of Period for Payment of Interest - Appellant imported Yellow / Green peas and cleared them on payment of customs duty. Subsequently, on coming to know that the goods would be eligible for nil rate of duty under a notification, appellant filed request for re-assessment under Section 149. Appellant also filed a refund claim. After extended proceedings, re-assessment order was passed on 17.09.2025 and refund order was issued on 01.12.2025. The adjudicating authority sanctioned the refund without interest. The Commissioner of Appeals allowed interest... [Read more]

Customs - Refund of Duty - Rate of Interest on Delayed Refund - Commencement of Period for Payment of Interest - Appellant imported Yellow / Green peas and cleared them on payment of customs duty. Subsequently, on coming to know that the goods would be eligible for nil rate of duty under a notification, appellant filed request for re-assessment under Section 149. Appellant also filed a refund claim. After extended proceedings, re-assessment order was passed on 17.09.2025 and refund order was issued on 01.12.2025. The adjudicating authority sanctioned the refund without interest. The Commissioner of Appeals allowed interest at 6% from 20.02.2019 till date of actual disbursement. Appellant aggrieved by the rate of interest preferred appeal seeking 12% interest. Revenue also preferred appeal contending that interest should be calculated only from 17.09.2025 - Whether the interest on delayed refund of duty should be granted at the rate of 12% or 6%, and from which date should the interest be calculated - HELD - Following the principle laid down in Ranbaxy Laboratories Ltd. Vs Union of India and Hamdard Waqf Laboratories Vs Union of India, interest on refund commences from the date of expiry of three months from the date of receipt of the initial refund application. The liability of Revenue to pay interest is not from the date of re-assessment order but from the date when refund claim was initially filed. The chronological history of the case demonstrates that the procrastination is from Revenue's side and the case was settled by Tribunal in favour of the importer which was upheld at Apex Court level - Following the decision of Calcutta High Court in Rajendra Kumar Jain Vs Commissioner of Customs (Port), interest at the rate of 12% per annum is payable on refunded amount in absence of any statutory provision fixing lower rate of interest for refund of amount deposited during investigation and adjudication - Appellant is entitled to interest at 12% from 20.02.2019 till date of refund - Appeal filed by importer is allowed and appeal filed by Revenue is dismissed [Read less]

GST - Composition Scheme, Automatic Lapse - Eligibility and Cessation on Exceeding Threshold Turnover - Appellant, a brick manufacturer registered under the composition scheme, was subjected to audit which disclosed a discrepancy between the turnover reflected in e-way bills and the turnover declared in FORM GST CMP-08 statements, showing that the aggregate turnover exceeded the prescribed threshold of Rs.1.50 crore. Upon such excess, the audit authorities proposed that the composition scheme was unavailable and demanded differential tax at the regular rate of 5% for the financial years 2020-21 and 2021-22, which was uphel... [Read more]

GST - Composition Scheme, Automatic Lapse - Eligibility and Cessation on Exceeding Threshold Turnover - Appellant, a brick manufacturer registered under the composition scheme, was subjected to audit which disclosed a discrepancy between the turnover reflected in e-way bills and the turnover declared in FORM GST CMP-08 statements, showing that the aggregate turnover exceeded the prescribed threshold of Rs.1.50 crore. Upon such excess, the audit authorities proposed that the composition scheme was unavailable and demanded differential tax at the regular rate of 5% for the financial years 2020-21 and 2021-22, which was upheld on first appeal - Whether upon the aggregate turnover of a registered person exceeding the threshold limit of Rs.1.50 crore prescribed under Section 10(3) of the CGST Act, 2017 the option availed for the composition scheme ceases to operate automatically, and the registered person becomes liable to discharge tax at the applicable regular rate instead of the concessional composition rate - HELD - The option availed of by a registered person under Section 10(1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under Section 10(1), and this consequence is automatic and operates by force of statute. Upon the aggregate turnover crossing the statutory ceiling prescribed under the Act, the composition levy stands terminated on the occurrence of the disqualifying event, whereby the registered person ceases to remain eligible for the benefit of the composition scheme from the date of such crossing - The expression aggregate turnover bears the meaning assigned under Section 2(6) of the Act, computed on an all-India basis. The consequence flowing from Section 10(3) is automatic and the composition levy terminates immediately upon the turnover exceeding the prescribed threshold. Upon such cessation, the registered person becomes liable to discharge tax at the applicable regular rate on all supplies made on and after the date of such lapse, subject to due credit and adjustment of any composition tax already paid - The impugned order is upheld with limited modification - GST - Composition Scheme - Computation of Differential Tax - Cum-tax Valuation under Rule 35 - Where value of supply is inclusive of tax - Upon cessation of the composition scheme due to exceeding the turnover threshold, the tax authorities computed the differential tax on the entire value declared in invoices without applying the cum-tax principle - Whether the differential tax liability should be computed applying the cum-tax valuation formula prescribed under Rule 35, treating the invoice value as inclusive of tax, when a composition scheme taxpayer who was prohibited from collecting tax separately exceeds the threshold limit and becomes liable to discharge tax at the regular rate - HELD - A person opting for the composition scheme is prohibited from collecting tax from recipients and cannot claim input tax credit; invoices issued must reflect the total consideration received without any separately identifiable tax component, meaning the value must be treated as inclusive of tax. Rule 35 prescribes the methodology for determining tax amount where the value of supply is inclusive of tax. Since the Department has not alleged that the appellants collected any tax over and above the invoice value, the value declared in invoices must be treated as inclusive of tax and the tax component must be worked out in accordance with the formula prescribed under Rule 35 - The appellants are entitled to the benefit of Rule 35 even though they did not specifically claim it, as they cannot be deprived of the benefit available to them in law. The proper officer is directed to recompute the differential tax liability on the supplies made on and after the date of lapse of the composition option by treating the declared value as cum-tax and by applying the formula prescribed under Rule 35, with consequential liability towards interest and penalty recalculated on the basis of the revised tax liability - The impugned order is modified to the extent that the appellants shall be entitled to the benefit of cum-tax valuation in terms of Rule 35 and the tax liability shall be recomputed accordingly. [Read less]

GST - Cancellation of Registration - Validity of Show-cause Notice and Cancellation Order - Violations of Natural Justice - Petitioner was granted seven days to file reply but no date and time was specified for personal hearing. Physical verification was conducted on 21.8.2025 and 19.8.2025 but verification report was not uploaded till passing of final order. Registration was cancelled with retrospective effect from 11.12.2020 - Whether the show-cause notice and cancellation order passed without specifying date and time for personal hearing and without uploading physical verification report within stipulated period are val... [Read more]

GST - Cancellation of Registration - Validity of Show-cause Notice and Cancellation Order - Violations of Natural Justice - Petitioner was granted seven days to file reply but no date and time was specified for personal hearing. Physical verification was conducted on 21.8.2025 and 19.8.2025 but verification report was not uploaded till passing of final order. Registration was cancelled with retrospective effect from 11.12.2020 - Whether the show-cause notice and cancellation order passed without specifying date and time for personal hearing and without uploading physical verification report within stipulated period are valid and in compliance with the provisions of Rule 22(1) read with Form GST REG-17 and Rule 25 of the CGST Rules, 2017 - HELD – The Form GST REG-17 read with Rule 22(1) makes it mandatory that the authority concerned must assign reasons for cancellation and grant seven working days time to file reply, and at the same time is under obligation to afford an opportunity of personal hearing by specifying date and time. The SCN issued without specifying date and time for personal hearing was issued in contravention to provisions of REG-17. Rule 25 requires that physical verification report along with other documents including photographs shall be uploaded within fifteen working days following the date of verification. In the present case physical verification was carried out but documents were not uploaded till passing of final orders, thereby violating provisions of Rule 25 - The order is wholly without jurisdiction and in violation of natural justice principles. The SCN and order of cancellation of registration are quashed. Respondent is at liberty to initiate fresh proceedings strictly in accordance with REG-17 and Rule 25 of CGST Rules - The writ petition is allowed [Read less]

GST – Insolvent Supplier, Applicability of Ghanashyam Mishra & Sons (P.) Ltd. case - Eligibility to Input Tax Credit under Section 16(2)(c) of the CGST Act, 2017 - Insolvency Proceedings - Petitioner availed Input Tax Credit on basis that supplier had already paid tax. Supplier subsequently became insolvent and insolvency proceedings were initiated under Insolvency and Bankruptcy Code 2016 - Department failed to claim tax against supplier in insolvency proceedings and since tax liability remained unpaid, demand was imposed on Petitioner under Section 16(2)(c) of CGST Act, 2017 - Whether Petitioner can be held liable for ... [Read more]

GST – Insolvent Supplier, Applicability of Ghanashyam Mishra & Sons (P.) Ltd. case - Eligibility to Input Tax Credit under Section 16(2)(c) of the CGST Act, 2017 - Insolvency Proceedings - Petitioner availed Input Tax Credit on basis that supplier had already paid tax. Supplier subsequently became insolvent and insolvency proceedings were initiated under Insolvency and Bankruptcy Code 2016 - Department failed to claim tax against supplier in insolvency proceedings and since tax liability remained unpaid, demand was imposed on Petitioner under Section 16(2)(c) of CGST Act, 2017 - Whether Petitioner can be held liable for tax unpaid by defaulting supplier - HELD – The Section 16(2)(c) of CGST Act is mandatory condition subject to Section 41 requiring that tax charged in respect of supply be actually paid to Government and unless same is paid, availing of ITC is prohibited – The purchasing dealer cannot be held entitled to claim Input Tax Credit unless all conditions up to clause (c) are satisfied. Burden lies on dealer to establish entitlement up to clause (c) as per Section 155 of CGST Act. Purchaser without ascertaining whether supplier paid tax should not have availed ITC and recovery of same becomes permissible once availed without supplier payment – The judgment in Ghanashyam Mishra & Sons (P.) Ltd., relied upon by learned counsel, deals with the consequences flowing from an approved resolution plan under the IBC and does not dispense with the statutory condition governing the entitlement to Input Tax Credit of purchasing dealer under Section 16(2)(c) of the CGST Act – The writ petition is dismissed [Read less]

GST - Procedural defect in Show Cause Notice - Levy of penalties for fraudulent Input Tax Credit – Vide the impugned order the High Court held that the typographical error does not vitiate the notice and sufficient opportunity of hearing has been provided, hence, there is no violation of principles of natural justice – Assessee in appeal – SC HELD - the High Court has rightly observed that the petitioner (appellant herein) has an alternative remedy of preferring a statutory appeal – The petitioner is granted time to prefer the statutory appeal before the Appellate Authority. It shall be open for the petitioner to r... [Read more]

GST - Procedural defect in Show Cause Notice - Levy of penalties for fraudulent Input Tax Credit – Vide the impugned order the High Court held that the typographical error does not vitiate the notice and sufficient opportunity of hearing has been provided, hence, there is no violation of principles of natural justice – Assessee in appeal – SC HELD - the High Court has rightly observed that the petitioner (appellant herein) has an alternative remedy of preferring a statutory appeal – The petitioner is granted time to prefer the statutory appeal before the Appellate Authority. It shall be open for the petitioner to raise all submissions available in law, including deficiencies in the show cause notice - The Special Leave Petition stands disposed of [Read less]

Customs - Special Additional Customs Duty - Refund Claim - Period of Limitation - Subordinate Legislation vs. Substantive Rights - Appellant engaged in business of import and trading of various plastics and textile products filed Bills of Entry for clearance of imported goods in years 2012-2014. Assessing Authority rejected declared value in Bills of Entry and re-determined values under Rule 5 of Customs Valuation Rules, 2007. Appellant challenged assessment before Commissioner (Appeals) who set aside order and accepted declared value on 11.03.2022. On 07.12.2022, appellant filed refund claim for Special Additional Customs... [Read more]

Customs - Special Additional Customs Duty - Refund Claim - Period of Limitation - Subordinate Legislation vs. Substantive Rights - Appellant engaged in business of import and trading of various plastics and textile products filed Bills of Entry for clearance of imported goods in years 2012-2014. Assessing Authority rejected declared value in Bills of Entry and re-determined values under Rule 5 of Customs Valuation Rules, 2007. Appellant challenged assessment before Commissioner (Appeals) who set aside order and accepted declared value on 11.03.2022. On 07.12.2022, appellant filed refund claim for Special Additional Customs Duty (4% SAD) in respect of Bills of Entry. Respondent rejected refund claim on ground of limitation relying upon Notification No. 93/2008-Cus dated 01.08.2008 which prescribed one-year limitation from date of payment of additional duty of customs for filing refund applications. Appellant contends that earlier Notification No. 102/2007-Customs dated 14.09.2007 had no period of limitation and said limitation was prescribed for first time through Notification No. 93/2008-Cus and such limitation cannot be imposed through subordinate legislation without statutory amendment - Whether one-year limitation period prescribed in Notification No. 93/2008-Cus dated 01.08.2008 is valid and applicable to refund claims filed after expiry of prescribed period - HELD - Notification No. 102/2007-Customs as amended by Notification No. 93/2008-Cus prescribed one-year limitation for filing refund claims for additional duty of customs, but said limitation has been read down by Delhi High Court in case of Sony India Pvt. Ltd. v. Commissioner of Customs, New Delhi. High Court held that period of limitation being essential legislative policy aspect cannot be prescribed by subordinate legislation. In matters dealing with substantive rights such as refunds, parent enactment must clearly impose such obligations and subordinate legislation or rules cannot prevail. Imposition of period of limitation for first time without statutory amendment through notification could not prevail. The amending notification must be read down to extent that it imposes limitation period. Tribunal in case of Ghaio Mall and Sons v. Commissioner, Ludhiana followed ratio of Delhi High Court and held that time limitation of one year specified under notification shall not apply until and unless basic provisions of Section 27 of the Act dealing with refunds are made applicable. For provisionally assessed Bill of Entry which has not been finalized, limitation is inapplicable because limitation starts from date of finalization of assessment - Impugned order is not sustainable in law as it rejects refund claim solely on ground of limitation prescribed in notification which has been read down by High Court - Appeal is allowed with consequential relief [Read less]

GST – Appeal – Exclusion of time spent in pursuing Rectification Application - Period of Limitation for Filing Appeal - Appellate Authority rejected appeal by impugned order solely on ground of limitation. Appellate Authority computed limitation period from date of original order instead of from date of rectification order - Whether period of limitation for filing appeal against order rejecting refund claim must be computed from date of original adjudication order or from date of order deciding rectification application filed within statutory period - HELD - When rectification application under Section 161 of the CGST ... [Read more]

GST – Appeal – Exclusion of time spent in pursuing Rectification Application - Period of Limitation for Filing Appeal - Appellate Authority rejected appeal by impugned order solely on ground of limitation. Appellate Authority computed limitation period from date of original order instead of from date of rectification order - Whether period of limitation for filing appeal against order rejecting refund claim must be computed from date of original adjudication order or from date of order deciding rectification application filed within statutory period - HELD - When rectification application under Section 161 of the CGST Act, 2017 is filed within prescribed statutory period of 90 days, Appellate Authority was required to examine appeal and decide on merits instead of rejecting on ground of limitation by computing period from date of original order. Filing and disposal of rectification application was vital aspect which would directly impact calculation of limitation period provided under Section 107 of CGST Act - Where rectification application has been filed within prescribed period and has been duly considered and decided by Adjudicating Authority by reasoned order, appeal against such order must be filed within prescribed period calculated from date of rectification order not from original adjudication order. If appeal was found to be barred by limitation even when period computed from rectification order, the Appellate Authority would be entitled to reject on that ground. However, it is not permissible to reject appeal by computing period from original adjudication order when rectification application filed within prescribed period has been duly considered and decided. Appellate Authority was required to examine details filled in by petitioner in GST APL-01 form before rejecting appeal on ground of delay – The impugned orders passed by Appellate Authority are quashed and set aside. Matters are remanded to Appellate Authority which shall decide appeals afresh on merits and in accordance with law – The petitions are allowed [Read less]

GST – Demand of IGST on Ocean Freight in CIF contract - Department issued Notices imposing IGST on ocean freight as supply of service - Whether ocean freight in CIF contracts constitutes separate taxable supply of service or forms part of composite supply of goods - HELD - Following Supreme Court judgment in Union of India v. Mohit Minerals Private Limited, ocean freight in CIF contracts constitutes composite supply comprising supply of goods and supply of transportation services. When IGST is levied on composite supply on entire value including ocean freight, separate levy of GST on freight component is not leviable –... [Read more]

GST – Demand of IGST on Ocean Freight in CIF contract - Department issued Notices imposing IGST on ocean freight as supply of service - Whether ocean freight in CIF contracts constitutes separate taxable supply of service or forms part of composite supply of goods - HELD - Following Supreme Court judgment in Union of India v. Mohit Minerals Private Limited, ocean freight in CIF contracts constitutes composite supply comprising supply of goods and supply of transportation services. When IGST is levied on composite supply on entire value including ocean freight, separate levy of GST on freight component is not leviable – The SCNs imposing tax on ocean freight as separate service are set aside - The writ petitions are allowed [Read less]

Customs/DGFT - Validity of export prohibition notification for sugar - Vested Rights and Legitimate Expectation - Petitioners are merchant exporters who had entered into contracts with overseas buyers for export of sugar and received advance payments prior to issuance of Impugned Notification - DGFT issued Impugned Notification dated 13th May 2026 changing export policy of sugar from restricted to prohibited with immediate effect until 30th September 2026 except for certain specified exceptions. Petitioners challenged Notification contending that it violates their legitimate expectations and vested rights created by earlie... [Read more]

Customs/DGFT - Validity of export prohibition notification for sugar - Vested Rights and Legitimate Expectation - Petitioners are merchant exporters who had entered into contracts with overseas buyers for export of sugar and received advance payments prior to issuance of Impugned Notification - DGFT issued Impugned Notification dated 13th May 2026 changing export policy of sugar from restricted to prohibited with immediate effect until 30th September 2026 except for certain specified exceptions. Petitioners challenged Notification contending that it violates their legitimate expectations and vested rights created by earlier Notifications, violates Article 14 and 19(1)(g) of Constitution, causes irreparable prejudice and constitutes arbitrary action - Whether issuance of export prohibition notification in respect of sugar is valid and whether it violates legitimate expectations, vested rights or constitutional guarantees of Petitioners - HELD - Mere allocation of export quotas under earlier Notifications does not create any vested or accrued rights in favour of exporters. Policy decision to prohibit export was taken in larger public interest after due deliberation by Committee of Ministers considering that sugar is essential commodity and domestic production had declined significantly from estimated 343 lakh metric tonnes to actual 308 lakh metric tonnes with closing stock likely to fall below safe level of 40 lakh metric tonnes - Legitimate expectation is not an enforceable right more particularly in context of well-reasoned policy decision taken in public interest. Petitioners failed to comply with statutory requirements including holding Irrevocable Commercial Letter of Credit before issuance of Notification as mandated by paragraph 1.05(b) of Foreign Trade Policy 2023. Earlier relaxation granted in 2022-23 season cannot constitute binding precedent for subsequent seasons as each sugar season has different market conditions - Earlier Notifications dated 14th November 2025 and 13th February 2026 were issued under Essential Commodities Act for quota allocation whereas Impugned Notification was issued under Foreign Trade Development and Regulation Act dealing with export policy and both operate under different statutes for distinct purposes. Impugned Notification does not operate retrospectively and contains prospective language – The exceptions in Notification for consignments already in physical export pipeline must be read in context of Section 51 of Customs Act requiring actual permission from proper officer for clearance and loading of goods for exportation and shipping bills filed. Petitioners have not fulfilled conditions required under Section 51 of Customs Act such as Let Export Order or evidence of shipment commencement before Notification - Doctrine of promissory estoppel and legitimate expectation cannot override policy decisions taken in accordance with law and in public interest unless policy is shown to be irrational, perverse or actuated by mala fides - Constitutional guarantee under Article 19(1)(g) is not absolute and permits reasonable restrictions in public interest. Protection of domestic sugar supply and pricing at relevant time appears to be need of hour – Petitioners remain at liberty to sell retained sugar quantities in domestic market subject to compliance with Sugar Control Orders and applicable laws - The writ petitions are dismissed [Read less]

GST - Demand against Deceased Taxpayer - Lack of Jurisdiction - Petitioner is legal heir (wife) of deceased taxpayer - Show Cause Notice under Section 74(1) along with FORM DRC-01 was issued on deceased taxpayer seeking recovery of tax liability. Order along with FORM DRC-07 was passed confirming demands in absence of reply from deceased taxpayer - Whether notice and order can be issued and passed against deceased taxpayer and whether such proceedings are without jurisdiction and nullity in eye of law - HELD – The notice under Section 74(1) and order under Section 74(9) of GGST Act can be issued or passed against person ... [Read more]

GST - Demand against Deceased Taxpayer - Lack of Jurisdiction - Petitioner is legal heir (wife) of deceased taxpayer - Show Cause Notice under Section 74(1) along with FORM DRC-01 was issued on deceased taxpayer seeking recovery of tax liability. Order along with FORM DRC-07 was passed confirming demands in absence of reply from deceased taxpayer - Whether notice and order can be issued and passed against deceased taxpayer and whether such proceedings are without jurisdiction and nullity in eye of law - HELD – The notice under Section 74(1) and order under Section 74(9) of GGST Act can be issued or passed against person chargeable with tax. Definition of person under Section 2(84) of GGST Act includes individual in case of proprietorship concern and not legal heirs of such individual. Proprietor taxpayer passed away on 29.07.2020 whereas impugned notice was issued only on 26.06.2025 and order was passed only on 04.12.2025. Nil dues were determined at time of cancellation of registration of deceased proprietor. In view thereof neither notice under Section 74(1) nor order under Section 74(9) can be issued or passed against deceased person – The impugned proceedings against deceased taxpayer are without jurisdiction and nullity in eye of law. Petitioner is housewife not connected with husband's business and GSTIN was cancelled in 2021 with nil demands. Authority issued notice and order to dead person being unaware about death of taxpayer. Impugned notice and order are passed against person who is no longer alive and hence cannot be served or heard – The impugned notice and impugned order are quashed and set aside. It is open for respondents to initiate proper proceedings in accordance with law against Petitioner (legal heir) for outstanding demand if any, following proper procedure – The petition is allowed [Read less]

GST – Tamil Nadu AAR - Classification of Services - Composite Supply or not - Applicant engaged in upkeep and maintenance of Tamil Nadu Urban Habitat Development Board Housing Units under contract with Greater Chennai Corporation - Applicant claimed services constitute composite supply of goods and services entitled to nil rate of GST under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) – Applicable classification of upkeep and maintenance services and whether services qualify for composite supply exemption - HELD - Services of upkeep and maintenance of housing units encompassing sweeping, cleaning and ga... [Read more]

GST – Tamil Nadu AAR - Classification of Services - Composite Supply or not - Applicant engaged in upkeep and maintenance of Tamil Nadu Urban Habitat Development Board Housing Units under contract with Greater Chennai Corporation - Applicant claimed services constitute composite supply of goods and services entitled to nil rate of GST under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) – Applicable classification of upkeep and maintenance services and whether services qualify for composite supply exemption - HELD - Services of upkeep and maintenance of housing units encompassing sweeping, cleaning and garbage removal are appropriately classifiable under SAC 999423- General Waste collection services residential, which is specific and pertinent to nature of services undertaken rather than residuary heading. Services do not qualify for exemption under Serial No. 3A of Notification 12/2017-Central Tax (Rate) as requirement of composite supply is not satisfied - Composite supply requires supply made to recipient consisting of two or more taxable supplies of goods or services naturally bundled together in ordinary course of business with one principal supply. In present case no transfer of ownership or possession of any goods to Greater Chennai Corporation occurs. The consumables are merely specified for deployment and maintenance requirements and are only used for work performance, not supplied as goods to recipient. By applicant's own admission consumables and welfare kits have no transfer of ownership and are left as such after contract expiry. Condition in notification relating to value of goods not exceeding 25% of composite supply cannot be invoked when there is no composite supply at all - All conditions for exemption must be cumulatively satisfied. Since fundamental requirement of composite supply is not met, exemption eligibility cannot be sustained regardless of whether other conditions are satisfied - Services classified under SAC 999423 General Waste collection services residential. Applicant not eligible for exemption under Serial No. 3A of Notification 12/2017-Central Tax (Rate) as amended – Ordered accordingly [Read less]