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GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, whi... [Read more]

GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, which was only a delay of 15 days - As per Section 107(4) of the Act, the Appellate Authority can condone the delay in filing the appeal if the appellant was prevented from presenting the appeal within the prescribed period. The grounds cited by the petitioner for the delay were neither imaginary nor fanciful, and the delay was only 15 days, which could have been condoned by the Appellate authority - The Appellate authority adopted a hyper-technical approach in dismissing the appeal on the ground that it should have been filed by 07.05.2025, which was contrary to the spirit of Section 107(4) of the Act, which allows condonation of delay within an extended one-month window - The delay in filing the appeal is condoned and the matter is remitted to Appellate authority for adjudication of the appeal on merits – The petition is disposed of [Read less]

Service Tax - Liability of service tax on payments made by an Indian company to its overseas Joint Venture for IT services – Dept appeal against the order of the Commissioner dropping the demand of service tax on payments made by the respondent-assessee to its joint venture company - The assessee had set up the JV to provide IT services to clients in the Middle East. The JV would raise debit notes on the assessee as "Consultant pay rolls" which were recorded in the assessee's books as "Consultant Charges" and "Purchase of Service". The revenue alleged that the assessee had not paid service tax on these payments under the... [Read more]

Service Tax - Liability of service tax on payments made by an Indian company to its overseas Joint Venture for IT services – Dept appeal against the order of the Commissioner dropping the demand of service tax on payments made by the respondent-assessee to its joint venture company - The assessee had set up the JV to provide IT services to clients in the Middle East. The JV would raise debit notes on the assessee as "Consultant pay rolls" which were recorded in the assessee's books as "Consultant Charges" and "Purchase of Service". The revenue alleged that the assessee had not paid service tax on these payments under the categories of "Business Support Service" (BSS) and "Information Technology Software Service" (ITSS) - Whether the payments made by the assessee to the JV located outside India is liable to service tax under the category of "Business Support Service" (BSS) for the period prior to 01.07.2012 – HELD – The words "operational and administrative assistance" have wide connotation and can include certain services already taxed under any other head of more specific description. The scope of BSS under Section 65(105)(zzzq) was expanded to include "operational or administrative assistance" only with effect from 01.05.2011 and not earlier. Therefore, the demand of service tax on the payments made by the assessee to the JV prior to 01.05.2011 is not sustainable. The appeal filed by Revenue for charge of service tax on the disputed activity, prior to 01.05.2011 does not have the support of law - For the period post-01.07.2012, when any service is provided outside the taxable territory between two persons who are not connected to the branch office in India and the services not being provided to the Assessee situated in India, such services cannot be brought under the tax net for payment of service tax – Further, as per the Place of Provision of Service Rules, 2012, the location of the service recipient determines the taxability of the service. In the present case, since both the service provider (JV) and the service recipient (assessee) are located outside India, and the services were rendered and consumed outside India, the same cannot be brought under the service tax net in India – The payment of consultancy charges paid by the Respondent-Assessee to JV situated abroad, in the present set of facts cannot be subjected to levy of Service Tax under the Finance Act, 1994 - The order of the Commissioner dropping the demand of service tax on the payments made by the assessee to the JV located abroad is upheld and the Revenue appeal is dismissed [Read less]

GST - Condonation of delay in filing appeal - Whether the delay of 48 days in filing the appeal against the assessment order is condonable – HELD - The delay was not due to any negligence or inaction on the part of the petitioner, but was caused by unavoidable and exceptional operational circumstances beyond its control. The petitioner had undergone a major organizational restructuring and transition, including the migration of its accounts, bill processing, GST compliances, and allied financial functions to a new centralized system. This resulted in delayed access to critical records and an inadvertent oversight of the ... [Read more]

GST - Condonation of delay in filing appeal - Whether the delay of 48 days in filing the appeal against the assessment order is condonable – HELD - The delay was not due to any negligence or inaction on the part of the petitioner, but was caused by unavoidable and exceptional operational circumstances beyond its control. The petitioner had undergone a major organizational restructuring and transition, including the migration of its accounts, bill processing, GST compliances, and allied financial functions to a new centralized system. This resulted in delayed access to critical records and an inadvertent oversight of the statutory appeal timeline. The non-adjudication of the appeal on merits would cause grave injury and prejudice to the petitioner, and thus, the delay should be condoned in the interest of justice. Accordingly, the Appellate Authority is directed to entertain the petitioner's appeal and adjudicate it on merits – The writ petition is allowed [Read less]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is canc... [Read more]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is cancelled, the GST portal disables the filing of regular returns (GSTR-1 and GSTR-3B), making it impossible for the petitioners to file the pending returns. The petitioners should be given an opportunity to file an application for revocation of the GSTIN cancellation order – The petition is disposed of granting liberty to the petitioners to file an application for revocation of the GSTIN cancellation and thereafter, to file an application for allowing them to file return and also to file an application under Section 80 of the CGST Act, 2017, allowing them to clear the liability in installments and on such application being filed, the bank accounts of the petitioners shall be defreezed - The writ petition is disposed of [Read less]

Customs - Rejection of declared value, re-determination of value, demand of differential duty, confiscation of goods and imposition of penalties – Appellant imported "Recycled LDPE Granules" availing benefit under Sl.No.477 of the Customs Notification No.21/2002 - Adjudicating Authority rejected the declared value, re-determined the value, demanded differential duty, confiscated the goods and imposed penalties on the appellants - Whether the Adjudicating Authority was justified in rejecting the declared value and re-determining the value of the imported goods – HELD - The Adjudicating Authority had wrongly held that th... [Read more]

Customs - Rejection of declared value, re-determination of value, demand of differential duty, confiscation of goods and imposition of penalties – Appellant imported "Recycled LDPE Granules" availing benefit under Sl.No.477 of the Customs Notification No.21/2002 - Adjudicating Authority rejected the declared value, re-determined the value, demanded differential duty, confiscated the goods and imposed penalties on the appellants - Whether the Adjudicating Authority was justified in rejecting the declared value and re-determining the value of the imported goods – HELD - The Adjudicating Authority had wrongly held that the relied upon documents were provided to the appellants along with the Show Cause Notice, when in fact the Adjudicating Authority's own letter had indicated that these documents were not available with them and a request was made to the DRI to provide the same. The denial of opportunity to the appellants to submit their response based on the relied upon documents was a violation of the principles of natural justice. Hence, the rejection of the declared value and re-determination of the value is set aside - The demands, the appropriation of deposits towards duty, the penalties imposed on the appellants and the confiscation of the goods are set aside - The appeals are disposed of - Whether the demand of differential duty under Section 28 of the Customs Act, 1962 was valid when the assessment was provisional – HELD - The judgments of the Supreme Court and High Courts have held that the demand under Section 28 can be raised only after the final assessment of the goods. In the present case, since the assessment was provisional, the demand of differential duty under Section 28 was not valid and set it aside. [Read less]

Customs - Imposition of minimum import price (MIP) by DGFT, Enhancement in declared value based on DGFT Notification - Appellant filed Bills of Entry for clearance of goods declared as Engineered Marble imported from China, with the declared unit prices being below the prescribed MIP of USD 60 per square meter as per DGFT Notification No. 18 (RE-2008) dated 04.08.2011. The Adjudicating Authority enhanced the value of the goods to USD 60 and ordered confiscation, permitting redemption on payment of a fine - Whether the Adjudicating Authority was justified in enhancing the declared transaction value of the goods and imposing... [Read more]

Customs - Imposition of minimum import price (MIP) by DGFT, Enhancement in declared value based on DGFT Notification - Appellant filed Bills of Entry for clearance of goods declared as Engineered Marble imported from China, with the declared unit prices being below the prescribed MIP of USD 60 per square meter as per DGFT Notification No. 18 (RE-2008) dated 04.08.2011. The Adjudicating Authority enhanced the value of the goods to USD 60 and ordered confiscation, permitting redemption on payment of a fine - Whether the Adjudicating Authority was justified in enhancing the declared transaction value of the goods and imposing confiscation, fine and penalty for the appellant's failure to comply with the DGFT's MIP notification – HELD - The valuation rules under the Customs Act and the value-based restrictions prescribed in the DGFT notification operate in distinct domains. Under the Customs Act, the assessable value is determined on the basis of the declared transaction value for the purpose of applying the ad valorem duty. In contrast, the value mentioned in the DGFT notification is meant to regulate the permissibility of importing the goods - The Adjudicating Authority had enhanced the declared value not on the basis of any findings on any misdeclaration of value or irregularity under the Customs Act, but solely to align the goods with the "policy conditions". Once the value is enhanced and aligned to USD 60 for import purposes, the goods become purged of the taint and are to be treated as compliant with the DGFT notification, irrespective of the fact that such enhancement of value stems from departmental action. Hence if the importer does not contest the enhanced value, as in this case, the goods become freely importable and are no longer liable to penal consequences - The confiscation, fine and penalty are set aside and that the goods are directed to be released after payment of duty as per the enhanced value - The appeal was disposed of accordingly - The Bench expresses considerable surprise that the Ld. Counsel for appellant was unaware of the decision of the Hon’ble High Court in their own case even after a decade of its passing, to the extent of requesting this Bench to have the hearing postponed pending outcome of the matter before the Hon’ble High Court. An appellant seeking relief before the Tribunal is obligated to make a full, fair, and true disclosure of all material facts pertinent to the relief claimed, and stating the applicable law. While the Tribunal is presumed to know the law, it is not presumed to know the facts. Complete disclosure is therefore indispensable, especially since the Tribunal ordinarily accepts the submissions and averments of parties at face value, assuming they are made candidly, in good faith and with clean hands. [Read less]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be ... [Read more]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be made within the extended period of limitation of five years if the non-payment or short payment of duty is due to fraud or collusion or wilful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty - The appellant had changed its address and intimated the change to the department, but the SCN was sent to the old address and when it was returned by the postal department, it was pasted on the notice board of the office of the department. This cannot be termed as proper service of notice. After the order was passed, the appellant sought the SCN and it was served on 24.7.2012 beyond the period of five years from the relevant period. The Annexures to the SCN and the relied upon documents were served even later - The SCN must be served before issuing the order and not after the order has been issued, as the very purpose of issuing an SCN is to give the noticees an opportunity to show cause, which cannot be served if the order is passed without serving the SCN - The impugned order cannot be sustained because the SCN was served beyond the extended period of limitation of five years. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only e... [Read more]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only electricity consumption can be sustained – HELD – The preliminary submission of the appellant is that since the investigation was conducted after the introduction of CGST Act in November 2017, the investigation lacks credibility. However, the savings clause in section 174(2) of the CGST Act, 2017 allows institution of any proceedings under the repealed Act (Central Excise Act, 1944) even after the appointed day of CGST Act. Therefore, on this issue, the submission of the learned counsel is rejected - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained based solely on the calculation using electricity consumption. The calculations in the SCN only considered electricity consumption and did not take into account any other parameters to determine the actual production - all that the figures and calculations show is that if the production of goods in terms of electricity consumption has been as efficient. However, the calculation does not establish that the production has, indeed, been so efficient throughout the period of dispute and part of the goods so produced was clandestinely removed without paying duty - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained and set aside – The impugned order is set aside and the appeals are allowed [Read less]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication with... [Read more]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication within six months from the seizure date – Dept in appeal against the impugned order – HELD - The statutory 6-month period under Section 110(2) is mandatory and not directory - The waiver of show cause notice does not override the statutory time limit and the importer cannot be held bound by such waiver after the expiry of 6 months - Failure to pass order within 6 months from seizure results in the seizure becoming illegal and the goods are liable to be released unconditionally. There is no infirmity in the order of the Commissioner (Appeals) in giving relief to the importer. The impugned order passed after the expiry of 6-month period is without jurisdiction and set aside and goods are ordered to be released - Whether the release of goods is correctly ordered - The goods imported were 'Cold Rolled Stainless Steel Coils Grade J2' which were found to be in conformity with the description and specifications based on testing - Ministry of Steel had issued NOC for similar goods imported by other parties – HELD - The circular of Ministry of Steel requiring NOC for import of goods not covered under the Steel and Steel Products (Quality Control) Order cannot be the basis for treating the imported goods as prohibited/restricted, as the circular cannot override the substantive law - For Grade J2, department has not been able to show that under which Control Order of the Ministry of Steel i.e. the Steel and Steel products (Quality Control Order) any restriction was applied on the ‘Cold Rolled Stainless Steel Coils Grade J2’ - The department failed to demonstrate that the imported goods were covered under the Quality Control Order or any BIS standards - In absence of any statutory restriction, the goods cannot be treated as prohibited and are liable to be released. [Read less]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the road... [Read more]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests, and not for use by the general public. The appellant had not produced any document or evidence to show that these internal roads were for general public use, which is the basic requirement for availing the exemption notification - In the case of Warsi Buildcon, it was held that the exemption on payment of service tax in respect of services relating to the construction of roads was limited only to those roads which were meant to be used by the general public, and not for private use by the buyers of the builders or residents of the township. However, the present case is distinguishable from the Warsi Buildcon case, as the Work Order in the present case has been issued by the Jaipur Development Authority, which is a Government Authority. Since the exemption has been sought under Entry No.13(a) and 29(h), the relevant issue to be decided is whether the construction of road is for use by general public - The impugned order is set aside and the matter is remanded to the Original Authority to decide the issue of eligibility for exemption from service tax afresh, considering the nature of the Work Order and the evidence provided by the appellant to establish that the construction of roads was for use by the general public - The appeal is allowed by way of remand [Read less]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - Th... [Read more]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - The Designated Authority had the inherent power to reject the declaration for non-compliance with the mandatory requirement of Section 107(3) to pay 50% of the declared tax dues by 31.12.2013. Where a power is conferred by a statute, it carries with it the power to do all such acts as are reasonably necessary for its execution – Further, the Scheme does not provide either the Revenue or the Declarant to amend or alter the time lines specified therein or the respective quantum of payment to be made, at their discretion. Therefore, these provisions have to be strictly interpreted, and the time limit specified in the Scheme have to be strictly adhered to by the declarant - The non-payment of fifty percent of the declared tax dues by the specified date of 31.12.2013 would in itself disentitle the appellant from availing the benefit of the VCES Scheme. The rejection of VCES declarations for non-payment of the 50% dues by the due date is upheld – The impugned order does not warrant any interference. The appeal is dismissed - Whether the declaration was barred under the second proviso to Section 106(1) of the Finance Act, 2013 – HELD - The appellant had been issued a show cause notice and order for non-payment of service tax on service charges for the period from January 2009 to June 2009. The declaration filed by the appellant under VCES was for the period from April 2010 to December 2012, which was a subsequent period to the one for which the earlier order was issued. Therefore, the declaration was rightly rejected by the Designated Authority under the second proviso to Section 106(1), which prohibits a declaration for a subsequent period on the same issue for which a notice or order has been issued. [Read less]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to cont... [Read more]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to contest the adjudication proceedings as the documents and records based on which the petitioner could have prepared its defense were not available to it. Without the documents and records, the petitioner would also not be in a position to prefer a proper appeal before the appellate authority - The impugned order should not be given effect to and the matter is remanded to the proper officer for fresh consideration after providing the petitioner with the seized documents or copies thereof, and the seized CPU, and affording the petitioner an opportunity of hearing in accordance with the principles of natural justice - the impugned order was treated as an additional show-cause notice, allowing the petitioner to file a composite reply within two weeks from the date of receiving the seized documents or copies thereof and the seized CPU - The writ petition is disposed of [Read less]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether... [Read more]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether the appellate authority was justified in rejecting the appeal on grounds not mentioned in the show cause notice – HELD - The only issue raised in the SCN was the non-filing of the supplier's return in Form GSTR-3B. Once the supplier filed the return for October 2019 during the pendency of the appeal, the appellate authority should have adopted the same standard as the adjudicating authority and dropped the demand for that month. The appellate authority, however, tried to upset the petitioner's case on grounds not mentioned in the notice to show cause, which was not permissible under the law. The appellate authority should have afforded the petitioner an opportunity to rebut any new grounds it intended to rely upon. By not doing so, the appellate authority acted arbitrarily - The appellate order is set aside and the matter is remanded to the appellate authority for a fresh decision after affording the petitioner an opportunity of hearing on all points the appellate authority may have contemplated against the petitioner in accordance with law – The petition is disposed of [Read less]

Central Excise - Cenvat credit of fuel used in generation of Electricity - Appellant is a manufacturer of slabs, blooms, ingots etc. To overcome power shortages and outages, the appellant established a captive power plant with DG Sets to generate electricity. The electricity generated was unstable and unsuitable for direct use in the furnaces and mills, so the appellant entered into agreements with State Electricity Board (HSEB) to synchronize power with the grid and receive back an equivalent power. The appellant availed CENVAT credit on the inputs such as furnace oil used for generation of electricity – Denial of CENVA... [Read more]

Central Excise - Cenvat credit of fuel used in generation of Electricity - Appellant is a manufacturer of slabs, blooms, ingots etc. To overcome power shortages and outages, the appellant established a captive power plant with DG Sets to generate electricity. The electricity generated was unstable and unsuitable for direct use in the furnaces and mills, so the appellant entered into agreements with State Electricity Board (HSEB) to synchronize power with the grid and receive back an equivalent power. The appellant availed CENVAT credit on the inputs such as furnace oil used for generation of electricity – Denial of CENVAT credit, holding that the electricity generated was not used in the manufacture of final products within the factory but was sold to HSEB - Whether the appellant is eligible for CENVAT credit on the inputs used for generation of electricity that was exported to the grid – HELD - for a transaction to be “sale” under the Central Excise Act, it has to be a transfer of possession of goods for cash, or deferred payment, or other valuable consideration. In the instant case, the transaction involves supply, of the entire electricity being unsuitable to be used in the factory of the appellants in the production of excisable goods, to the grid and receiving the stable power from the grid in return. The supply of the entire electricity generated by the appellant to the grid of HSEB/DHBVNL constitutes a sale - As per the definitions of "input" under the CENVAT Credit Rules, the primary eligibility for goods to be considered as "input" is that they should be used in the manufacture of final product or for any other purpose, within the factory of production. In the instant case, the entire electricity generated by the appellant was wheeled out to the HSEB grid, which was located outside the factory of production. Thus, the inputs used in the generation of such electricity were not used either in the manufacture or for any other purpose within the factory. The Supreme Court in Maruti Suzuki Ltd. and Gujarat Narmada Fertilizers Co. Ltd., held that the CENVAT credit is available only to the extent the electricity produced is utilized within the factory of production and not on the portion of electricity transferred/sold outside the factory – the appellants are not entitled to the Cenvat credit on the fuel used in the generation of such electricity which was entirely exported/ supplied/ fed to the grid of State Electricity Board. The appellant is eligible to Cenvat credit on inputs only to the extent the electricity produced and utilized in the factory of production and not on the portion of electricity transferred/sold to the grid - The invocation of the extended period of limitation is not sustainable as the appellant had a bona fide belief based on the earlier favorable decisions and there was no evidence of suppression of facts or intent to evade duty – The appeal is partly allowed [Read less]

Customs - Classification of 'Natural Rubber Latex Concentrate' – Appellant imported 'Natural Rubber Latex Concentrate' in liquid form and classified it under CTH 4001 2910 attracting BCD @ 20% - Department reclassified the goods under CTH 40011020 attracting BCD @ 70% and demanded short-paid customs duty along with equal penalty under section 114A of the Customs Act, 1962 - Whether the goods imported by the appellant are correctly classifiable under CTH 4001 2910 or CTH 40011020 of the Customs Tariff Act, 1975 – HELD - The burden of proving the correct classification of the goods is on the revenue Department. There was... [Read more]

Customs - Classification of 'Natural Rubber Latex Concentrate' – Appellant imported 'Natural Rubber Latex Concentrate' in liquid form and classified it under CTH 4001 2910 attracting BCD @ 20% - Department reclassified the goods under CTH 40011020 attracting BCD @ 70% and demanded short-paid customs duty along with equal penalty under section 114A of the Customs Act, 1962 - Whether the goods imported by the appellant are correctly classifiable under CTH 4001 2910 or CTH 40011020 of the Customs Tariff Act, 1975 – HELD - The burden of proving the correct classification of the goods is on the revenue Department. There was a genuine divergence of views involving interpretation of law on the classification of the goods between the appellant and the Revenue, as tariff heading 4001 2910 specifically recognizes 'Hevea' as a distinct variety of natural rubber latex - The appellant's declarations and past clearances, being an Accredited Client Programme (ACP) client, warranted a more rigorous and careful scrutiny by the adjudicating authority. Further, the Tribunal held that a finding of wilful misstatement requires the presence of a positive act which betrays a negative intention of wilful default, which was not demonstrated in the present case - The show cause notice is time-barred as it was issued beyond the normal period of one year from the relevant date. Once the demand is found to be time-barred, there is no occasion for the Tribunal to enquire into the merits of the issues - The impugned order is set aside and the appeal is allowed on the ground of time-bar [Read less]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the inp... [Read more]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the input services used for construction of the building have a direct nexus with the output service of renting. The 'includes' clause of the definition of 'input service' expressly covers services used in relation to setting up of the premises of an output service provider, which would include the construction services utilized by the appellant – Further, various judicial precedents, including the judgment of the Hon'ble Punjab & Haryana High Court in the case of the appellant's sister concern, have allowed the CENVAT credit on input services used for construction of immovable property which is subsequently let out. Accordingly. the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property – The impugned order is set aside and the appeal is allowed [Read less]

West Bengal Value Added Tax Act, 2003 - Revisional jurisdiction under Sections 85 and 86 of WBVAT Act, 2003 – Respondent-assessee earlier obtained an order from the Joint Commissioner under Section 86 of the WBVAT Act, directing issuance of certain export-related declarations. Subsequently, the Senior Joint Commissioner, in exercise of suo motu revisional powers under Section 85, modified the order of the Joint Commissioner - Whether the Senior Joint Commissioner had the authority to exercise suo motu revisional jurisdiction under Section 85 over an order passed by the Joint Commissioner under Section 86 – HELD - Once ... [Read more]

West Bengal Value Added Tax Act, 2003 - Revisional jurisdiction under Sections 85 and 86 of WBVAT Act, 2003 – Respondent-assessee earlier obtained an order from the Joint Commissioner under Section 86 of the WBVAT Act, directing issuance of certain export-related declarations. Subsequently, the Senior Joint Commissioner, in exercise of suo motu revisional powers under Section 85, modified the order of the Joint Commissioner - Whether the Senior Joint Commissioner had the authority to exercise suo motu revisional jurisdiction under Section 85 over an order passed by the Joint Commissioner under Section 86 – HELD - Once an order has been subjected to revision under Section 86 by a Joint Commissioner acting as a delegatee of the Commissioner, the same order cannot thereafter be revised by a Senior Joint Commissioner under Section 85. An order passed by a delegatee under Section 86 assumes the character of an order of the Commissioner himself, and therefore, does not fall within the scope of Section 85, which empowers revision of orders passed by subordinate officers appointed under Section 6(1) to assist the Commissioner - Once the revisional jurisdiction is exercised by one officer under a similar provision, the same revisional jurisdiction cannot be re-invoked by another officer seeking to exercise powers under the same section, as the power of revision over the same subject-matter stands exhausted. Accordingly, the Senior Joint Commissioner lacked the authority to exercise suo motu revisional jurisdiction under Section 85 over the order passed by the Joint Commissioner under Section 86 - The review application filed by Revenue is dismissed [Read less]

Andhra Pradesh VAT Act, 2005 - Input Tax Credit on goods sold in the same form at subsidized rates - Petitioner, a State Government undertaking, procures and supplies essential commodities at subsidized rates fixed by the Government. It claims Input Tax Credit on the purchase of these goods which it then sells in the same form through the public distribution system - Whether the petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities when the goods are sold in the same form at subsidized rates fixed by the Government – HELD - The petitioner is entitled to claim full Input Tax Credit on th... [Read more]

Andhra Pradesh VAT Act, 2005 - Input Tax Credit on goods sold in the same form at subsidized rates - Petitioner, a State Government undertaking, procures and supplies essential commodities at subsidized rates fixed by the Government. It claims Input Tax Credit on the purchase of these goods which it then sells in the same form through the public distribution system - Whether the petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities when the goods are sold in the same form at subsidized rates fixed by the Government – HELD - The petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities as per Rule 20(4)(a) of the AP VAT Rules, 2005, which allows a dealer who buys and sells goods in the same form to claim full Input Tax Credit. The fact that the goods are sold at subsidized rates fixed by the government does not disentitle the petitioner from claiming the full Input Tax Credit. The respondents' disallowance of the Input Tax Credit claimed by the petitioner on the ground that the sale price was less than the purchase price is not sustainable - the order under challenge is set aside and the writ petition is allowed - Purchase Tax on By-Products - The respondents levied purchase tax under Section 4(4) of the AP VAT Act on the by-products (broken rice, bran, and husk) which are left with the millers as per the terms of the agreement between the petitioner and the millers, on the ground that these by-products are consideration for the conversion of paddy into rice - Whether the by-products left with the millers can be treated as "disposed of" by the petitioner and therefore subject to purchase tax under Section 4(4) of the APVAT Act – HELD - The by-products like broken rice, bran, and husk are left with the millers as per the terms of the agreement and there is no transfer of title or "disposal" of these goods by the petitioner. Therefore, the levy of purchase tax under Section 4(4) on these by-products is not sustainable. The responsibility to pay tax on these by-products lies with the millers as per the agreement. This issue is no longer res integra, as the High Court has previously held in a similar case that the value of by-products left with the millers cannot be added to the turnover of the petitioner for the purpose of tax computation. [Read less]

Customs – Import of Linear Accelerator (LINAC) and associated equipment classified under Customs Tariff Heading 9022 9030 'Radiation Beam Delivery Unit', claiming concessional duty - The goods were cleared after first check examination by customs on 08.05.2016 but the show-cause notice was issued on 26.09.2017, over one year after clearance. The appellant argued that the notice was time-barred, while the Department contended that Section 124 of the Customs Act does not have strict timelines and Section 125(2) can be invoked – HELD - The show-cause notice is the foundation for levy and recovery of duty, penalty and inte... [Read more]

Customs – Import of Linear Accelerator (LINAC) and associated equipment classified under Customs Tariff Heading 9022 9030 'Radiation Beam Delivery Unit', claiming concessional duty - The goods were cleared after first check examination by customs on 08.05.2016 but the show-cause notice was issued on 26.09.2017, over one year after clearance. The appellant argued that the notice was time-barred, while the Department contended that Section 124 of the Customs Act does not have strict timelines and Section 125(2) can be invoked – HELD - The show-cause notice is the foundation for levy and recovery of duty, penalty and interest, and the allegations have to be clearly spelt out in it so that the noticee can make a proper defense. The Department cannot improve on its position or fill in gaps in law to strengthen the show-cause notice at the appellate stage by raising a new question of law. If the notice is found to be time-barred, there would be no occasion to examine the merits of the dispute - The fact that the appellant sought clarification from the department or sought 'first check’ cannot be held to be an act of trickery meant to mislead the officers. It is only an assumption. When the goods have been subjected to physical examination and scrutiny by departmental officers, no blame can be laid at the doors of the importer even if he is a medical professional. Merely because the importer is a doctor he need not be an expert in understanding the classification methodologies of goods under the Customs Tariff, more so, to a degree that can fool Customs officer - Since the notice was issued beyond the normal period, it is liable to be struck down on that ground - The impugned order is set aside and the appeal is allowed on limitation [Read less]

Service Tax - Jurisdiction of Superintendent to adjudicate cases involving extended period of limitation - The petitioners had been found liable to pay service tax, education cess, and secondary and higher education cess by the Superintendent of Central Tax Commissionerate - Whether the Superintendent had the jurisdiction to adjudicate the petitioners' case, which involved issues of extended period of limitation and taxability of services - HELD - The Superintendent lacks jurisdiction to adjudicate the petitioners' case. The CBEC Circular no. 1049/37/2016-CX dated September 29, 2016 clearly states that cases involving "tax... [Read more]

Service Tax - Jurisdiction of Superintendent to adjudicate cases involving extended period of limitation - The petitioners had been found liable to pay service tax, education cess, and secondary and higher education cess by the Superintendent of Central Tax Commissionerate - Whether the Superintendent had the jurisdiction to adjudicate the petitioners' case, which involved issues of extended period of limitation and taxability of services - HELD - The Superintendent lacks jurisdiction to adjudicate the petitioners' case. The CBEC Circular no. 1049/37/2016-CX dated September 29, 2016 clearly states that cases involving "taxability, classification, valuation and extended period of limitation" shall be kept out of the purview of adjudication by Superintendents, and such cases up to Rs. 10 lakhs shall be adjudicated by the Deputy/Assistant Commissioner. In the present case, the notice to the petitioners had invoked the extended period of limitation, and the order impugned was also passed based on the extended period of limitation. Therefore, the Superintendent clearly lacked jurisdiction to adjudicate the petitioners' case. The inherent lack of jurisdiction would render the order passed by the Superintendent a nullity, and the petitioners' participation in the proceedings before the Superintendent would not have conferred jurisdiction on the authority. Accordingly, the order impugned is set aside, as it was passed without jurisdiction - The writ petition is allowed [Read less]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modi... [Read more]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modify the assessment by deleting the said sales turnover - Whether the assessing authority was justified in issuing a fresh assessment order restoring the original assessment, despite the appellate authority's clear directions – HELD - The appellate authority had allowed the appeal filed by the petitioner directing the assessing authority to modify the assessment by “deleting the sales turnover” from the assessment. The appellate authority also found that such an order is required since turnover actually belongs to another dealer - The assessing authority could not have issued notices to the petitioner demanding further documents, as the appellate order had already made a positive finding that the sales turnover in question belonged to the son's new firm. The assessing authority should have simply implemented the appellate order by issuing a fresh assessment order accepting the directions. The assessing authority's action in restoring the original assessment order is not justified - The assessment order passed by the assessing authority is set aside and the writ petition is allowed [Read less]

GST – Challenge to Summons under Section 70 of CGST Act, 2017 and arrest under Section 69 of CGST Act, 2017 - Petitioners claimed that the summons were in violation of the guidelines issued by the Board and were issued in a mechanical manner without following the proper procedure. They also sought the release of the seized documents and goods and restraining the respondent from illegally detaining the petitioners - Whether the summons issued under Section 70 of the CGST Act, 2017 can be challenged at the stage of inquiry – HELD - The summons issued under Section 70 of the CGST Act are part of the inquiry process and no... [Read more]

GST – Challenge to Summons under Section 70 of CGST Act, 2017 and arrest under Section 69 of CGST Act, 2017 - Petitioners claimed that the summons were in violation of the guidelines issued by the Board and were issued in a mechanical manner without following the proper procedure. They also sought the release of the seized documents and goods and restraining the respondent from illegally detaining the petitioners - Whether the summons issued under Section 70 of the CGST Act, 2017 can be challenged at the stage of inquiry – HELD - The summons issued under Section 70 of the CGST Act are part of the inquiry process and not the initiation of proceedings. The nature of a summons is to gather information and evidence, and it cannot be equated with the initiation of proceedings. In the judgments of Armour Security India Limited vs. Commissioner CGST and Radhika Agarwal vs. Union of India, it has been held that the issuance of summons is a precursor to the proceedings and does not amount to the initiation of proceedings - In any case, the Summons have been issued for taking the statement of the petitioners and seeking the production of documents/ invoices against the goods seized during the search procedure conducted. There is no illegality in the said summons to this extent, and the Respondent has acted well within its powers - Seeking setting aside of Summons, is essentially seeking interim protection or an anticipatory bail, during an inquiry stage, i.e. essentially at a stage when the Respondent is collecting information and evidence based on suspicion and cannot be equated with the initiation of proceedings - The writ petition is dismissed being premature [Read less]

GST - Ex-parte Order, Availability of Statutory Remedy, denial of opportunity of personal hearing - Whether the show cause notice and the impugned order were properly served on the petitioner – HELD - The petitioner has a statutory remedy available under Section 107 of the CGST Act, which provides for an appeal against the impugned order. The appellate authority is empowered to examine both questions of fact and law, including the petitioner's grievances regarding service of notice, compliance with Section 169, and the alleged denial of opportunity of personal hearing under Section 75(4) of the Act. The exercise of writ ... [Read more]

GST - Ex-parte Order, Availability of Statutory Remedy, denial of opportunity of personal hearing - Whether the show cause notice and the impugned order were properly served on the petitioner – HELD - The petitioner has a statutory remedy available under Section 107 of the CGST Act, which provides for an appeal against the impugned order. The appellate authority is empowered to examine both questions of fact and law, including the petitioner's grievances regarding service of notice, compliance with Section 169, and the alleged denial of opportunity of personal hearing under Section 75(4) of the Act. The exercise of writ jurisdiction under Article 226 of the Constitution is discretionary and should not be invoked where an effective and efficacious alternative statutory remedy is available, unless exceptional circumstances such as lack of jurisdiction, violation of fundamental rights, or a patent breach of the principles of natural justice are clearly established. In the present case, the issues raised by the petitioner can be appropriately and effectively adjudicated by the appellate authority under Section 107 of the CGST Act - The writ petitions are dismissed on the ground of availability of an alternative statutory remedy – Ordered accordingly [Read less]

Central Excise - Availment of CENVAT credit on input services and common inputs used for manufacture of dutiable and exempted goods – Demand for reversal of credit - Appellant had not maintained separate records for the utilization of inputs in the manufacture of dutiable and exempted goods as required under Rule 6(2) of the CCR 2004 - Whether the appellant had availed CENVAT credit on input services and common inputs used for the manufacture of both dutiable and exempted goods during the disputed period – HELD - The appellant had not availed CENVAT credit on common input services prior to the audit objection. After th... [Read more]

Central Excise - Availment of CENVAT credit on input services and common inputs used for manufacture of dutiable and exempted goods – Demand for reversal of credit - Appellant had not maintained separate records for the utilization of inputs in the manufacture of dutiable and exempted goods as required under Rule 6(2) of the CCR 2004 - Whether the appellant had availed CENVAT credit on input services and common inputs used for the manufacture of both dutiable and exempted goods during the disputed period – HELD - The appellant had not availed CENVAT credit on common input services prior to the audit objection. After the audit objection was raised, the appellant availed the credit on common input services and simultaneously reversed 5% of the amount representing the value of the exempted goods in terms of Rule 6(3)(i) of the CCR 2004. The appellant had categorically submitted that they had not availed CENVAT credit on common input services during the disputed period of August 2009 to March 2011 and had only availed the credit after the audit note was issued on 27.11.2011, which was immediately reversed on 06.02.2012. No contrary evidence was brought on record by the Revenue to indicate that the amount of 5% on the value of exempted goods was not reversed by the appellant. Consequently, the confirmation of demand of interest and imposition of penalty are not justified as the appellant had immediately reversed the 5% of the value of the exempted goods after availing the CENVAT credit on common input services – The appeal is allowed [Read less]

Central Excise - Valuation of excisable goods cleared to an inter-connected undertaking, Supply of tailor-made goods - Appellant supplied certain material to an inter-connected undertaking. Department contended that the valuation should be done under section 4(1)(b) of the Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, as the goods were being cleared to a related party, which in turn were being sold in retail – Appellant case that Rule 9 and 10 cannot be applied as the entire excisable goods are not sold only to or through related person –... [Read more]

Central Excise - Valuation of excisable goods cleared to an inter-connected undertaking, Supply of tailor-made goods - Appellant supplied certain material to an inter-connected undertaking. Department contended that the valuation should be done under section 4(1)(b) of the Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, as the goods were being cleared to a related party, which in turn were being sold in retail – Appellant case that Rule 9 and 10 cannot be applied as the entire excisable goods are not sold only to or through related person – Demand invoking extended period – HELD - For invoking Rule 9 of the Central Excise Valuation Rules, it is necessary that the inter-connected undertaking is also related in the manner specified in sub-clauses (ii), (iii) or (iv) of section 4(3)(b). In the present case, the Department did not allege or establish that the inter-connected undertakings were related in the said manner. For the related person definition under section 4(3)(b)(iv), there must be a mutual interest between the parties, which was not proved in the present case. Mere inter-connectedness of the undertakings does not lead to the conclusion of mutuality of interest. There being merely an inter-connected undertaking cannot lead to valuation in accordance with Rule 9 or 10(a), both prior to and post amendment to 01.12.2013. Incidentally, only Rule 9 has been invoked in the SCN for valuation. Therefore, the transaction value has to be accepted for the purposes of discharging Central Excise duty – an attempt has been made by the adjudicating authority to hold that even if Rule 9 and 10 of Central Excise Valuation Rules were not applicable, the valuation in the case should be under clause (b) of sub-section (1) of section 4. It is a case where the demand was proposed based on valuation under Rule 9, where the goods were required to be sold only through the related person prior to 01.12.2013, which is not the case in the present appeal and post amendment, while it is covered as part sale is also included under Rule 9, but the same interconnected undertaking is also required to be related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of section 4(3)(b). The department has not been able to establish that they were otherwise also related in terms of said sub-clauses - The transaction value of the goods cleared to the inter-connected undertaking should be accepted for the purpose of discharging the Central Excise duty. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Invocation of extended period of limitation - Based on information received from the Income Tax Department that there was a difference in the value of services shown in the appellant's income tax returns and service tax returns - The extended period of limitation invoked alleging that the appellant had suppressed the material facts with the intent to evade payment of service tax - Whether the extended period of limitation could have been invoked against the appellant to make the service tax demand - HELD - In cases where the service tax is payable by the service recipient under the reverse charge mechanism, t... [Read more]

Service Tax - Invocation of extended period of limitation - Based on information received from the Income Tax Department that there was a difference in the value of services shown in the appellant's income tax returns and service tax returns - The extended period of limitation invoked alleging that the appellant had suppressed the material facts with the intent to evade payment of service tax - Whether the extended period of limitation could have been invoked against the appellant to make the service tax demand - HELD - In cases where the service tax is payable by the service recipient under the reverse charge mechanism, the service provider cannot be held liable for non-payment of tax by the service recipient - The extended period of limitation can be invoked only when there is a positive act of fraud, collusion, wilful misstatement or suppression of facts with the intent to evade payment of tax. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period - For the department to invoke the extended period of limitation, there must be an active and deliberate act on the part of the assessee to evade payment of tax. In the present case, the appellant had a bonafide belief that the service tax was payable by the service recipient under the reverse charge mechanism and there was no positive act of suppression or evasion on the part of the appellant - The demand made by invoking the extended period of limitation is set aside and the appeal is allowed [Read less]

Customs - Entitlement to duty drawback on Mobile Phone - Whether unlocking of mobile phones would result in withdrawal of duty drawback benefits – Vide the impugned order the High Court held that the mere act of unlocking does not constitute the phones being \"taken into use\" within the meaning of the applicable provisions – Revenue in appeal - SC HELD – There is no good ground to interfere with the impugned order passed by the High Court. The Special Leave Petition is dismissed

Service Tax – Taxability of horticulture services, processing of fly ash bricks, and other management, maintenance and repair services - Appellant provided various taxable, non-taxable/exempt services to NTPC, including horticulture services, processing of fly ash bricks, and management, maintenance and repair services - Whether the horticulture services provided by the appellant are exempt from service tax – HELD – The horticulture activities undertaken by appellant are specifically excluded from the scope of 'cleaning activity' under the Finance Act. Therefore, the horticulture services provided by the appellant ar... [Read more]

Service Tax – Taxability of horticulture services, processing of fly ash bricks, and other management, maintenance and repair services - Appellant provided various taxable, non-taxable/exempt services to NTPC, including horticulture services, processing of fly ash bricks, and management, maintenance and repair services - Whether the horticulture services provided by the appellant are exempt from service tax – HELD – The horticulture activities undertaken by appellant are specifically excluded from the scope of 'cleaning activity' under the Finance Act. Therefore, the horticulture services provided by the appellant are not liable to service tax - The appellant have provided the services of maintenance of lawns and gardens comprised of growing of grass, plants, trees, regular mowing of lawns, pruning and trimming of shrubs and cleaning of garden, such activities would fall within the ambit of ‘Management, Maintenance or Repair service’ - The appellant has been paying Service Tax for the said service for the period after 01.07.2012, during the Negative List regime. Thus, no merit in the claim of the appellant that the said services are exempted from payment of Service Tax - The matter is remanded to the adjudicating authority to verify the correctness of the appellant's claim and quantify the service tax payable, if any – The appeal is disposed of by way of remand - Processing of Fly Ash Bricks - Appellant contended that the services of processing of fly ash bricks were exempt as per the relevant notifications – HELD - Any service provided in relation to production or processing amounting to manufacture of excisable goods is excluded from the definition of 'Business Auxiliary Service' and thus the benefit of exemption notification is available to the appellant up to 30.06.2012. For the period after 01.07.2012, such activities are covered under the Negative List and Mega Exemption Notification – The matter is remanded back to the adjudicating authority to verify the correctness of the appellant's claim and eligibility for exemption upon production of relevant documentary evidence - Other Services - Regarding the remaining demand pertaining to other services, the Tribunal held that the appellant's reconciliation between the value of services as per audited Trial Balances and the value of services declared in ST-3 Returns indicates that the value of taxable services had been correctly declared. However, the Tribunal remanded this issue back to the adjudicating authority for verification of the correctness of the appellant's claims based on the documents to be furnished - Differential Tax on Change in Rate - The Tribunal held that the demand of differential tax of 2.06% on the value of services received during 2012-13 in respect of past periods needs to be verified, as the appellant's claim in this regard appears to be in line with the judicial precedents - Opening Balance in NTPC Ledger – The appellant was following the mercantile system of accounting and was required to maintain books on accrual basis, while service tax was payable on the payment receipt basis prior to 01.04.2011. Therefore, the Tribunal remanded this issue for verification of the appellant's claim regarding the evidence of invoices issued prior to 01.04.2011 and receipt of payment thereafter - Unpaid Service Tax & Short Payment - The Tribunal remanded these issues for verification of the appellant's claims that the demand pertains to double counting and clerical error, respectively. [Read less]

Service Tax – Computation of demand based on ST-3 returns - Appellant did not dispute the service tax liability but contested the computation and recovery of interest and penalty - Whether the appellant had correctly paid the service tax liability by utilizing the CENVAT credit, which was not considered by the Commissioner in the impugned order – HELD - The ST-3 returns for the period October 2011 to March 2012 showed that the appellant had paid the service tax liability by debiting the CENVAT credit account, in addition to the cash payments. The Commissioner had not taken this into account while confirming the demand,... [Read more]

Service Tax – Computation of demand based on ST-3 returns - Appellant did not dispute the service tax liability but contested the computation and recovery of interest and penalty - Whether the appellant had correctly paid the service tax liability by utilizing the CENVAT credit, which was not considered by the Commissioner in the impugned order – HELD - The ST-3 returns for the period October 2011 to March 2012 showed that the appellant had paid the service tax liability by debiting the CENVAT credit account, in addition to the cash payments. The Commissioner had not taken this into account while confirming the demand, resulting in the incorrect computation of the payable amount - The matter is remanded to the adjudicating authority to re-examine the service tax liability, interest, and penalty after adjusting the payments made by the appellant through cash and CENVAT credit, as reflected in the ST-3 returns - The appeal is remanded to the adjudicating authority for limited purpose of re-determining the final payable amount after considering the CENVAT credit utilization by the appellant - The appeal is allowed by way of remand [Read less]

Service Tax – Eligibility to Cenvat Credit on various input services like business support services, visa fees, personnel baggage, general insurance, life insurance, rent-a-cab, manpower recruitment, etc.- Eligibility of Cenvat credit on Business Support Services, Visa Fees, Personnel Baggage - HELD - Since the appellant had availed similar credits in its earlier period and the Tribunal had upheld the same, the credits for the current period should also be allowed, subject to verification of nexus between the input and output services. The matter is remanded to the adjudicating authority for re-examination - The impugned... [Read more]

Service Tax – Eligibility to Cenvat Credit on various input services like business support services, visa fees, personnel baggage, general insurance, life insurance, rent-a-cab, manpower recruitment, etc.- Eligibility of Cenvat credit on Business Support Services, Visa Fees, Personnel Baggage - HELD - Since the appellant had availed similar credits in its earlier period and the Tribunal had upheld the same, the credits for the current period should also be allowed, subject to verification of nexus between the input and output services. The matter is remanded to the adjudicating authority for re-examination - The impugned order is set aside except for the denial of credit on general insurance services. The other issues are remanded to the adjudicating authority for re-examination as per the directions given. The appeal is partly allowed by remand - Eligibility of Cenvat credit on General Insurance Services - HELD - Since the medical insurance for employees is not a statutory requirement, and is specifically excluded from the definition of 'input service', the credit is not eligible. The denial of credit on this ground is upheld - Eligibility of Cenvat credit on Life Insurance and Rent-a-Cab Services - HELD - If the appellant had discharged service tax on the amounts collected from employees towards such services, the credit to that extent should be allowed, subject to verification of records. The matter is remanded - Eligibility of Cenvat credit on other services like Clearing & Forwarding, Management Consultancy, Commercial Training, Maintenance, Sponsorship, Hotel Stay, Goods Transport, Manpower Recruitment – HELD - Since the eligibility of these services was accepted in the appellant's earlier period, the matter is remanded to the adjudicating authority to re-examine the eligibility based on the documents and decisions relied upon by the appellant - Incorrect Computation of Refund – HELD - The refund should be computed based on the gross Cenvat credit availed, without deducting the credit utilized for domestic liability and reversals, as per the Tribunal's earlier decision in the appellant's own case. The matter is remanded for re-computation. [Read less]

Service Tax - Cosmetic and plastic surgery and Healthcare services - Appellant operates a clinical establishment under the brand name 'Medlinks', providing dermatological and trichological healthcare services - Whether the services provided by the appellant fall under the category of 'cosmetic and plastic surgery services' and are thus liable to service tax, or whether they qualify as 'health care services' and are entitled to exemption – HELD – There is a fine line of distinction between an activity being covered as a cosmetic and plastic surgery or as a healthcare service. The services provided by the appellant inclu... [Read more]

Service Tax - Cosmetic and plastic surgery and Healthcare services - Appellant operates a clinical establishment under the brand name 'Medlinks', providing dermatological and trichological healthcare services - Whether the services provided by the appellant fall under the category of 'cosmetic and plastic surgery services' and are thus liable to service tax, or whether they qualify as 'health care services' and are entitled to exemption – HELD – There is a fine line of distinction between an activity being covered as a cosmetic and plastic surgery or as a healthcare service. The services provided by the appellant include treatments for various skin and hair conditions, some of which may be undertaken for medical reasons, while others may be for aesthetic purposes. The definition of 'health care services' in the Mega Exemption Notification specifically excludes hair transplant or cosmetic or plastic surgery, except when undertaken to restore or reconstruct anatomy or functions of the body affected due to congenital defects, developmental abnormalities, injury or trauma – Matter is remanded to the adjudicating authority to examine the nature of each service rendered by the appellant and give reasoned findings on whether they qualify as healthcare services or cosmetic and plastic surgery services - The appeal is allowed by way of remand - Invocation of Extended Period of Limitation - The appellant argued that the demand under the show cause notice was time-barred, as it pertained to the period prior to the invocation of the extended period of limitation - Whether the extended period of limitation can be invoked in the present case – HELD - The issue is one of interpretation as to whether the services rendered by the appellant would fall under health care services and be entitled to exemption, or under cosmetic and plastic surgery services and be liable to service tax. Where the issue is one of interpretation, the element of suppression or misstatement cannot be attributed to the assessee, and therefore, the extended period of limitation cannot be invoked - Cum-Tax Benefit under Section 67(2) - The appellant argued that it is entitled to the cum-tax benefit under Section 67(2) of the Finance Act, 1994 - Whether the appellant is entitled to the cum-tax benefit – HELD - The service tax is an indirect tax, and as per the system of taxation, the tax borne by the consumer of services is collected by the assessee and remitted to the government. When the amount is collected for the provision of services, the total compensation received should be treated as inclusive of the service tax due to be paid by the ultimate customer, unless the service tax is also paid by the customer separately. The appellant is entitled to the cum-tax benefit under Section 67(2) of the Finance Act, 1994. [Read less]

GST – Anti-Profiteering – Complainant alleged that the respondent did not pass on the benefit of input tax credit to the complainant by way of commensurate reduction in the prices on purchase of the said flat after the introduction of GST - Whether the respondent has contravened the provision under section 171 of the CGST Act, 2017 by not passing on the benefit of ITC to the complainant – HELD - The flat was booked by the complainant in the post-GST period. As per the judgment of the High Court of Delhi in Reckitt Benckiser India Pvt. Ltd. Vs. Union of India, since the price of the flat would have been fixed after ta... [Read more]

GST – Anti-Profiteering – Complainant alleged that the respondent did not pass on the benefit of input tax credit to the complainant by way of commensurate reduction in the prices on purchase of the said flat after the introduction of GST - Whether the respondent has contravened the provision under section 171 of the CGST Act, 2017 by not passing on the benefit of ITC to the complainant – HELD - The flat was booked by the complainant in the post-GST period. As per the judgment of the High Court of Delhi in Reckitt Benckiser India Pvt. Ltd. Vs. Union of India, since the price of the flat would have been fixed after taking into account the ITC which has become available to the builder in the post-GST period and which was not available to him in the pre-GST period, no benefit of ITC to the home buyer would be available – Further, the DGAP, after scrutinizing the relevant documents and considering the reply submitted by the respondent, arrived at the conclusion that the respondent has not contravened the provision under Section 171. The DGAP has taken into consideration the ITC availed, and the purchase value of Goods and Services during pre and post GST period, and found that the ratio of ITC as a percentage of expenses incurred on purchase of inputs Goods and Services in the post GST period was reduced as against the percentage during pre-GST period. Therefore, there was no saving made by the respondent on account of implementation of GST - The report of the DGAP is accepted and the objections raised by the complainant are rejected – Ordered accordingly [Read less]

Central Excise - Eligibility for SSI exemption due to use of brand name and location of manufacturing unit in rural area - Appellant had cleared pharmaceutical products to various customers on payment of duty and had cleared medicines to Ozonic Health Care and Sri Aksaya Agencies without payment of duty, using their brand names - Whether the appellant is eligible for SSI exemption despite using the brand names of another person – HELD - If the brand name belongs to a person who is a Director or proprietor of the appellant's firm, it cannot be considered as the brand name of another person, and the appellant would be elig... [Read more]

Central Excise - Eligibility for SSI exemption due to use of brand name and location of manufacturing unit in rural area - Appellant had cleared pharmaceutical products to various customers on payment of duty and had cleared medicines to Ozonic Health Care and Sri Aksaya Agencies without payment of duty, using their brand names - Whether the appellant is eligible for SSI exemption despite using the brand names of another person – HELD - If the brand name belongs to a person who is a Director or proprietor of the appellant's firm, it cannot be considered as the brand name of another person, and the appellant would be eligible for SSI exemption. In the present case, the proprietor of Ozonic Health Care and the proprietrix of Sri Aksaya Agencies were the Managing Director and a Director of the appellant firm, respectively. Therefore, the use of their brand names by the appellant cannot be considered as the use of brand names of another person, and the appellant is eligible for SSI exemption - The appellant's manufacturing unit is located in a rural area and, consequently, the appellant is eligible for SSI exemption. The certificate issued by the jurisdictional Tahsildar is a valid document to substantiate the claim of the manufacturing unit being located in a rural area for the purpose of availing SSI exemption. In the present case, the appellant had submitted a certificate issued by the jurisdictional Tahsildar, which was found to be a valid document – The demand of central excise duty along with interest and penalties imposed on the appellant and its Managing Director are set aside and the appeals are allowed [Read less]

Customs - Refund of Pre-Deposit - Appellant aggrieved by the rate of interest awarded at 6% per annum by the Commissioner (Appeals) on the refunded amount - Whether the refund amount should be disbursed to the appellant along with interest at the rate of 12% per annum from the date of deposit till the date of refund, as claimed by the appellant – HELD - As per the Notification No. 70/2014-Customs dated 12.08.2014, the rate of interest to be paid on refunds is within the range of 5% to 30%, and the Commissioner (Appeals) has rightly awarded interest at the rate of 6% per annum - The Madras High Court in the case of C. Pad... [Read more]

Customs - Refund of Pre-Deposit - Appellant aggrieved by the rate of interest awarded at 6% per annum by the Commissioner (Appeals) on the refunded amount - Whether the refund amount should be disbursed to the appellant along with interest at the rate of 12% per annum from the date of deposit till the date of refund, as claimed by the appellant – HELD - As per the Notification No. 70/2014-Customs dated 12.08.2014, the rate of interest to be paid on refunds is within the range of 5% to 30%, and the Commissioner (Appeals) has rightly awarded interest at the rate of 6% per annum - The Madras High Court in the case of C. Padmini Chinnadurai v. Assistant Commissioner, Central Excise, Tirunelveli and the CESTAT in the case of Devendra Udyog v. Commissioner of CGST, Jodhpur, has held that if the deposit is towards the payment of duty/tax, the provisions of Section 11BB of the Central Excise Act would apply, and the notifications prescribing the rate of interest issued under this section would be applicable - The interest shall be computed and paid at the rate of 6% per annum as mentioned in the notification issued under Section 129EE of the Customs Act, 1962, which is pari materia to Section 11BB of the Central Excise Act - The interest awarded at the rate of 6% per annum is in accordance with the applicable statutory provisions and notifications – The appeal is dismissed [Read less]

Custom - Classification of the impugned goods viz. Tendofit, Mobilee &GG Orosoluble - Appellant challenged the classification of imported goods Tendofit, Mobilee, and GG Orosoluble under Chapter 21 of the Customs Tariff as "Miscellaneous Edible Preparations" instead of under Chapters 39 and 30 as claimed by the appellant - Whether the imported goods were correctly classified under Chapter 21 or should be classified under Chapters 39 and 30 as claimed by the appellant – HELD - Tendofit, which contained 86% Mucopolysaccharides and 15% Collagen, should be classified under Chapter 39 as a natural polymer, based on the expert... [Read more]

Custom - Classification of the impugned goods viz. Tendofit, Mobilee &GG Orosoluble - Appellant challenged the classification of imported goods Tendofit, Mobilee, and GG Orosoluble under Chapter 21 of the Customs Tariff as "Miscellaneous Edible Preparations" instead of under Chapters 39 and 30 as claimed by the appellant - Whether the imported goods were correctly classified under Chapter 21 or should be classified under Chapters 39 and 30 as claimed by the appellant – HELD - Tendofit, which contained 86% Mucopolysaccharides and 15% Collagen, should be classified under Chapter 39 as a natural polymer, based on the expert opinion submitted by the appellant and the US Customs ruling that Chondroitin Sulphate, the main component of Tendofit, is a natural polymer. The Department failed to provide any evidence to controvert the appellant's classification, and classification has to be based on the condition of goods at the time of import, not their intended use – The product Mobilee, which contained 60-75% Sodium Hyaluronate along with Polysaccharides and Collagen, should also be classified under Chapter 39 as a natural polymer, based on the expert opinion and the US and EU Customs classification of Sodium Hyaluronate. The Department's contention that the presence of Collagen makes it a food preparation is rejected, as Mobilee was imported in bulk and required formulation before becoming edible - The product GG Orosoluble, which was a probiotic containing Lactobacillus Rhamnosus GG along with excipients, should be classified under Chapter 30 as a probiotic/culture of microorganisms, based on the expert opinion submitted by the appellant. The Department failed to lead any evidence to controvert the appellant's classification - The classification adopted by the appellant is correct. The impugned order is set aside and the appeal is allowed [Read less]

Customs - Utilization of Served From India Scheme (SFIS) Scrips – Petitioner received Duty Credit Scrips under the Served From India Scheme (SFIS). However, the petitioner faced challenges in utilizing these scrips, as they were deemed non-transferable and could only be predominantly used for import of vehicles for commercial tourism operations, thereby limiting their applicability and usability - Whether the petitioner should be allowed to transfer or utilize the SFIS scrips in a manner different from the restrictions imposed under the original Foreign Trade Policy - HELD - The petitioner had made genuine efforts to uti... [Read more]

Customs - Utilization of Served From India Scheme (SFIS) Scrips – Petitioner received Duty Credit Scrips under the Served From India Scheme (SFIS). However, the petitioner faced challenges in utilizing these scrips, as they were deemed non-transferable and could only be predominantly used for import of vehicles for commercial tourism operations, thereby limiting their applicability and usability - Whether the petitioner should be allowed to transfer or utilize the SFIS scrips in a manner different from the restrictions imposed under the original Foreign Trade Policy - HELD - The petitioner had made genuine efforts to utilize the SFIS scrips, but was unable to do so due to various administrative and policy constraints. It could never have been the intention of the Government or the Policy to let such genuinely availed and entitled scrips lapse – The respondents to consider the petitioner's representations seeking relaxation regarding the utilization of the SFIS scrips, including extension, monetization, or permission to utilize the scrips for payment of IGST/BSD, or in the alternative, to permit transferring the scrips to other eligible persons - Additionally, the status quo be maintained with regard to the validity of the SFIS scrips issued to the petitioner for a period of three months, to allow the respondents to consider the petitioner's requests - The writ petition is disposed of [Read less]

Service Tax - Reverse Charge Liability for Ocean Freight - Department initiated investigation and demanded service tax under reverse charge on the ocean freight incurred by the appellant - Whether the appellant can be made liable to pay service tax on ocean freight under RCM – HELD - The assessee being neither the service provider nor the service recipient, cannot be made liable to pay service tax on ocean freight paid by the foreign seller to the foreign shipping line. The levy of service tax on ocean freight under Reverse Charge has been declared unconstitutional as it goes beyond the scope of Sections 64, 66B, 67 and ... [Read more]

Service Tax - Reverse Charge Liability for Ocean Freight - Department initiated investigation and demanded service tax under reverse charge on the ocean freight incurred by the appellant - Whether the appellant can be made liable to pay service tax on ocean freight under RCM – HELD - The assessee being neither the service provider nor the service recipient, cannot be made liable to pay service tax on ocean freight paid by the foreign seller to the foreign shipping line. The levy of service tax on ocean freight under Reverse Charge has been declared unconstitutional as it goes beyond the scope of Sections 64, 66B, 67 and 94 of the Finance Act, 1994 – The Hon’ble High Court of Gujarat in the case of M/s. SAL Steel Limited Vs. Union of India has held that Notification Nos. 15/2017-S.T. and 16/2017-S.T. making Rule 2(1)(d)(EEC) and Rule 6(7CA) of the Service Tax Rules and inserting Explanation-V to reverse charge Notification No. 30/2012-S.T. is ultra vires Sections 64, 66B, 67 and 94 of the Finance Act, 1994 - The order of the Commissioner (Appeal) which had set aside the demand of service tax on ocean freight under RCM is upheld and the Revenue appeal is dismissed [Read less]

Service Tax - Leviability of Service Tax on excess income earned by freight forwarder - Appellant was promoting and marketing the services of freight forwarders by offering such services to importers and exporters, and had received brokerage/discounts, resulting in income over and above the air cargo and sea cargo freight charge - Department contended that this excess income represented commission or brokerage received towards the promotion or marketing of services provided by overseas freight forwarders, and therefore constituted Business Auxiliary Service - Whether service tax is leviable on the excess income earned by t... [Read more]

Service Tax - Leviability of Service Tax on excess income earned by freight forwarder - Appellant was promoting and marketing the services of freight forwarders by offering such services to importers and exporters, and had received brokerage/discounts, resulting in income over and above the air cargo and sea cargo freight charge - Department contended that this excess income represented commission or brokerage received towards the promotion or marketing of services provided by overseas freight forwarders, and therefore constituted Business Auxiliary Service - Whether service tax is leviable on the excess income earned by the appellant out of the ocean freight amount under the category of BAS – HELD - as a freight forwarder the appellant has undertaken transport of cargo from one country to another through multimodal transportation and for this purpose they jointly work with their counterparts in other countries and based on agreements with them the profit earned or the loss incurred in each transaction is shared with them - the common thread running in various Tribunal decisions relating to "Profit Share" on Freight Forwarding Services is that the "Business Profits" cannot be taxed to Service Tax, and also that when the two partners are jointly delivering the service in multi-modal transport, operating in different geographical locations, such sharing of profit cannot be taxed to Service Tax - The appellant is not liable to pay service tax on the excess income earned under the category of BAS – The impugned order is set aside and the appeal is allowed [Read less]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to inter... [Read more]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to interfere in the impugned judgment and order passed by the High Court. Accordingly, the Revenue appeal is disposed of [Read less]

GST - Validity of a common show cause notice covering multiple tax periods - The petitioner was issued a show cause notice covering tax periods from 2018-19 to 2020-21 - Whether a common show cause notice covering multiple tax periods is valid - HELD - The Court relied on its earlier judgment in S.J. Constructions vs. The Assistant Commissioner and Ors, where it was held that assessment of tax and other amounts payable under the Acts for each taxation period or financial year should be initiated by way of separate show cause notices and a common SCN cannot be issued by clubbing different taxation periods. Accordingly, the ... [Read more]

GST - Validity of a common show cause notice covering multiple tax periods - The petitioner was issued a show cause notice covering tax periods from 2018-19 to 2020-21 - Whether a common show cause notice covering multiple tax periods is valid - HELD - The Court relied on its earlier judgment in S.J. Constructions vs. The Assistant Commissioner and Ors, where it was held that assessment of tax and other amounts payable under the Acts for each taxation period or financial year should be initiated by way of separate show cause notices and a common SCN cannot be issued by clubbing different taxation periods. Accordingly, the impugned show cause notice covering multiple tax periods is set aside. However, this order shall not preclude the authorities from initiating appropriate action in accordance with law - The writ petition is allowed [Read less]

GST - Reversal of Input Tax Credit on account of Credit Notes and on account of discrepancy in place of supply, Non-consideration of GST returns - Whether the petitioner was required to reverse the ITC – HELD - The facts and figures indicating the petitioner's liability to reverse ITC were available in the relevant GST return Forms filed by the petitioner. However, the Appellate Authority failed to consider these records and did not provide any reasons for why the amounts mentioned in the return forms should not be considered. In such situation, the Appellate Authority ought to have considered such facts and figures as a... [Read more]

GST - Reversal of Input Tax Credit on account of Credit Notes and on account of discrepancy in place of supply, Non-consideration of GST returns - Whether the petitioner was required to reverse the ITC – HELD - The facts and figures indicating the petitioner's liability to reverse ITC were available in the relevant GST return Forms filed by the petitioner. However, the Appellate Authority failed to consider these records and did not provide any reasons for why the amounts mentioned in the return forms should not be considered. In such situation, the Appellate Authority ought to have considered such facts and figures as available on the portal itself and then proceeded to answer the issues that were raised before it - There is no discussion as regards the aforesaid facts and figures in the order impugned and there is nothing to indicate why the amounts mentioned in the said return Forms should not be considered. This was a clear abdication of duty on the part of the Appellate Authority - The orders of the Appellate Authority and the Adjudicating Authority/Proper Officer are set aside and the matter is remanded for fresh consideration by the Adjudicating Authority after affording the petitioner an opportunity of hearing and considering the relevant GST return forms – The petition is disposed of [Read less]

Haryana Value Added Tax Act, 2003 - Statutory pre-deposit requirement for hearing appeal against tax assessment - Petitioner argued that it faced severe financial hardship and its case had merit, therefore, the appellate authority should have entertained the appeal without insisting on the pre-deposit - Whether the appellate authority can be directed to entertain the petitioner's appeal without insisting on the statutory pre-deposit in terms of Section 33(5) of HVAT Act, 2003 – HELD - Relying on Supreme Court decision in M/s Tecnimont Pvt. Ltd. v. State of Punjab, the pre-deposit condition is not onerous, harsh or unreas... [Read more]

Haryana Value Added Tax Act, 2003 - Statutory pre-deposit requirement for hearing appeal against tax assessment - Petitioner argued that it faced severe financial hardship and its case had merit, therefore, the appellate authority should have entertained the appeal without insisting on the pre-deposit - Whether the appellate authority can be directed to entertain the petitioner's appeal without insisting on the statutory pre-deposit in terms of Section 33(5) of HVAT Act, 2003 – HELD - Relying on Supreme Court decision in M/s Tecnimont Pvt. Ltd. v. State of Punjab, the pre-deposit condition is not onerous, harsh or unreasonable, and the appellate authority does not have the discretion to grant relief against this requirement - In terms of Section 33(5) of HVAT Act, it is open to the assessee to submit even a bank guarantee or adequate security to the satisfaction of assessing Authority in the manner prescribed for the amount in dispute. The financial information provided by the Department indicated that the petitioner's financial status is sound, with significant taxable turnover and tax payments under the GST regime - The petitioner is granted liberty to take necessary steps for compliance with the pre-deposit requirement - The writ petition is dismissed, upholding the statutory pre-deposit requirement for entertaining the petitioner's appeal [Read less]

Central Excise – Applicable interest on delayed refund of rebate amount, inordinate delay in adjudication of Show Cause Notice - Appellant filed writ petition against the inordinate delay in the adjudication of the SCNs, pursuant to which the High Court quashed the SCNs. Consequently, the rebate claims were sanctioned, but no interest was paid for the delay of 12 years - Whether the appellant is entitled to interest at a higher rate than 6% per annum on the delayed refund of the rebate claims – HELD - The appellant is entitled to interest at the rate of 12% per annum on the sanctioned rebate claims from the date of dep... [Read more]

Central Excise – Applicable interest on delayed refund of rebate amount, inordinate delay in adjudication of Show Cause Notice - Appellant filed writ petition against the inordinate delay in the adjudication of the SCNs, pursuant to which the High Court quashed the SCNs. Consequently, the rebate claims were sanctioned, but no interest was paid for the delay of 12 years - Whether the appellant is entitled to interest at a higher rate than 6% per annum on the delayed refund of the rebate claims – HELD - The appellant is entitled to interest at the rate of 12% per annum on the sanctioned rebate claims from the date of deposit till the date of refund. The provisions of Section 11BB of the Central Excise Act, 1944 regarding payment of interest on delayed refund would not be sufficient in cases of abnormal delay, as in the present case where the refund was delayed by more than 12 years without any fault of the appellant. If the refund/rebate has been withheld for an unreasonable time and the appellant suffers hardship, interest at a higher rate, not less than 12%, is required to be paid. The appellant cannot be deprived of the interest earned by the department on the retained amount, as it is the property of the appellant. Accordingly, the impugned Order-in-Appeal is modified and the department was directed to pay interest at the rate of 12% per annum on the sanctioned rebate claims – The appeal is allowed [Read less]

GST - Export of services or Intermediary services, Providing educational consultation to Indian students intending to pursue education in foreign universities – Vide the impugned order the High Court held that the respondent\'s (assessee) services qualify as export of services under Section 2(6) of the IGST Act, 2017 instead of \'intermediary\' under the Section 2(13) of the Act – Revenue in appeal against the High Court Order – SC HELD - Not inclined to interfere with the impugned judgment and order of the High Court, hence, the special leave petition is dismissed

Central Excise - Classification of single/double roasted Rava/Sooji - Based on intelligence, it was found that the appellants were manufacturing single/double roasted Sooji/Rava packed under the brand name 'Pillsbury' but had not discharged duty on the same - Department alleged that the process of drying and roasting of Sooji/Rava results into 'manufacture' and that the process of single/double roast of Sooji/Rava and marketing it in unit containers falls under Chapter Sub-heading 19019090 of the CETA, 1985, attracting duty and also Maximum Retail Price (MRP) based assessment - Whether Rava/Suji on roasting at an appropria... [Read more]

Central Excise - Classification of single/double roasted Rava/Sooji - Based on intelligence, it was found that the appellants were manufacturing single/double roasted Sooji/Rava packed under the brand name 'Pillsbury' but had not discharged duty on the same - Department alleged that the process of drying and roasting of Sooji/Rava results into 'manufacture' and that the process of single/double roast of Sooji/Rava and marketing it in unit containers falls under Chapter Sub-heading 19019090 of the CETA, 1985, attracting duty and also Maximum Retail Price (MRP) based assessment - Whether Rava/Suji on roasting at an appropriate temperature resulting into reduction in the moisture content be treated as ‘manufacture’ within the definition of Section 2(f) of Central Excise Act, 1944 – HELD - The process of roasting undertaken by the appellants does not result into 'manufacture' within the definition of Section 2(f) of the CEA, 1944. The Rava/Suji itself is a finished product falling under Chapter 1103 ready to be used and sold in the market. The process of 'single roasting' or 'double roasting' of Rava does not bring any change in the item itself nor any change in its physical properties/characteristics, only the process of roasting reduces the moisture content of Rava/Suji. The plain Rava/Suji when subjected to first roasting and/or second roasting, no transformation takes place nor the resultant roasted product has an altogether distinct character and use. Therefore, the process of roasting i.e. 'single roasting' and/or 'double roasting' of the plain Rava/Suji does not result into 'manufacture' within the definition of Section 2(f) of CEA, 1944, hence, not leviable to excise duty - Since the process of roasting undertaken by the appellant does not result into manufacture, further discussion about change in its classification becomes academic, hence, not dealt into – The impugned order is set aside and the appeal is allowed [Read less]

Customs – Availment of CVD exemption on import of Manganese Ore – Appellants imported 'Manganese Ore' and classified it under Tariff item 2602 00 20, claiming exemption from payment of CVD in terms of S.No.56 of Notification No.12/2012-CE dated 17.03.2012. The Original Authority and the Commissioner (Appeals) denied the exemption benefit on the ground that the imported goods are not 'Manganese Ores' as they have undergone washing, removal of waste and sizing, and therefore, are 'Manganese Concentrates' - Whether the appellants are eligible for the CVD exemption on imported Manganese Ore – HELD - The processes underta... [Read more]

Customs – Availment of CVD exemption on import of Manganese Ore – Appellants imported 'Manganese Ore' and classified it under Tariff item 2602 00 20, claiming exemption from payment of CVD in terms of S.No.56 of Notification No.12/2012-CE dated 17.03.2012. The Original Authority and the Commissioner (Appeals) denied the exemption benefit on the ground that the imported goods are not 'Manganese Ores' as they have undergone washing, removal of waste and sizing, and therefore, are 'Manganese Concentrates' - Whether the appellants are eligible for the CVD exemption on imported Manganese Ore – HELD - The processes undertaken on the Run of Mine (ROM) ore, such as screening, sizing, crushing, and washing for removal of foreign material, have resulted in the emergence of 'Manganese Concentrates' and not 'Manganese Ores' - The process of converting ores into concentrates would amount to 'manufacture' under the provisions of Chapter Note 4 to Chapter 26. Once the goods are deemed to be 'manufactured' products, they would not be eligible for the exemption notification which is meant for 'Ores' only. The exemption notifications are to be construed strictly, and the benefit thereof should not be extended to the assessee in case of any doubt - Further, the appellants' contention that the processes undertaken were normal and not 'special treatments' is rejected as any activity carried out on the ROM ore with an intent to remove foreign matter, either partially or fully, to make it useful for metallurgical purposes or for economic transport, would amount to conversion and result in the emergence of a new excisable good, i.e., 'Manganese Concentrates' - The orders passed by the Original Authority and the Commissioner (Appeals) are upheld. The appeals are dismissed [Read less]

Service Tax - Demand of service tax under Commercial Training or Coaching Centre services on providing of long-term management programmes – Vide the impugned order the Tribunal modified the Order-in-Original by setting aside penalty and upholding the confirmation of demands with interest for the normal period of limitation – Revenue in appeal against the Tribunal Order – SC HELD – There is no sufficient cause to condone the delay in filing the present appeal against the impugned order of the CESTAT. The appeal filed by Revenue is dismissed on the ground of delay – Ordered accordingly

Service Tax - Taxability of web hosting, domain registration and related services - Demand of service tax on services related to domain registration/renewal, hosting space renewal, hosting space, hosting backup space, and hosting space registration - Whether the services provided by the appellant, such as domain registration and renewal, hosting space renewal, hosting space, hosting backup space, and hosting space registration, are taxable under the category of Information Technology software services – HELD - The services rendered by the appellant, including web hosting, server collocation, and domain name registration,... [Read more]

Service Tax - Taxability of web hosting, domain registration and related services - Demand of service tax on services related to domain registration/renewal, hosting space renewal, hosting space, hosting backup space, and hosting space registration - Whether the services provided by the appellant, such as domain registration and renewal, hosting space renewal, hosting space, hosting backup space, and hosting space registration, are taxable under the category of Information Technology software services – HELD - The services rendered by the appellant, including web hosting, server collocation, and domain name registration, are in the taxable category of information technology software services, which were brought into the statute with effect from 16.05.2008 - The present matter deals with service provided by the appellant under Information Technology service and therefore, the cases relied upon by the appellant are not applicable in this case - The invocation of the extended period of limitation is also upheld as the appellant had not registered with the service tax department and had not filed any returns, which prevented the department from scrutinizing the correctness of the payment of service tax. The conduct of the appellant in not registering and not paying the tax amounts to suppression of facts, making the extended period of limitation invokable - The appellant is liable to pay service tax on the activities of domain registration/renewal, hosting space renewal, hosting space, hosting backup space, and hosting space registration. The matter is remanded to the Original Adjudicating Authority to determine the correct service tax amount, interest liability, and penalty proposals – The appeal is dismissed [Read less]

GST - Cancellation of GST Registration, Non-compliance with Rule 25 of CGST Rules, 2017 and with principles of natural justice - Petitioners argued that the showcause notices did not specify the date and time for personal hearing, thereby violating the principles of natural justice and the physical verification report was not uploaded on the common portal – HELD - The showcause notices were issued in contravention of the provisions of Form GST REG-17, which mandates that the authority issuing the showcause notice must specify the date and time for personal hearing. By not providing this information, the petitioners were ... [Read more]

GST - Cancellation of GST Registration, Non-compliance with Rule 25 of CGST Rules, 2017 and with principles of natural justice - Petitioners argued that the showcause notices did not specify the date and time for personal hearing, thereby violating the principles of natural justice and the physical verification report was not uploaded on the common portal – HELD - The showcause notices were issued in contravention of the provisions of Form GST REG-17, which mandates that the authority issuing the showcause notice must specify the date and time for personal hearing. By not providing this information, the petitioners were denied the opportunity to file a reply and make their submissions. The violation of natural justice at the first stage cannot be cured by the availability of an alternative remedy of appeal, as the Appellate authority cannot remit the matter back to the assessing authority – Further, according to Rule 25 of CGST Rules, 2017, it is necessary to upload the physical verification report alongwith other documents including photographs on the common portal within a period of 15 working days following the date of such verification. The failure to upload the physical verification report on the common portal within the prescribed timeline is in contravention of Rule 25 of the CGST Rules - The showcause notices and the subsequent final orders are quashed. The Respondents shall be at liberty to initiate fresh proceedings against the petitioners strictly in accordance with REG-17, Rule 25 of CGST Rules, 2017 – The writ petitions are allowed [Read less]

Service Tax - Exemption from Service Tax - Appellants were individual members of a co-operative housing society who received rental income from leasing out a property owned by the society. The rental income was paid directly to the individual members as per court directions, rather than to the society. The service tax authorities sought to levy service tax on the rental income, treating it as "renting of immovable property" service - Whether the individual members were liable to pay service tax on the rental income received by them - HELD - When the rental income is received directly by the individual co-owners as per cour... [Read more]

Service Tax - Exemption from Service Tax - Appellants were individual members of a co-operative housing society who received rental income from leasing out a property owned by the society. The rental income was paid directly to the individual members as per court directions, rather than to the society. The service tax authorities sought to levy service tax on the rental income, treating it as "renting of immovable property" service - Whether the individual members were liable to pay service tax on the rental income received by them - HELD - When the rental income is received directly by the individual co-owners as per court directions, and not through a collective entity, then the individual co-owners are eligible for the general exemption notification for service tax on rental income up to the specified limit. The rental income was distributed equally among the individual members, and each member's share was below the exemption limit for the relevant years. The members had voluntarily paid the service tax and interest for the years when their rental income exceeded the exemption limit, and there was no evidence of any attempt to evade tax - The appeals filed by the individual members of the co-operative housing society against the service tax demand are allowed [Read less]

GST - Applicability of Circular No. 183/15/2022-GST dated 27.12.2022 and Circular No. 193/05/2023-GST dated 17.07.2023 - The petitioner sought the benefit of Circular No. 183/15/2022-GST dated 27.12.2022, which provides a mechanism to rectify errors committed in invoices or statutory forms, for the financial year 2019-20, even though the Circular expressly referred to the financial years 2017-18 and 2018-19 - HELD - Since the petitioner had committed identical errors in the assessment years 2017-18, 2018-19, and 2019-20, the benefit of Circular No. 183/15/2022-GST dated 27.12.2022 could not be denied to the petitioner for ... [Read more]

GST - Applicability of Circular No. 183/15/2022-GST dated 27.12.2022 and Circular No. 193/05/2023-GST dated 17.07.2023 - The petitioner sought the benefit of Circular No. 183/15/2022-GST dated 27.12.2022, which provides a mechanism to rectify errors committed in invoices or statutory forms, for the financial year 2019-20, even though the Circular expressly referred to the financial years 2017-18 and 2018-19 - HELD - Since the petitioner had committed identical errors in the assessment years 2017-18, 2018-19, and 2019-20, the benefit of Circular No. 183/15/2022-GST dated 27.12.2022 could not be denied to the petitioner for the financial year 2019-20 merely on the ground that the Circular expressly referred to earlier years. The Circular No. 193/05/2023-GST dated 17.07.2023 now expressly covers the period relevant to the petitioner. Accordingly, the respondents are directed to take necessary steps in relation to the petitioner for the assessment year 2019-20 by applying both Circular No. 183/15/2022-GST dated 27.12.2022 and Circular No. 193/05/2023-GST dated 17.07.2023 - The writ petition is disposed of [Read less]

GST - Principles of Natural Justice - Non-payment of tax and irregularities in input tax credits - The petitioner alleged that its chartered accountant had deceived it by not depositing the GST amounts collected from the petitioner with the department - Whether the petitioner's contention of violation of principles of natural justice due to lack of opportunity of hearing is tenable - HELD - The petitioner did not avail the statutory remedy of appeal and instead directly approached the High Court under Article 226. In such matters where a specific statutory remedy is available, the interference by the High Court has to be m... [Read more]

GST - Principles of Natural Justice - Non-payment of tax and irregularities in input tax credits - The petitioner alleged that its chartered accountant had deceived it by not depositing the GST amounts collected from the petitioner with the department - Whether the petitioner's contention of violation of principles of natural justice due to lack of opportunity of hearing is tenable - HELD - The petitioner did not avail the statutory remedy of appeal and instead directly approached the High Court under Article 226. In such matters where a specific statutory remedy is available, the interference by the High Court has to be minimal and only in extraordinary or exceptional circumstances. The impugned orders show that the petitioner was served with notices and provided opportunities of hearing, but it did not submit any response. The contention of the petitioner regarding its chartered accountant's misconduct is a disputed question of fact which cannot be adjudicated in the present writ proceedings. The order rejecting the petitioner's application for rectification is also affirmed, as the same did not fall under the purview of error apparent on the face of record - The writ petition is dismissed for lack of merit [Read less]

GST - Refund of amount recovered, Non-constitution of Tribunal - The petitioner seeking direction to the respondent to sanction the refund as sought by the petitioner. The petitioner contended that the order of the appellate authority was sought to be challenged under before the Tribunal, and in light of the non-constitution of the Tribunal and the provisions of Circular No.224/18/2024-GST, the question of recovery ought not to have been resorted to – HELD – The para No.6 of the Circular does provide for refund in the event the assessee furnishes an undertaking to file an appeal and upon filing of such appeal, recovery... [Read more]

GST - Refund of amount recovered, Non-constitution of Tribunal - The petitioner seeking direction to the respondent to sanction the refund as sought by the petitioner. The petitioner contended that the order of the appellate authority was sought to be challenged under before the Tribunal, and in light of the non-constitution of the Tribunal and the provisions of Circular No.224/18/2024-GST, the question of recovery ought not to have been resorted to – HELD – The para No.6 of the Circular does provide for refund in the event the assessee furnishes an undertaking to file an appeal and upon filing of such appeal, recovery proceedings are not to be initiated - In light of the submission of the petitioner that for the present he is willing to forego refund with respect to the pre-deposit amount and would not insist for interest at present, it would be appropriate to direct the revenue to refund the amount recovered after withholding the pre-deposit amount as contemplated under Section 112 of the CGST Act - insofar as the amount directed to be refunded, petitioner foregoes the claim of any interest on the same – The petition is allowed [Read less]

GST - Audit Order – Petitioner was subjected to a GST audit for the period 2020-21 to 2022-23 by the respondent authorities. The audit resulted in the issuance of a final audit report, a show cause-cum-demand notice, and a final demand order, all of which were challenged by the petitioner in a writ petition – HELD - The petitioner cannot challenge the validity of the show cause notice and the audit report, as it had effectively participated in the proceedings before the competent authority and the final order was passed under Section 74 of the CGST Act, 2017. When there is an alternate statutory remedy available, the p... [Read more]

GST - Audit Order – Petitioner was subjected to a GST audit for the period 2020-21 to 2022-23 by the respondent authorities. The audit resulted in the issuance of a final audit report, a show cause-cum-demand notice, and a final demand order, all of which were challenged by the petitioner in a writ petition – HELD - The petitioner cannot challenge the validity of the show cause notice and the audit report, as it had effectively participated in the proceedings before the competent authority and the final order was passed under Section 74 of the CGST Act, 2017. When there is an alternate statutory remedy available, the petitioner should be relegated to avail the statutory remedy of appeal - The petitioner is at liberty to raise all the grounds before the appellate authority and thereafter approach the GST Tribunal, if required – The petition is dismissed [Read less]

Customs – Import of goods – Classification – Appellant imported aluminium tubes, aluminium pipes and aluminium profiles by classifying them under Customs Tariff Heading 7604 of First Schedule to the Act and claimed exemption from payment of Basic Customs Duty in terms of Serial No.610 of Notification No. 152/2009-Cus – After following due process of law, Commissioner re-classified imported goods under CTH 8708 and directed for recovery of customs duty – Whether imported goods are classifiable under CTH 7604 as claimed by Appellant or under CTH 8708 as held in impugned order – HELD – As per department, importe... [Read more]

Customs – Import of goods – Classification – Appellant imported aluminium tubes, aluminium pipes and aluminium profiles by classifying them under Customs Tariff Heading 7604 of First Schedule to the Act and claimed exemption from payment of Basic Customs Duty in terms of Serial No.610 of Notification No. 152/2009-Cus – After following due process of law, Commissioner re-classified imported goods under CTH 8708 and directed for recovery of customs duty – Whether imported goods are classifiable under CTH 7604 as claimed by Appellant or under CTH 8708 as held in impugned order – HELD – As per department, imported goods deserve classification under CTI 8708 as parts and accessories of motor vehicles. Goods as imported are raw inputs of aluminium, which are subjected to various processes by Appellant, before they can be used in manufacturing charge air cooler or condensers. Merely because Appellant used imported goods in manufacturing parts of automobiles, it cannot be conclude that said goods are for sole or principal use with motor vehicles. Imported goods are specifically covered under CTH 7604, therefore, Appellant would be entitled to claim benefit of Notification. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable t... [Read more]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable to Service Tax – HELD - The appellant produced the television programs on its own, without any involvement of the broadcasters. In such a situation, the activity would not attract Service Tax as the very concept of rendering of "service" implies two entities, one who renders the "service", and the other, who is the recipient thereof - Copyrights are intangible property without a physical existence, and an intangible activity need not necessarily mean it is a service. The assignment of copyright in the television programs by the appellant to the broadcasters was in the nature of a 'sale of goods' liable to VAT, and not a 'service' liable to Service Tax. The payment of service tax and VAT are mutually exclusive, and if sale of goods is involved and VAT has been paid correctly, the activity would be outside the preview of Service Tax - The transfer of copyright in these programs to the broadcasters do not constitute a 'service' under the definition of 'TV or Radio Programme Production Service' in the Finance Act, 1994 - The demand for Service Tax, interest, and penalty are set aside and the appeal is allowed [Read less]

Customs – Section 108 of Customs Act, 1962 – Rules 3 and 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Import of furniture – Rejection of declared value – Demand of differential duty – Appellant had purchased furniture locally from importers against proper bills on payment of applicable taxes – After following due process of law, Principal Commissioner rejected declared value of imported goods under Rule 12 of the Rules, re-determined same under Rule 3 of the Rules and confirmed demand of differential customs duty – Whether statements of persons recorded under Section 108 ... [Read more]

Customs – Section 108 of Customs Act, 1962 – Rules 3 and 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Import of furniture – Rejection of declared value – Demand of differential duty – Appellant had purchased furniture locally from importers against proper bills on payment of applicable taxes – After following due process of law, Principal Commissioner rejected declared value of imported goods under Rule 12 of the Rules, re-determined same under Rule 3 of the Rules and confirmed demand of differential customs duty – Whether statements of persons recorded under Section 108 of the Act could have been relied upon by Principal Commissioner for rejecting the transaction value – HELD – Principal Commissioner had relied upon statements made by various persons under Section 108 of the Act to record a finding regarding mis-declaration and undervaluation of goods, but said statements were retracted by Appellant in their replies. During proceedings before Principal Commissioner, Appellant had sought cross examination of certain persons, but such request was rejected by Principal Commissioner. In such circumstances, statements of persons recorded under Section 108 of the Act could not have been relied upon by Principal Commissioner for rejecting transaction value and re-determining the same. In absence of any certificate, print outs could not have been considered for purposes of reaching a conclusion regarding undervaluation. Impugned order passed by Principal Commissioner is set aside – Appeals allowed [Read less]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining ... [Read more]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining the persons who made the statements as witnesses before the adjudicating authority and obtaining the authority's opinion that the statements should be admitted in the interests of justice, as required under Section 138B – In the instant case, the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same – Further, the printouts of emails could not be relied upon without the certificate required under Section 138C - The elaborate procedures in these sections are meant to safeguard against the possibility of statements being recorded under coercion or compulsion during the investigation stage. Since the mandatory procedures under these provisions were not followed, the impugned orders are set aside and the appeals are allowed [Read less]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are i... [Read more]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are in-admissible - Whether ITC is admissible under Section 16 of the CGST Act, 2017 on procurement of pipes and works contract service for construction/laying of underground cross-country pipeline – HELD - The pipelines laid by the appellant are considered as immovable property and not 'plant and machinery' as per the explanation to Section 17(5) of the CGST Act. The Section 17(5)(c) and 17(5)(d) restrict the availment of ITC on goods and services used for construction of immovable property, other than plant and machinery – Since the statute specifically bars availment of ITC on works contract services when supplied for construction of immovable property and the cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on works contract services provided for construction of such pipeline for transportation of natural gas - Further, clause (d) of Section 17(5) bars entitlement to ITC in respect of goods or services used for construction of immovable property on own account - The cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on goods or services received for construction and laying of such pipeline for transportation of natural gas – The appeal is rejected - Whether cross-country pipeline is “Plant & Machinery” – HELD - The pipelines laid cross-country by the Appellant on the direction of PNGRB do not form part of “plant and machinery” as these are laid outside the factory premises meant for processing the LNG, RLNG or CNG and therefore fall under the restriction clause as prescribed under Section 17(5) (c) and (d) of CGST Act – The underground pipelines laid by the Appellant as per the requirement of the PNGRB, do not form part of plant and machinery as such pipelines laid outside factory premises are excluded from the definition of plant and machinery. The expression “pipelines outside the factory” signifies that the pipeline is to transport some product from the factory to the end user. In the instant case, the gasified natural gas is transported through the pipeline which is outside the factory. Hence, the said pipeline is a “pipeline outside the factory” for which the appellant cannot avail ITC by treating pipelines as “plant & machinery” - Whether cross-country pipeline is covered under “apparatus, equipment, machinery” – HELD - To call ‘pipeline’ an “apparatus, equipment or machinery” would be a distortion of the meaning when the appellant himself described it as a pipeline. While construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document, it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with subject matter understand it. Thus, in common parlance, a pipeline cannot be treated as an apparatus, equipment or machinery. When a specific description is available, it is not justified to bring a pipeline within a meaning of “apparatus, equipment or machinery” by quoting convenient meanings just in order to avail ITC. [Read less]

Customs – Classification - Essential character vs physical appearance - Classification of ‘Arm and Blade Assembly’ - The appellant imported "Arm and Blade Assembly for Windscreen Wipers" which was classified by the authorities under Customs Tariff Heading (CTH) 85124000 as complete windscreen wipers - Appellant contended that the goods were merely a component of a complete windscreen wiper assembly and should be classified under CTH 85129000 as parts of windscreen wipers - Whether the imported Arm and Blade Assembly is classifiable as a complete windscreen wiper under CTH 85124000, or as parts thereof under CTH 85129... [Read more]

Customs – Classification - Essential character vs physical appearance - Classification of ‘Arm and Blade Assembly’ - The appellant imported "Arm and Blade Assembly for Windscreen Wipers" which was classified by the authorities under Customs Tariff Heading (CTH) 85124000 as complete windscreen wipers - Appellant contended that the goods were merely a component of a complete windscreen wiper assembly and should be classified under CTH 85129000 as parts of windscreen wipers - Whether the imported Arm and Blade Assembly is classifiable as a complete windscreen wiper under CTH 85124000, or as parts thereof under CTH 85129000 – HELD - The imported goods consist only of Arm and Blade Assembly, without the wiper motor assembly, which is the principal driving mechanism of a windscreen wiper. As per the HSN Explanatory Notes, windscreen wipers are described as motor-driven devices, and in the absence of a motor, the imported goods cannot be regarded as complete windscreen wipers. The Heading 85129000 specifically covers “Parts of the articles of heading 8512”, thus, the subject goods clearly fall within this description - The application of Rule 2(a) of GIR presupposes that the imported article, as presented, possesses the essential character of the complete article. However, the essential character must be assessed with reference to functionality, and not merely physical appearance. In the present case, without the motor and related mechanism, the Arm and Blade assembly cannot perform the essential function of a wiper – Further, the appellant's subsequent classification of identical goods under CTH 85129000 was accepted by the Department without objection. The impugned goods are correctly classifiable under CTH 85129000 as parts of windscreen wipers - The classification of the goods under CTH 85129000 as declared by the appellant is upheld. The penalty imposed is also set aside - The appeal is allowed [Read less]

Service Tax Liability for Rental Income – Appellant is engaged in manufacturing excisable goods and has also rented out certain premises. During an audit, Department observed a difference between the rental income shown in the appellant's Profit & Loss account and the ST-3 returns filed - Whether the appellant is liable to pay service tax on the differential rental income – HELD - The appellant had duly accounted for the rental income in its financial records, including the rental income from residential quarters provided to its employees at the Sikkim project, which is exempt from service tax. The authorities below ha... [Read more]

Service Tax Liability for Rental Income – Appellant is engaged in manufacturing excisable goods and has also rented out certain premises. During an audit, Department observed a difference between the rental income shown in the appellant's Profit & Loss account and the ST-3 returns filed - Whether the appellant is liable to pay service tax on the differential rental income – HELD - The appellant had duly accounted for the rental income in its financial records, including the rental income from residential quarters provided to its employees at the Sikkim project, which is exempt from service tax. The authorities below had not properly considered the detailed submissions and documents provided by the appellant. There is no merit in invoking deliberate suppression, as the entire details of rental income had been duly accounted for - The impugned order is set aside and the appeal is allowed in favor of appellant [Read less]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - ... [Read more]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - For invoking the extended period of limitation under Section 73(1), the authorities must arrive at a specific conclusion that the case falls under any of the conditions specified in the proviso to Section 73(1), i.e. fraud, collusion, willful misstatement, suppression of facts or contravention of any provisions of the Act with the intent to evade payment of tax. However, in the present case, the impugned order-in-original did not contain any such finding by the authorities - Mere non-furnishing of documents or information cannot be construed to have given rise to a situation under any or all of these five conditions under the proviso to Section 73(1) to levy service tax by extending the limitation. The authorities had proceeded on the basis of the information available in Form 26AS obtained from the Income Tax Department, without examining whether the services rendered by the petitioner were liable to service tax under the Finance Act, 1994. The tax cannot be imposed on the basis of inferences and analogy, and there must be a declaration of liability under the statute - The invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 by the respondent authorities is not justified - The impugned order-in-original is quashed and the writ petition is allowed [Read less]

Service Tax – Imparting of education – Entitlement of exemption – Appellant society is registered as a charitable institution – Primary objective of Appellant is to impart education to intelligent students from poor families – Department issued show cause notice to Appellant by proposing demand of service tax under category of commercial training or coaching services – Whether services provided by Appellant would be exempted as claimed by Appellant in terms of Notification No.25/2012-ST – HELD – Undisputedly, Appellant was constituted with the sole purpose of advancement of religion, spirituality and charit... [Read more]

Service Tax – Imparting of education – Entitlement of exemption – Appellant society is registered as a charitable institution – Primary objective of Appellant is to impart education to intelligent students from poor families – Department issued show cause notice to Appellant by proposing demand of service tax under category of commercial training or coaching services – Whether services provided by Appellant would be exempted as claimed by Appellant in terms of Notification No.25/2012-ST – HELD – Undisputedly, Appellant was constituted with the sole purpose of advancement of religion, spirituality and charity. Though Appellant was imparting skill and knowledge to members of their community, they were not into any profit making exercise and were primarily a religious/social community engaged in promotion of welfare of their Samaj members. Fact of rendering of certain services like training for competitive exams like IAS/RAS to needy members cannot be considered as rendering of commercial training or coaching centre, given the background of the organization working for purely non-commercial purpose/objectives, being in realm of a charitable organization. Revenue had not disputed the charity objective and programmes carried out by Appellant. Services provided by Appellant were exempted in terms of Mega Notification No.25/2012-ST. Impugned order is liable to be quashed and therefore set aside – Appeal allowed [Read less]

Service Tax - Manufacture vs Service, Outsourcing of Work, Intimation to Department - Appellant had undertaken job work for principal for the manufacture of "Polymer Master Batch" on a job work basis - Appellant outsourced part of the work to another job worker. The principal had paid the central excise duty on the manufactured goods. Department issued a show cause notice to the appellant demanding service tax on the processing of goods, which did not amount to manufacture, along with interest and penalty - Whether the processes undertaken by the appellant amounted to manufacture, which was exempted from service tax, or wh... [Read more]

Service Tax - Manufacture vs Service, Outsourcing of Work, Intimation to Department - Appellant had undertaken job work for principal for the manufacture of "Polymer Master Batch" on a job work basis - Appellant outsourced part of the work to another job worker. The principal had paid the central excise duty on the manufactured goods. Department issued a show cause notice to the appellant demanding service tax on the processing of goods, which did not amount to manufacture, along with interest and penalty - Whether the processes undertaken by the appellant amounted to manufacture, which was exempted from service tax, or whether the appellant had rendered a taxable service by processing the goods – HELD - The processes undertaken by the appellant amounted to manufacture, which was exempted from service tax. The mere fact that the appellant had outsourced part of the work to its sub-contractor did not mean that the appellant had rendered another service on which it had to pay service tax. The same activity undertaken by the appellant cannot be treated by the department both as manufacture for charging central excise duty (which was paid by the principal manufacturer) and also as a service to demand service tax - Department had accepted the intimation of the arrangement between the appellant and the principal, and the principal had paid the central excise duty on these processes. It is also not disputed that the principal manufacturer had paid central excise duty on these processes. It is, therefore, not correct to say that the same processes which have been accepted by the Department as manufacture to charge central excise duty cannot now be called as not manufacture so as to charge service tax from the appellant - The fact that the appellant had sub-contracted part of the work to its sub-contractor contrary to some clauses of the agreement would also make no difference whatsoever. If there is any violation of any condition of the contract, it is a matter of dispute between the appellant and the principal. The department, as a stranger to the contract, has no locus standi in the matter relating to that contract. Even if the appellant had violated some conditions of the contract, the processes which were actually manufacture cannot turn into a service - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Revenue Sharing Arrangement - Appellant is engaged in the provision of healthcare services to patients and availed certain specialized services from specialized service providers (DSPs) within the hospital premises on payment of agreed/fixed consideration/revenue - Whether the appellant's revenue sharing arrangements with the DSPs are subject to service tax under the category of 'Support Services of Business or Commerce' – HELD - The issue involved is no longer res integra and has been settled in favor of the assessee in various earlier decisions. The Circular No. 109/03/2009-ST dated 23.02.2009 recognises ... [Read more]

Service Tax - Revenue Sharing Arrangement - Appellant is engaged in the provision of healthcare services to patients and availed certain specialized services from specialized service providers (DSPs) within the hospital premises on payment of agreed/fixed consideration/revenue - Whether the appellant's revenue sharing arrangements with the DSPs are subject to service tax under the category of 'Support Services of Business or Commerce' – HELD - The issue involved is no longer res integra and has been settled in favor of the assessee in various earlier decisions. The Circular No. 109/03/2009-ST dated 23.02.2009 recognises that transactions between two contracted parties on a principal-to-principal basis are not to be treated as a service. The appellant allowed the DSPs to install their equipment and machines and operate their respective centers in the hospital, and the diagnostic services are provided by the hospital through the patients using the expertise and machinery of the DSPs. The entire revenue from the diagnostic centers is accounted for in the books of the appellant, and the appellant pays for the services provided by the DSPs after retaining its own percentage. The service, if any, has been provided by the DSPs to the appellant and not vice versa - Further, the healthcare services provided by the appellant are fully exempted from service tax. Moreover, the issue involved was relating to the interpretation of the statutory provision, and the appellant was under a bona fide belief that healthcare services are not liable to service tax, therefore, the extended period cannot be invoked - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of Fees Received by Hospitals from Visiting Doctors - Department alleged that the appellant was providing "Business Support Services" to visiting doctors in the form of infrastructural and administrative support, and thus was liable to pay service tax on the fees received from the visiting doctors - Whether the services provided by the appellant to the visiting doctors falls under "Business Support Services" - HELD - The services provided by hospitals to visiting doctors are in the nature of Healthcare services and not Business Support Services. The visiting doctors are engaged by the appellant hos... [Read more]

Service Tax - Taxability of Fees Received by Hospitals from Visiting Doctors - Department alleged that the appellant was providing "Business Support Services" to visiting doctors in the form of infrastructural and administrative support, and thus was liable to pay service tax on the fees received from the visiting doctors - Whether the services provided by the appellant to the visiting doctors falls under "Business Support Services" - HELD - The services provided by hospitals to visiting doctors are in the nature of Healthcare services and not Business Support Services. The visiting doctors are engaged by the appellant hospital to provide healthcare services to patients, and the appellant hospital is availing the professional services of the visiting doctors, for which it pays them as per the agreement - The visiting doctors are working with the appellant’s hospital and it is the visiting doctors who, in fact, are service providers to the appellant’s hospital as the appellant’s hospital is availing the services of such visiting doctors, for which they are paid by the said hospital as per the agreement and not the vice versa – Further, the extended period of limitation could not be invoked in the present case as the issue involved was a matter of interpretation of statutory provisions, which was decided in favor of the assessee in various decisions. The impugned order is set aside and the appeal is allowed [Read less]

GST - Waiver of interest and penalty – Petitioner seeking waiver of interest and penalty under Section 128A of the CGST Act, 2017 – HELD - A part of the demand may have to be dropped in view of the statutory intervention by way of insertion of Sections 16(5) and 16(6) with retrospective effect from 01.07.2017. The remaining tax liability appears to pertain to availing of ineligible Input Tax Credit - The matter back to the second respondent to examine whether the petitioner was otherwise entitled to the Input Tax Credit but for the belated availment. The second respondent to pass appropriate orders on merits as expedit... [Read more]

GST - Waiver of interest and penalty – Petitioner seeking waiver of interest and penalty under Section 128A of the CGST Act, 2017 – HELD - A part of the demand may have to be dropped in view of the statutory intervention by way of insertion of Sections 16(5) and 16(6) with retrospective effect from 01.07.2017. The remaining tax liability appears to pertain to availing of ineligible Input Tax Credit - The matter back to the second respondent to examine whether the petitioner was otherwise entitled to the Input Tax Credit but for the belated availment. The second respondent to pass appropriate orders on merits as expeditiously as possible – The writ petition is disposed of [Read less]

GST – Telangana AAAR – Taxability of Contribution made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) - Whether the statutory contributions made to DMF and NMET as per the MMDR Act, 1957, which are independent trusts having the status of corporeal person, can be treated as consideration for mining lease – HELD - For this mining activities, appellant are required to contribute an amount of 30% of royalty towards DMF and 2% of royalty towards NMET under the specific provisions of the MMDR Act. This payment to both the trusts is on account of their mining operations being carried out ... [Read more]

GST – Telangana AAAR – Taxability of Contribution made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) - Whether the statutory contributions made to DMF and NMET as per the MMDR Act, 1957, which are independent trusts having the status of corporeal person, can be treated as consideration for mining lease – HELD - For this mining activities, appellant are required to contribute an amount of 30% of royalty towards DMF and 2% of royalty towards NMET under the specific provisions of the MMDR Act. This payment to both the trusts is on account of their mining operations being carried out in the State. Thus these contributions get covered under ‘any other activity whether or not it is for a pecuniary benefit and also towards furtherance of their business’. Accordingly, the applicant’s payment to DMF and NMET merits as a part of mining royalty which is paid in the course or furtherance of business – However, in view of Circular no.206/18/2023-GST dt. 31.10.2023 have, it is ruled that the contribution made towards DMF is not liable to GST. The clarification does not cover the contributions towards NMET. Therefore, the contribution towards NMET is liable to GST - In respect of contribution to DMF Trust, the appeal is allowed and it is ruled that GST is not applicable to this extent - In respect of contribution to NMET as per Mines and Minerals (Development & Regulation) Act, 1957 (MMDR Act, 1957), there is no merit in the appeal filed by the appellant and thus the ruling of the lower authority is upheld – Ordered accordingly [Read less]

For computation of refund under Rule 89(4) of the CGST Rules, the expression “relevant period” has to be understood and applied consistently in respect of all the terms including ‘ITC’ as well as ‘turnover’ and also the ‘adjusted turnover’.

GST – Chhattisgarh AAR - Applicability of GST on Diesel and Petrol charges invoiced separately on a per kilometer basis for providing Fleet operation services – Applicant is engaged in fleet operations and would be providing services such as repair and maintenance, insurance, drivers, and fuel charges to clients based on a per kilometer basis. The applicant would raise separate invoices for the services and the fuel charges - Whether the invoice for diesel and petrol charges, invoiced separately on a per kilometer basis, would be considered a supply of goods and liable to VAT, or liable to GST – HELD - GST is not lev... [Read more]

GST – Chhattisgarh AAR - Applicability of GST on Diesel and Petrol charges invoiced separately on a per kilometer basis for providing Fleet operation services – Applicant is engaged in fleet operations and would be providing services such as repair and maintenance, insurance, drivers, and fuel charges to clients based on a per kilometer basis. The applicant would raise separate invoices for the services and the fuel charges - Whether the invoice for diesel and petrol charges, invoiced separately on a per kilometer basis, would be considered a supply of goods and liable to VAT, or liable to GST – HELD - GST is not leviable on diesel and petrol charges as these petroleum products are currently outside the purview of GST as per the provisions of Section 9(2) of the CGST Act, 2017. Petroleum products, including petrol and diesel, continue to be taxed under the pre-GST regime - The transaction in question cannot be treated as a composite supply as defined under Section 2(30) of the CGST Act, 2017, and the concept of bundled services is not relevant. The opinion of the applicant that when diesel is used as part of a bundled service (like fleet management or transport service billed per kilometer), the transaction may be considered a composite supply of service, is not sustainable under law - The fuel component (diesel and petrol) is to be treated independently for tax purposes, and VAT is applicable on such fuel charges, but Input Tax Credit is not eligible on the VAT paid, in terms of the provisions of Sections 16 and 17 of the CGST Act, 2017- Ordered accordingly - Whether the fuel component, when not bundled with the service and invoiced distinctly, is to be treated independently for tax purposes – HELD - Since GST is presently not applicable on fuel charges (fuel component) comprising of petroleum products, the fuel component is to be treated independently and is subject to the existing taxation structure, which includes Central Excise Duty and VAT. [Read less]