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Central Excise - CENVAT Credit on services availed outside the Factory Premises - Services Used in Setting Up of Unit - Appellant, a cement manufacturer, collected fly ash from NTPC's electricity generation plant and incurred costs for loading, transportation, unloading and maintenance of the fly ash pond as per Pollution Control Board specifications - The appellant claimed CENVAT credit for services rendered at the fly ash pond as well as for loading, unloading and freight charges for movement of fly ash – Denial of credit on the ground that services were rendered outside the factory premises and hence CENVAT credit was... [Read more]

Central Excise - CENVAT Credit on services availed outside the Factory Premises - Services Used in Setting Up of Unit - Appellant, a cement manufacturer, collected fly ash from NTPC's electricity generation plant and incurred costs for loading, transportation, unloading and maintenance of the fly ash pond as per Pollution Control Board specifications - The appellant claimed CENVAT credit for services rendered at the fly ash pond as well as for loading, unloading and freight charges for movement of fly ash – Denial of credit on the ground that services were rendered outside the factory premises and hence CENVAT credit was not eligible - Whether CENVAT credit can be taken for services used in or in relation to manufacture of final products even when such services are rendered outside the factory premises - HELD - The definition of input service under Rule 2(l) of CENVAT Credit Rules 2004 does not impose any requirement that the service must be received by the manufacturer within the factory premises. The Rule states that input services include any service used by a manufacturer whether directly or indirectly in or in relation to the manufacture of final products and clearance thereof up to the place of removal. The definition expressly includes services relating to procurement of inputs, setting up of factories and inward transportation of inputs which are often rendered outside factory premises - The mere location of service delivery outside factory premises does not make it ineligible for credit if it is used in or in relation to manufacture. Fly ash is admittedly the raw material and input for manufacturing cement and the services incurred in loading, unloading, transportation and maintenance of fly ash pond are directly used in relation to manufacture of cement. The services do not need to be rendered within the factory premises to qualify as input services - The CENVAT credit is available for services related to fly ash operations and other operations even when conducted outside the factory premises - The impugned order denying CENVAT credit is set aside and the appeal is allowed [Read less]

GST - Bail - ITC Fraud - Petitioners were arrested for alleged offences under Section 132(1)(c) of the CGST Act for fraudulently obtaining GST registrations in names of different persons, generating fake tax invoices and unlawfully availing ITC. The Department opposed bail contending that investigation was still in progress and multiple Aadhaar cards were recovered suggesting possible role in larger conspiracy - Whether bail should be granted in a GST fraud case where the maximum punishment is five years and the petitioners have already undergone more than 55 days of incarceration - HELD - In cases involving ITC fraud and ... [Read more]

GST - Bail - ITC Fraud - Petitioners were arrested for alleged offences under Section 132(1)(c) of the CGST Act for fraudulently obtaining GST registrations in names of different persons, generating fake tax invoices and unlawfully availing ITC. The Department opposed bail contending that investigation was still in progress and multiple Aadhaar cards were recovered suggesting possible role in larger conspiracy - Whether bail should be granted in a GST fraud case where the maximum punishment is five years and the petitioners have already undergone more than 55 days of incarceration - HELD - In cases involving ITC fraud and GST offences under Section 132(1)(c) of the CGST Act carrying a maximum punishment of five years imprisonment, bail should normally be granted unless extraordinary circumstances justify continued incarceration. The Supreme Court has observed that it is surprised when accused persons are denied bail at all levels of courts in such cases where the maximum punishment is only five years - The fact that investigation is still pending does not by itself constitute an extraordinary circumstance especially when the petitioner has already been in custody for a substantial period exceeding 55 days and much of the investigation would have been completed. The offence under Section 132(1)(c) is compoundable under Section 138 of the GST Act which further militates against prolonged incarceration. The prosecution case rests substantially on documentary evidence and there is no requirement for custodial interrogation for documentary evidence. The mere allegation of running shell companies without foundational facts or evidence of involvement of the petitioners in their operation does not justify continued custody - Bail is granted subject to appropriate conditions including personal bond, sureties, deposit of amount and reporting obligations – The petition is allowed [Read less]

Service Tax on Profit from Investment in Venture Capital Fund Units – Demand under Banking and Financial Services - Classification of profit from venture capital fund investment - Appellant was a unit-holder Venture Capital Fund and received profit from sale of units held in the fund. Department sought to tax this profit as consideration for fund management services under Banking and Financial Services - Whether profit from investment in venture capital fund units can be taxable under banking and financial services on the basis of accounting nomenclature - HELD - A unit-holder receiving its rightful share of profits from... [Read more]

Service Tax on Profit from Investment in Venture Capital Fund Units – Demand under Banking and Financial Services - Classification of profit from venture capital fund investment - Appellant was a unit-holder Venture Capital Fund and received profit from sale of units held in the fund. Department sought to tax this profit as consideration for fund management services under Banking and Financial Services - Whether profit from investment in venture capital fund units can be taxable under banking and financial services on the basis of accounting nomenclature - HELD - A unit-holder receiving its rightful share of profits from a venture capital fund has not provided any fund management service for which such profit could be consideration. The appellant did not manage the funds of Adharshila Venture Capital Fund for this specific receipt, rather, the appellant was a unit-holder receiving its rightful share of profits - The nomenclature used in books of accounts cannot determine the taxability of a transaction. The profit was earned as a unit-holder receiving distribution from the fund upon its exit or valuation gain, not as a service provider managing the fund's assets. The revenue relied entirely on accounting nomenclature and the difference between ST-3 returns and audited financial statements to claim taxation but failed to produce any evidence of a taxable service provided by the appellant. The income earned by the appellant on the basis of differential figures between the books of accounts and ST-3 Returns, cannot form the taxable service provided by the appellant - The demand of service tax on profit from investment in Venture Capital Fund is set aside and no penalties are imposable on the appellant – The impugned order is set aside and the appeal is allowed - Intellectual Property Services - Royalty received for use of copyright - Statutory exclusion of copyright from intellectual property rights - Appellant received royalty from another entity for permitting use of computer software and website portal which were registered as copyright works. Department classified the royalty as taxable intellectual property service - Whether royalty for the use of copyright, which is statutorily excluded from the definition of intellectual property right, can be taxed as intellectual property service - HELD - The statutory definition of intellectual property right under Section 65(55a) of the Finance Act specifically states that it means any right to intangible property including trademarks, designs, patents or any other similar intangible property, but does not include copyright. The transaction involved granting of right to use registered copyright of a literary work which constitutes computer programme, which is a literary work under Section 13(1)(a) of the Copyright Act, 1957. The copyright was the essential character of the transaction for which royalty was paid at ten percent of gross revenues, while the trademark transfer was merely incidental with nominal consideration. Therefore, the royalty received for the use of copyright which is expressly excluded from the definition of intellectual property right cannot be taxed under intellectual property service - The demand is set aside - CENVAT Credit - Denial on technical grounds - Procedural defects in documentation - Appellant availed CENVAT credit on service tax paid by the suppliers for input services which were used for provision of output services. The credit was denied on technical grounds such as non-submission of documents, mismatch of addresses and invoices issued in the name of key managerial personnel - Whether substantive CENVAT credit can be denied merely on procedural or clerical discrepancies in invoices when the receipt of services, payment of tax by supplier and use for output services are not disputed - HELD - It is a well-settled principle that the substantive right to avail CENVAT credit cannot be denied due to curable procedural defects. The appellant had availed credit on payment of service tax by the supplier which is not disputed by the revenue. The services were received by the appellant for its business and were used for provision of output services. The invoices were in the name of the appellant's key managerial personnel but the receipt of services and payment of tax by the supplier and use for output services were not disputed by the revenue. Merely on technical grounds or clerical discrepancies, the substantive CENVAT credit cannot be denied when the material facts are not disputed - The credit is allowed - Limitation - Extended period of limitation - Invocation on basis of difference between returns and audited accounts - Whether the extended period of limitation can be invoked on the basis of difference between returns and audited financial statements - HELD - The extended period of limitation can only be invoked if the non-payment of tax is occasioned by fraud, collusion, wilful misstatement or suppression of facts with deliberate intent to evade payment of tax. The burden of proving such mala fide intent lies squarely on the revenue. In this case, the show-cause notice was issued on the basis of audit of books of accounts and scrutiny of profit and loss account. The invoices dated 31.03.2008 on which the demand was based were available in the financial report for the year 2007-2008 itself. No fresh material has been brought by the revenue to allege any suppression of facts with intention to evade tax. The demand of service tax cannot be confirmed merely on the difference between returns and audited accounts. The show-cause notice issued on 17.10.2012 is barred by limitation - Imposition of penalties under Section 77 and Section 78 of Finance Act, 1994 - Penalties under Section 77 and Section 78 were imposed on the appellant on the basis of the alleged short payment of service tax - Whether penalties can be imposed when the underlying demand of service tax is set aside - HELD - When the demand of service tax is not sustainable against the appellant, consequently, no penalties imposed on the appellant on the basis of that demand are also not sustainable. The penalties cannot be allowed to stand independently when the underlying demand on which they were based is set aside. Therefore, the penalties imposed under Section 77 and 78 of the Finance Act, 1994 are set aside. 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Service Tax - Conditions for entitlement to benefit of Exemption Notification - Non-filing of export return in time - Appellant engaged commission agents located overseas for export of goods and claimed exemption under Notification No.18/2009-ST and Notification No.42/2012-ST. Department alleged that appellant did not file EXP-3 Returns within prescribed time and failed to submit documents with EXP-4, thereby violating mandatory conditions of the notification. Department demanded service tax on commission payments - Whether substantive benefit of exemption notification can be denied when the procedural condition of timely ... [Read more]

Service Tax - Conditions for entitlement to benefit of Exemption Notification - Non-filing of export return in time - Appellant engaged commission agents located overseas for export of goods and claimed exemption under Notification No.18/2009-ST and Notification No.42/2012-ST. Department alleged that appellant did not file EXP-3 Returns within prescribed time and failed to submit documents with EXP-4, thereby violating mandatory conditions of the notification. Department demanded service tax on commission payments - Whether substantive benefit of exemption notification can be denied when the procedural condition of timely filing of EXP-3 Return is breached - HELD - The conditions prescribed in exemption notifications must be examined and distinguished between mandatory substantive requirements and procedural requirements. The substantive requirements being those which go to the heart of the exemption such as engagement of commission agents outside India and payment of commission to such agents. The procedural requirements being those pertaining to filing of forms and returns within time - When an assessee has complied with the substantive requirements of an exemption notification, denial of the benefit on account of procedural lapses such as delayed filing of returns or lack of proper authentication of documents would be inequitable and contrary to settled principles of tax law. Procedural requirements which are technical in nature cannot be allowed to override the substantive benefit earned by the assessee. The observations of the Commissioner (Appeals) were self-contradictory as he found on one hand that documents were not authenticated and on the other that they were not submitted. The original authority correctly concluded that delay in filing EXP-3 does not amount to violation of mandatory substantive provisions and cannot disentitle the appellant from exemption benefit when the substantive conditions are satisfied - The appeal is allowed and the demand is set aside [Read less]

Service Tax - Invocation of extended period of limitation - Appellant claimed exemption under the small-scale exemption notification and asserted that income from weigh bridge service was not taxable, while paying service tax on Technical Inspection and Certification Agency Service - Department raised show cause notice demanding service tax on weigh bridge income, alleging that exemption was forfeited by payment of tax on other services, and invoked extended period of limitation claiming suppression of facts with intent to evade tax - Whether extended period of limitation can be invoked when issue involves legal interpreta... [Read more]

Service Tax - Invocation of extended period of limitation - Appellant claimed exemption under the small-scale exemption notification and asserted that income from weigh bridge service was not taxable, while paying service tax on Technical Inspection and Certification Agency Service - Department raised show cause notice demanding service tax on weigh bridge income, alleging that exemption was forfeited by payment of tax on other services, and invoked extended period of limitation claiming suppression of facts with intent to evade tax - Whether extended period of limitation can be invoked when issue involves legal interpretation of taxability and the assessee was a bona fide registered assessee regularly filing returns and showing all particulars in financial records - HELD - Extended period of limitation under the proviso to Section 73 can be invoked only when there is clear evidence of suppression of facts or undervaluation with deliberate intent to evade payment of tax. When the issue involves question of legal interpretation regarding taxability of a service and the assessee is a small operator registered under service tax regime regularly filing returns and maintaining proper books of accounts showing all particulars, there is no basis to allege suppression with intent to evade tax - The mistake in classification of services or interpretation of taxability, when made bona fide by a conscientious taxpayer, cannot justify invocation of extended period. The fact that the issue came to light through audit further indicates absence of any deliberate suppression. The extended period cannot be invoked - The appeal is allowed and the impugned order is set aside [Read less]

GST - Parallel Proceedings - Forum Shopping - Maintainability of Writ Petition when Statutory Appeal Pending - Whether a writ petition challenging the same assessment orders is maintainable when the petitioner has already filed statutory appeals challenging the identical orders - HELD - When a petitioner has already filed statutory appeals challenging assessment orders before the appellate authority and the very same assessment orders are subsequently challenged by way of writ petition before the High Court, the petitioner cannot be permitted to simultaneously invoke the jurisdiction of multiple forums as such practice is ... [Read more]

GST - Parallel Proceedings - Forum Shopping - Maintainability of Writ Petition when Statutory Appeal Pending - Whether a writ petition challenging the same assessment orders is maintainable when the petitioner has already filed statutory appeals challenging the identical orders - HELD - When a petitioner has already filed statutory appeals challenging assessment orders before the appellate authority and the very same assessment orders are subsequently challenged by way of writ petition before the High Court, the petitioner cannot be permitted to simultaneously invoke the jurisdiction of multiple forums as such practice is not in the interest of justice. The question regarding whether parallel proceedings violate Section 6(2)(b) of the CGST Act or whether the orders were passed without jurisdiction is a matter that can be appropriately examined and decided by the appellate authority when the statutory appeals are taken up for adjudication - Simultaneous pursuit of parallel remedies defeats the purpose of the hierarchical appellate structure and creates forum shopping which is contrary to principles of judicial economy and justice - The petitioner is granted liberty to raise all its contentions before the appellate authority - The writ petitions are disposed of [Read less]

GST - Bail - Fraudulent availment of input tax credits through fake invoices - Right to bail in cases of offences under Section 132(1) of CGST Act, 2017 - Petitioner alleged to have created bogus firms and fraudulently availed and passed on fake input tax credits through fake invoices without actual supply of goods or services. Department contended that the offence was serious, involving fraudulent creation and operation of multiple fake entities and large quantum of fake ITC, warranting denial of bail - Whether bail should be granted in cases under Section 132(1) of CGST Act - HELD - In cases under Section 132(1), in norm... [Read more]

GST - Bail - Fraudulent availment of input tax credits through fake invoices - Right to bail in cases of offences under Section 132(1) of CGST Act, 2017 - Petitioner alleged to have created bogus firms and fraudulently availed and passed on fake input tax credits through fake invoices without actual supply of goods or services. Department contended that the offence was serious, involving fraudulent creation and operation of multiple fake entities and large quantum of fake ITC, warranting denial of bail - Whether bail should be granted in cases under Section 132(1) of CGST Act - HELD - In cases under Section 132(1), in normal course, accused should get bail unless there are extraordinary circumstances. The quantum of fake input tax credits involved and the serious nature of allegations are not by themselves extraordinary circumstances warranting denial of bail. Where investigation is complete, case is based on electronic and documentary evidence which has been appended with the complaint, witnesses to be examined are government officers with negligible chances of tampering or influence, the offence is punishable with maximum imprisonment of five years, the accused have undergone substantial period of custody and have roots in society with no criminal antecedents, bail should be granted - Further detention in custody is not warranted when allegations are to be tested at trial and circumstances do not indicate risk of tampering with evidence or influencing witnesses. Petitioner is released on regular bail with standard conditions – The petitions are allowed [Read less]

GST – Uttarakhand AAR - Input Tax Credit on upfront lease amount - Admissibility of ITC on GST paid on upfront lease amount for construction of factory on leased land - Meaning of term "plant and machinery" under Section 17(5)(d) of CGST Act - Applicant sought ITC of GST charged on upfront payment of lease amount for long term lease of industrial plot from lessor where applicant intended to construct factory building on such leased land. Department argued that ITC was blocked under Section 17(5)(d) as land and building are specifically excluded from "plant and machinery" - Whether ITC is admissible on GST paid on upfront... [Read more]

GST – Uttarakhand AAR - Input Tax Credit on upfront lease amount - Admissibility of ITC on GST paid on upfront lease amount for construction of factory on leased land - Meaning of term "plant and machinery" under Section 17(5)(d) of CGST Act - Applicant sought ITC of GST charged on upfront payment of lease amount for long term lease of industrial plot from lessor where applicant intended to construct factory building on such leased land. Department argued that ITC was blocked under Section 17(5)(d) as land and building are specifically excluded from "plant and machinery" - Whether ITC is admissible on GST paid on upfront lease amount for construction of immovable property other than plant and machinery - HELD - Input tax credit shall not be available in respect of goods or services received for construction of immovable property other than plant and machinery on own account when used in course or furtherance of business. As per Explanation in Section 17(6), the expression "plant and machinery" under the Act specifically excludes land, building and any other civil structures. Judicial pronouncements in similar cases before Advance Ruling Authorities in other States have consistently held that ITC of GST paid on lease rental for land is blocked under Section 17(5)(d) as legislative intent is to block ITC in respect of services pertaining to land received by taxable person for construction of immovable property - In present case applicant intends to construct factory building on leased land which is an immovable property other than ‘plant and machinery’ and therefore ITC is blocked. Applicant is not eligible for claim of ITC of GST paid on upfront payment of lease amount – Ordered accordingly - Jurisdiction of Authority for Advance Ruling - Application seeking Ruling on admissibility of refund of GST - Applicant sought ruling from Authority for Advance Ruling regarding whether it could claim refund of GST paid on upfront lease amount for industrial plot - Whether Authority for Advance Ruling has jurisdiction to pronounce ruling on admissibility of refund under Section 97(2) of CGST Act, 2017 - HELD - Admissibility of refund is governed by Section 54 of the CGST Act and is not covered under any clause of Section 97(2) of the Act. Section 97(2) permits Authority to pronounce ruling only on seven specified matters namely classification of goods or services, applicability of notifications, determination of time and value of supply, admissibility of input tax credit, determination of tax liability, requirement of registration, and whether any act results in supply of goods or services. Seeking ruling on admissibility of refund of tax paid by applicant is not within purview of Section 97(2) of the Act and Authority has no jurisdiction to pronounce ruling thereon. Application relating to admissibility of refund is rejected. [Read less]

Central Excise – Classification of Nicotine Sulphate and Applicability of Extended Period of Limitation – Appellant manufactured Organic Manure and Nicotine Sulphate and cleared products in DTA and for export – Dept investigated case of mis-classification of Nicotine Sulphate, alleged it should be classified under CTH 24039990 instead of CTH 29399900 declared by appellant in returns - Whether Nicotine Sulphate is correctly classifiable under CTH 24039990 covering tobacco extracts and essences or under CTH 29399900 covering vegetable alkaloids – HELD – Appellant had intimated department about manufacture of Nicoti... [Read more]

Central Excise – Classification of Nicotine Sulphate and Applicability of Extended Period of Limitation – Appellant manufactured Organic Manure and Nicotine Sulphate and cleared products in DTA and for export – Dept investigated case of mis-classification of Nicotine Sulphate, alleged it should be classified under CTH 24039990 instead of CTH 29399900 declared by appellant in returns - Whether Nicotine Sulphate is correctly classifiable under CTH 24039990 covering tobacco extracts and essences or under CTH 29399900 covering vegetable alkaloids – HELD – Appellant had intimated department about manufacture of Nicotine Sulphate under CTH 29397002 vide letter dated 07.04.2006 addressed to Deputy Commissioner, Central Excise and monthly Excise Returns (ER-1) filed for disputed period clearly disclosed manufacture and clearance of Nicotine Sulphate under CTH 29399900. Since the Classification was already known to Department therefore no ground to allege suppression or misstatement to invoke extended period – Information declared in statutory returns, if suppression cannot be alleged for non-furnishing of any other information not required to be supplied in statutory return. When facts are known to both sides, omission to do what ought to have been done cannot be considered as suppression – Demand for period June-2015 to June-2017 is barred by limitation – Further, the appellant correctly classified Nicotine Sulphate under CTH 29399900 and demand of differential duty is set aside – The appeal is allowed - Classification - Nicotine Sulphate obtained by adding dilute sulphuric acid to Nicotine extracted from tobacco is vegetable alkaloid and appropriately classifiable under CTH 2939. Manufacturing process clearly indicates that Nicotine Sulphate is vegetable alkaloid extracted from tobacco – Chapter Note 1(a) restricting heading to separate chemically defined compounds does not apply as sub-heading C under General Notes to Chapter 29 provides exceptions for certain products which remain classified in Chapter 29 even when not separate chemically defined compounds, alkaloids being one such exception – CTH 2403 covers Other Manufactured Tobacco and Tobacco Substitutes, Homogenised or Reconstituted Tobacco and Tobacco Extracts and Essences – Nicotine Sulphate obtained by the appellant is vegetable alkaloid and therefore, it is appropriately classifiable under CTH 2939 - Validity of Test Report - Test report on sample drawn from third party premises on 08.03.2016 is unreliable as samples drawn in absence of manufacturer or his representative violated CBIC Supplementary Manual procedure requiring samples to be drawn in presence of owner or manager of factory – Sample tested after more than one year from date of drawl violating IS 10627:1983 prescribing testing within 90 days of manufacture – Chemical examiner's opinion on classification is not relevant, role being only to supply analytical data not to determine classification –Appellant correctly classified Nicotine Sulphate under CTH 29399900 and demand of differential duty is set aside - Related party sales – The related party sales, showing one common director between appellant and BGP Healthcare Pvt Ltd does not establish related party status as Section 4(3)(b) of Central Excise Act requires mutuality of business interest which is absent – Allegation of related party sale without supportive evidence cannot be sustained – Differential duty demand on undervaluation for related party sales is also set aside and the appeal is allowed [Read less]

Customs - Confiscation of Gold - Notified goods recovered from conscious possession of appellant at interception - Whether seized gold biscuits were properly liable to absolute confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962 given appellant's contention that the Department failed to prove its foreign origin or smuggled nature - HELD - Gold being notified goods under Section 123 of the Customs Act, the statutory burden squarely rested upon the appellants to establish the licit importation or lawful acquisition and possession thereof. Despite adequate opportunity, no documentary evidence whatsoever was... [Read more]

Customs - Confiscation of Gold - Notified goods recovered from conscious possession of appellant at interception - Whether seized gold biscuits were properly liable to absolute confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962 given appellant's contention that the Department failed to prove its foreign origin or smuggled nature - HELD - Gold being notified goods under Section 123 of the Customs Act, the statutory burden squarely rested upon the appellants to establish the licit importation or lawful acquisition and possession thereof. Despite adequate opportunity, no documentary evidence whatsoever was brought on record to substantiate the lawful import, procurement or possession of the seized gold - The Dept had not rested its case merely upon the statutory presumption under Section 123 but had brought on record various attendant circumstances, including statements recorded under Section 108 and the recovery effected from the conscious possession of appellant, which consistently pointed towards the illicit nature of the seized gold. No cogent material was placed to indicate a lawful source or to satisfactorily explain the possession and transportation of such substantial quantity of notified goods. The cumulative effect of evidence, viewed in its proper perspective, lent due corroboration to the Revenue's case. Moreover, appellant had relinquished and disowned any claim over the seized gold during adjudication, and a subsequent attempt to question the order of absolute confiscation despite such unequivocal relinquishment did not inspire confidence - The seized gold biscuits have rightly been held liable to confiscation under Sections 111(b) and 111(d) of the Customs Act - The order directing absolute confiscation is affirmed and the appeal is dismissed [Read less]

GST - Service - Notice and Order Through Common Portal - Effectual Service - Whether uploading of SCN and order-in-original on the common portal amounts to effectual service when the petitioner has no actual knowledge of such uploading and no acknowledgment of receipt has been obtained - HELD - Service of SCN or order-in-original by merely uploading on the common portal cannot be deemed to constitute proper service merely on account of uploading unless its receipt is acknowledged or a reply is filed by the assessee in response to the SCN. The CGST Rules expressly limit the utility of the common portal to specific functions... [Read more]

GST - Service - Notice and Order Through Common Portal - Effectual Service - Whether uploading of SCN and order-in-original on the common portal amounts to effectual service when the petitioner has no actual knowledge of such uploading and no acknowledgment of receipt has been obtained - HELD - Service of SCN or order-in-original by merely uploading on the common portal cannot be deemed to constitute proper service merely on account of uploading unless its receipt is acknowledged or a reply is filed by the assessee in response to the SCN. The CGST Rules expressly limit the utility of the common portal to specific functions such as registration, filing returns, payment of tax, refunds, appeals and e-way bills but do not authorize service of SCN or orders through the portal. Rule 142 of the CGST Rules 2017 provides that orders must be communicated electronically but uploading on the common portal is not equivalent to electronic communication. The Government notification issued under Section 146 of the CGST Act specifically identifies the manner of service and uploading on common portal is not an authorized mode of service - The writ petition is disposed of in terms of the precedent established in Luxmi Traders and The Amar Cooperative LC Society cases – Ordered accordingly [Read less]

Service Tax - Appeal before High Court - Maintainability - Questions relating to rate of duty and taxability - Whether appeal before High Court is maintainable against CESTAT order determining the taxability of a particular service under Section 35L of the Central Excise Act - HELD - where the CESTAT determines the taxability of a particular service, an appeal against such determination would lie before the Hon'ble Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court - The Allahabad High Court decision in NKG Infrastructure Ltd. v. Commissioner did not consider the maintainability ... [Read more]

Service Tax - Appeal before High Court - Maintainability - Questions relating to rate of duty and taxability - Whether appeal before High Court is maintainable against CESTAT order determining the taxability of a particular service under Section 35L of the Central Excise Act - HELD - where the CESTAT determines the taxability of a particular service, an appeal against such determination would lie before the Hon'ble Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court - The Allahabad High Court decision in NKG Infrastructure Ltd. v. Commissioner did not consider the maintainability issue before the High Court and cannot be relied upon to establish a contrary principle. No statutory provision or binding precedent supports the contention that appeals on taxability issues are maintainable before the High Court – The appeals on questions relating to taxability are governed by Section 35L and must be taken before the Supreme Court - The present appeal before the High Court is not maintainable and dismissed [Read less]

Central Excise - CENVAT Credit on Structural Steel Items - Capital Goods - Immovable Property - Whether structural steel items and materials used for fabrication of support structures that become permanently affixed to the ground and form part of immovable property can be claimed as CENVAT credit on inputs or capital goods, and whether the amendment to CENVAT Credit Rules 2004 dated 07.07.2009 is clarificatory or prospective in operation - HELD - The issue of CENVAT credit eligibility for structural steel items used in fabrication of support structures for capital goods is no longer res integra having been considered in ca... [Read more]

Central Excise - CENVAT Credit on Structural Steel Items - Capital Goods - Immovable Property - Whether structural steel items and materials used for fabrication of support structures that become permanently affixed to the ground and form part of immovable property can be claimed as CENVAT credit on inputs or capital goods, and whether the amendment to CENVAT Credit Rules 2004 dated 07.07.2009 is clarificatory or prospective in operation - HELD - The issue of CENVAT credit eligibility for structural steel items used in fabrication of support structures for capital goods is no longer res integra having been considered in catena of decisions by the Tribunal, High Courts and Supreme Court. The principle that capital goods become immovable property is irrelevant to the question of credit eligibility which must be determined at the stage before such goods become part of immovable property. The structural steel items used for fabrication of structures for installation of capital goods are directly or indirectly used in manufacture of final products and fall within the definition of inputs under the CENVAT Credit Rules - The amendment to the CCR, 2004 by Notification No. 16/2009-CE (NT) dtd 07.07.2009 is not clarificatory but prospective in operation and cannot apply retrospectively to periods prior to 07.07.2009 - For the period prior to 07.07.2009, the appellant is duly eligible to avail CENVAT credit on steel, cement, electrodes and gases used for fabrication of structural items - The impugned order denying CENVAT credit is set aside to the extent of demands up to 07.07.2009 – The appeal is partly allowed [Read less]

GST - Procedure for granting opportunity of hearing under Section 75(4) of CGST Act, 2017 - Requirement to intimate date, time and venue of personal hearing - Show-cause notice and three subsequent reminders did not specify date, time or venue of personal hearing. Petitioners replied selecting "No" against personal hearing column - Whether omission to intimate date, time and venue of personal hearing in show-cause notice and reminders vitiates proceedings or whether petitioner's selection of "No" against personal hearing absolves authority from duty to grant opportunities of hearing - HELD – The Section 75(4) of CGST Act... [Read more]

GST - Procedure for granting opportunity of hearing under Section 75(4) of CGST Act, 2017 - Requirement to intimate date, time and venue of personal hearing - Show-cause notice and three subsequent reminders did not specify date, time or venue of personal hearing. Petitioners replied selecting "No" against personal hearing column - Whether omission to intimate date, time and venue of personal hearing in show-cause notice and reminders vitiates proceedings or whether petitioner's selection of "No" against personal hearing absolves authority from duty to grant opportunities of hearing - HELD – The Section 75(4) of CGST Act mandates that opportunity of hearing shall be granted where request is received or where any adverse decision is contemplated. As per Section 75(5), adjudication authority must grant up to three adjournments meaning four dates for personal hearing. It is incumbent upon authorities to intimate date, time and venue of personal hearing in show-cause notice before passing final order against assessee. Failure to specify date, time and venue of personal hearing in notice and reminders deprives assessee of effective opportunity of hearing – The selection of "No" against personal hearing column does not absolve authority from statutory duty to grant three opportunities of hearing as contemplated under Section 75(4). Authority must pass reasoned and speaking order considering all materials on record, not merely order that assessee remained absent – The impugned order is non-speaking order which is absolutely unreasoned cannot be sustained and quashed – The matter is remanded to jurisdictional State Tax Officer with direction to pass fresh order after affording opportunity of hearing in accordance with law – The petition is disposed of [Read less]

GST - Anti-Profiteering - Obligation to pass on benefit of additional Input Tax Credit to homebuyers under Section 171(1) of CGST Act - Complaint alleging that construction service supplier did not pass on benefit of ITC to homebuyers by reducing prices on introduction of GST - DGAP investigation found that supplier became eligible to avail ITC after GST implementation whereas it had no CENVAT or VAT credit eligibility in pre-GST period - Whether benefit of additional ITC was required to be passed on to homebuyers - HELD - Where a supplier becomes entitled to benefit of ITC on account of implementation of GST on inputs and... [Read more]

GST - Anti-Profiteering - Obligation to pass on benefit of additional Input Tax Credit to homebuyers under Section 171(1) of CGST Act - Complaint alleging that construction service supplier did not pass on benefit of ITC to homebuyers by reducing prices on introduction of GST - DGAP investigation found that supplier became eligible to avail ITC after GST implementation whereas it had no CENVAT or VAT credit eligibility in pre-GST period - Whether benefit of additional ITC was required to be passed on to homebuyers - HELD - Where a supplier becomes entitled to benefit of ITC on account of implementation of GST on inputs and input services, such benefit is required to be passed on to recipients by way of commensurate reduction in prices. Section 171 casts statutory obligation upon every registered supplier to ensure that benefit arising from availability of additional ITC is not retained by supplier but is passed on to recipients. Respondent not disputing entitlement to additional ITC or computation by DGAP. Accordingly, supplier became entitled to benefit of additional ITC upon implementation of GST and such benefit was required to be passed on to eligible homebuyers in accordance with Section 171(1) of CGST Act, 2017 – Ordered accordingly - Scope of Section 171(1) of CGST Act - Meaning of "commensurate reduction in prices" - Supplier contended that it passed on ITC benefit by carrying out structural upgrades and additional fittings in flats free of cost and that value of such works exceeded profiteered amount - Whether additional structural works and free fittings constitute passing on benefit of ITC in manner contemplated under Section 171(1) of CGST Act - HELD - Section 171(1) requires benefit of ITC to be passed on by way of commensurate reduction in prices. Supplier cannot substitute such reduction in prices by extending benefit in any other form such as increase in quantity, supply of free material or any collateral benefit. The legislative mandate is that reduction of tax rate or benefit of ITC must not only be reflected in reduction of prices but must also reach recipient. Statutory requirement cannot be tampered with by supplier by substituting benefit in form of reduction of actual price with any other form such as additional or free material – The additional structural works and fittings carried out by supplier, even if actually executed and even if value thereof exceeds profiteered amount, cannot be treated as passing on benefit in manner contemplated under Section 171(1) – The supplier is not at liberty to substitute prescribed mode by providing additional works or other benefits. Accordingly, additional structural works and fittings do not amount to passing on benefit of ITC by way of commensurate reduction in prices - Calculation of profiteered amount - Inclusion of GST component in amount to be refunded to homebuyers - Supplier required to pass on profiteered amount with corresponding GST component along with interest - Consideration collected by supplier from homebuyers was inclusive of GST - Whether profiteered amount should be refunded without GST component or inclusive of GST - HELD - Consideration collected by supplier from homebuyers was inclusive of GST. Profiteered amount being part of consideration realised from homebuyers is liable to be returned along with corresponding GST component. Both Central and State Government had no intent of collecting additional GST on higher price as they had sacrificed their revenue in favour of buyer - By compelling buyers to pay additional GST on higher price, supplier has not only defeated intent of Governments but has also acted against interest of consumer. GST collected by supplier on additional realization has rightly been included in profiteered amount. Respondent is liable to pass on profiteered amount together with GST component to eligible homebuyers - Interest payable on profiteered amount - Supplier liable to pay interest at prescribed rate from date of collection of higher amount - Rule 133(3)(b) of CGST Rules provides that registered person shall return amount not passed on together with interest at prescribed rate from date of collection of higher amount till date of its return - Whether interest is payable on profiteered amount and at what rate - HELD - Where benefit of reduction in tax or ITC has not been passed on by way of commensurate reduction in prices, registered person shall return amount not passed on together with interest. Section 171 is broad enough to empower Central Government to prescribe interest to ensure that suppliers are deterred from pocketing benefits meant for consumers - Respondent is liable to pay interest at rate of eighteen per cent per annum on profiteered amount from date of collection till date of its actual payment in terms of Rule 133(3)(b) of CGST Rules, 2017 - Penalty under Section 171(3A) of CGST Act - Penalty provision came into force on 01.01.2020 but profiteering activity occurred in period prior to enforcement - Investigation period extends from 01.07.2017 to 02.01.2020. Construction of project completed and occupancy certificate applied for prior to coming into force of penalty provision on 01.01.2020 - Whether penalty under Section 171(3A) is attracted - HELD - Section 171(3A) was inserted by Finance (No. 2) Act, 2019 and came into force on 01.01.2020. Although proceedings culminated just one day after insertion of penalty provision, conduct constituting alleged contravention had already concluded prior to coming into force of said provision. In peculiar facts and circumstances where project had been completed and Respondent had already applied for Occupancy Certificate before 01.01.2020, imposition of penalty under Section 171(3A) would not be warranted. Accordingly, no penalty under Section 171(3A) of CGST Act, 2017 is leviable in facts of present case. [Read less]

Service Tax – Exemption for Coaching Leading to Educational Qualification Recognized by Law – Whether coaching imparted for CA-CPT, ICWA-Foundation and Intermediate (10+2) examinations is eligible for exemption under Notification No. 33/2011-ST granting exemption to coaching or training leading to grant of certificate, diploma, degree or educational qualification recognized by law – HELD – The notification exempts coaching leading to grant of certificate, diploma, degree or educational qualification recognized by law and contains no restriction limiting exemption only to final stage of educational programme – CPT... [Read more]

Service Tax – Exemption for Coaching Leading to Educational Qualification Recognized by Law – Whether coaching imparted for CA-CPT, ICWA-Foundation and Intermediate (10+2) examinations is eligible for exemption under Notification No. 33/2011-ST granting exemption to coaching or training leading to grant of certificate, diploma, degree or educational qualification recognized by law – HELD – The notification exempts coaching leading to grant of certificate, diploma, degree or educational qualification recognized by law and contains no restriction limiting exemption only to final stage of educational programme – CPT is the mandatory first stage of the statutory course under the Chartered Accountants Act, 1949 and regulations framed thereunder, and a candidate cannot proceed to IPCC unless he successfully clears CPT. Thus CPT is not an independent or optional examination but forms an inseparable component of the statutory educational qualification – ICWA-Foundation is also a statutory stage prescribed under the Cost Accountancy Regulations and merely because the certificate issued at the CPT stage enables progression to the next level, it cannot deprive it of the character of an educational qualification recognized by law – The Tribunal in Sri Chaitanya Educational Committee case examined the notification and held that coaching imparted for recognized educational qualifications is not liable to service tax – The adjudicating authority erred in denying exemption merely on the ground that CPT is only qualifying examination as the notification does not employ the expression 'final qualification' and reading an additional condition into the notification amounts to re-writing it, which is impermissible – Further, for subsequent periods the department itself accepted the exemption in respect of similar coaching and refunded excess tax paid. In absence of any change either in facts or in law, the Revenue cannot adopt inconsistent stands for different periods – The demands of service tax, together with interest and penalties, are set aside and the appeals filed by appellant are allowed [Read less]

Service Tax – Denial of exemption to services provided to SEZ Unit, Non-furnishing of Form A-2 – Whether exemption available in respect of taxable services provided to SEZ unit can be denied solely because Form A-2 pertaining to relevant financial year was not furnished – HELD – Section 26 of SEZ Act grants substantive statutory exemption and conditions governing such exemption can only be prescribed under SEZ Act and SEZ Rules – Revenue cannot curtail or deny statutory exemption by imposing additional procedural requirements through notifications issued under Finance Act – Non-filing of Form A-2 cannot result ... [Read more]

Service Tax – Denial of exemption to services provided to SEZ Unit, Non-furnishing of Form A-2 – Whether exemption available in respect of taxable services provided to SEZ unit can be denied solely because Form A-2 pertaining to relevant financial year was not furnished – HELD – Section 26 of SEZ Act grants substantive statutory exemption and conditions governing such exemption can only be prescribed under SEZ Act and SEZ Rules – Revenue cannot curtail or deny statutory exemption by imposing additional procedural requirements through notifications issued under Finance Act – Non-filing of Form A-2 cannot result in denial of exemption otherwise available under SEZ Act. The SEZ Act being special enactment overrides inconsistent provisions by virtue of Section 51 of Act – In present matter no finding was recorded that services were not provided to eligible SEZ unit or services were not used for authorized operations or appellant was otherwise ineligible for exemption. The sole basis for confirming demand was absence of Form A-2 which is directly contrary to law declared by Hon'ble High Court – Once established that services were rendered to eligible SEZ unit for authorized operations, denial of exemption merely on account of non-production of Form A-2 is not sustainable in law – Demand of service tax together with consequential interest and penalty is set aside – Late fee for delayed filing of ST3 returns shall stand restricted to amount legally permissible under Section 70 of Finance Act, 1994 if found to have been imposed in excess of statutory limit – Impugned order set aside and appeal allowed by way of remand for limited purpose of re-quantification of late fee – The appeal is allowed by remand [Read less]

Central Excise – Clandestine Removal of Pig Iron, Mixed Coke and Crude Tar – DGCEI issued Show Cause Notice proposing recovery of central excise duty under Section 11A(4) of Central Excise Act with interest and penalty alleging that Appellant had clandestinely cleared goods without payment of duty – Appellant contended that shortage was only notional due to accounting methodology - Whether allegation of clandestine removal of goods by Appellant is sustainable on basis of difference between stock recorded by external agency on volumetric basis and figures reflected in statutory records without any tangible evidence �... [Read more]

Central Excise – Clandestine Removal of Pig Iron, Mixed Coke and Crude Tar – DGCEI issued Show Cause Notice proposing recovery of central excise duty under Section 11A(4) of Central Excise Act with interest and penalty alleging that Appellant had clandestinely cleared goods without payment of duty – Appellant contended that shortage was only notional due to accounting methodology - Whether allegation of clandestine removal of goods by Appellant is sustainable on basis of difference between stock recorded by external agency on volumetric basis and figures reflected in statutory records without any tangible evidence – HELD – Allegation of clandestine removal is a serious charge which cannot be sustained on mere presumptions and assumptions, but requires concrete, positive and tangible evidence such as evidence of excess use of raw material, actual removal of unaccounted finished goods from factory, discovery of such goods outside factory, sale to identified parties, receipt of sale proceeds, excess electricity consumption or proof of actual transportation – In present case, no such tangible evidence has been produced by Revenue, merely difference between stock figures on volumetric basis and statutory records cannot prove clandestine removal – External agency's stock verification was conducted on volumetric basis not actual weighment, volumetric estimation is inherently approximate. Appellant's DSA was based on conversion ratios due to absence of weighment facility for pig iron production, different basis adopted for production estimation, consumption, clearance and stock taking, therefore discrepancy between stock taking figures and production figures should not immediately lead to conclusion that difference was removed clandestinely – Appellant is public sector undertaking, therefore possibility of mala fide conduct is remote – Further, statements recorded during investigation violated procedure prescribed under Section 9D(1)(b) of CEA, 1944 as the procedure requires summoning of persons who made statement, examining them as witness and opinion that admission is in interests of justice, which was not done – Extended period of limitation is not invocable as there is no evidence of positive act of suppression or fraud on part of appellant, in fact Appellant itself detected shortage and adjusted in books reflected in Balance Sheet and entire investigation emanates from such disclosure – Revenue failed to discharge burden of proving clandestine manufacture and removal by tangible evidence – Demand of central excise duty confirmed in impugned order is set aside and penalty imposed is also set aside – The appeal is allowed [Read less]

Customs - Classification of ‘Final Gear Kit, Differential', Application of General Explanatory Notes to Section XVII - Imported goods comprising Final Gear Kit, Differential, Gear Differential Side, Pinion Differential and other gears were declared under CTI 84834000 by importer - Department reclassified the said goods under CTI 87085000 arguing they were parts of rear axle assembly used in motor vehicles - Appellant-importer contended that gears and gearing are specifically covered under Heading 8483 and cannot be classified as vehicle parts under Section XVII and further that goods were integral to transmission functio... [Read more]

Customs - Classification of ‘Final Gear Kit, Differential', Application of General Explanatory Notes to Section XVII - Imported goods comprising Final Gear Kit, Differential, Gear Differential Side, Pinion Differential and other gears were declared under CTI 84834000 by importer - Department reclassified the said goods under CTI 87085000 arguing they were parts of rear axle assembly used in motor vehicles - Appellant-importer contended that gears and gearing are specifically covered under Heading 8483 and cannot be classified as vehicle parts under Section XVII and further that goods were integral to transmission function not exclusive to motor vehicles - Whether goods specifically covered under Heading 8483 can be reclassified as parts under Heading 8708 of Section XVII - HELD - Gears and Gearing are specifically mentioned in Heading 8483 and are more specifically covered under Tariff Item 8483 40 00 in Section XVI. Section Note 1(l) of Section XVI explicitly excludes articles of Section XVII from that Section. The HSN Explanatory Notes to Heading 84.83 specifically state that transmission equipment including differentials designed for use solely or principally with vehicles fall in Section XVII but this exclusion does not apply to gears as such - The General Explanatory Notes to Section XVII under category Parts and Accessories stipulate that parts must comply with all three conditions cumulatively. The condition that parts must not be more specifically included elsewhere in the Nomenclature is critical. Since the impugned goods are gears and gearing which are specifically and more precisely covered under Heading 8483, the third condition is not satisfied. Therefore the goods cannot be classified as parts and accessories under Heading 8708. The fact that goods are suitable for use with motor vehicles does not override the more specific coverage under Heading 8483. The classification under CTI 84834000 is correct and the reclassification is untenable - The impugned goods are classifiable under Heading 8483 in terms of Rule 1 itself there is no need to revert to the subsequent Rules of interpretation - The impugned demand for differential customs duty is set aside and the classification under CTI 84834000 is upheld - When the reclassification of goods is set aside and the original classification is found to be correct, the consequent demand for differential duty cannot be sustained - The demand is set aside and the appeals are allowed - Interpretation of explanatory notes to HSN - General explanatory notes given below the General Rules for the Interpretation of the First Schedule stipulates that where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by “-“ the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading, with the further explanation that where the description of an article or group of articles is preceded by “- -“, the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has “-“. Thus, any goods as listed against a heading, sub-heading or tariff item in the schedules of chapters of Section XVII, including ‘parts thereof’, would qualify as “articles of Section XVII”, so long as they are liable to be classified thereunder in accordance with the relevant chapter notes and section notes, read with the explanatory notes to HSN where they are also applicable - Customs - Confiscation and Redemption Fine - Applicability when underlying duty demand is unsustainable - Department held the impugned goods liable for confiscation under Section 111(m) of the Customs Act on the ground that they were imported with short payment of customs duties and the goods were misclassified. A redemption fine of substantial amount was imposed in lieu of confiscation - Whether goods can be held liable for confiscation when the underlying classification and duty demand on which the confiscation is based is found to be erroneous and unsustainable - HELD - Confiscation under Section 111(m) can be ordered only when the goods are found to have been imported with under-payment of duties or in violation of customs law. When the underlying duty demand is set aside as erroneous, the basis for confiscation ceases to exist. The goods cannot be held liable for confiscation when they were correctly classified and no under-payment of duty occurred. Therefore the redemption fine imposed in lieu of confiscation is also liable to be set aside - Customs - Penalties - Imposition on company and individuals - Section 112(a) and Section 114AA - Penalties were imposed on the importer company under Section 114AA and on individual officers under Sections 112(a), 114AA and 117 on the ground that the goods were misclassified, mis-declared and short duty paid customs duties was rendered liable for confiscation - Whether penalties can be imposed when the underlying classification is found to be correct and no duty evasion or misclassification occurred - HELD - Penalties are consequential upon the finding of a contravention. When the underlying duty demand and confiscation are set aside because the classification adopted by the importer is found to be correct, no contravention of customs law occurred. The act of claiming a particular classification based on the understanding of the tariff nomenclature and HSN explanatory notes, when the importer adopts the classification in good faith based on the provisions of the tariff and the General Rules for Interpretation, does not constitute wilful misclassification or misstatement. Penalties cannot be imposed on the company or on the individual officers as no violation of customs law is established. The penalties imposed under Sections 112(a), 114AA and 117 are all set aside. [Read less]

GST - Powers and Jurisdiction of Appellate Authority under Section 107(11) of CGST Act, 2017 - Power to permit cross-examination of witnesses during appeal proceedings - Petitioner raised demand for wrongful availment of ITC on basis of fake invoices. Petitioner contended that Appellate Authority has no power to remit matter back to Adjudicating Authority and that petitioner was not given opportunity to cross-examine witnesses during adjudication proceedings, making writ petition maintainable - Whether Appellate Authority under Section 107(11) of CGST Act has power to permit cross-examination of witnesses and undertake fur... [Read more]

GST - Powers and Jurisdiction of Appellate Authority under Section 107(11) of CGST Act, 2017 - Power to permit cross-examination of witnesses during appeal proceedings - Petitioner raised demand for wrongful availment of ITC on basis of fake invoices. Petitioner contended that Appellate Authority has no power to remit matter back to Adjudicating Authority and that petitioner was not given opportunity to cross-examine witnesses during adjudication proceedings, making writ petition maintainable - Whether Appellate Authority under Section 107(11) of CGST Act has power to permit cross-examination of witnesses and undertake further inquiry during appeal proceedings despite prohibition on remanding matter to Adjudicating Authority - HELD - Although Section 107(11) of CGST Act expressly prohibits Appellate Authority from referring case back to Adjudicating Authority, it expressly empowers Appellate Authority to undertake such further inquiry as may be necessary before deciding appeal. Such power is sufficiently wide to enable Appellate Authority in appropriate case to permit cross-examination of witnesses wherever considered necessary for just adjudication - Appellate Authority exercises jurisdiction of first appellate forum and possesses ample powers to confirm, modify or annul order under challenge. Being vested with wide appellate powers, Appellate Authority is competent to examine both factual and legal issues arising from impugned order including grievance relating to denial of cross-examination and consideration of deposits made - Petitioner must exhaust statutory remedy of appeal available under Section 107 of CGST Act before approaching High Court in writ jurisdiction - The writ petition is disposed of [Read less]

GST - Timing of availment of Input Tax Credit under Reverse Charge - Relevant invoice for computing period of limitation under Section 16(4) of CGST Act, 2017 - Petitioner discharged reverse charge liability and issued its own tax invoice. Proper officer rejected claim that ITC was available under Section 16(4) as amended on ground that payment was made in financial year 2021-22 after receiving supplies in financial year 2020-21 - Whether relevant invoice for computing period of limitation for availing ITC under RCM is invoice issued by recipient or invoice issued by supplier and whether proper officer considered Section 3... [Read more]

GST - Timing of availment of Input Tax Credit under Reverse Charge - Relevant invoice for computing period of limitation under Section 16(4) of CGST Act, 2017 - Petitioner discharged reverse charge liability and issued its own tax invoice. Proper officer rejected claim that ITC was available under Section 16(4) as amended on ground that payment was made in financial year 2021-22 after receiving supplies in financial year 2020-21 - Whether relevant invoice for computing period of limitation for availing ITC under RCM is invoice issued by recipient or invoice issued by supplier and whether proper officer considered Section 31(3)(f) of CGST Act - HELD - Under Section 31(3)(f) of CGST Act, relevant invoice for computing limitation period for availing ITC is invoice issued by petitioner/recipient and not invoice issued by supplier. This aspect was not considered in impugned order. Proper officer erroneously recorded finding that taxpayer not eligible to claim and utilize ITC on account of making payment in financial year 2021-22 after receiving supplies in financial year 2020-21 without considering that limitation period is computed from date of invoice issued by petitioner on discharge of reverse charge liability - Additionally approach of arriving at tax liability by adding excess ITC available in petitioner's GSTR-2A in relation to CGST and SGST was clearly erroneous and warrants reconsideration - The impugned order and recovery notice set aside and matter remanded for reconsideration with reasonable opportunity to petitioner including personal hearing - The writ petitions are disposed of [Read less]

GST - Assessment of deceased assessee - Whether tax liability can be recovered from legal representatives under Section 93 of the CGST Act, 2017 without complying with procedural requirements of notice and hearing under Section 75(4) and (6) of the CGST Act - HELD - Section 93 of the CGST Act provides that where an assessee dies, the legal representative of the deceased shall be liable to pay out of the estate of the deceased any tax, interest or penalty that was determined whether before or after the death of the assessee. However, this statutory provision for recovery from legal representatives is subject to compliance w... [Read more]

GST - Assessment of deceased assessee - Whether tax liability can be recovered from legal representatives under Section 93 of the CGST Act, 2017 without complying with procedural requirements of notice and hearing under Section 75(4) and (6) of the CGST Act - HELD - Section 93 of the CGST Act provides that where an assessee dies, the legal representative of the deceased shall be liable to pay out of the estate of the deceased any tax, interest or penalty that was determined whether before or after the death of the assessee. However, this statutory provision for recovery from legal representatives is subject to compliance with the mandatory procedural provisions contained in Sections 75(4) and 75(6) of the CGST Act. Section 75(4) mandates that an opportunity of hearing shall be granted where any adverse decision is contemplated against any person chargeable with tax or penalty. Section 75(6) mandates that the proper officer in his order shall set out the relevant facts and the basis of his decision. These provisions are mandatory in nature and apply with full force to assessment proceedings involving legal representatives of deceased assesses - Assessment orders passed against deceased assessees without issuance of independent notice to the legal representatives and without affording them an opportunity of personal hearing are vitiated and void ab initio. The mere fact that Section 93 provides for recovery from legal representatives does not dilute the procedural safeguards mandated under Sections 75(4) and 75(6) - The assessment orders are quashed and set aside with liberty to the respondents to issue fresh notice to the legal representative and pass fresh orders after affording proper opportunity of hearing – The writ petition is allowed [Read less]

Customs - Classification of Pneumatic Tyres - Mining vs Truck and Bus Radial Tyres - Petitioner importers imported pneumatic tyres declared as Brand New All Steel Radial Mining Tyres classified under CTI 4011 8000, which are freely importable under Foreign Trade Policy - Revenue alleged the goods should be classified under CTI 4011 2010 (Truck and Bus Radial tyres), which is a restricted category requiring BIS compliance - Whether pneumatic tyres marked with speed symbol D corresponding to maximum speed of 65 kmph can be classified as restricted Truck and Bus Radial tyres requiring BIS certification when such tyres are exp... [Read more]

Customs - Classification of Pneumatic Tyres - Mining vs Truck and Bus Radial Tyres - Petitioner importers imported pneumatic tyres declared as Brand New All Steel Radial Mining Tyres classified under CTI 4011 8000, which are freely importable under Foreign Trade Policy - Revenue alleged the goods should be classified under CTI 4011 2010 (Truck and Bus Radial tyres), which is a restricted category requiring BIS compliance - Whether pneumatic tyres marked with speed symbol D corresponding to maximum speed of 65 kmph can be classified as restricted Truck and Bus Radial tyres requiring BIS certification when such tyres are expressly excluded from BIS standards IS 15636:2022 and from Quality Control Order 2009 by virtue of speed limit below 80 kmph, and whether goods can be deemed prohibited for provisional release purposes when they fall under restricted category and merely lack certification rather than being completely banned - HELD - A fundamental distinction exists between prohibited goods which are completely banned under the Customs Act and restricted goods which can be imported subject to obtaining requisite authorizations and complying with prescribed standards. Tyres marked with speed symbol D corresponding to maximum speed of 65 kmph fall outside the scope of IS 15636:2022 which only covers tyres with speed symbol F to H corresponding to speeds of 80 kmph and above - Quality Control Order 2009 expressly exempts commercial vehicle tyres identified by speed symbols A to E from mandatory BIS marking requirements. Therefore tyres with speed symbol D cannot be treated as requiring BIS compliance. The goods cannot be classified as prohibited merely because they lack certification when the applicable standard does not cover them. Since no notification under the Customs Act or any law prohibits the import of these tyres, they remain in the restricted category at most, not prohibited - The distinction between prohibited and restricted is crucial - prohibited goods cannot be released even provisionally whereas restricted goods can be released provisionally pending adjudication. Where classification itself is in dispute and established only through investigation findings rather than a conclusive notification, provisional release cannot be denied – The CESTAT had correctly directed provisional release subject to bond, bank guarantee and undertaking that goods shall not be sold for on-road use in commercial vehicles. The test reports and investigations must be conclusive before treating goods as prohibited - The Writ Petitions filed by assessees are allowed and directions are issued for provisional release of the seized goods within four weeks subject to compliance of conditions. The Writ Petition and Appeals filed by the Customs Department are dismissed [Read less]

GST - Service of Show Cause Notice and Assessment Order - Validity of service through uploading on Common Portal - Whether service merely by uploading on Common Portal amounts to valid service of SCN and order and whether amendment to Section 115 by Finance Act 2022 permits such service - HELD - Service merely by uploading SCN or order on Common Portal does not amount to valid service. The CGST Rules, 2017 do not contain any provision permitting uploading of SCN or order on Common Portal. Rule 142 relates to electronic communication but does not specify Common Portal for service of SCN or order. Common Portal is explicitly... [Read more]

GST - Service of Show Cause Notice and Assessment Order - Validity of service through uploading on Common Portal - Whether service merely by uploading on Common Portal amounts to valid service of SCN and order and whether amendment to Section 115 by Finance Act 2022 permits such service - HELD - Service merely by uploading SCN or order on Common Portal does not amount to valid service. The CGST Rules, 2017 do not contain any provision permitting uploading of SCN or order on Common Portal. Rule 142 relates to electronic communication but does not specify Common Portal for service of SCN or order. Common Portal is explicitly confined to limited functions such as registration, filing returns, payment, refund, appeal, e-way bill, e-invoicing and recovery proceedings as specified in relevant Rules but Rules do not refer to Common Portal for service of SCN or order – The amendment introduced by Finance Act 2022 to Section 115 does not authorize service of SCN or order through Common Portal as Notification dated 23.01.2018 does not expressly specify Common Portal for this purpose and merely empowers performance of functions provided under CGST Rules on Common Portal - In the present case, the order was uploaded only on the Common Portal, and the petitioner has specifically stated that being an illiterate person, he had no knowledge thereof – The Court is not persuaded to take a view different from the one expressed in Luxmi Traders case merely on account of the reference to the provisions of Finance Act, 2022 – The instant writ petition is also disposed of in terms of Luxmi Traders – The petition is disposed of [Read less]

Customs – Validity of Retrospective application of Circular No. 9/2012 dated 23.03.2012 - Petitioner imported iron ore pellets classified under CTH 2601 which was exempted from Additional Customs duty under Notification dated 01.03.2006. Petitioner obtained clearance of nine consignments from April 2011 to February 2012 on nil duty basis. Subsequently, vide Circular No.9/2012 dated 23.03.2012, the Board clarified that ores and concentrates are two distinct products and that the exemption notification applies only to ores and not to concentrates – SCN issued demanding recovery of additional customs duty with retrospecti... [Read more]

Customs – Validity of Retrospective application of Circular No. 9/2012 dated 23.03.2012 - Petitioner imported iron ore pellets classified under CTH 2601 which was exempted from Additional Customs duty under Notification dated 01.03.2006. Petitioner obtained clearance of nine consignments from April 2011 to February 2012 on nil duty basis. Subsequently, vide Circular No.9/2012 dated 23.03.2012, the Board clarified that ores and concentrates are two distinct products and that the exemption notification applies only to ores and not to concentrates – SCN issued demanding recovery of additional customs duty with retrospective effect from 06.04.2011 - Whether a clarificatory Circular which restricts the scope of an existing exemption and adopts the concept of manufacture under Central Excise Act into Customs Tariff can be applied retrospectively to recover duty from traders who had obtained clear assessments prior to its issuance - HELD - A clarificatory Circular which clarifies the scope of an existing exemption has the potential to be oppressive and not beneficial to the assessee. When a clarification by the Board restricts the scope of an exemption that was previously operative and traders had relied upon such exemption in obtaining goods cleared at nil duty on proper assessment by the Customs Authority, such clarification cannot be applied retrospectively - The principle established in Suchitra Components case is that a beneficial Circular is to be applied retrospectively but an oppressive Circular limiting the scope of exemption is to be applied prospectively. The Board has borrowed the concept of manufacture from Note 4 of Chapter 26 of Central Excise Act, 1944 and has attempted to apply it to the Customs Tariff Act, 1975, which operate in different spheres and are governed by separate statutes. The Circular cannot be applied retrospectively to impose financial liabilities on traders who had obtained proper clearances prior to its issuance - The show-cause notices demanding differential duty with retrospective effect are quashed and set aside - The writ petitions are partly allowed [Read less]

Customs – Classification of Facsimile Machines - Appellant imported Facsimile Machines and parts declaring goods under Customs Tariff Heading 8443 3260 as Facsimile machines capable of connecting to automatic data processing machine or to a network, claiming exemption under Notification No. 24/2005-Cus – Later on, the Dept took view that imported Facsimile Machines were not capable of connecting to network within meaning of Heading 8443 3260 but merited classification under Heading 8443 3970 – Dept issued notice proposing recovery of differential Customs Duty and imposition of penalties invoking extended period under... [Read more]

Customs – Classification of Facsimile Machines - Appellant imported Facsimile Machines and parts declaring goods under Customs Tariff Heading 8443 3260 as Facsimile machines capable of connecting to automatic data processing machine or to a network, claiming exemption under Notification No. 24/2005-Cus – Later on, the Dept took view that imported Facsimile Machines were not capable of connecting to network within meaning of Heading 8443 3260 but merited classification under Heading 8443 3970 – Dept issued notice proposing recovery of differential Customs Duty and imposition of penalties invoking extended period under Section 28(4) of Customs Act – Whether imported Facsimile Machines requiring external Analogue Telephone Adapter (ATA) device for network connectivity are classifiable under CTH 8443 3260 for machines capable of connecting to network or under CTH 8443 3970 for machines not so capable – HELD - Revenue failed to discharge burden of proving that imported Facsimile Machines merit classification under CTH 8443 3970. The Tariff employs expression capable of connecting and does not prescribe requirement of direct cable connection without external interface device – In modern information technology architecture, network connectivity is frequently achieved through routers, gateways, adapters, converters, wireless interfaces and other intermediary devices, such devices do not cease to be network-capable merely because connectivity is achieved through external interface. Department's own investigation records establish and acknowledge that imported machines can be networked through Analogue Telephone Adapter or similar interface devices, thereby admitting network capability - It is well-settled that classification under Customs Tariff must be determined primarily on basis of language employed in tariff itself and resort to HSN Explanatory notes permissible only as aid to interpretation where statutory language is ambiguous - Classification must ultimately be based upon actual characteristics of imported goods and not upon unduly restrictive reading of Explanatory material – Burden of establishing that goods fall within particular tariff entry lies upon Revenue and must be discharged by adducing satisfactory evidence and not by mere reinterpretation – The B/Es were filed declaring imported goods as Facsimile Machines under CTH 8443 3260, goods were examined by proper officers after physical verification. The classification was not mere self-assessment accepted mechanically but assessment undertaken after physical verification by Dept itself. The demand of differential duty, interest and penalties not sustainable – The impugned order is set aside and the appeal is allowed - Applicability of Extended Period of Limitation – HELD - Extended period under Section 28(4) of Customs Act can be invoked only where duty has not been levied or has been short levied by reason of collusion, wilful misstatement, suppression of facts or fraud requiring deliberate intent to evade payment of duty – Appellant disclosed goods as Facsimile machines, produced relevant invoices, catalogues and technical literature and claimed classification under tariff heading which according to it correctly described goods, such conduct wholly inconsistent with any allegation of fraud or deliberate suppression – Every material fact necessary for assessment was available before Department at time of import itself and Revenue has not pointed out any document that was concealed or false declaration made. The subsequent change of opinion on classification cannot by itself constitute suppression of facts or wilful misstatement – In the present case, the conditions precedent for invoking extended period is absent. [Read less]

Customs - Settlement Application under Section 127B of Customs Act, 1962 - Procedure to be followed by Settlement Commission - Principles of natural justice - Applicant filed Settlement application after goods imported under Bill of Entry were seized as they contained cigarettes along with declared waste paper. Settlement Commission admitted application determining duty liability but later enhanced duty liability based on report of jurisdictional Commissioner which was never supplied to applicant - Whether Settlement Commission violated principles of natural justice and statutory provisions of Section 127C(5) by passing or... [Read more]

Customs - Settlement Application under Section 127B of Customs Act, 1962 - Procedure to be followed by Settlement Commission - Principles of natural justice - Applicant filed Settlement application after goods imported under Bill of Entry were seized as they contained cigarettes along with declared waste paper. Settlement Commission admitted application determining duty liability but later enhanced duty liability based on report of jurisdictional Commissioner which was never supplied to applicant - Whether Settlement Commission violated principles of natural justice and statutory provisions of Section 127C(5) by passing order based on report of jurisdictional Commissioner without supplying that report to applicant and affording opportunity of hearing on that report - HELD - Section 127C(5) requires Settlement Commission to afford opportunity of hearing to applicant after receiving report from concerned Commissioner and after examining such further evidence as may be placed before it or obtained by it, before passing any order. The quintessential feature of Section 127C(5) is obligation to afford opportunity of hearing to applicant who has filed settlement application under Section 127B(1) and thereafter upon hearing concerned Commissioner to pass appropriate order – The Settlement Commission is under statutory obligation to afford opportunity to applicant to respond to report furnished to it and thereafter pass appropriate order in accordance with Act - In present case report of jurisdictional Commissioner on which reliance was placed for enhancing duty liability was never supplied to applicant. Impugned order not only suffers from violation of principles of natural justice but also contravenes statutory provisions of Section 127C(5) of Customs Act. Order is quashed and matter remanded to Settlement Commission for fresh consideration in accordance with statutory provisions after affording opportunity of hearing to applicant – The petition is allowed [Read less]

Central Excise – Refund of duty paid on Supplementary Invoices for price enhancement rejected by buyer – Appellant issued supplementary invoices seeking increase in rates of automobile parts already cleared against original invoices but buyer did not accept enhanced prices and did not pay any amount against supplementary invoices – Appellant filed refund claim for duty paid on proposed price enhancement – Original authority rejected refund claim alleging that even if customer did not honour increased price, appellant remained liable to pay duty on transaction value – Whether appellant is entitled to refund of dut... [Read more]

Central Excise – Refund of duty paid on Supplementary Invoices for price enhancement rejected by buyer – Appellant issued supplementary invoices seeking increase in rates of automobile parts already cleared against original invoices but buyer did not accept enhanced prices and did not pay any amount against supplementary invoices – Appellant filed refund claim for duty paid on proposed price enhancement – Original authority rejected refund claim alleging that even if customer did not honour increased price, appellant remained liable to pay duty on transaction value – Whether appellant is entitled to refund of duty paid on supplementary invoices for price enhancement when buyer did not accept enhanced prices and issued certificate confirming non-acceptance, non-payment and non-availment of CENVAT credit - HELD – The assessable value under Section 4(1)(a) of CEA, 1944 is transaction value being price actually paid or payable for goods. The enhancement of price sought through supplementary invoices was rejected by buyer and no amount was actually paid or remained payable. Since buyer never accepted enhanced price and was never liable to pay enhanced amount, such amounts cannot be part of transaction value by any stretch of definition – Further, the buyer did not avail any CENVAT credit on strength of supplementary invoices as it was availing area-based exemption. The principle of unjust enrichment not applicable when price increase not accepted by buyer and buyer issued certificate to that effect – Both lower authorities wrongly treated refund claim as one of refund of duty paid on clearance effected on basis of transaction value. The reliance placed by lower authorities on Section 4(3)(d) wholly misplaced – The impugned order not sustainable in law and set aside – The appeal is allowed [Read less]

Gujarat Value Added Tax Act, 2003 – Eligibility to Input Tax Credit - Burden of proof regarding genuineness of transaction and actual movement of goods under Section 70 of Gujarat VAT Act, 2003 – Appellant-assessee claimed ITC on purchases made from dealers whose registration was cancelled, furnishing tax invoices, weigh bridge slips and proof of payment through cheques but failed to produce transport receipts bearing truck numbers mentioned in weigh bridge slips - Whether mere production of tax invoices, weigh bridge slips and payment details is sufficient to discharge burden of proof under Section 70 of the Act to cl... [Read more]

Gujarat Value Added Tax Act, 2003 – Eligibility to Input Tax Credit - Burden of proof regarding genuineness of transaction and actual movement of goods under Section 70 of Gujarat VAT Act, 2003 – Appellant-assessee claimed ITC on purchases made from dealers whose registration was cancelled, furnishing tax invoices, weigh bridge slips and proof of payment through cheques but failed to produce transport receipts bearing truck numbers mentioned in weigh bridge slips - Whether mere production of tax invoices, weigh bridge slips and payment details is sufficient to discharge burden of proof under Section 70 of the Act to claim ITC - HELD - Section 70 casts burden upon purchasing dealer claiming ITC to prove correctness of ITC claim and genuineness of transaction. Merely because dealer claims to be bona fide purchaser is not enough. Mere production of invoices or payment by cheques is not sufficient to discharge burden of proof - Dealer claiming ITC has to prove beyond doubt actual transaction by furnishing name and address of selling dealer, details of vehicle which delivered goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars - Dealer must prove actual physical movement of goods and genuineness of transaction by furnishing detailed supporting material. Production of tax invoices is one document but not sufficient to discharge burden to prove genuineness of transaction - In present case, assessee failed to produce independent evidence such as transport receipts bearing truck numbers mentioned in weigh bridge slips or other cogent material establishing actual physical movement of goods. The assessee failed to discharge burden of proof cast under Section 70 of the GVAT Act and therefore disallowance of ITC was justified. Tribunal rightly applied decision of Supreme Court in Ecom Gill Coffee Trading case and confirmed the disallowance – The appeal is dismissed [Read less]

Customs – Late Filing Fee for Supplementary Bill of Entry – Appellant imported bulk consignment of PCI Coal through vessel and filed original B/E on 31.05.2024 for clearance of manifested quantity of coal which was duly assessed and cleared without any dispute regarding quantity, classification or valuation – After clearance of manifested quantity, excess quantity of coal still remained lying within the Port area – Appellant obtained requisite permission from proper officer and filed Supplementary Bill of Entry on 17.12.2024 for clearance of excess quantity – ICEGATE system automatically imposed late filing fee u... [Read more]

Customs – Late Filing Fee for Supplementary Bill of Entry – Appellant imported bulk consignment of PCI Coal through vessel and filed original B/E on 31.05.2024 for clearance of manifested quantity of coal which was duly assessed and cleared without any dispute regarding quantity, classification or valuation – After clearance of manifested quantity, excess quantity of coal still remained lying within the Port area – Appellant obtained requisite permission from proper officer and filed Supplementary Bill of Entry on 17.12.2024 for clearance of excess quantity – ICEGATE system automatically imposed late filing fee under Section 46(3) of Customs Act, 1962 by computing the period of delay with reference to date of filing of original Import General Manifest – Whether the levy of late filing fee under Section 46(3) of Customs Act, 1962 in respect of Supplementary Bill of Entry filed for clearance of excess quantity of imported cargo is legally sustainable – HELD – The excess quantity of PCI Coal arose solely on account of the peculiar nature of bulk cargo including variations in moisture content and allied factors, which is a well-recognised and accepted incident in handling of bulk cargo and by itself does not render such quantity distinct from or alien to the original imported consignment – Appellant had filed original B/E covering entire manifested quantity well within the stipulated period and Supplementary Bill of Entry came to be filed only after excess quantity was noticed during clearance operations and upon requisite permission granted by Customs authorities in accordance with prescribed procedure – Section 46(3) of Customs Act, 1962 is attracted only where there is failure to present Bill of Entry within prescribed period without sufficient cause – Late filing fee cannot be imposed mechanically ignoring bona fide conduct of appellant and peculiar nature of transaction – The Proper Officer has authority to waive late fee in deserving cases and in present case late filing cannot be attributed due to any act or fault on part of appellant – In view of bona fides of appellant, imposition of late fee is unwarranted and is a fit case for waiver of late fee – The impugned Order-in-Appeal upholding levy of late filing fee is set aside and appeal is allowed [Read less]

Customs – Eligibility for Reduced Duty Benefit on Imported Electric Scooters in Knocked Down Condition – Appellant imported electric scooters in CKD condition model without tyre, battery and charger seeking classification under Customs Tariff Heading 8711 6020 with reduced duty benefit under Notification No. 50/2017-Cus – The adjudicating authority found that since the impugned consignment was not inclusive of tyre, battery and charger, it was not eligible for reduced duty benefit contemplated under Serial No. 531A(1)(a) but was eligible for concessional rate of duty contemplated under clause 2 of Serial No. 531A –... [Read more]

Customs – Eligibility for Reduced Duty Benefit on Imported Electric Scooters in Knocked Down Condition – Appellant imported electric scooters in CKD condition model without tyre, battery and charger seeking classification under Customs Tariff Heading 8711 6020 with reduced duty benefit under Notification No. 50/2017-Cus – The adjudicating authority found that since the impugned consignment was not inclusive of tyre, battery and charger, it was not eligible for reduced duty benefit contemplated under Serial No. 531A(1)(a) but was eligible for concessional rate of duty contemplated under clause 2 of Serial No. 531A – Whether the impugned goods are eligible for the benefit of amended Notification No. 02/2022-Cus when the import was prior to the issue of amendment notification – HELD – The benefit of Notification No. 50/2017-Cus at Serial No. 531A(1)(a) was rightly denied since the explanation in amended Notification No. 02/2022-Cus was issued post the import of the impugned goods – The description at Serial No. 531A of Notification No. 50/2017-Cus dated 30.06.2017 has been changed in amended Notification No. 02/2022-Cus dated 01.02.2022 whereby the benefit of notification is available even if electrically operated vehicles are imported incomplete or unfinished as a knocked down kit – The explanation is applicable only to imports after 01.02.2022 under Notification No. 02/2022-Cus dated 01.02.2022 and has no retrospective application – As per pre-amended Notification No. 50/2017-Cus, the motorcycle has to be imported as a knocked down kit containing all the necessary components, parts or sub-assemblies for assembling a complete vehicle – Since the impugned import did not contain all the necessary components, parts or sub-assemblies for assembling a complete electrically operated motorcycle, the benefit of Notification No. 50/2017-Cus at Serial No. 531A(1)(a) is not available – The decisions of the lower authorities are sustainable and the impugned order is upheld – The appeal is dismissed [Read less]

Service Tax – Taxability of Construction services for construction of residential quarters, Validity of remand by the CESTAT where there exists settled legal precedent – Demand of service tax on construction of residential quarters for State Police Housing Corporation - Petitioner appealed before CESTAT contending that since the work was undertaken for a Government organization, Service Tax provisions did not apply. The CESTAT, despite settled legal precedent on issue chose to remand the matter to adjudicating authority - Whether CESTAT was correct to remand the matter to adjudicating authority when there is settled le... [Read more]

Service Tax – Taxability of Construction services for construction of residential quarters, Validity of remand by the CESTAT where there exists settled legal precedent – Demand of service tax on construction of residential quarters for State Police Housing Corporation - Petitioner appealed before CESTAT contending that since the work was undertaken for a Government organization, Service Tax provisions did not apply. The CESTAT, despite settled legal precedent on issue chose to remand the matter to adjudicating authority - Whether CESTAT was correct to remand the matter to adjudicating authority when there is settled legal precedent on the exact issue raised and thereby cause multiplicity of proceedings - HELD - When a matter before the CESTAT involves interpretation of law and there exists settled legal precedent directly applicable to the facts in issue, the CESTAT should decide the matter on merits rather than remand it to the adjudicating authority. The remand to the adjudicating authority to examine facts and terms of contract when settled legal precedent clearly excludes Government undertakings from the scope of taxable services would give rise to multiplicity of proceedings. The CESTAT should have examined whether the construction was undertaken for a Government organization in light of settled precedent and decided the matter finally instead of remanding. The endeavor of the CESTAT should be to avoid multiplicity of the proceedings and to provide finality to disputes - The order remanding the matter to adjudicating authority is quashed and the matter is remanded to CESTAT to decide the appeal on merits by passing a speaking order – The petition is allowed [Read less]

Central Excise - Jurisdiction to question certificate of eligibility issued by High Powered Committee constituted under Notification No.39/2001-CE – Petitioner-Manufacturer claimed central excise duty exemption for setting up new industrial unit in earthquake-hit area of Kachchh and claimed refund of duty paid on finished goods manufactured and cleared during exemption period – Dept issued notice after five years alleging that manufacturer obtained certificate of eligibility from High Powered Committee by misleading departmental officers and without actually setting up new unit - Whether Commissioner of Central Excise ... [Read more]

Central Excise - Jurisdiction to question certificate of eligibility issued by High Powered Committee constituted under Notification No.39/2001-CE – Petitioner-Manufacturer claimed central excise duty exemption for setting up new industrial unit in earthquake-hit area of Kachchh and claimed refund of duty paid on finished goods manufactured and cleared during exemption period – Dept issued notice after five years alleging that manufacturer obtained certificate of eligibility from High Powered Committee by misleading departmental officers and without actually setting up new unit - Whether Commissioner of Central Excise has jurisdiction to question validity of certificate issued by High Powered Committee by alleging fraud and misrepresentation - HELD - High Powered Committee consisting of Chief Commissioner of Central Excise and Principal Secretary to Government of Gujarat is statutory authority formed under Notification dated 31.07.2001 to issue certificate that unit is new unit set up during specified period. Allegations regarding misrepresentation and fraud in obtaining certificate can only be examined by the High Powered Committee which issued certificate - Commissioner of Central Excise has no jurisdiction to question certificate issued by statutory committee by alleging misrepresentation unless committee itself has doubted certificate or unless proceedings are initiated before committee itself – Further, the Commissioner did not inform committee about alleged misrepresentation nor took action against officers involved in verification. Commissioner accepted certificates and processed refunds based thereon - The Show-cause notice questioning certificate is illegal and without jurisdiction being bereft of authority. Respondent acted arbitrarily and abused its authority in issuing show-cause notice after five years. Show-cause notice is quashed and set aside – The petition is allowed [Read less]

Gujarat Sales Tax Act, 1969 - Supersession of Circular and Applicability of Exemption Benefit - Assessees received benefit of exemption during 2001-2005 pursuant to Circular dated 19.02.2001. The said Circular was sought to be superseded by the impugned Circular dated 02.09.2005. The 2005 Circular was assailed by the respondents/Assessees before the Gujarat High Court. The matter ultimately travelled to the Supreme Court and by order dated 04.02.2009, the same was remanded to the High Court to answer two questions of law which were framed by the Supreme Court - Whether the two questions of law framed by the Supreme Court s... [Read more]

Gujarat Sales Tax Act, 1969 - Supersession of Circular and Applicability of Exemption Benefit - Assessees received benefit of exemption during 2001-2005 pursuant to Circular dated 19.02.2001. The said Circular was sought to be superseded by the impugned Circular dated 02.09.2005. The 2005 Circular was assailed by the respondents/Assessees before the Gujarat High Court. The matter ultimately travelled to the Supreme Court and by order dated 04.02.2009, the same was remanded to the High Court to answer two questions of law which were framed by the Supreme Court - Whether the two questions of law framed by the Supreme Court should be answered and decided on merits by the High Court - HELD - The Gujarat enactment, i.e., Gujarat Sales Tax Act, 1969 has been superseded by the Central enactment w.e.f. 01.07.2017, i.e., the GST Act, 2017. The period of assessment involved in these cases is from 2001-2005 which is more than two decades. Assuming the State is successful in these special leave petitions, it is only as against the respondents/assessees that there could be re-opening of assessments. At this length of time it may not be practicable to undertake such an exercise. In respect of an enactment which is no longer in force, a decision to be made by the Court at this stage would be wholly academic. The ends of justice would be served if these SLPs are disposed of leaving the questions of law, which have been raised by the State in these petitions open, to be agitated in any other appropriate matter in case of necessity - The assessment of the respondents herein for the years 2001-2005 which has attained finality shall not be interfered with – Ordered accordingly [Read less]

Central Excise - Cenvat Credit - Actual Physical Receipt of Inputs - Appellant, a manufacturer of aluminium products, claimed Cenvat Credit on imported aluminium scrap and other input materials - Department found that although imports were made in the Appellant's name, the scrap was diverted to third parties in connivance with co-noticees and was never physically received in the Appellant's factory - Whether Cenvat Credit can be validly claimed when the claimed inputs are not actually received in the factory - HELD - Cenvat Credit is admissible only when inputs are actually received in the factory as required under Rule 3(... [Read more]

Central Excise - Cenvat Credit - Actual Physical Receipt of Inputs - Appellant, a manufacturer of aluminium products, claimed Cenvat Credit on imported aluminium scrap and other input materials - Department found that although imports were made in the Appellant's name, the scrap was diverted to third parties in connivance with co-noticees and was never physically received in the Appellant's factory - Whether Cenvat Credit can be validly claimed when the claimed inputs are not actually received in the factory - HELD - Cenvat Credit is admissible only when inputs are actually received in the factory as required under Rule 3(1) of the Cenvat Credit Rules, 2004. The documentary evidence including gate endorsements directing diversion of scrap, corroborated statements of Custom House Agents, and admissions of the Appellant itself clearly established that the imported scrap was never received in the factory. The Appellant failed to produce any cogent evidence beyond its own account ledger to support the claimed credit. The named suppliers had made no transaction or supply to the Appellant as per department investigation. The technical plea of non-admissibility of evidence raised by the Appellant was not acceptable given the facts and circumstances. The Cenvat credit has been wrongly availed in violation of Rule 3(1) and the reversal as ordered by the Commissioner (Appeals) has been rightly upheld - Central Excise Duty - Clandestine Removal of Manufactured Goods - HELD - The evidence on record including freight vouchers, dispatch details, booking registers and lowery receipt books clearly established that the Appellant cleared finished products clandestinely in collusion and connivance with co-noticees thereby causing evasion of excise duty. The admissions of the Appellant and the recipient parties were corroborated by the documentary evidence. The adjudicating authority meticulously examined all records and correctly concluded that the clearance was fraudulent. As the case involved fraud and willful suppression of facts rather than mere procedural lapses, the extended period of limitation was rightly invoked. The imposition of penalty was justified in view of the fraudulent conduct. The demand of excise duty has been rightly confirmed and penalty was imposed. [Read less]

Customs - Duty Drawback - All Industry Rate (AIR) - Retrospective Application of Clarificatory Circular - Petitioner claimed entitlement to AIR customs duty drawback at 1% on exports of Soya Bean Meal despite having availed CENVAT credit. The Customs Department denied the benefit on the ground that the clarificatory Circular No. 35/2010-Cus dated 17.09.2010 expressly stating that duty drawback was available to SBM merchants despite CENVAT availed only operated prospectively from 20.09.2010 onwards and could not be applied retrospectively to the years 2008-2010 - Whether a clarificatory circular that merely explains and set... [Read more]

Customs - Duty Drawback - All Industry Rate (AIR) - Retrospective Application of Clarificatory Circular - Petitioner claimed entitlement to AIR customs duty drawback at 1% on exports of Soya Bean Meal despite having availed CENVAT credit. The Customs Department denied the benefit on the ground that the clarificatory Circular No. 35/2010-Cus dated 17.09.2010 expressly stating that duty drawback was available to SBM merchants despite CENVAT availed only operated prospectively from 20.09.2010 onwards and could not be applied retrospectively to the years 2008-2010 - Whether a clarificatory circular that merely explains and settles the scope of benefit under previous notifications can be given retrospective operation - HELD - A distinction exists between a clarificatory Circular which explains the scope of existing provisions and one which introduces a new fiscal regime. The Circular No. 35/2010-Cus dated 17.09.2010 is clarificatory and explanatory in nature and does not substantively modify or amend the previous CBEC Notifications Nos. 81 of 2006, 68 of 2007, 103 of 2008 and 84 of 2010 - The language of the Circular does not expand or alter the scope of previous Notifications but merely cements the claim of merchant exporters who were entitled to receive the benefit of AIR customs duty drawback since 2007. By virtue of the Circular, no new right or benefit was created but the actual scope of the benefit was explained and settled. The Circular merely clarified that the benefit of 1% customs duty drawback under prior Notifications was available to SBM merchants despite having availed CENVAT. Being explanatory in nature, the Circular cannot be construed as adopting a fresh fiscal regime for rebate of customs duty intended to affect vested rights - The doctrine of fairness requires that where a beneficial provision merely explains existing entitlements without inflicting undue burden, retrospective effect should be granted. The petitioner is entitled to the benefit of 1% AIR customs duty drawback on export of SBM from 2008 onwards with retrospective operation to the Circular - The impugned order denying the drawback is quashed and set aside – The writ petition stands allowed [Read less]

GST - Assessment - Non-adherence to Statutory Time Period – Challenge to assessment on multiple grounds including that show cause notice was issued less than six months prior to passing of order as mandated by Section 74(2) of the CGST Act, 2017 and that the assessment was passed in violation of principles of natural justice without affording genuine opportunity of hearing - Whether the requirement of issuing show cause notice at least six months prior to passing of assessment order under Section 74(2) is mandatory and whether non-compliance thereof vitiates the assessment order - HELD - The provision of Section 74(2) re... [Read more]

GST - Assessment - Non-adherence to Statutory Time Period – Challenge to assessment on multiple grounds including that show cause notice was issued less than six months prior to passing of order as mandated by Section 74(2) of the CGST Act, 2017 and that the assessment was passed in violation of principles of natural justice without affording genuine opportunity of hearing - Whether the requirement of issuing show cause notice at least six months prior to passing of assessment order under Section 74(2) is mandatory and whether non-compliance thereof vitiates the assessment order - HELD - The provision of Section 74(2) requiring issuance of SCN at least six months prior to passing of assessment order does not appear to be mandatory in nature as no consequences thereof are provided and mere use of the word shall in such situation will not render it mandatory. Even otherwise such provisions must be tested on whether the assessee has suffered any prejudice. In the facts of the case the petitioner was granted multiple opportunities for filing reply and personal hearing at different stages after issuance of show cause notice - The personal hearing notices were issued and the petitioner participated in the hearing on 23.03.2026. The order was passed on 28.03.2026 well within the period of limitation for passing assessment order. The petitioner had not raised the grounds of non-observance of Section 74(2) in the earlier writ petitions filed before this court - The assessment order has been passed after affording multiple opportunities to the petitioner. No real prejudice has been caused to the petitioner by non-adherence to the time period of six months. The Supreme Court in its order dated 13.05.2026 has relegated the petitioner to avail the statutory remedy of appeal and in the modification order dated 29.05.2026 has observed that it is up to the petitioner to prefer statutory appeal or avail any other remedy in law. In the circumstances the writ petition should not be entertained - The writ petition is dismissed and the petitioner is relegated to avail the statutory remedy of appeal as per the observations of the Supreme Court - GST - Dismissal of appeal for non-deposit of statutory pre-deposit, Opportunity to cure procedural defects through defect memo - At the time of filing appeal, there was a shortfall in statutory pre-deposit of 10% required under Section 107(6)(b) of the CGST Act. The Appellate Authority rejected the appeal on the sole ground that statutory pre-deposit was not completed at the time of filing. However, prior to passing the Order-in-Appeal dismissing the appeal, the Petitioner had completed the shortfall deposit well within the one-month grace period under the statute and before the order was passed - Whether an appeal can be dismissed merely on procedural ground of non-deposit of statutory pre-deposit when such defect was subsequently rectified before the order of dismissal was passed - HELD – The procedural requirements for filing appeals such as deposit of statutory pre-deposit are mandatory but cannot be used as an excuse to deny justice without first giving the appellant adequate opportunity to rectify the defect. When a procedural defect exists in an appeal, the Appellate Authority is duty-bound to issue a defect memo intimating the Appellant of the deficiency and providing reasonable time to cure it, rather than summarily dismissing the appeal. Justice cannot be denied for failure to comply with procedure without granting opportunity to the Appellant to rectify procedural defects - The principles of natural justice require that when a defect has been cured before the order of dismissal is passed, the appeal should not be rejected on the basis of the defect. In this case the shortfall in pre-deposit was completed within the grace period provided by statute and before the appellate order was passed, therefore the ground for dismissing the appeal ceased to exist. The Appellate Authority acted in a mechanical manner without adequate consideration of the facts and without giving opportunity for cure - The Order-in-Appeal is set aside and the appeal is restored with direction to Appellate Authority to hear the matter on merits – The writ petition stands allowed [Read less]

GST - Anti-Profiteering - Calculation of profiteered amount and passing on of benefit of ITC in real estate project - Methodology for computation of additional ITC benefit - Inclusion of GST on profiteered amount where benefit already passed by way of discount - DGAP investigation found that developer had passed on 95% benefit. Developer contended that reversal of ITC on unsold inventories, subsequent passing of remaining 5% benefit to home-buyers and applicability of GST on profiteered amount where benefit already passed by way of discount requires consideration - Whether DGAP correctly computed profiteered amount without... [Read more]

GST - Anti-Profiteering - Calculation of profiteered amount and passing on of benefit of ITC in real estate project - Methodology for computation of additional ITC benefit - Inclusion of GST on profiteered amount where benefit already passed by way of discount - DGAP investigation found that developer had passed on 95% benefit. Developer contended that reversal of ITC on unsold inventories, subsequent passing of remaining 5% benefit to home-buyers and applicability of GST on profiteered amount where benefit already passed by way of discount requires consideration - Whether DGAP correctly computed profiteered amount without considering ITC reversal on unsold inventories and when benefit of ITC already passed by way of discount to home-buyers - HELD - It is admitted fact that developer passed on 95% benefit of ITC to home-buyers. DGAP considered reversal of ITC but did not appreciate it in light of fact that developer was executing multiple projects simultaneously. Where ITC reversal relates to unsold inventories specifically attributable to project, it requires proper examination as it affects calculation of profiteered amount. Where developer already passed benefit of ITC to home-buyers by way of discount and reduced taxable value, imposition of GST at 12% on such profiteered amount requires examination. Subsequently passing on of remaining 5% benefit and cancellation of allotments of certain buyers require verification. Matter remanded to DGAP for further investigation on specific issues including proper consideration of reversal of ITC, applicability of GST on discount already provided, and verification of subsequent passing on of remaining benefit with opportunity of hearing to respondent – Ordered accordingly [Read less]