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2026-VIL-239-GSTAT-THN | Tribunal SGST

GST - Denial of input tax credit on supplies from suppliers whose registrations were cancelled retrospectively – Validity of SCN and Order-in-Original that are cryptic and non-speaking - Violation of principles of natural justice – Appellant availed input tax credit on inward supplies from registered suppliers later categorised as non-genuine taxpayers whose registrations were cancelled ab initio - SCNs under Section 73 issued solely on supplier-side cancellations stated only ‘As per attachment under the brief facts and grounds’ - The Appellant did not reply and ex-parte orders confirming tax, interest and penalty were passed describing the issue in a single line - Whether denial of input tax credit under Section 16 through SCNs and orders that are cryptic, non-speaking and devoid of independent reasoning violates the principles of natural justice - HELD – Though the burden of proving eligibility to input tax credit lies on the claimant under Section 155, the revenue authorities are equally bound to afford a fair opportunity to discharge it, which begins with a valid, detailed and speaking SCN - The SCNs showed a glaring lack of substantive reasoning and did not elaborate any specific finding or the nature of the alleged contravention. The Adjudicating Authority confirmed substantial demands without recording any independent analysis or factual findings. Every quasi-judicial authority must pass a speaking order and recording of reasons is an essential facet of natural justice. The Department cannot rely solely on retrospective cancellation of the suppliers' registrations to confirm a demand without independently verifying the facts and giving the Appellant a fair and transparent opportunity of being heard - The orders of the adjudicating authority are vitiated for violation of natural justice and are set aside - The matter remanded for fresh adjudication without expressing any opinion on the merits of admissibility of credit - The appeals are allowed by way of remand to the adjudicating authority - Dismissal of appeal by First Appellate Authority on the ground of non-prosecution without deciding the merits - Section 107(11) and 107(12) of the CGST Act, 2017 - The FAA rejected the appeals on merits for want of transport documents such as lorry receipts and toll receipts and also on the ground of non-prosecution for non-attendance at the scheduled hearings - Whether the FAA can dismiss a statutory appeal for non-prosecution or default in appearance without independently adjudicating the documentary evidence on record - HELD - Section 107(11) requires the Appellate Authority, after making such further inquiry as may be necessary, to pass such order as it thinks just and proper confirming, modifying or annulling the order appealed against. Section 107(12) requires the order to be in writing stating the points for determination, the decision thereon and the reasons for such decision - The Appellate Authority has a statutory duty to examine the merits and the grounds raised even if the appellant is not present. Dismissal of an appeal for non-prosecution amounts to abdication of statutory powers and is legally unsustainable. As the adjudication orders had no legal or factual reasoning and the appellate orders failed to cure the defect, there was gross violation of the principles of natural justice - The orders of the FAA are set aside and the appeals are allowed by way of open remand to the adjudicating authority for fresh adjudication. [Read less]

2026-VIL-238-GSTAT-THN | Tribunal SGST

GST - Partial rejection of refund of accumulated input tax credit without issuing notice in FORM GST RFD-08 and without opportunity of being heard – Violation of mandatory procedure under Rule 92(3) of the CGST Rules, 2017 – Appellant-EOU exporting its products without payment of tax, filed refund claims of accumulated ITC under Section 16(3)(a) of the IGST Act, 2017 - The adjudicating authority sanctioned the refund in part and rejected the remaining portion in FORM GST RFD-06 on the sole ground of Mismatch of ITC - The FAA recorded that Rule 92(3) was not followed but still confirmed the rejection - Whether the partial rejection of a refund claim under Section 54 without issuing the notice in FORM GST RFD-08 and without an opportunity of being heard violates the principles of natural justice and Rule 92(3) - HELD - The language of Rule 92(3) is unambiguous and mandatory. The use of the word ‘shall’, combined with the absolute embargo in the proviso that no application for refund shall be rejected without giving the applicant an opportunity of being heard, leaves the adjudicating authority with no jurisdiction or discretion to reject a refund claim wholly or partially without first issuing FORM GST RFD-08 and affording a hearing - It is an admitted and undisputed fact that the order in FORM GST RFD-06 was issued directly. The Appellant is thereby deprived of the right to know the precise grounds of the alleged mismatch and to furnish a document-backed reply in FORM GST RFD-09. An order passed in defiance of a mandatory statutory procedure is void ab initio, in line with the principle that quasi-judicial authorities must follow prescribed procedure and pass reasoned orders - The rejection of refund without compliance with Rule 92(3) is bad in law and the orders of the adjudicating authority and the FAA are set aside - The matters are remanded to the Adjudicating Authority keeping all the issues open for fresh, de novo processing of the refund applications – The appeals are allowed by remand - Whether a hearing at the appellate stage cures the non-issuance of notice in FORM GST RFD-08 at the adjudication stage - Whether a foundational procedural defect of bypassing the original adjudication procedure can be cured by affording a hearing at the appellate stage - HELD - The right to a notice and a hearing before an adverse civil consequence is a fundamental statutory right rooted in the principle of audi alteram partem. A post-decisional hearing at the appellate stage cannot serve as a substitute for a pre-decisional statutory notice. The FAA, having noted the violation of Rule 92(3), ought to have remanded the matter instead of demanding documents and deciding the case on merits. [Read less]

2026-VIL-1796-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise - Admissibility of CENVAT credit of service tax paid by job workers on exempted job work under Notification No. 25/2012-ST - Rule 2(l)(ii) of CENVAT Credit Rules, 2004 read with Section 5A(1A) of Central Excise Act, 1944 – Appellant took CENVAT credit of service tax charged by job workers on job work charges. The Department held that the job work was exempt from the whole of the service tax under Notification No. 25/2012-ST, and so could not be an input service under Rule 2(l)(ii) - Whether the Appellant can be denied CENVAT credit of the service tax paid by its job workers on the ground that the job work was exempt and the tax ought never to have been paid - HELD - The case of the Revenue holds only if the law compels the provider of an exempt service to avail the exemption. Section 5A(1A) of the Act, which forbids a manufacturer to pay duty where an exemption has been granted absolutely, does not travel into the Finance Act, 1994. Section 83 of the Finance Act, 1994 takes in only sub-section (2A) of Section 5A. The omission of sub-section (1A) must be taken to be deliberate and cannot be supplied by construction. A provider of a taxable service is therefore under no obligation to avail an exemption, and tax paid by it is not tax paid without the authority of law - Nothing in Rule 2(l)(ii) makes the character of a service as an input service depend on whether the service is taxable in the hands of its provider. The SCN did not doubt that the job work was used in or in relation to the manufacture of the final products, and the objection therefore reads into the definition a condition which it does not contain - Further, the tax paid by the job workers was accepted by the Department without demur, and nothing on record showed that their assessments were reopened or that the tax was refunded. The Revenue cannot retain the tax as validly paid at the end of the provider and treat it as tax which ought not to have been paid when the recipient claims credit - The credit having been rightly availed, the demand fails. Interest, being accessory to the demand, cannot survive. The penalty under Rule 15(1) presupposes that credit has been wrongly taken or utilised and becomes untenable - The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1794-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Exemption to works contract services for construction provided to Railways - Entry 14(a) of Notification No. 25/2012-ST - Adjudication beyond the scope of remand - Appellant provided works contract services for construction of a training school and a hostel to Railways - Whether the services provided to Railways are liable to service tax and whether the Adjudicating Authority could re-open the issue in de novo proceedings - HELD - The services are exempt under Entry 14(a), which covers construction of original works pertaining to railways. The Railways Act, 1989 defines railway to include stations, offices, hostels and other works constructed for the purpose of or in connection with a railway. The training school and the hostel fall within that definition. By confirming the demand, the Adjudicating Authority acted beyond the scope of the remand directions. An authority acting on remand is bound by the directions of the Appellate Authority and cannot revisit settled issues. The finding of exemption, not having been challenged by the Department, had attained finality, and the Department is barred by estoppel from re-agitating it - The demand is set aside and the appeal is allowed - Exemption to works contract services for construction of government buildings provided to State Government corporations - Entries 12/12A and 29(h) of Notification No. 25/2012-ST - Section 102 of Finance Act, 1994 - Contracts entered prior to 01.03.2015 - Appellant provided works contract services to State Government undertakings for construction of Government clinical and educational establishments, offices and residential buildings for Government staff. The lower authorities denied the exemption on the ground that mere Government ownership does not make the entity a Governmental Authority and that the entities did not carry out functions entrusted to a municipality - Whether exemption under Entry 12A can be extended to these works contract services for contracts awarded prior to 01.03.2015 - HELD - The State Government undertakings having over 90% equity are a Governmental Authority as defined in the Notification. The services were for construction of non-commercial Government buildings, which are covered by Entry 12/12A read with the retrospective validation under Section 102. The Appellant is also eligible for exemption as a sub-contractor under Entry 29(h), as the main contractors provided exempt services to the Government. Taxability has to be decided according to the service rendered to the client, whether rendered directly by the main contractor or through a sub-contractor. The Hon'ble Supreme Court has held that the exemption cannot be restricted to authorities carrying out functions entrusted to a municipality, as plain and unambiguous provisions must be interpreted as they stand - The demand on these services is set aside and the appeal is allowed - Cum-tax benefit under Section 67(2) of Finance Act, 1994 - Works contract services under contracts awarded after 01.03.2015 - The first Adjudicating Authority allowed cum-tax benefit on the strength of a certificate from the service recipient and the work orders and payment certificates, which showed that no service tax was paid. The Department did not challenge this. In the de novo proceedings, the benefit was denied on the ground that the Appellant failed to conclusively establish that the amounts received were inclusive of service tax - Whether the Appellant is entitled to cum-tax benefit - HELD - The Appellant had not collected any service tax separately from its clients, and the Department failed to produce any document showing that service tax was charged or received. The gross amount received must therefore be treated as inclusive of service tax in terms of Section 67(2). The benefit, having been correctly allowed in the first Order-in-Original and not challenged by the Department, had attained finality and could not be denied in the de novo proceedings - The Appellant is entitled to cum-tax benefit and the appeal is allowed on this issue - Demand on differential between receipts as per Income Tax Return and Form 26AS - Determination of value of services - The Adjudicating Authority in de novo proceedings treated the gross receipts declared in the ITR as higher than the receipts in Form 26AS and confirmed demand at the full rate on the differential. The FAA had earlier recorded the gross receipts in the ITR as a lower figure - Whether service tax is leviable on the alleged differential between the ITR and Form 26AS - HELD - The ITR for the relevant year shows a total gross receipt lower than the figure adopted by the Adjudicating Authority, as already noted by the FAA. The alleged differential does not exist, as the ITR figure was wrongly quoted by the Department. The demand on the differential is improper and illegal - The demand is set aside and the appeal is allowed on this issue - Threshold exemption under Notification No. 33/2012-ST for the financial year 2016-17 - The FAA denied the threshold exemption on the ground that it is not available once the taxable turnover exceeds the prescribed limit. The Appellant contended that its services in the preceding year were entirely exempt - Whether the Appellant is entitled to threshold exemption in the financial year 2016-17 - HELD - Eligibility for the exemption is determined based on the taxable turnover of the preceding financial year. In the preceding year, the Appellant's services were entirely exempt and the aggregate value of taxable services was nil. The Appellant is therefore entitled to the threshold exemption. The authorities below failed to grant this statutory exemption without any valid reason - The appeal is allowed on this issue - Invocation of extended period of limitation and imposition of penalties under Sections 77, 78 and 70 of Finance Act, 1994 - Bona fide belief on exemption - The exemption under Entry 12(a) for works contract services of construction of Government buildings was omitted by Notification No. 6/2015-ST and reinserted by Notification No. 9/2016-ST as Entry 12A with retrospective effect, subject to a condition regarding contracts entered into prior to 01.03.2015. The Appellant did not take registration or file ST-3 returns, believing its services to be exempt, but declared all its receipts in its financial statements and ITRs. The SCN invoked the extended period and proposed penalties, and a late fee under Section 70 was also imposed - Whether the extended period and penalties can be sustained - HELD - The SCN was issued without any tangible evidence of fraud, collusion, willful misstatement or suppression of facts with intent to evade tax. It merely reproduces statutory language, and the burden of proving willful intent lies on the Department. Suppression of facts must be construed strictly and requires a deliberate and willful act to evade tax, not mere omission or non-payment. The withdrawal and reinstatement of the exemption created an impression that the exemption was still available, and the case is one of bona fide belief arising from an interpretational dispute. The extended period and penalty under Section 78 cannot be invoked in such a case. Penalties under Section 77 are also not imposable. The late fee under Section 70 read with Rule 7C of the Service Tax Rules, 1994 is illegal, as Rule 7C prescribes a penalty for delay in filing returns and not for non-filing of returns - The extended period is not invocable, the penalties and late fee are set aside, and the appeal is allowed - Validity of SCN issued without pre-SCN consultation - Board Instruction and Master Circular - SCN proposed a demand above the monetary threshold prescribed in the Board's instructions and circulars, for which pre-SCN consultation is mandatory. The record did not show that any consultation was held. The FAA held that pre-SCN consultation was not necessary, as the Board had excluded fraud and collusion cases from the process - W [Read less]

2026-VIL-1207-BOM-CU | High Court CUSTOMS

Customs - Applicability of Notification amending import policy of studded platinum jewellery from Free to Restricted under Foreign Trade Policy to goods which arrived in India before publication of the Notification but for which Bills of Entry were filed after publication - Petitioner imported goods under Airway Bills dated 30th and 31st March 2026, which arrived in India prior to publication of the Notification in the Official Gazette on 2nd April 2026, while the Bills of Entry were filed after the Notification - Respondent refused release on the ground that the goods were restricted and pending clearance for home consumption - Whether the date of import for applicability of restriction is to be reckoned as per the Foreign Trade Policy or the Customs Act, 1962 and the Notification applies to goods which arrived before its publication - HELD - Paragraph 1.05(b) of the Foreign Trade Policy defines the date of import for the purpose of policy, and provides that import already made before the date of such restriction will not be affected. Paragraph 2.17(a) read with paragraph 11.11 of the Handbook of Procedures reckons the date of import with reference to the date of shipment or dispatch from the supplying country, which in case of import by air is the date of the relevant Airway Bill, and not the date of arrival or of clearance for home consumption - Once the date of import is defined under the Foreign Trade Policy, the date of import under the Customs Act cannot be applied, otherwise the date defined in the policy would be redundant and meaningless - The Hon'ble Apex Court decisions relied upon by the Respondent dealt with the rate of duty under Section 15 of the Customs Act and are distinguishable. The date of filing of B/E or the clearance post the restriction is wholly irrelevant to applicability of a change in the Foreign Trade Policy - The Notification, which is admittedly not retrospective, can be applied only to goods dispatched after its publication - The Notification is declared not applicable to goods arrived in India before its publication, the Respondent is directed to release the goods expeditiously and to permit submission of the Bill of Entry without insisting on Import Authorisation - The writ petition is allowed - Validity of Office Memorandum issued by the DGFT after filing of the writ petition clarifying that any import consignment not cleared before the date of Notification is governed by the Restricted policy irrespective of date of arrival of goods or filing of Bills of Entry, and effect of Import Authorisation issued thereunder - Respondent relied on the Office Memorandum dated 13th May 2026 to contend that the restriction applies irrespective of arrival of goods, and Import Authorisations were issued to the Petitioner on an interim basis pursuant to directions of the Hon'ble Apex Court - Whether the Office Memorandum can override the Foreign Trade Policy and the definition of date of import therein, and whether the Import Authorisation redresses the grievance of the Petitioner - HELD - The Office Memorandum is contrary to the Foreign Trade Policy and in the teeth of the decisions of the Gujarat and Delhi High Courts. It has no statutory force, is not even subordinate legislation, and no authority of law was pointed out for its issue. Relying on the Hon'ble Apex Court, a clarification contrary to statutory provisions or to law declared by the Courts is not binding and has no existence in law - The Foreign Trade Policy can be amended only by the Central Government in exercise of powers under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, and the purported clarification would literally amount to amending the policy and giving retrospective effect to the Notification, which is beyond the jurisdiction of the issuing authority - The Import Authorisation cannot be treated as redressal of the grievance of the Petitioner, since the conditions imposed therein were beyond the jurisdiction and authority of the Director General of Foreign Trade - The Office Memorandum is held to be of no effect on the goods. The writ petitions are allowed. [Read less]

2026-VIL-1197-BOM | High Court SGST

GST - Provisional attachment of bank accounts under Section 83 of CGST Act - Opinion of Commissioner and tangible material – Respondent-Dept attached the current and escrow bank accounts of the Petitioner, a payment aggregator authorised by the RBI, under Section 83 on the allegation that the Petitioner may be playing a significant role in evasion of GST by an organised online money gaming syndicate, did not cooperate in the investigation - Whether the provisional attachment of the bank accounts of petitioner under Section 83 is without jurisdiction and contrary to the mandate of the Supreme Court in Radha Krishan Industries case - HELD - The power of provisional attachment is draconian and the conditions prescribed by the statute must be strictly fulfilled. The opinion of the Commissioner must be formed on tangible material bearing on the necessity of attachment to protect the interest of the Government revenue and the orders cannot be justified through affidavits-in-reply - The impugned orders contain only vague statements which do not show any GST liability of the Petitioner, and the entire case relates to money laundering by unnamed third parties. The orders do not mention the specific transactions, the entities involved, the manner of evasion or the role of the Petitioner, and the alleged non-existent merchants are not disclosed even in the affidavit-in-reply - Section 83 permits attachment of property belonging to the taxable person or a person specified in Section 122(1A), but the order does not record that the Petitioner is such a person. The monies in the escrow account are impressed with a trust, do not belong to the Petitioner and cannot be attached under Section 83. The Petitioner dealing with government entities is not a fly by night operator. The account of a payment aggregator which is not held liable on any transaction cannot be attached to recover liabilities that may become due in the hands of third parties. There was non-application of mind and the opinion is based completely on suspicion without cogent and credible material - The provisional attachment is illegal as the tests in Radha Krishan Industries are not satisfied. The petition is allowed by quashing the attachment orders and the partial defreezing orders to the extent they continue the attachment – The writ petition is allowed [Read less]

2026-VIL-235-GSTAT-ERN | Tribunal SGST

GST – Confirmation of demand of ITC on a ground not specified in the SCN, violation of Section 75(7) of CGST Act, 2017 - SCN alleged that ITC was ineligible under Section 16(2)(aa) on invoices of suppliers who had not filed GSTR-3B for the tax period 2018-19 - Appellant replied that Section 16(2)(aa) took effect only from 01.01.2022 and could not govern the period, and tendered invoices, ledgers and bank records - The adjudicating authority confirmed the demand by holding that the tax had not been credited to the Government and that Section 16(2)(c) was contravened, without addressing the plea on Section 16(2)(aa) - Appellant contended that the SCN and the Order-in-Original present entirely different cases and that the demand was confirmed on a ground other than that specified in the notice - Whether the mere recital of a legal provision as part of the SCN, without mentioning whether and how it has been contravened, amounts to a charge on which the taxpayer can be said to have been put on notice - HELD - The SCN was issued only on the ground of non-compliance with Section 16(2)(aa), and the charge of contravention of Section 16(2)(c) was never put to the Appellant in the SCN or at the personal hearing. The charge changed in the adjudication order into non-payment of tax by the suppliers, which required detailed verification of supplier records and was not put to the Appellant - A SCN is the foundation of the case and delineates the scope of the proceedings, so any ground, reasoning or claim not figuring in the SCN cannot be permitted to adversely affect the notice - The bare recital of Section 16(2)(c) as part of the extract of Section 16, in the absence of an allegation of whether and how it was contravened, does not put the Appellant on notice. Section 160(1) does not apply as it saves only proceedings which are in substance and effect in conformity with the requirements of the Act, and the proceedings here are vitiated by breach of Section 75(7) - The entire proceedings are vitiated and set aside - The appeal is allowed [Read less]

2026-VIL-230-GSTAT-LCK | Tribunal SGST

GST - ITC on invoices of a non-existent supplier - Denial of Input Tax Credit on invoices of a supplier found non-existent - Burden of proof under Section 155 and actual receipt of goods under Section 16(2)(b) of CGST Act, 2017 - Respondent availed ITC on invoices issued by a supplier found non-existent at its declared place of business - Demand under Section 74 on the allegation that only invoices were generated without movement of goods - FAA quashed the demand by confining itself to the fact that the supplier's registration was active on the portal – Dept contended that FAA failed to examine actual movement and receipt of goods - Whether the orders of the adjudicating authority and FAA are sustainable without examining the documentary evidence of movement of goods and the fulfilment of conditions under Section 16 - HELD - Section 16(2)(b) prescribes actual receipt of goods or services as an essential condition and Section 155 places the burden of proving eligibility on the person claiming ITC. The conditions under Section 16(2) are to be read conjointly; the condition of payment of tax under Section 16(2)(c) cannot be treated as a substitute for actual receipt of goods under Section 16(2)(b) - Genuineness of the transaction and actual physical movement of goods are a sine qua non and the purchasing dealer may discharge the burden by producing tax invoices, e-way bills, transport receipts and other proof of receipt of goods - Active registration of the supplier, issuance of invoices and payment through banking channels cannot, in isolation, conclusively establish receipt of goods when genuineness of the supply is specifically disputed. Equally, non-availability of the supplier at its declared place of business during a subsequent investigation does not by itself conclusively establish that no goods were supplied. The Order-in-Original did not consider the invoices and e-way bills uploaded by the Respondent nor assign reasons for finding them insufficient - FAA confined itself to the active status of the supplier's registration, which is relevant but not determinative, and did not make an independent and comprehensive examination of the claim - The Order-in-Appeal and the Order-in-Original are set aside and the matter is remanded to the adjudicating authority for fresh adjudication with specific and reasoned findings after giving the Respondent an effective opportunity to produce documents on movement of goods - The appeal is allowed by way of remand - Maintainability of second appeal filed by the Department where the disputed ITC is below the monetary limit prescribed in the Circular - Appellant filed second appeal against the order of FAA which had quashed the demand raised on ITC availed on invoices of a supplier found non-existent - Appellant submitted that, notwithstanding the monetary limit under Circular No. 207/1/2024-GST dated 26.06.2024, the matter falls within the exclusion under Para 4(iv)(e) as it concerns a recurring issue involving interpretation of the Act and relied on Para 4(vi) subject to the opinion of the Commissioner - Whether the appeal can be heard on merits notwithstanding the monetary limit - HELD - The appeal involves interpretation and application of Section 16(2)(b) of the UPGST Act, 2017, regarding admissibility of ITC where the supplier was found to be non-existent. It therefore raises a recurring question concerning genuineness of supplies and eligibility for ITC and is not confined to the disputed ITC. The Bench considered the opinion of the Commissioner UPSGST and held that the second appeal must be heard and decided on merit in the interest of revenue - The appeal is entertained and decided on merits. [Read less]

2026-VIL-231-GSTAT-CHD | Tribunal SGST

GST - Eligibility to transitional credit under Section 140(2) of CGST Act, 2017 on duty paid on capital goods imported before the appointed day and received in the factory after the appointed day - Appellant took transitional credit of CVD and additional duty of excise paid on capital goods imported vide Bill of Entry dated 27.06.2017 and received in the factory on 08.07.2017 through Table 6(a) of Form TRAN-1 - SCN under Section 73 was confirmed by the original adjudicating authority and the appeal was rejected by the Appellate Authority - Whether the credit of CVD and additional duty of excise on capital goods received after 01.07.2017 can be carried forward to the electronic credit ledger under Section 140 - HELD - Section 140(2) allows credit of unavailed CENVAT credit in respect of capital goods not carried forward in a return furnished under the existing law, subject to the conditions that the registered person is not opting to pay tax under Section 10, that the credit was not carried forward in a return under the existing law and that it is admissible as CENVAT credit under the existing law as also as ITC under the GST law - The sub-section does not bar unavailed CENVAT credit on capital goods received after 01.07.2017 and Rule 117(2)(a) of the CGST Rules does not provide that credit availed or utilised cannot be nil. The Section does not specify that only fifty per cent credit can be transitioned, so credit not carried forward in the Central Excise return can be transitioned through TRAN-1 whether it is fifty per cent or the full quantum. The Appellant fulfilled all the conditions and filed the necessary information in Form TRAN-1 - The credit in respect of capital goods under Section 140(2) is allowed - The appeal is allowed on this issue - Denial of transitional credit under Section 140 of CGST Act, 2017 of Central Excise duty paid on goods dispatched for export before the appointed day - Appellant took transitional credit through Table 7(a) of Form TRAN-1 of Central Excise duty paid on goods dispatched for export on 29.06.2017 under claim for rebate, on which IGST was again paid at the time of export after 01.07.2017 - Appellant contended that the same goods suffered tax twice, that Section 174(2) of the Act protects rights accrued under the repealed Act and that transitional credit is a vested right which cannot be taken away on procedural or technical grounds - Whether the credit of Central Excise duty paid on goods dispatched for export, which was not required to be paid under the GST law, can be taken as transitional credit in Form TRAN-1 under Section 140 - HELD - Table 7 of Form TRAN-1 relates to inputs held in stock and is not applicable to the Appellant. There is no provision under Section 140 for credit of Central Excise duty paid on goods cleared for export before 01.07.2017 but actually exported after the introduction of GST - The Appellant could perhaps have claimed refund of the Central Excise duty paid but cannot use Section 140 as a residuary provision to avail credit which is not admissible as per law. Recovery of the credit wrongly taken under Section 140 of the CGST Act is governed by the provisions of GST law. No right had accrued to the Appellant under the existing law, as the right to take transitional credit accrued only after GST came into effect and in accordance with its provisions, so Section 174(2)(c) is of no assistance - Transitional credit on Central Excise duty paid on goods exported cannot be allowed under Section 140 and the appeal is rejected on this issue - Liability to pay interest under Section 50 of CGST Act, 2017 on transitional credit held inadmissible - Whether interest is payable under Section 50 if the credit is not held to be admissible - HELD - The law is well settled that if the amount of tax or wrongly availed ITC is recoverable from a taxpayer, the demand of interest on the same is legally tenable. Since the credit relating to export is held inadmissible, interest is payable on that credit - Interest is upheld on the credit held inadmissible, to be calculated accordingly, and the appeal is rejected on this issue - Imposition of penalty under Section 73(9) and Section 122(2) of CGST Act on inadmissible transitional credit - Whether penalty is sustainable if the credit is not held to be admissible - HELD - If the amount is determined as payable under Section 73 of the CGST Act, penalty equivalent to ten per cent of the tax is payable under Section 73(9). Section 73 applies precisely where ITC has been wrongly availed or utilised for any reason other than fraud, wilful misstatement or suppression of facts, so the contention of no suppression is not tenable - Penalty is sustained on the credit held inadmissible and is reduced to ten per cent of the amount disallowed. [Read less]

2026-VIL-1784-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax – Classification of hiring of Transit Mixer machines for transportation of ready mix concrete as Supply of Tangible Goods Service and not Goods Transport Agency Service – Appellant-GTA provided Transit Mixer machines to a ready mix concrete company for transportation of ready mix concrete on monthly charges, with the driver, maintenance and diesel to be within the scope of the Appellant - On scrutiny of third party information, SCN was issued and the demand against hiring charges of Transit Mixer machines was confirmed by the adjudicating authority and upheld by the FAA after appropriating the tax already paid by the Appellant under transport of goods by road service - Appellant contended that the vehicles were provided for freight, that control of the vehicles was not handed over - Whether the hiring of Transit Mixer machines is a Supply of Tangible Goods Service chargeable to service tax on the full amount received or a Goods Transport Agency Service - HELD - The taxable service under Section 65(105)(zzzzj) covers supply of tangible goods for use without transferring right of possession and effective control. The test is whether the contract transferred both possession and effective control, which is a question of fact determined from the agreement and the manner of operation. Following the Hon'ble Apex Court, where substantial control remains with the contractor and is not handed over to the user, there is no transfer of the right to use the vehicles and the transaction is a service within the meaning of Section 65(105)(zzzzj). The Appellant provided the machines for transportation of ready mix concrete, and the driver, maintenance and diesel were to be undertaken by the Appellant. No evidence was submitted that the Appellant provided Goods Transport Agency Service or issued consignment notes - The case is covered by the Hon'ble Apex Court, the Appellant is liable to pay service tax on the full amount received, there is no infirmity in the impugned order - The appeal is dismissed [Read less]

2026-VIL-1786-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Invocation of Extended Period of Limitation for Demand Raised by SCN Beyond Five Years - Appellant was engaged in providing Clearing and Forwarding Agent Service and Business Auxiliary Service - SCN dated 22.10.2021 proposed recovery of service tax for the period April, 2016 to June, 2017 under the proviso to Section 73(1) of the Finance Act, 1994 - Adjudicating Authority confirmed part of the demand along with interest and penalty - Appellant contended that the SCN was issued beyond five years and that the extended period was not invokable as it had replied to the SCN and letters intimating details - Whether the demand for the period covered in the SCN issued on 22.10.2021 is barred by limitation - HELD - The SCN was issued beyond five years for a part of the period involved, which runs from 2016-17 up to June, 2017. The demand up to September, 2016 is therefore not sustainable on limitation itself - The demand is held to be sustainable only for the period within limitation, and the Tribunal proceeded to examine the merits of the remaining demand - Demand up to September, 2016 is set aside as time barred - Liability on Works Contract Service Rendered to Private Companies - Appellant supplied materials and executed renovation and alteration work in the factory plant of the recipient companies, and the Department alleged that the appellant had not paid service tax on such works contract - Adjudicating Authority confirmed the demand - Whether the appellant is liable to pay service tax on works contract service rendered to the said companies for the period within limitation - HELD - The appellant is liable to pay service tax on works contract service rendered to the said companies for the period 01.10.2016 to 30.06.2017 at the rate of 33% of the gross amount received. Interest is payable on the tax so determined - No penalty is imposable on the appellant - The demand is sustained for the period within limitation along with interest but without penalty, and the appeal is disposed of accordingly - Exemption to Commission Earned as Distributor of Telecom SIM and Recharge Vouchers - Appellant entered into an agreement for distribution of recharge vouchers and took distributorship of SIM of a telecom company, and the Department alleged that service tax was payable on the commission accrued - Appellant contended that the commission was exempted under Serial No. 29(f) of Notification No. 25/2012-ST dated 20.06.2012 - Whether the commission earned by the appellant from the telecom company is liable to service tax - HELD - The commission earned by the appellant is exempted at Serial No. 29(f) of Notification No. 25/2012-ST dated 20.06.2012. The appellant is therefore not liable to pay service tax on the commission earned from the telecom company - The demand confirmed on this account is set aside - Taxability of Supply of Plastic Dustbins and Portolet Toilets to Local Bodies and State Governments - Appellant supplied sanitary equipment such as plastic dustbins and portolet toilets to local bodies and State Governments and paid VAT on these transactions - Department alleged that service tax was payable on the amounts received, and the Adjudicating Authority confirmed the demand - Appellant produced invoices to show that the transactions pertained to sale of goods - Whether the supply of plastic dustbins and portolet toilets on payment of VAT is liable to service tax - HELD - The invoices produced by the appellant show that the transactions pertain to sale of the said goods on which VAT has been paid. The appellant has not provided any service but has supplied plastic dustbins and portolet toilets. The appellant is therefore not liable to pay service tax on such supply - The demand confirmed on this account is set aside. [Read less]

2026-VIL-1205-ALH | High Court SGST

GST - Penalty under Section 125 of the CGST Act, 2017 imposed for delayed furnishing of return in FORM GSTR-3B - Penalty exceeding the maximum limit provided under Section 125 - Whether the show cause notice and the penalty order imposing the maximum general penalty under Section 125 can be sustained where the return was filed and late fee paid - HELD - The Petitioner had already filed the return and paid the late fees in accordance with law. The impugned penalty order was for a sum which exceeded the maximum limit provided under the Act - The impugned show cause notice and the penalty order are quashed and set aside and t... [Read more]

2026-VIL-237-GSTAT-ERN | Tribunal SGST

GST – Validity of Remand order by the First Appellate Authority directing the adjudicating authority to verify reconciliation statements and delete the demand - Violation of Section 107(11) of the CGST Act - The adjudicating authority confirmed the demand of ITC along with interest and imposed penalty - The FAA partially allowed assessee's appeal and directed it to submit reconciliation statements and workings for the relevant financial years before the adjudicating authority – Appellant-Revenue contended that the order contravenes Section 107(11) of the CGST Act and Rule 113 of the CGST Rules, 2017 - Whether the FAA c... [Read more]

2026-VIL-223-GSTAT-ERN | Tribunal SGST

GST - Refund of tax collected on air tickets cancelled during the Covid pandemic - Sufficiency of evidence under Section 54(4) of CGST Act - The Appellant-airline filed refund claims of GST collected on tickets sold mostly through IATA agents and settled through the Billing Settlement Plan, which were cancelled and the entire fare including GST was refunded to the passengers – Rejection of appeals on the ground that the Appellant failed to establish excess payment of tax or reimbursement to passengers and that a one-to-one correlation between the travel agent and the passenger was not possible - Whether the Appellant is eligible for refund of GST collected from the passengers and paid to the Department, but subsequently refunded along with the fare to the passengers on cancellation of flights due to the pandemic in terms of the order of the Supreme Court - HELD - The Appellant had submitted sample copies of air tickets, tax invoices, credit notes and the corresponding BSP files before the adjudicating authority and the FAA, which were not appreciated. The ticket number and the passenger name are common to the refund voucher, the tax invoice and the credit note, and provide an undeniable connection between the invoice and the credit note issued for refund of the fare to each passenger. The mode of payment used for purchase of the ticket is also reflected in the refund voucher - The FAA and the adjudicating authority failed to examine this visible information and rejected the refund on flimsy grounds. The entire amount including GST was refunded to the passengers, no amount was retained by the Appellant, and there is no unjust enrichment - The BSP is a trusted framework used by airlines and agents for settlement of amounts collected and of refunds on cancellation. The Appellant also filed an undertaking that no passenger had complained of non-receipt of refund. The Appellant has provided sufficient evidence that the refund of the cancelled tickets reached the respective passengers directly and that the incidence of tax was not passed on - The Appellant is eligible for the refund, the order of the FAA is set aside - The Respondent is directed to process the refund claims with applicable interest from the date of the original refund application till payment – The appeal is allowed - Refund claimed as excess payment of tax where credit notes could not be adjusted against output liability - Circular No. 137/07/2020-GST - The Appellant issued credit notes against tax invoices on cancellation of tickets, but as there were no scheduled flights and no outward supply, the credit notes could not be adjusted in the return. The Appellant therefore filed refund claims under the category of excess payment of tax in Form GST RFD-01, and the FAA held that the Appellant had wrongly claimed the refund as excess payment of tax as there was no excess payment - Whether the refund claim filed as excess payment of tax in the absence of output tax liability to adjust the credit notes is the correct procedure - HELD - The Circular clarifies that where a credit note is issued, the tax liability is to be adjusted in the return, but in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under excess payment of tax, if any, through Form GST RFD-01. The FAA did not apply the Circular in letter and spirit. The Appellant has correctly followed the procedure by claiming the refund in the present manner - The reasoning of the FAA for rejecting the appeals is not sustainable and the order of the FAA is set aside - Credit notes under Section 34(2) of CGST Act - Reversal of ITC by recipient and incidence of tax - The FAA held that the unadjusted credit notes were time-barred under Section 34(2), that the credit notes were issued to travel agents and not to passengers, and that the Appellant must ensure that the agents have reversed the ITC before reducing its GST liability - Whether the conditions of Section 34(2) were satisfied in respect of the credit notes issued during the relevant period so as to entitle the Appellant to refund - HELD - All the tickets were issued in the name of individual passengers and the transactions are B2C transactions, so that there is no question of availing ITC and subsequently reversing it. Section 34 permits a supplier to issue a credit note where tax liability is reduced due to cancellation, and the obligation of reversal lies with the recipient under Section 16(2) read with Rule 37 of the CGST Rules. The proviso requiring reversal of ITC by the recipient was inserted only with effect from 1-10-2025, and the earlier proviso restricted reduction of liability only where the incidence of tax had been passed on to any other person. The question of reversal of ITC for the relevant period therefore does not arise - The Appellant submitted a self-declaration under Rule 89(2)(l) and, having refunded the entire amount to each passenger, the question of passing the incidence of tax does not arise. The matching of credit notes in the recipient's returns would automatically trigger reversal of ITC even in respect of any B2B buyer, and the Revenue brought no such evidence. The Appellant has satisfied the conditions of Section 34(2) while issuing the credit notes - The findings of the FAA are not sustainable and set aside. [Read less]

2026-VIL-218-GSTAT-PYG | Tribunal SGST

GST - Leviability of penalty under Section 129(1)/129(3) of CGST Act, 2017 on stock transfer of goods moved without e-way bill - Appellant transferred five two-wheelers in its own loader from its godown to its showroom about 14 km away and the loader was intercepted by the Mobile Squad - Penalty under Section 129(3) was imposed for want of an e-way bill and was upheld by the FAA - Appellant contended that it was an internal stock transfer of tax-paid goods with no supply and no tax liability - Whether penalty under Section 129 can be confirmed on a registered person for transporting goods without an e-way bill when the goods are moved as a stock transfer - HELD - Rule 138(1) of the CGST Rules, 2017 applies equally to movement of goods for reasons other than supply and therefore covers an intra-city stock transfer. A delivery challan under Rule 55 does not exempt the movement from the e-way bill requirement since Rule 55(3) provides that the movement must still be declared as specified in Rule 138 - The exemption in Rule 138(14)(n) is only for movement to and from a weighbridge, and the provisos to Rule 138(3) and Rule 138(5) only relate to Part B of the e-way bill. Non-generation of the e-way bill is therefore a procedural non-compliance. However, the penalty under Section 129(1) is leviable only with reference to the tax payable on such goods. For a transaction to be a supply under Section 7 there must be two different persons between whom the sale, transfer or disposal takes place for consideration. In a stock transfer there is only one party and no consideration, hence it is not a supply, is not covered by Section 9, and no tax is payable on the goods. Once no tax is payable the penalty determined with reference to such tax is not leviable - The penalty under Section 129 is quashed, the orders of the adjudicating authority and the FAA are set aside - The appeal is allowed - Necessity of intent to evade tax for penalty under Section 129 of CGST Act, 2017 and charge of clandestine removal in stock transfer of two-wheelers - Goods were moved by Appellant from its godown to its showroom under a delivery challan but without an e-way bill - Revenue contended that statutory GST penalties do not require proof of mens rea Appellant contended that goods could not be sold out of books and that there was no deliberate intent to evade tax - Whether a charge of deliberate intent to evade tax by clandestine removal and imposition of penalty under Section 129 is warranted - HELD - Each two-wheeler is uniquely identifiable by its engine and chassis numbers, and registration with the R.T.O. and insurance require a valid tax invoice, Form 21 and Form 22, which makes a clandestine sale virtually impossible. The charge of clandestine removal is therefore unsustainable both in law and on facts - The vehicles were purchased from the manufacturer against valid tax invoices on which GST was duly paid and where the tax has already reached the State exchequer the motive to evade tax is absent. The Appellant's practice of not generating e-way bills for such transfers and its reliance on the distance-based exemptions arose from an honest misunderstanding, so there was a technical and procedural breach without mens rea - A stock transfer carrying no tax liability discloses no material from which an intent to evade tax can reasonably be inferred and mens rea remains a necessary ingredient for penalty under Section 129 - Although the law required an e-way bill to be generated, the virtual impossibility of tax evasion and the absence of fraudulent intent rule out the penal measures under Section 129, therefore the penalty is quashed - The appeal is allowed [Read less]

2026-VIL-225-GSTAT-ERN | Tribunal SGST

GST - Denial of Input Tax Credit - Excess ITC alleged on comparison of GSTR-2A with GSTR-3B head-wise - Appellant, a super distributor of mobile phones, was issued an SCN under Section 73 alleging excess ITC availed for the year 2017-18, and the demand was confirmed and upheld by the FAA. The Appellant produced an undisputed reconciliation of the latest GSTR-2A and GSTR-9 figures together with IGST credit on import of goods, showing that overall ITC available exceeded the ITC availed, with a shortfall in CGST and SGST credit that was covered by surplus IGST credit - Whether excess availment of ITC can be determined on an aggregate basis by setting off the surplus IGST credit against the shortfall in CGST and SGST credit, so as to sustain a demand under Section 73 - HELD - The facts and figures of the reconciliation, including the IGST credit on imports, were not disputed or rebutted by the Respondent. Under Section 49(5)(a), IGST credit is first utilised towards IGST and the remaining amount may be utilised towards CGST and State tax, and it is therefore the vested right of the taxpayer to use surplus IGST credit to discharge any shortfall of CGST and SGST. Following the Kerala High Court decision, which approved the principle that the electronic credit ledger is a unified pool with compartments for IGST, CGST and SGST, and which has been followed in later decisions, the jurisdictional High Court ruling is binding in keeping with judicial discipline. The shortfall in CGST and SGST credit stood absorbed by the surplus IGST credit, so that the overall credit remained in excess. The contentions on Section 16(2)(c) and Section 155 are not relevant as the SCN contained no specific allegation on them, and apart from the alleged difference between GSTR-2A and GSTR-3B the SCN disclosed no cause of action - No case of short payment of tax is made out to invoke Section 73 - The demand is set aside and the appeal is allowed - Order confirming demand under Section 73 passed without personal hearing and non-speaking order of the FAA - Appellant contended that the adjudicating authority neither afforded a personal hearing nor considered the reply to the notice in Form ASMT-10, and that the FAA upheld the order without addressing this violation - Whether the adjudication order passed without hearing and the appellate order confirming it mechanically without discussing the contentions can be sustained - HELD - It is a matter of record that the adjudicating authority did not afford a hearing to the Appellant and did not discuss the contentions in the order, which is a unilateral recital of charges. The order is null and void on this ground alone as it is passed against the principles of natural justice. The FAA recorded the contentions of the Appellant, including those on facts not rebutted by the Respondent, but did not discuss or analyse any of them and confirmed the order mechanically. The order is a non-speaking order showing total non-application of mind, in gross violation of the principles of natural justice - The impugned order in appeal is set aside in its entirety, and the appeal is allowed. [Read less]

2026-VIL-221-GSTAT-AGR | Tribunal SGST

GST - Amnesty scheme under Notification No. 53/2023-Central Tax - Pre-deposit paid through electronic credit ledger instead of electronic cash ledger - The Appellant-taxpayer filed a time-barred first appeal under Section 107 of the CGST Act availing the amnesty scheme and paid the entire pre-deposit by debiting the electronic credit ledger as the portal did not allow payment through the electronic cash ledger. The FAA registered the appeal as defective, and dismissed it as time-barred when the Appellant did not appear on the date of hearing - Whether the rejection of the first appeal as time-barred under the amnesty schem... [Read more]

2026-VIL-220-GSTAT-AGR | Tribunal SGST

GST - Input Tax Credit, Allegation of bogus supplier - Eligibility of ITC supported by documentary evidence of purchase, transportation and receipt of goods - SCN under Section 74 was issued to the Respondent-assessee on the basis of an investigation report from another State alleging that the supplier was a bogus firm engaged only in exchange of invoices, and that the Respondent had availed ITC on purchases from that supplier. The adjudicating authority confirmed tax, penalty and interest as no reply was filed, but the FAA set aside the demand and penalty - Whether ITC availed on purchases from the supplier was liable to be disallowed on the ground that the supplier was allegedly bogus and the actual movement and receipt of goods was not established - HELD - The allegation against the supplier cannot be considered in isolation from the evidence produced by the recipient, as the eligibility of ITC must be examined with reference to the statutory conditions and the facts and evidence relating to the particular transactions - The Respondent produced purchase orders, tax invoices, e-way bills, payment records, entries in the books of account and stock register, consignment documents and vehicle particulars, which establish the actual purchase, transportation and receipt of goods and refute the allegation that only invoices were procured. The registration of the supplier, which had allegedly been cancelled on the basis of the investigation, was subsequently restored by the supplier's jurisdictional authority and the Revenue did not controvert the revocation order. The revocation of the supplier's registration nullifies the allegation that the supplier is bogus or non-existent. The ratios of the High Court judgments relied upon by the Revenue do not apply to the facts of the case - Allowance of ITC is justified, the Revenue has failed to establish grounds for interference - The appeal is dismissed - Natural Justice - Additional evidence accepted by FAA - Whether acceptance of additional evidence without opportunity to adjudicating authority vitiates the appellate order - The Revenue contended that the FAA accepted additional evidence produced by the Respondent-taxpayer without affording the adjudicating authority an adequate opportunity to examine and controvert it, contrary to the principles of natural justice, while the Respondent submitted that the documents were forwarded to the adjudicating authority and a report was called for - Whether the order of the FAA allowing ITC calls for interference on the ground that additional evidence was accepted without opportunity to the Revenue - HELD - The FAA did not proceed solely on the basis of the Respondent's assertions. The record indicates that the documents produced by the Respondent were forwarded to the adjudicating authority, a report was called for, and the report submitted by the adjudicating authority was taken into consideration by the FAA. In these circumstances, the contention that the additional evidence was accepted without affording any opportunity to the Revenue does not furnish sufficient ground for setting aside the impugned order - The ground of the Revenue is rejected, the appeal is dismissed and the order of the FAA is upheld. [Read less]

2026-VIL-224-GSTAT-TVP | Tribunal SGST

GST - Input tax credit on interior work in rented showrooms - Restriction under Section 17(5)(d) of the CGST Act, 2017 and Explanation 1 thererto - Extent of capitalisation - The Appellant-retail trader availed ITC on invoices for joinery, carpentry and painting services used for setting up wooden and glass shelves in showrooms taken on rent, and the ITC was denied as restricted under Section 17(5) of the CGST Act. The Appellant produced a CA certificate stating that the expenditure was capitalised under furniture and fixtures, that GST charged on the invoices was not added to the cost of the assets, that it was accounted separately as ITC, and that no depreciation was claimed on the tax component - Whether the Appellant is entitled to ITC on the invoices or whether the credit is restricted under Section 17(5) - HELD - The services were procured for interior work of the shops used for the retail business, which is in direct relation to furtherance of business, and ITC is available under Section 16(1). Explanation 1 to Section 17(5)(c) and (d) provides that the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property - If the Appellant has not capitalised the CGST and SGST portion of the invoices in its books of accounts, it would be eligible for ITC on such additions and alterations to the shop which is its registered place of business. The GST portion of the invoices was excluded from the claim of depreciation and was not capitalised, so that it is not covered under the restricted category of Section 17(5)(d) - The Appellant is entitled to ITC on the said invoices - The order of the FAA is set aside and the appeal is allowed - Classification of supplier's services raised for the first time at appeal - Scope of SCN in ITC dispute - The Appellant availed ITC on invoices issued by the supplier for joinery and carpentry services and painting services in respect of its rented retail showrooms, and the ITC was denied under Section 17(5) - Respondent contended that the services fall under the SAC group of building completion and finishing services as classified by the supplier, whereas the Appellant contended that the services fall under interior design services - Whether the classification of services at the supplier's end can be examined at the stage of appeal in a dispute regarding availment of ITC at the recipient's end - HELD - The SCN issued by the Deputy Commissioner does not raise any dispute about the classification of services provided by the supplier. Once the classification of services at the supplier's end is not disputed, it cannot be raised at this stage when the issue is only regarding availment of ITC at the buyer's end. The Tribunal is not inclined to go into mere allegations which are beyond the scope of the SCN - The classification of services is not examined and the issue is confined to the eligibility of ITC. [Read less]

2026-VIL-234-GSTAT-LCK | Tribunal SGST

GST - Penalty under Section 129(3) of CGST Act, 2017 for diversion of goods to an undeclared recipient - Vehicle carrying goods accompanied by tax invoice, e-way bill and bilty was intercepted near the entrance of a factory in Kanpur, whereas the documents declared the bill-to party in Haryana and ship-to party in Kolkata - Department alleged diversion on the basis of the location of the vehicle, the driver's initial statement and a discrepancy in the bilty regarding the place of dispatch - Penalty was imposed in Form GST MOV-09 and upheld by FAA - Whether the Department has established, on the basis of cogent and reliable evidence, that the goods were intended to be delivered to an undeclared recipient so as to justify penalty under Section 129(3) - HELD - The goods were accompanied by a tax invoice and e-way bill identifying the goods and the declared transaction, and no discrepancy in description or quantity was established. Mere presence of a vehicle near a factory entrance does not conclusively establish that the goods were being delivered there. The driver's statement is relevant but cannot be treated as conclusive in isolation and must be assessed with the accompanying documents and independent corroboration - In the absence of evidence showing actual unloading, receipt of the goods by the alleged local recipient, or other independent material establishing the alleged transaction, the inference of diversion must be examined with caution. The declared invoice and e-way bill cannot be displaced merely on the basis of suspicion or an inference drawn from the vehicle's location - Where the authority relies on a video recording, the person proceeded against must have a reasonable opportunity to examine and controvert it, and the non-supply of the recording impaired the ability to rebut – Further, under the GST Act there is no provision requiring disclosure of route. The Department did not establish actual unloading or receipt by an undeclared purchaser, and since the vehicle was intercepted outside the gate, the allegation rests on assumption rather than proof - The Order-in-Appeal and the Order-in-Original are set aside - The penalty under Section 129(3) is quashed and the appeal is allowed [Read less]

2026-VIL-232-GSTAT-LCK | Tribunal SGST

GST - Classification of Ghamella marketed as Tasla under Tariff Item 7323 94 10 or Heading 8201, Eligibility to exemption as agricultural hand tool for the period prior to 25.01.2018 - Appellant manufactured circular concave articles by slitting CR or galvanized iron sheets and deep drawing them in a power press, and cleared them from 01.07.2017 to 22.01.2018 as Tasla under HSN 8201 at NIL rate, but from 23.01.2018 changed the description to Ghamellas, reclassified them under HSN 7323 94 10 and paid 18% GST - SCN under Section 73(1) was dropped by the adjudicating authority as the notifications of 25.01.2018 were prospective, but FAA restored the demand - Appellant contended that the exclusion of Ghamella from Entry 137 and the insertion of Entry 236A by the notifications of 25.01.2018 operate prospectively - Whether the product is classifiable as other hand tool of a kind used in agriculture under Heading 8201 and exempt for the period 01.07.2017 to 24.01.2018 or is taxable under Tariff Item 7323 94 10 - HELD - To qualify as a hand tool under Heading 8201 the article must inherently possess an active working surface, blade or mechanical layout designed for specialised manual actions such as chopping, digging or sawing. The product is a passive, load-bearing container or tray used for collecting, carrying and dispersing material and lacks such traits - Applying Rule 3(a) of the General Rules for Interpretation, a specific description overrides a general or residual entry, and Tariff Item 7323 94 10 specifically names Ghamellas, so it cannot be bypassed under the pretext of partial end-use. Heading 7323 is not restricted to culinary utensils and covers table, kitchen or other household articles, so the presence of zinc or lead coating is irrelevant - Introduction of GST on 01.07.2017 created an independent and fresh tariff matrix, so the 2015 Central Excise Tariff Conference resolutions and legacy orders issued under the erstwhile Central Excise framework cannot override GST schedules - The words "other than ghamella" added to Entry 137 and the insertion of Entry 236A by the notifications of 25.01.2018 were clarificatory amendments to remove ambiguity and plug the loophole, since the specific description of Ghamellas was active in the GST Tariff from 01.07.2017, no new tax liability was created retrospectively - The product is held taxable from the inception of GST under Tariff Item 7323 94 10 - The Order-in-Appeal is upheld and the appeal is dismissed - Validity of SCN issued under Section 73(1) after the pre-SCN consultation was closed by the Joint Commissioner (Audit) - Final Audit Report was considered during the first pre-SCN consultation and the dispute was closed on 13.01.2021, but the SCN was thereafter issued by the Assistant Commissioner (Audit) on 03.02.2022 - Appellant contended that under Section 5(2) of the CGST Act a subordinate authority cannot reopen a matter closed by a superior officer and that the SCN is an abuse of process and void ab initio - Whether a SCN can be issued under Section 73(1) when the pre-SCN consultation was closed by a superior officer - HELD - Reliance on Section 5(2) is misplaced, since although a superior officer may exercise the powers of a subordinate, an internal audit clearance or a pre-SCN administrative closure is not a formal quasi-judicial adjudication order. Section 65 empowers the department to conduct audits and Section 73(1) mandates service of notice where it appears to the proper officer that tax has not been paid or short paid - The SCN was valid and the plea of res judicata at the pre-notice stage is not sustainable - Imposition of penalty under Section 122(1)(x) of CGST Act, 2017 on clearance of taxable goods under an exempted classification - Appellant cleared the goods as Tasla under HSN 8201 at NIL rate from 01.07.2017 to 22.01.2018 and from 23.01.2018 changed the invoice nomenclature to Ghamellas, reclassified under HSN 7323 94 10 and began paying 18% GST, and FAA imposed penalty equivalent to the tax - Whether penalty under Section 122(1)(x) is sustainable - HELD - Audit verification established that there was no change in raw materials, machine press layouts, chemical coatings, weight, pricing models or wholesale buyers before or after January 2018. Since the physical reality of the product remained identical, the deliberate manipulation of invoice descriptions to mask a fully taxable article under an exempted category proves that the Appellant actively suppressed the true nature of its transactions to wrongfully capture a tax benefit. The intentional misstatement of the product description to evade tax stands established - The penalty under Section 122(1)(x) is sustainable and justified. [Read less]

2026-VIL-1785-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs - Absolute confiscation of betel nuts and imposition of penalty for alleged smuggling of goods of foreign origin - Intelligence was received that two consignments of betel nuts smuggled from Myanmar through the Indo-Myanmar border and stored at a godown in Mizoram were to be transported by two trucks through the Siliguri area of West Bengal - The DRI officers intercepted both trucks and seized the betel nuts under Section 110 of the Customs Act, 1962 as liable to confiscation under Sections 111(b) and 111(d) - SCN proposed absolute confiscation of the goods under Sections 111(b) and 111(d) and penalties on the Appellants under Sections 112(a) and 112(b) - The adjudicating authority absolutely confiscated the goods and imposed penalties relying on the statements of the drivers and handymen, the test report and the statements of the consignors, which was upheld by the FAA - Whether betel nuts, being non-notified goods, can be confiscated under Section 111 and penalties imposed under Section 112 of the Customs Act, 1962 on the basis of statements and a test report without proof that the goods are of foreign origin and smuggled - HELD - The sole allegation was that the trucks intercepted far from the border were carrying betel nuts of foreign origin. The invoices showed consignors in Mizoram and consignees in West Bengal, so it cannot be merely said that the betel nuts were seized at the Indo-Myanmar border. The test report does not conclusively say that the betel nuts are of Myanmar origin since it only says that they seem to be of North East including Myanmar region, which does not mean that the goods are of Myanmar origin. Even if the goods are presumed to be of Myanmar origin, betel nuts are not notified under Section 123 of the Customs Act, 1962, therefore the burden of proving that they are smuggled lies on the Revenue. Merely on the basis of a statement, it cannot be concluded that the betel nuts are smuggled. Following the decisions of the Hon'ble High Court at Calcutta, affirmed by the Hon'ble Apex Court, and of the Tribunal and the Hon'ble High Court at Allahabad, no adverse presumption can be drawn against the Appellants for non-notified goods, suspicion however strong cannot substitute proof, and a finding based on presumption without legal or factual basis cannot be sustained. An opinion that is only suggestive and not definitive, and is not based on any scientific test to determine origin, cannot be accepted as cogent material to establish foreign origin - The Revenue failed to discharge the burden of proving that the goods are smuggled, hence the goods cannot be held liable to confiscation on the basis of assumptions and presumptions - The order of confiscation is set aside, no penalty is imposable on the Appellants and the appeals are allowed [Read less]

2026-VIL-1780-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Applicability of Sl. No. 3 of Notification No. 23/2003-C.E. to DTA clearances of Instant Tea by a 100% EOU manufactured wholly from indigenous raw materials - Appellant, a 100% EOU, cleared into the DTA Instant Tea manufactured exclusively from indigenous raw materials and availed Sl. No. 4 of the Notification - Department held that Sl. No. 4 was not available as like goods manufactured by a non-EOU were not wholly exempt or chargeable to nil rate of duty, assessed the clearances under Sl. No. 2 and confirmed differential duty with interest and penalty under Section 11AC(1)(c) of Central Excise Act, 1944 - Appellant contended that Sl. No. 3 applied and that a wrong claim of serial number cannot deny the exemption otherwise available - Whether the clearances necessarily fall under Sl. No. 2 once Sl. No. 4 is held unavailable or are governed by Sl. No. 3 - HELD - Even if Sl. No. 4 may not be applicable, the applicability of Sl. No. 2 cannot be presumed merely by elimination without examining the nature of the goods cleared, the origin of the raw materials and the conditions stipulated under the other entries. All three conditions of Sl. No. 3 are satisfied. The goods were manufactured wholly from indigenous raw materials, as verified by the Department in earlier proceedings where separate accounts were found maintained and the demand was dropped. The goods were cleared into the DTA in accordance with the Foreign Trade Policy as acknowledged by the adjudicating authority itself. Like goods manufactured by a non-EOU were neither wholly exempt nor chargeable to nil rate of duty. A procedural lapse or an initial incorrect claim cannot deny a substantive exemption. An applicant who fails to claim the correct exemption at the initial stage is not debarred or estopped from claiming it later - The Appellant is entitled to Sl. No. 3, the duty is restricted to that leviable on like goods manufactured by a non-EOU, the demand in excess is set aside, and the Appellant is liable to pay duty with interest as computable under Sl. No. 3 only within the normal period of limitation – The appeal is disposed of - Invocation of extended period of limitation under Section 11A(4) of Central Excise Act, 1944 where the Department had prior knowledge of the facts - Four SCNs were issued for DTA clearances of Instant Tea by a 100% EOU, the last being styled as a supplementary notice overlapping the earlier periods, and the extended period was invoked on the allegation of suppression of facts with intent to evade duty - Appellant contended that the facts were known to the Department through earlier proceedings, audits and the earlier SCNs - Whether the extended period of limitation is invokable - HELD - In the earlier proceedings the Department had examined the very issue of use of imported tea vis-à-vis indigenous raw materials after physical verification of the factory and records, and the demand was dropped. The subsequent SCNs were issued on the same notification and the same duty computation, and the later notice revised the quantification of the earlier notices. As held by the Hon'ble Supreme Court, where the relevant facts were already within the knowledge of the Department when an earlier SCN was issued, the same facts cannot be relied upon later to allege suppression and invoke the extended period afresh by merely reiterating the allegation. The SCNs were issued before the amendment of Section 11A by the Finance Act, 2016 which enhanced the normal period from one year to two years - The extended period of limitation is not available to Revenue and the demands raised by invoking the extended period are set aside - Imposition of penalty under Section 11AC(1)(c) of Central Excise Act, 1944 where the dispute arises from adoption of an incorrect serial number of exemption notification - Penalty equal to the duty confirmed was imposed on the Appellant, a 100% EOU, on the allegation of suppression with intent to evade payment of duty on DTA clearances - Whether the ingredients for penalty under Section 11AC(1)(c) are made out - HELD - The Department failed to bring on record any tangible evidence of fraud, collusion, wilful mis-statement or suppression of facts with intent to evade payment of duty. The dispute emanates from the adoption of an incorrect serial number of Notification No. 23/2003-C.E. while determining duty on clearances into the DTA, which is a lapse of incorrectly applying the relevant entry and not an established act of deliberate evasion. The material circumstances concerning the manufacturing operations and the use of indigenous raw materials had previously been examined by the Department. In the absence of cogent evidence of deliberate concealment, the mere adoption of an incorrect serial number cannot be elevated to wilful suppression with intent to evade duty - The requisite statutory ingredients for penalty under Section 11AC are not made out and the penalty is set aside. [Read less]

2026-VIL-1781-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Maintainability of penalty proceedings under Rule 26(2) of Central Excise Rules, 2002 against a Director of a company without issuing SCN to the company - Appellant, a Director but not the Authorised Signatory of a trading company, was penalised under Rule 26(2) for the company's alleged availment and passing on of CENVAT credit on paper transactions without receipt of goods - SCN was issued to the Appellant for penalty but not to the company - The adjudicating authority confirmed the penalty in the de novo order after the matter was remanded by the Tribunal - Appellant contended that the proceedings against him without issuing SCN to the company are not maintainable in law - Whether penalty can be imposed on the Director without issuing SCN to the company - HELD - It is an admitted fact that proceedings were initiated against the Appellant for imposition of penalty without any SCN to the company. The other Director was the Authorised Signatory of the company and the Appellant was not. Penalty cannot be imposed on the Director for the alleged offence of the company without making the company a party - The proceedings initiated against the Appellant without issuing notice to the company are legally not sustainable and the penalty is set aside - Imposition of penalty under Rule 26(2) of Central Excise Rules, 2002 for issue of invoices without supply of goods - Appellant, a Director of a trading company, was penalised for facilitating passing on of CENVAT credit to buyers on 57 consignments of M.S. items allegedly received only through invoices from a supplier found to have no infrastructure for manufacturing M.S. items - The Department relied on the supplier's lack of infrastructure and on the reversal of credit by the buyers - Appellant contended that he did not issue any invoice without supply of goods and that the supplier was a registered manufacturer from whom goods were procured through brokers - Whether penalty is imposable under Rule 26(2) in absence of a finding that the Appellant issued invoices without delivery of goods - HELD - Penalty under Rule 26(2) can be imposed only when a person is found to issue invoices without supply of the underlying goods or abets in making such invoices. There is no finding in the impugned order that the Appellant issued any invoice without supply of goods to facilitate others in taking CENVAT credit, and no evidence of connivance or abetment by him. The Director was not the beneficiary of the credit passed on. Reversal of credit by the buyers under compulsion has no impact on the Appellant's company and cannot be taken as an admission of passing on irregular credit. The supplier not having sufficient infrastructure cannot lead to an inference that the company did not receive the goods and passed on credit through paper only - The penalty imposed under Rule 26(2) is set aside - Evidentiary value of statements of truck owners where the procedure under Section 9D of the Central Excise Act, 1944 is not followed - The adjudicating authority relied on the statements of some truck owners to sustain the allegation of supply of invoices without goods - Appellant contended that the statements have no evidentiary value since the procedure under Section 9D was not followed - Whether the statements recorded during investigation can be relied upon without following Section 9D - HELD - Following the Hon'ble High Court at Punjab and Haryana, Section 9D(1) is mandatory. Unless the circumstances in clause (a) exist, the maker of the statement must first be examined as a witness before the adjudicating authority, who must then form the opinion that the statement should be admitted in evidence in the interests of justice. If this procedure is not followed, the Revenue is regarded as having given up the witnesses and the statements must be eschewed from consideration as not relevant for proving the truth of their contents - The statements of the truck owners have no evidentiary value and cannot be relied upon, and the penalty founded on them cannot be sustained. [Read less]

2026-VIL-1779-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Eligibility to CENVAT credit of CVD paid at concessional rate on imported coal under Customs Notification No. 12/2012-Cus - Respondent, a manufacturer of Sponge Iron and M.S. Ingot, imported steam coal on payment of CVD at concessional rate and availed CENVAT credit under Rule 3(1)(vii) of CENVAT Credit Rules, 2004 - Appellant-Revenue alleged that the credit was not admissible since CENVAT credit in respect of concessional rate of excise duty on coal under Central Excise Notification No. 12/2012-CE is barred by the proviso to Rule 3(1)(i) - The demands were confirmed with interest and penalty by the adjudi... [Read more]

2026-VIL-1793-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Denial of Cenvat Credit for Non-Production of Invoices During Audit - Audit of the Appellant for the year 2013-14 issued a memo stating that copies of invoices in respect of Cenvat Credit taken during April, 2013 to March, 2014 were not produced, and the lower authorities confirmed the demand of credit along with interest and penalty - Appellant contended that the documents were taken away by Anti-Evasion officials, that the receipt of goods was entered in the Register of Input Duty Credit attested by the Superintendent, and that there was no allegation of non-receipt or diversion of goods - Revenue contended that no evidence was brought to show that the documents were taken away and that the details of the Register were not produced before the lower authorities - Whether Cenvat Credit can be denied for non-production of copies of invoices - HELD - Admittedly the Appellant was not in a position to produce the invoices before the audit party. However, the Appellant has properly accounted for the receipt of goods in the Cenvat Duty Register, which is attested by the Superintendent, and has also produced some of the invoices. There is no allegation in the SCN or in the proceedings that the goods were not received by the Appellant. The accounting of goods in the Register and in the ledger of the vendor shows that the materials were received - Cenvat Credit cannot be denied only on a technical allegation - Demand of Cenvat Credit is not sustainable on merits and the impugned order is set aside - Limitation for SCN Issued More Than Two Years After Department Became Aware of Cenvat Credit - Department raised a demand of Cenvat Credit by spot memo dated 31.07.2015 after audit, and SCN was issued on 06.09.2017 - Appellant contended that the Department was aware of the issue on 31.07.2015 and the SCN issued after more than two years is time barred - Whether the demand is barred by limitation - HELD - The letter issued by the Superintendent on 31.07.2015 shows that the Department was aware of the credit on that date itself. There is no suppression when the Department had the knowledge of the facts, and the principle laid down in the Tribunal's decision that the extended period cannot be invoked in the absence of suppression with intent to evade payment of duty is applicable. The SCN issued more than two years after the date of knowledge is time barred - The appeal is allowed on account of time bar, with consequential relief, if any, as per law. [Read less]

2026-VIL-1791-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise - CENVAT Credit on input services received at service stations covered by centralised service tax registration and taken in the factory CENVAT account - Appellant provided taxable repair and maintenance services from service stations under a centralised registration at the factory address - Revenue denied the credit in three SCNs on the grounds that the services were not used in relation to manufacture, were not received in the factory and ought to have been distributed through an Input Service Distributor - Whether the credit could be taken in the factory CENVAT account and utilised for payment of excise duty when the factory was not registered as an Input Service Distributor - HELD - The services did not qualify under the manufacturer limb of Rule 2(l), and centralised registration being a procedural matter cannot cure this. However, the first limb of Rule 2(l) tests whether the service is used by a provider of output service for providing an output service, and this limb was never examined by the authorities below - The services were received and used at premises from which taxable output services were rendered, so the Appellant discharged the burden under Rule 9. Centralised registration under Rule 4(2) of the Service Tax Rules brings all declared premises of one assessee under a single registration, and the service stations are premises of the registered provider and not separate providers - The condition that services be received in the factory is irrelevant, as Rule 3 attaches no such condition, and Rule 3(4) permits utilisation of credit for payment of any duty of excise without one to one correlation - The ISD mechanism presupposes distribution from one office to another, whereas here the invoices were received, accounted and paid at the centrally registered premises, so nothing was left to distribute. Rule 7, till 31.03.2016, was only enabling, and the absence of registration as ISD is at best a curable procedural lapse. The amendment making distribution compulsory from 01.04.2016 binds an Input Service Distributor and does not deem a registrant who distributed nothing to be one. Rule 7 was not invoked in the SCNs, and the Revenue cannot sustain the demand on a ground not laid in the notice. The OIO also confirmed a larger sum under Section 11A(4) than the sum proposed under Section 11A(1) in one SCN - The credit was admissible to the Appellant as a provider of output service, the demands are set aside and the appeals are allowed - CENVAT Credit - Credit on services received at marketing and branch offices claimed as input services of the manufacturer - Whether the demand on this credit is sustainable when the plea of place of removal was left unanswered - HELD - The component was decided only on the plea actually made, as the first limb of Rule 2(l) was never invoked for it. Section 4(3)(c)(iii) includes within place of removal a depot or any other place from where excisable goods are to be sold after clearance from the factory, and the second limb of Rule 2(l) covers services used in relation to clearance upto the place of removal, including advertisement, sales promotion and storage. The assertion that goods are sold from these offices was neither examined nor controverted. Ispat Industries does not help the Revenue, since these offices are premises of the manufacturer, and a contention specifically raised and left unanswered by both authorities cannot be brushed aside. The SCNs also did not segregate this component or allege anything specific about use of the services at these offices - The demand on credit relating to marketing and branch offices is not sustainable and is set aside - Recovery of ISD credit distributed wholly to the factory - Input Service Distributor distributed its entire credit for a period to the factory - SCN alleged that this offended Rule 7(d) as the credit ought to have been distributed pro rata on turnover with the spare parts packing unit - The Appellant reversed a portion on a turnover basis worked out by a Chartered Accountant to meet the audit objection - Whether the ISD credit distributed wholly to the factory is recoverable from it - HELD - Clause (d) of Rule 7 applied only to credit of a service used in more than one unit, whereas clause (c) required credit of a service used wholly in one unit to be distributed only to that unit. The SCN assumed without enquiry that the services were common to both units, while the Appellant's consistent case was that they pertained to motorcycle manufacture at the factory. The Chartered Accountant's apportionment is not evidence of usage, and the foundational fact for clause (d) was never established. Eligibility of the services and quantum of credit were not in dispute, and the distribution was never questioned at the end of the ISD. Before 01.04.2016 Rule 7 used the expression may distribute, there was no compulsion to distribute proportionately among all units and credit distributed wholly to one unit could not be denied. The FAA answered an argument never made, namely that the amendment of 01.04.2014 was retrospective - The recovery of the ISD credit is not sustainable on merits and is also barred by limitation - Extended period of limitation for recovery of ISD credit, credit of other units and credit of service stations - The SCN invoked Section 11A(4) on the grounds that the facts would not have surfaced but for the audit and that the Appellant reversed the credit only after the audit - Whether the extended period was rightly invoked - HELD - Suppression means deliberate withholding of information with intent to evade duty, mere non disclosure does not suffice, the burden of proving mala fides lies on the Revenue, and non disclosure can be alleged only if there was a requirement to disclose. The ER-1 returns disclosed the credit taken each month and did not call for invoice wise particulars, the audit objections were raised from the Appellant's own records, and failure of officers to scrutinise returns cannot be converted into suppression. A matter coming to light in audit does not by itself establish suppression - The Department had every fact before it and itself proceeded under the normal period in the two later SCNs on the identical issue. The exercise was revenue neutral as the other units were entitled to the credit and took it, and the Rule 7 question was genuinely arguable, which excludes wilful contravention - The extended period was not invocable, the demands on ISD credit and credit of other units are barred by limitation, and the service station demand is barred beyond the normal period - Interest and Penalty - Sustainability of interest and penalty under Rule 15(1) and Rule 15(2) read with Section 11AC where the demands fail on merits and limitation - Penalty under Rule 15(2) was imposed even on the amount already reversed and intimated before the SCN, and the penalty under Rule 15(1) read with Section 11AC(1)(a) was three times the statutory ceiling - Whether interest and penalties are sustainable - HELD - No interest is payable on the credit of the service stations as it was rightly taken, and interest demanded in a notice barred by limitation cannot survive. The alternative plea that interest is not payable in a revenue neutral situation was left open. The penalty under Rule 15(2) was premised on fraud, suppression or wilful misstatement with intent to evade duty, and that premise having failed the penalty cannot stand. Clause (a) of Section 11AC(1) caps the penalty under Rule 15(1) at ten per cent of the duty determined or a fixed sum, whichever is higher, so a penalty far above this ceiling was imposed without authority of law and was affirmed by the FAA without comment - Interest and penalties are not sustainable and are set aside [Read less]

2026-VIL-1792-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Clandestine manufacture and removal alleged on the basis of third-party records - Appellant, a manufacturer of Sponge Iron, was alleged to have cleared goods without payment of duty on the strength of computer printouts and pen drive data retrieved from the premises of one buyer and a handwritten ledger recovered from another party - The Appellant's own sale register and ledger matched the duty paid entries, and no record was recovered from its premises - Whether the demand of duty, interest and penalty can be sustained on uncorroborated third-party records - HELD - Where the entire demand is founded on entries made by a third party, the Department must demonstrate by cogent and independent evidence that the entries relate to the assessee and bear a credible nexus with the clandestine manufacture or removal. A mere entry in a record maintained by another person cannot be transmuted into proof of manufacture and clearance by the assessee. There was no evidence of excess procurement of raw materials, excess consumption of electricity, excess production, receipt of consideration outside the books or flow back of funds. Though lorry numbers appeared in the printouts, no statement of any transporter or driver was relied upon to prove physical movement of the goods. Clandestine removal cannot be presumed from private records recovered from third parties unless fortified by independent and tangible evidence that the goods were manufactured and removed without payment of duty, as held in Dinabandhu Steel and Arya Fibres. The evidentiary chain commenced and terminated with the notings in the third-party records, and the allegation was based on assumptions and presumptions - The demand of duty with interest is set aside and the appeals are allowed - Admissibility of computer printouts under Section 36B and evidentiary value of handwritten ledger of unidentified author - Printouts taken from computers and pen drives seized from a third party were relied upon by the Department, and the FAA invoked the presumption under Section 36A - No certificate under Section 36B(4) was produced, the accountant of the third party only endorsed that the printouts were taken in his presence, and the SCN did not state how the pen drive was sealed and kept before it was opened - Whether the printouts and the ledger can be relied upon against the Appellant - HELD - Section 36B requires a certificate identifying the record, the manner of its production, the device involved and compliance with Section 36B(2). Witnessing the taking of a printout cannot be equated with such certification, and the accountant, who made entries only on the instructions of the Director, was not shown to be the author or custodian of the contents. The absence of an account of sealing and custody of the pen drive further detracted from the integrity of the record. Section 36A operates only against the person who produced the document or from whose custody it was seized, and the records were neither produced by nor seized from the Appellants. Following Trikoot Iron and Steel Casting, printouts taken from a computer or pen drive without a certificate under Section 36B cannot be admitted in evidence. A handwritten document of unknown authorship cannot be elevated to substantive evidence merely because it was recovered during investigation - The printouts and the ledger are inadmissible and unreliable as the foundation of the demand - Evidentiary value of statements recorded under Section 14 without compliance with Section 9D - Revenue relied upon statements of the Director and the accountant of a third party and upon the statement of Appellant No. 2, which the adjudicating authority characterised as evasive - None of the deponents was examined before the adjudicating authority, and the request for cross examination was not considered even by the FAA - Whether the statements can be relied upon against the Appellants - HELD - The statements did not contain any direct or unequivocal incrimination of the Appellants. Without compliance with Section 9D(1)(b), the statements cannot be treated as substantive evidence, as held in Geetham Steels. Appellant No. 2 consistently stated that the sales were made through a broker on payment of duty and that he could not comment on the records of an independent third party. Such an expression of want of knowledge cannot be equated with an admission, and the characterisation as evasive was unsupported by the statement - The statements fail to supply the missing corroborative link between the third-party records and the alleged clandestine clearances - Valuation - Undervaluation alleged on the basis of settled rates noted in third-party printouts - The Department compared the invoice value of duty paid clearances with the higher rates noted in the printouts of a buyer and alleged that consideration over and above the invoice value was received by Appellant No. 1 - Whether the demand on account of under-invoicing can be sustained - HELD - The demand rested primarily on third-party printouts whose admissibility was compromised by the absence of the certificate under Section 36B. There was no independent evidence that any amount in excess of the invoice value was paid to the Appellant, and the burden lay on the Department to establish by positive evidence both the existence of such consideration and its nexus with the Appellant. Preferring an unexplained third-party notation over the invoice value would reverse the evidentiary burden. A presumption cannot be founded on another presumption - The demand on account of under-invoicing is set aside - Penalty on the company under Section 11AC and on the Director under Rule 26 of the Central Excise Rules, 2002 - Penalties were imposed on the premise of clandestine manufacture, removal and undervaluation, with the Director held liable as being conversant with the affairs of the company - Whether the penalties are sustainable when the principal allegations are not established - HELD - Penalty under Section 11AC is consequential upon establishment of the duty liability with the ingredients of fraud, suppression or wilful misstatement, and no foundation survives once the allegations fail for want of positive and cogent evidence. Penalty under Rule 26 requires that the person dealt with excisable goods with knowledge or belief that they were liable to confiscation. No specific role was attributed to the Director by reliable evidence, and mere status as a Director cannot furnish an independent basis for penalty without evidence of conscious involvement or mens rea - The penalties on the company and on the Director are dropped and the appeals are allowed with consequential relief. [Read less]

2026-VIL-219-GSTAT-DEL | Tribunal SGST

GST - Sustainability of demand under Section 73(1) of CGST Act, 2017 for short paid tax already discharged through DRC-03 before the order-in-original - Respondent was issued a demand-cum-SCN under Section 73 on the basis of audit for a financial year and deposited the residual tax along with interest through DRC-03 before the order-in-original was passed and intimated the payment by e-mail - The adjudicating authority confirmed the demand without adverting to the payment and the first appellate authority set aside the tax demand - Appellant-Department contended that the DRC-03 was not placed in time before the adjudicating authority and that the tax was liable to be confirmed with interest and penalty in any case - Whether the order-in-appeal erred in setting aside the tax demand on the ground that the DRC-03 was not considered by the adjudicating authority - HELD - It is not in dispute that the Respondent deposited the tax and a like sum towards interest through DRC-03 before the order-in-original was signed. The order-in-original is silent on this payment and confirms the shortfall as a fresh demand. A demand under Section 73(1) exists to fix what a person owes and to direct that it be paid, and it is not a tool for recovering a second time an amount that has already been received. A person cannot be vexed twice for the same cause of action. Once the short paid tax stood discharged, there was nothing left of that shortfall for Section 73(1) to operate upon - Confirming the demand afresh without application of mind to a payment already on record cannot stand, the issue is answered against the Department - The order-in-appeal setting aside the tax demand is affirmed. The Department's appeal is dismissed - Computation of interest under Section 50(1) of CGST Act, 2017 up to the date of credit to the Government's account or the date of debit from Electronic Cash Ledger on filing of return - Tax was deposited through challans in Form GST PMT-06 and the return was filed later - Appellant-Department contended that interest runs until the date the return is filed since only then is the amount debited from the Electronic Cash Ledger and the liability discharged, while the Respondent contended that interest ceases once the amount is credited to the Government's account - Whether interest under Section 50(1) is to be computed to the date on which the tax stands credited to the Government's account or to the later date of debit from the Electronic Cash Ledger on filing of the return - HELD - A registered person deposits money under Section 49 through a challan in Form GST PMT-06 and on realisation of the challan the amount is credited to the Government's account and treated as credited to the Electronic Cash Ledger from that date - Once cash is credited to the Government's account the liability is discharged from the deposit date, and the debit at the time of filing of the return is a mere accounting entry, so interest cannot be charged for the period between the deposit and the filing of the return - For tax paid by depositing cash through Form GST PMT-06, interest under Section 50(1) runs from the due date up to the date the amount is credited to the Government's account and not up to the later date of debit from the Electronic Cash Ledger, and the issue is answered in favour of the Respondent - Quantum of interest payable under Section 50(1) of CGST Act, 2017 for a financial year and entitlement to further credit of interest paid with the short paid tax - Interest for one month was computed by the adjudicating authority up to the date of filing of GSTR-3B although the entire tax for that month was deposited through six challans before the filing, the return having been rendered ineffective by a technical glitch on the portal - Whether the interest is correctly quantified by the first appellate authority and whether the Respondent is entitled to further credit against the balance - HELD - Since the entire tax for the month was deposited through challans before the return was filed, interest is correctly computed from the due date to each challan's own date and not to the date of return filing. For the remaining months there is no instance of cash being credited to the Government's account materially earlier than the filing of the return, as the delay arose from late filing simpliciter. The month-wise recomputation of the first appellate authority, after correcting the due date for one month in terms of the notification, calls for no interference and the plea of the Department for restoration of the original figure is rejected. The interest paid along with tax on the short payment corresponds to the interest on the tax shortfall itself, which stands discharged by that payment. It is analytically distinct from the interest on delayed monthly payments, and a single sum cannot be credited twice to discharge two distinct liabilities - The interest liability as determined by the first appellate authority is upheld, the balance is payable after crediting the amount already paid, and no further credit is due on account of the payment made along with the tax - Sustainability of penalty under Section 122(2)(a) read with Section 73 of CGST Act, 2017 where tax and interest were not paid within thirty days of the SCN - Respondent paid the short paid tax and interest after the thirty-day window from the SCN had expired and before the order-in-original, and contended that the dispute arose from a bona fide reconciliation issue without mens rea and that Section 122(2)(a) cannot be invoked in a Section 73 proceeding - Whether the penalty under Section 122(2)(a) read with Section 73 is sustainable - HELD - Section 73(8) provides that no penalty is payable where tax along with interest is paid within thirty days of issue of the SCN. Since the payment was not made within thirty days, the Respondent is liable to pay penalty under Section 73(9). Section 73(9) and Section 122(2)(a) prescribe an identical formula for the same category of case, the two provisions are not in competition, and invoking Section 122(2)(a) read with Section 73 is justified. Penalty ought not to follow absent contumacious conduct applies to genuinely discretionary penalties, but Sections 73(8), (9) and (11) read together leave no discretion once the thirty-day window is missed and the demand is confirmed. The penalty is imposed not because of fraud or dishonest intent but because the law has fixed a specific minimum consequence for payment outside the thirty-day period. The bona fide origin of the dispute and the payment of the bulk of the interest before the SCN speak to the character of the default and do not alter the statutory consequence - The penalty is upheld, the order-in-appeal is confirmed. [Read less]

2026-VIL-217-GSTAT-KLK | Tribunal SGST

GST - Liability to interest and penalty under Section 73(9) of CGST Act, 2017 for belated payment of short paid tax - Appellant-taxpayer was issued an SCN under Section 73 for short payment of GST for a financial year and the demand was confirmed by the adjudicating authority and the FAA - Appellant contended that the tax was already paid by filing appropriate return and that penalty is arbitrary since mere failure to pay tax within time does not make the taxpayer liable to penalty unless it acted in conscious disregard of its obligations - Whether interest and penalty are payable where the short paid tax is paid belatedly... [Read more]

2026-VIL-1202-GAU | High Court SGST

GST - Non-issuance of SCN to the consignee in proceedings under Section 129 of CGST Act, 2017 for goods detained on interception for verification of records - Goods transported by the transporter were intercepted for verification of invoices, e-way bills and weight, notice proposing penalty was issued only to the transporter who admitted non-uploading of Part-B of the e-way bill - Petitioner, being the consignee, was not issued notice though the goods remained detained and the Petitioner was suffering losses - Whether the proceedings under Section 129 can proceed without issuing notice to the consignee - HELD - The dispute... [Read more]

2026-VIL-1200-BOM | High Court SGST

GST - Breach of principles of natural justice by denial of personal hearing under Section 75(4) of CGST Act, 2017 where the box for personal hearing in Form GST DRC-06 was ticked as ‘No’ - Impugned Order was passed without granting personal hearing - State contended that every opportunity was given to reply and that Petitioner had ticked the box as No in the option for personal hearing in Form GST DRC-06 - Whether the impugned Order is sustainable when personal hearing was not granted despite the specific request in the reply to SCN - HELD - Section 75(4) mandates that an opportunity of hearing shall be granted where a... [Read more]

2026-VIL-1201-CAL | High Court SGST

GST - Time limit for passing order under Section 129(3) of CGST Act, 2017 for detention of goods and conveyances - Vehicles carrying goods under e-tax invoices and e-way bills were intercepted and detained on 14.07.2025, MOV-07 notices were issued and served on 17.07.2025, the date of appearance was fixed on or before 24.07.2025 – The orders under Section 129(3) confirming penalty were passed on 15.01.2026, the delay being attributed in the orders to the matter being sub-judice before the Guwahati High Court - Petitioner, who is only the owner of the vehicles, contended that the orders are barred by limitation and withou... [Read more]

2026-VIL-233-GSTAT-LCK | Tribunal SGST

GST - Liability to interest under Section 50 and Rule 88B on tax voluntarily paid through FORM GST DRC-03 before issuance of SCN - Certain B2C sales of FY 2020-21 were inadvertently omitted from monthly GSTR-1 and GSTR-3B due to a clerical error but were disclosed in the Annual Return GSTR-9/9C - Appellant discharged the entire tax liability through DRC-03, before issuance of any SCN, without payment of interest - The demand of interest was confirmed by the adjudicating authority and upheld by FAA - Whether interest was correctly calculated without considering the balances in the Electronic Cash and Credit Ledgers - HELD - The contention that no interest can arise merely because tax was voluntarily paid before SCN is not accepted. Interest is a statutory consequence of delayed payment of tax and is to be determined in accordance with Section 50 and Rule 88B. Since the tax for FY 2020-21 was paid on 04.03.2022 through DRC-03, Section 50 is attracted – However, the interest cannot be computed on the entire tax liability and has to be determined with reference to the month-wise liability, the respective due dates, the date of actual discharge of tax and the amount, if any, required to be discharged through the Electronic Cash Ledger - The demand of interest is set aside to the extent of the existing computation and the proper officer is directed to recompute it strictly in accordance with Section 50 read with Rule 88B after month-wise verification of the omitted turnover and the ledgers - Penalty merely on account of inadvertent non-reporting of turnover in monthly returns is not justified and is set aside - The appeal is partly allowed - Imposition of penalty under Section 73 where entire tax liability was voluntarily paid before issuance of SCN in terms of Section 73(5) and 73(6) - Turnover omitted from monthly returns due to inadvertent clerical error was reflected in the books of account and disclosed in the Annual Return - Appellant on noticing the omission discharged the entire tax liability through DRC-03 prior to SCN - Whether penalty is justified for an inadvertent clerical error in the absence of any intention to evade tax and the tax liability was voluntarily discharged before SCN - HELD - Section 73(5) is applicable as the entire tax liability was discharged before issuance of SCN. The turnover was not in dispute and the Respondent itself verified the month-wise reconciliation and did not dispute the correctness of the figures. The turnover was neither outside the books of account nor concealed from the Department, and the discrepancy arose merely from non-reporting in the monthly returns - The conduct of the Appellant, who came forward on its own without waiting for the Department to initiate proceedings, is a material circumstance which cannot be ignored - Penalty merely on account of inadvertent non-reporting of turnover in monthly returns is not justified and is set aside. [Read less]

2026-VIL-236-GSTAT-DEL-PB | Tribunal SGST

GST - Transfer of appeals pending before State Benches to the Principal Bench of GSTAT under Section 109(5) third proviso and Section 109(6) of CGST Act, 2017 where an identical question of law is involved - Whether the appeals pending before two or more State Benches involving an identical question of law can be transferred to and heard by the Principal Bench - HELD - Sections 109 and 110 provide for the jurisdiction of the different Benches of GSTAT. The third proviso to Section 109(5) empowers the Government on the recommendations of the Council to notify cases or class of cases which shall be heard only by the Principa... [Read more]

2026-VIL-1783-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Exemption under Entry 13 of Notification No. 25/2012-ST dated 20.06.2012 to works contract service of repair and renewal of public road provided to PWD - Appellant, registered for providing Works Contract Services, received amounts in the Financial Year 2014-15 from the PWD against two work orders for repair and renewal of road - SCN was issued on the basis of third party information received from the Income Tax Department - The FAA upheld the order on the ground that the work order produced related to the Financial Year 2015-16 whereas the receipt pertained to 2014-15, so the nature of the service could not ... [Read more]

2026-VIL-227-GSTAT-DEL-NAPA | Tribunal SGST

GST - Anti-Profiteering - Validity of investigation where the notice alleged non-reduction of MRP but profiteering was computed on the base price and the methodology was not communicated to the Respondent - Application alleged that the Respondent, a public sector enterprise, did not pass on the benefit of reduction in rate of tax from pre-GST to post-GST in respect of packaged drinking water, as the MRP fixed by the Railway Board was not reduced - Respondent contended that the computation based on the average base price differed from the allegation of non-reduction of MRP in the notice, that it was denied an effective opportunity to rebut, and that the methodology was not communicated at the notice stage - Whether the investigation and computation based on the transfer price and base price are vitiated for want of notice of the allegation and methodology - HELD - The notice informed the Respondent of the reference and the allegations, and the DGAP did not allege that the MRP was not reduced since it recorded that the MRP is fixed by the Railway Board. The entire computation was based on the transfer price, which the Respondent admitted to be the base price plus taxes, and not on the MRP. The Respondent actively participated in the investigation and produced invoice-wise sales details, returns and sample invoices. The DGAP is not required to communicate the methodology adopted for investigation. Following the Hon'ble High Court of Delhi, no fixed or uniform formula can be laid down for determining profiteering, the authority may adopt a methodology case by case so long as it is fair and reasonable, and comparison of the pre-GST average base price with the post-GST selling price was a correct methodology - The contentions of the Respondent regarding the notice and methodology are rejected - Contravention of Section 171 of CGST Act, 2017 by a Government enterprise supplying packaged drinking water at transfer price while MRP is fixed by the Ministry of Railways - Whether the Respondent has contravened Section 171 by not passing on the benefit of reduction in rate of tax - HELD - The competent authority had granted the Respondent the discretion to fix the transfer price, and the Respondent was required to reduce the transfer price and not the MRP on the reduction in tax rate. Section 171 does not distinguish between complimentary or subsidised supplies or between private and Government organisations, and the Respondent as a registered person filing returns and collecting tax is bound by the Act. The price of the product forms part of the fare collected from passengers of premium trains. The Respondent accepted the bids of the public private partnership plants and sold the product to licensees at the same price, hence all plants were rightly considered. Following the Hon'ble High Court of Delhi, costing and market factors are irrelevant as the authority only examines whether the reduction in tax rate has been passed on by commensurate reduction in price, and any offsetting cost must be established on a cogent basis. The Respondent never reduced its basic prices commensurately after 01.07.2017 - Profiteering is established and the Respondent has contravened Section 171. The DGAP report is accepted and the Respondent is directed to deposit the profiteered amount in the Central and State Consumer Welfare Funds in equal ratio - Period of investigation under Section 171 of CGST Act, 2017 where no limitation is prescribed - The DGAP investigated the period from the date of implementation of GST up to May 2020 in respect of non-passing on of the benefit of reduction in rate of tax - Respondent contended that the investigation cannot go beyond one year, being the Financial Year 2017-18, since a reasonable period is implied in the law and costs were volatile during the period - Whether the investigation by the DGAP for the period beyond one year is impermissible - HELD - Section 171 does not prescribe any period of investigation, as conceded by the Respondent, and the reasonable period depends on the facts and circumstances of each case. The date of implementation of GST is the relevant date when the benefit of tax reduction becomes due to the recipients. The period of investigation is determined by the DGAP so that the benefit of tax reduction is extended to the maximum number of recipients - The period of investigation was rightly determined by the DGAP and the contention is rejected - Levy of interest under Rule 133(3)(c) of CGST Rules, 2017 and penalty under Section 171(3A) of CGST Act, 2017 on the profiteered amount for a period commencing before the insertion of the provisions - Profiteering by the Respondent was established for the period from 01.07.2017 to 31.05.2020 - The interest provision was inserted with effect from 28.06.2019 and the penalty provision came into force with effect from 01.01.2020 - Whether interest and penalty are leviable on the profiteered amount - HELD - Interest can be imposed only for the period commencing from 28.06.2019 and not for any period prior thereto, as held by the coordinate Bench of this Tribunal. Since the period of contravention extends to a period after 01.01.2020, the provision for penalty of ten per cent of the profiteered amount under Section 171(3A) is attracted, and no penalty is leviable if the profiteered amount is deposited within thirty days of the order - The Respondent is liable to pay interest at 18% from 28.06.2019 till the date of deposit, the share of the States where State Consumer Welfare Funds are not created is to be deposited in the Central Consumer Welfare Fund, and the penalty at ten per cent shall not be payable if the profiteered amount with interest is deposited within thirty days. [Read less]

2026-VIL-228-GSTAT-DEL-NAPA | Tribunal SGST

GST - Anti-Profiteering - Disclosure of confidential documents furnished by the Respondent to the DGAP at the stage of adjudication by the Tribunal under Rules 129(5) and 130(1) of CGST Rules, 2017 - Applicant filed a complaint alleging profiteering by the Respondent in a pipeline contract, and the DGAP computed the profiteered amount relying on the documents furnished by the Respondent during investigation - During hearing the Applicant sought production of GST returns, returns of the other registration, annual reports, VAT and ST-3 returns and the electronic credit ledger, contending that it could not respond to the Respondent's challenge to the computation without them, that the documents relate to the past period and have no commercial sensitivity, and that confidentiality is not permanent under the Competition Commission of India (General) Regulations, 2009 - Respondent contended that the documents were furnished under a claim of confidentiality and the Applicant should have approached the DGAP - Whether the Tribunal can direct disclosure of the confidential documents to the Applicant - HELD - Rule 129(5) requires the DGAP to make available the evidence presented by one interested party to the other, but Rule 130(1), by a non obstante clause, overrides it insofar as confidential information is concerned and applies Section 11 of the Right to Information Act, 2005 mutatis mutandis. Under Section 11 the information supplied by a third party as confidential cannot be provided to another party without notice to and hearing of the party who furnished it. Since the Respondent furnished the documents under a claim of confidentiality, disclosure can be considered only within the safeguards of Rule 130(1), and the Applicant by-passed the statutory mechanism instead of approaching the DGAP. The regulations of the Competition Commission of India do not apply notwithstanding Rules 129(5) and 130(1). The correctness of the data and the computation remains open for adjudication, and the Applicant may raise its contentions, including utilisation of credit, through pleadings and oral submissions - The application for production and disclosure of documents is dismissed - Exercise of inherent powers under Rule 10 of GSTAT Procedural Rules, 2025 to direct production of documents in the face of the non obstante clause in Rule 130 of CGST Rules, 2017 - Applicant sought production of documents furnished by the Respondent to the DGAP, contending that the Tribunal may under Rule 10 make such orders as are necessary to meet the ends of justice, and offered an undertaking that the documents would be used only for the present case - Respondent contended that anti-profiteering matters are governed by the special procedure under Rule 126 and the methodology and procedure rules adopted by the Tribunal, so reliance on Rule 10 is misplaced - Whether the inherent powers under Rule 10 can be invoked to direct disclosure of confidential documents - HELD - Following the Hon'ble Apex Court, the inherent power of a court cannot be exercised contrary to or different from the procedure expressly provided, and where specific provisions deal with a topic and exhaust the jurisdiction in relation to the matter, inherent power cannot be invoked to cut across them. Rule 130 of CGST Rules, 2017 contains a non obstante clause governing disclosure of confidential information - The inherent power under Rule 10 cannot be invoked in the existence of the non obstante clause in Rule 130 and the application for disclosure is dismissed. [Read less]

2026-VIL-229-GSTAT-DEL-NAPA | Tribunal SGST

GST - Anti-Profiteering - Applicability of Section 171 of CGST Act where supplier obtained GST registration after rate reduction following demerger - Respondent supplied modular kitchens and related goods, and contended that it obtained GST registration only from 21.11.2017, that pre-rate-reduction transactions were undertaken by the transferor company, and that Section 171 applies only to transitional contracts, whereas the DGAP relied on a quotation of the transferor and a later invoice of the Respondent - Whether the transactions could be examined under Section 171 of CGST Act in view of the later GST registration and the demerger under the NCLT order, and whether absence of any pre-rate-reduction supply by the Respondent affects such determination - HELD - The date of registration is a relevant circumstance but is not by itself determinative of the applicability of Section 171. The NCLT order treats the income and expenditure of the demerged Home Retail Business Undertaking as that of the Respondent, but it cannot be read in isolation as conclusively fixing the identity of the supplier for each transaction. The question must be decided on the cumulative effect of the demerger arrangement, invoices, registration particulars and pricing documents showing continuity of the business transferred. The absence of a pre-rate-reduction tax invoice in the name of the Respondent is not conclusive against Section 171, as the provision requires the benefit of reduction in rate of tax to be passed on and does not restrict itself to transitional contracts. A quotation, however, cannot by itself establish the price for comparison unless its nexus with the later supply is shown from the record - The objection that the transactions cannot be examined under Section 171 merely because of the later registration is rejected and the issue is decided against the Respondent - Scope of investigation by the DGAP beyond the goods or services covered in the complaint - The Respondent contended that the DGAP exceeded its jurisdiction by examining goods and services beyond the subject matter of the complaint, and that the later inserted Rule 129(5) confines the investigation - Whether the DGAP's investigation is restricted to the specific goods or services identified in the complaint - HELD - Rule 129(2) of the CGST Rules empowers the DGAP to investigate whether the benefit of reduction in rate of tax or of input tax credit has been passed on in respect of any supply of goods or services. Following the Delhi High Court decision, Section 171 is widely worded, the expression 'any' includes some as well as all, and the investigative power is not limited to goods or services in respect of which the complaint is received. The extension of investigation to other supplies does not render it without jurisdiction where the DGAP does not travel outside the statutory purpose of determining whether the benefit was passed on, and the Respondent failed to show otherwise. The subsequent insertion of Rule 129(5) does not alter the scope of power under Rule 129(2) - The objection that the DGAP acted without jurisdiction is not sustainable and the issue is decided against the Respondent - Reliability of methodology for customised and composite supplies after remand by the NAA - The NAA remanded the matter for examination of entries taxed at lower rates, variations in pre and post rate-reduction base prices including a credit note and sale of damaged goods, mismatch in State-wise totals, and the legal identity of the supplier. The Respondent contended that customised modular kitchens supplied for a lump-sum consideration cannot be compared component-wise, that quotations do not evidence the pre-rate-reduction price, and that the DGAP prescribed a methodology contrary to Rule 126 - Whether the customised and composite nature of the supplies, the lump-sum arrangement and the manner of evidencing prices affect comparability, and whether the methodology adopted by the DGAP is sustainable - HELD - No fixed or uniform formula can be laid down for determining profiteering, and the methodology must be fair, reasonable and responsive to the peculiarities of the case. Customised nature of supplies does not by itself exclude them from Section 171. Quotations furnished by the Respondent do not establish the price at which supply was made, and are not taken into account as the DGAP compared the tax invoices issued before and after the rate reduction. The calculation compared base prices exclusive of GST and applied the reduced rate to determine the commensurate price. Entries taxed at lower rates fell within the rate reductions examined. A credit note carried no profiteering, and in the absence of cogent evidence that sales of damaged goods were unrelated to the normal sales, variations in individual transactions do not justify their wholesale exclusion. The mismatch in State-wise totals arose from an inadvertent error in one State figure, which on correction left an insignificant residual difference that is ignored. The contention on Rule 126 has no merit, as Rule 126 empowers the Authority to determine methodology while the DGAP applies it during investigation - The methodology is held to be a permissible basis for determining the benefit to be passed on under Section 171(1) and the issue is decided against the Respondent - Effect of withdrawal of complaint on continuation of proceedings under Section 171 of CGST Act - The Applicant withdrew the complaint after the matter was referred to the DGAP for investigation under Rule 129, and the Respondent contended that no grievance survived - Whether the subsequent withdrawal of the complaint affects the continuation or validity of the proceedings under Section 171 - HELD - Once the matter is taken up under the statutory mechanism and referred for investigation, the proceedings must be examined in accordance with the Act and the Rules. Proceedings under Section 171 are not a purely private dispute depending on the complainant's continued grievance, as the obligation to pass on the benefit is statutory and its compliance is determined by the competent authorities. Anti-profiteering provisions are a consumer-welfare measure, and withdrawal cannot retrospectively invalidate the proceedings already undertaken or extinguish the statutory obligation - The withdrawal does not bring the proceedings to an end or invalidate the investigation, and the issue is decided against the Respondent - Failure to pass on benefit of rate reduction and need for proof of wilful retention - The DGAP determined, on invoice-wise data, the benefit not passed on, while the Respondent contended that earning profit or increase in selling price is not profiteering, that no intention was established, and that input costs, market conditions, demand, supply and labour costs explained the price increase - Whether the Respondent failed to pass on the benefit arising from reduction in rate of tax by commensurate reduction in prices in contravention of Section 171(1), and whether profiteering can be sustained in the absence of proof of wilful retention - HELD - Section 171(1) casts a statutory obligation to pass on the benefit, and the enquiry is directed to the existence and extent of the benefit and whether it was passed on. A finding of intention or wilful retention is not a condition precedent. A mere increase in price or earning of profit, without establishing the quantum of benefit and its non-passing on, is not profiteering. The presumption that a rate reduction must result in a reduction in prices is rebuttable only by cogent, clear and unequivocal evidence, and the supplier must justify offsetting factors. General assertion of commercial factors without contemporaneous and transaction-specific evidence cannot displace the invoice-wise computation - The Respondent failed to pass on the benefit in contravention of Section 171(1), and the issue is answered in the affirmative - Appropriate [Read less]

2026-VIL-226-GSTAT-DEL-NAPA | Tribunal SGST

GST - Anti-Profiteering - Determination of profiteering under Section 171 of CGST Act, 2017 on the basis of actual savings against actual expenses in real estate project where cost escalation exceeds additional ITC - Complaint alleged that the Respondent, a real estate developer, did not pass on the benefit of ITC to the flat buyers by way of commensurate reduction in prices after introduction of GST - Whether the Respondent has contravened Section 171 of the CGST Act, 2017 by not passing on the benefit of ITC - HELD - Profiteering should be calculated on the basis of actual savings incurred by the Respondent against the a... [Read more]

2026-VIL-1179-PAT | High Court SGST

GST - Validity of show cause notice under Section 74(1) of the CGST Act, 2017 issued on the basis of audit findings - Petitioner was subjected to audit under Section 65 for three financial years. The audit memo pointed out non-payment and short payment of tax, non-payment of interest and late fee, and non-payment of GST under RCM - The final audit report was communicated to the Petitioner with a direction to deposit the amount within 15 days, failing which a SCN would be issued - Petitioner neither contested the final audit report nor deposited the amount, and a show cause notice under Section 74(1) was issued - Petitioner contended that the notice was issued mechanically on the audit report, without any element of fraud, wilful misstatement or suppression of facts, and that no penalty was proposed in the notice - Whether the show cause notice under Section 74(1) suffers from non-application of mind or jurisdictional error - HELD - Section 65(7) confers power on the proper officer to initiate action under Section 73 or Section 74 where the audit detects tax not paid or short paid, and it is the proper officer who has to take a view as to the provision under which action is to be initiated - After the final audit report was communicated, the Petitioner was liable to deposit the tax, interest and penalty within the given period or under Section 74(5) before service of the notice. As the Petitioner's case was not covered by Section 74(5), the notice under Section 74(1) was issued, and the reasons for its invocation were stated, namely that the non-payment and short payment would have gone unnoticed had the audit not been conducted of the records of the notice - The Supreme Court has held that the foundational facts leading to the inference of fraud, wilful misstatement or suppression should be evident from the notice itself and that the officer must record satisfaction even where audit objections exist. Those decisions turned on their own facts, where the notice contained only a bland statement and the department itself had taken up the audit objections before the Public Accounts Committee - Where the audit report finds huge non-payment, the assessee is aware of the delayed filing but does not pay the late fee, and the assessee fails to satisfy the proper officer of its bona fides, the proper officer is competent to issue notice under Section 74(1). While a simple case of non-payment for bona fide reasons cannot invoke the extended period, every case has to be looked into on its own facts. A writ court, in extraordinary jurisdiction, does not go into the sufficiency of the reasons for the opinion formed by the proper officer, and can examine only whether the belief existed, was bona fide and had a rational connection with the material - The contention that no penalty was proposed is also incorrect, as the notice contained a proposed demand for recovery of penalty - No fault is found in the issuance of the show cause notice under Section 74(1), which does not suffer from non-application of mind or any jurisdictional error – The writ application stands disposed of - Maintainability of writ petition against an appealable order-in-original when alternative remedy of appeal under Section 107 of the CGST Act, 2017 is available - HELD - The order-in-original is an appealable order under Section 107 and the appellate remedy is equally efficacious. The rule of alternative remedy is a rule of convenience, and where an equally efficacious statutory remedy exists, the High Court should not exercise writ jurisdiction to examine the original order unless the impugned order suffers from a jurisdictional error. The show cause notice was found free of jurisdictional error - The High Court declines to entertain the challenge to the order-in-original and relegates the Petitioner to the appellate remedy. If the Petitioner prefers an appeal within one month from the date of the order, the appellate authority shall consider it on its own merits. [Read less]

2026-VIL-1199-ALH | High Court SGST

GST - Validity of proceedings under Section 74 initiated and concluded on the strength of Rule 96(10) of CGST Rules, 2017 after its omission - Petitioner was subjected to proceedings under Section 74 of CGST Act relying on Rule 96(10) for FYs 2019-20 to 2023-24 - Petitioner challenged impugned orders on the ground that with omission of sub-rule (10) of Rule 96, no proceedings can be sustained - Whether the impugned orders are sustainable in the wake of the judgment of the Hon'ble Apex Court and the omission of sub-rule (10) of Rule 96 of CGST Rules, 2017 - HELD - Sub-rule (10) of Rule 96 was omitted by Notification dated 0... [Read more]

2026-VIL-1195-HP | High Court SGST

GST - Validity of SCN issued on the basis of Rule 89(4B) of CGST Rules, 2017 omitted without any saving clause - Petitioner challenged the SCN issued on the basis of Rule 89(4B) of the CGST Rules, 2017 - Whether an SCN issued on the basis of a Rule omitted without any saving clause is sustainable - HELD - The Respondents submitted that the process leading to the SCN was initiated and completed before the omission but could not demonstrate that the Rule was in the rule book on the date of issuance of the SCN - The Hon'ble Supreme Court has held that the effect of omission of a rule is to obliterate it from the statute book ... [Read more]

2026-VIL-240-GSTAT-RPR | Tribunal SGST

GST - Penalty under Section 129(1)(a) of the CGST Act, 2017 for goods transported after expiry of e-way bill - The vehicle was intercepted about three days after the e-way bills had expired and a notice in FORM GST MOV-09 was issued - Penalty equal to twice the amount of tax was imposed - The Appellant contended that the documents were produced, the vehicle was only about four kilometres short of the destination and there was no evidence of intent to evade tax - Whether penalty under Section 129(1)(a) is not attracted in absence of intent to evade tax - HELD - A taxing statute is to be construed strictly and its intention is gathered from the words used. Section 129(1) does not provide that intent to evade tax is mandatory for invoking the provision or imposing penalty, unlike Section 130 of the Act. Mens rea is an essential element only for criminal offences and is not an essential element for imposing penalty for breach of civil obligations or liabilities - Proceedings under Section 129 are adjudicatory in nature and determine a civil liability. The Circular No. 64 dated 14.09.2018 does not provide that no proceeding under Section 129 be initiated where the e-way bill has expired, and the case of the Appellant does not fall in any of its exceptions - For invoking the of provision of section 129(1) or/and imposing penalty under this section the proof or facts, circumstances or material on record which shows intent to evade tax are not required – Ordered accordingly - Movement of goods after expiry of e-way bill on plea of vehicle breakdown - Rule 138(10) of the CGST Rules, 2017 - Evidentiary value of GPS report, repair bills and FORM GST DRC-03 - The Appellant contended that the e-way bills expired because the vehicle broke down on three occasions and relied on GPS records, vehicle repair bills and a mention of breakdown in FORM GST DRC-03 - Whether the Appellant established a genuine circumstance justifying movement of goods after expiry of the e-way bill - HELD - Documents were produced at the time of inspection and there was no discrepancy in description, quantity, value or names of the parties. The Appellant did not amend or extend the validity of the e-way bill, which under the third proviso to Rule 138(10) may be extended within eight hours from the time of its expiry. The disclaimer in the GPS report was not a correct reason for disbelieving it. However, the GPS report did not pertain to the vehicle involved and was generated after the interception, so it was not relevant - The Tribunal, being the final authority of fact finding, examined the repair bills. Some were estimates and not cash memos, one was a credit memo without signature of an authorised person and one was a simple paper. These bills have no evidentiary value. The breakdown was first mentioned in FORM GST DRC-03 nine days after interception, without mentioning three breakdowns, and no explanation was given for the silence. The Appellant could have obtained the statement of the driver under the RTI Act, 2005 or filed an affidavit of the driver, but did not - The plea of breakdown is not established and the order of the FAA is upheld - The appeal is disallowed [Read less]

2026-VIL-1206-MAD-ST | High Court SERVICE TAX

Service Tax - Eligibility to CENVAT credit of input services used for both taxable and exempted output services - Rule 6(5) of CENVAT Credit Rules, 2004 - Period from 16.06.2005 to 01.06.2007 - Respondent, engaged in development and maintenance of an IT Park, was registered for Management, Maintenance and Repair Service (MMR) and Renting of Immovable Property Service (RIP). It did not maintain a bifurcation of credit and availed the credit in toto under Rule 6(5). SCN proposed to disallow and recover the credit with interest and penalty on the ground that the credit related to RIP, which was exempt for the period. The Tribunal allowed the Respondent's appeal against the order disallowing the credit - Whether the Respondent was entitled to credit of the whole of the service tax under Rule 6(5) when it was also engaged in exempted services - HELD - Rule 6(5) is a code by itself and allows credit of the whole of the service tax paid on the specified taxable services, including MMR. Credit is available unconditionally, barring a situation where the services have been used exclusively in relation to provision of exempted services. The RIP services were admittedly exempt for the period. However, the credit was used for all output services including MMR and RIP, and not exclusively for RIP. As the Respondent is engaged in rendition of taxable services as well, the condition of exclusivity is not attracted - The High Court concurred with the Tribunal and answered the question in favour of the Respondent-assessee - Eligibility to CENVAT credit of input services used for Renting of Immovable Property Service - Reliance on Board Circular - Period post 01.06.2007 - Respondent availed credit of input services for the output service of renting of immovable property, which became taxable post 01.06.2007. The credit was denied on the basis of a Board Circular, which clarified that credit cannot be taken as immovable property is subject neither to Central Excise duty nor to Service Tax. The Tribunal rejected the reliance on the Circular and allowed the credit - Whether the Tribunal erred in treating the Board Circular as erroneous and irrelevant for the period post 01.06.2007 - HELD - The Circular erroneously focussed on the eligibility of input services for immovable property, whereas it should have addressed their eligibility for the output service of Renting of Immovable Property. The clarification has therefore to be disregarded and is in any case not binding on the Tribunal. What is required to be seen is whether the input services have the necessary nexus with the output service and fall within the definition of input services in Rule 2(l) of the CENVAT Credit Rules, 2004, as it existed during that period - The High Court concurred with the Tribunal and answered the question in favour of the Respondent - Liability to service tax on fit-out charges forming part of consideration for renting of immovable property - Payment of VAT on fit-outs - Respondent, engaged in management of an IT Park, provided fit-outs such as work stations, cabins and meeting rooms along with the office space rented to its clients under lease agreements. The Respondent contended that VAT had been paid on the fit-outs and service tax was therefore not payable. The authority held that the fit-outs form part of the value of the immovable property rented out. The Tribunal reversed the order on the ground that the fit-outs were movable items on which VAT was remitted, and that VAT and service tax are exclusive - Whether the erroneous payment of sales tax on fit-out charges would immune the Respondent from liability to service tax - HELD - There are both factual and legal errors in the conclusion of the Tribunal. On facts, the fit-outs did not relate only to movables but also to other infrastructure such as work stations, which formed part of the lease agreements, so a portion of the consideration has necessarily to be earmarked to them. On law, mere payment of VAT does not lead to the conclusion that no service tax is payable. The Hon'ble Supreme Court has held that service tax and VAT assessments are both possible in respect of the same transaction, if the foundational requirements for such assessments are justified on the facts. Further, no proof was produced that VAT had been paid on the fit-outs - The question is answered in favour of the Appellant-Department and the Tribunal's order on this issue is reversed. [Read less]

2026-VIL-1180-GUJ | High Court SGST

GST/SARFAESI - Priority of secured creditor over State GST dues under Section 26E of the SARFAESI Act, 2002 - Petitioner, a banking corporation, had granted credit facilities secured by registered mortgage of immovable properties. The borrower's account was classified as a Non-Performing Asset, and a notice under Section 13(2) was issued. On the borrower's failure to pay within sixty days, Petitioner took possession of the secured assets under Section 13(4) read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002. Respondent got a charge entered in the record of rights of the properties for a demand outstandi... [Read more]

2026-VIL-1178-GUJ | High Court SGST

GST - Refund of IGST, interest and penalty on exports under Advance Authorisation after omission of Rule 96(10) of the CGST Rules, 2017 - Petitioner held Advance Authorisations for procuring raw materials for export goods, which were exempt from customs duty and IGST, and claimed refund under Rule 89(4) or Rule 96(10), as applicable - Petitioner claimed refund of the un-recredited IGST, interest and penalty in light of omission of Rule 96(10) vide Notification dated 08.10.2024 - Whether Petitioner is entitled to refund of the un-recredited IGST, interest and penalty in view of the omission of Rule 96(10) of the CGST Rules,... [Read more]

2026-VIL-1194-TRI | High Court SGST

GST – Appeal, Service of Order/Notice - Limitation and condonation of delay - Service of order by mere uploading on the common portal under Section 169 of the CGST Act - Whether uploading of the order on the common portal amounts to valid communication so as to start the limitation period for filing an appeal under Section 107, and whether the delay in filing the appeal is liable to be condoned - HELD - Section 169 prescribes various modes of service and gives the Department a choice of the mode. Whenever administrative power is conferred by a statute, the presumption is that it would be exercised in a manner which is fa... [Read more]

2026-VIL-1782-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Taxability of budgetary fund allocation received through NEC by a Government organisation under the Ministry of Water Resources - Appellant, a Government organisation entrusted with conservation and utilisation of water resources, undertook survey and investigation work for a hydro electric project without raising any bill or invoice and received funds from the Ministry of Water Resources through NEC - SCN was issued for the period October 2009 to September 2014 treating the funds received as consideration, and the demand was confirmed with interest and penalty - Appellant contended that the amount is the normal fund granted for carrying on day to day activities and not consideration for any service rendered - Whether the fund allocation received through NEC is consideration for a taxable service - HELD - There is no service provider and service recipient relationship between the Appellant and NEC. The Ministry of Water Resources sends the funds to the Appellant through NEC, hence the amount cannot be taken as consideration received for providing any taxable service - The demand on the fund allocation is set aside - Taxability of services rendered by a Government organisation to NTPC as performance of sovereign function in the light of Circular No. 96/7/2007-ST dated 23.08.2007 - Appellant raised bills on NTPC showing service tax on a part of the services, but the tax charged was not paid on the ground that no service tax was payable - The demand on the amounts received from NTPC was confirmed by the adjudicating authority, and the Respondent contended that similar services rendered by private parties are liable to service tax - Appellant contended that it performs the sovereign function of collecting the amount on behalf of the Government, remits the entire amount to the Government and meets its day to day expenses from funds granted by the Government - Whether the amounts received from NTPC are chargeable to service tax - HELD - The Circular clarifies that activities assigned to and performed by sovereign or public authorities under the provisions of any law are statutory duties, are not services provided for a consideration, and any amount or fee collected in such cases is not consideration for the purpose of service tax. The Appellant is performing the sovereign function of collecting the amount on behalf of the Government and does not retain any amount but remits it to the Government. The Appellant charged service tax initially under the impression that the service was taxable, but the service tax was not paid - The demand on account of transactions with NTPC is legally not sustainable on merits - Invocation of extended period of limitation where a Government organisation entertained a bona fide belief that it performs sovereign function and is not liable to service tax - Appellant, being part of the Ministry of Water Resources, did not pay service tax for the period October 2009 to September 2014 and SCN was issued invoking the extended period - Appellant contended that it carried a bona fide belief that no service tax was payable, that even where tax was charged in some invoices it was not paid on that belief, and that being part of the Government it could have no intention to evade tax - Whether the extended period of limitation is invocable against the Appellant - HELD - The Appellant, being part of the Ministry of Water Resources, could have entertained a bona fide belief that it was performing a sovereign function and was not required to pay service tax. The major portion of the demand is on account of grants given for running day to day activities, and in respect of the NTPC transactions service tax was not collected. The Revenue has not made out any case of suppression on the part of the Appellant - The demand confirmed for the extended period is set aside on account of time bar also and the appeal is allowed with consequential relief, if any. [Read less]

2026-VIL-222-GSTAT-RJK | Tribunal SGST

GST - Confiscation under Section 130 - Breach of principles of natural justice - Order of confiscation passed on the same day as the notice in Form GST MOV-10 despite seven days granted for reply - Goods in transit were intercepted and detained under Section 129(1) as no invoice and e-way bill for onward supply was produced, which were generated after interception - Whether the order of confiscation passed on the same day as the notice, when the notice itself allowed seven days for reply, satisfies Section 130(4) read with Section 126(3) of the CGST Act and the principles of natural justice - HELD - Section 130(4) read wit... [Read more]

2026-VIL-1788-CESTAT-BLR-ST | CESTAT SERVICE TAX

Service Tax - Applicability of Exemption Available to Authorised Service Station for Pre-Delivery Inspection and After Sales Services Rendered on Behalf of Sister Concern - Appellant rendered repair of motor vehicles, pre delivery inspection and warranty services on behalf of its sister concern, which was the authorised dealer of the manufacturers, and the demand of service tax under Business Auxiliary Service was confirmed for the period 01.04.2006 to 31.03.2007 along with interest and penalties - Whether the benefit claimed as an authorised service station is available to the appellant - HELD - The claim made by the appellant as applicable to an authorised service station for exemption from service tax is not applicable since the appellant is not an authorised service station. The appellant was carrying out activities on behalf of its sister concern - The contention based on the Circulars therefore does not help the appellant on this aspect, and the question of the demand being sustained or not was decided on the other grounds - Classification under Business Auxiliary Service and Invocation of Extended Period of Limitation When Same Demand Was Dropped in Earlier Adjudication - Appellant provided repair, pre delivery inspection and warranty services on behalf of its sister concern, and SCN dated 10.12.2007 demanded service tax under Business Auxiliary Service for the period 01.04.2006 to 31.03.2007 by invoking the extended period - Commissioner (Appeals) dropped the penalty under Section 76 but upheld the demand, interest and the remaining penalties - Appellant contended that the services can at best be classified under Business Support Services and not Business Auxiliary Service, that the department was aware of the facts as the registration was surrendered on its advice, and that there was no suppression to invoke the extended period - Whether the demand under Business Auxiliary Service confirmed by invoking the extended period of limitation is sustainable - HELD - For the very same period from 01.04.2006 to 30.09.2007, the SCN issued by another Commissionerate was dropped by the Adjudicating Authority on the ground that the appellant had sought clarification regarding tax liability and had surrendered the registration in 2006 only on the advice of the department. It was further held in that order that the services rendered by the appellant to its sister concern do not merit classification under Business Auxiliary Service, and no appeal was filed by the Revenue against that order. In these facts, the demand confirmed by invoking the extended period of limitation under the category of Business Auxiliary Service is unsustainable - The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-1787-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Taxability of Amount Realised by Encashment of Bank Guarantee for Shortfall in Minimum Guarantee Tonnage as Declared Service under Section 66E(e) of the Finance Act, 1994 - Appellant, a port trust, rented out berths to allottees under Berth Reservation Scheme, wherein the allottees guaranteed a minimum tonnage of cargo and furnished irrevocable Bank Guarantees equivalent to the applicable wharfage charges - Where the committed tonnage was not achieved, the Appellant encashed the Bank Guarantee for the wharfage relatable to the shortfall quantity - SCN demanded service tax for the period April 2015 to June 2... [Read more]

2026-VIL-1797-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Denial of Cenvat Credit on the allegation of receipt of invoices without goods from first stage and second stage dealers - Reliance on statements recorded during investigation without following Section 9D of Central Excise Act, 1944 – Appellant availed Cenvat Credit on invoices issued by two second stage dealers. On the basis of an investigation, it was alleged that the dealers were non-existent and had issued fake invoices without supplying goods - Whether Cenvat Credit can be denied to the Appellant on the basis of statements of the dealers, recorded during investigation, when the procedure under Secti... [Read more]

2026-VIL-1196-DEL-CU | High Court CUSTOMS

Customs - Computation of interest reflected in Customs EDI System on liability arising from confiscation and redemption of goods under Section 125 of Customs Act, 1962 for the period prior to determination of liability by the Order-in-Original - Petitioner filed a Bill of Entry declaring the imported goods as Bitumen, which was assessed, but on examination the goods were found to be Used Oil and were seized, followed by SCN proposing confiscation and penalties - The proceedings remained pending for more than seven years until the Order-in-Original amended the description and classification of the goods, confirmed the duty already paid, allowed redemption on payment of fine and imposed penalties - The Customs EDI System reflected interest charges which continued to increase, computed from the original assessment - Petitioner sought waiver of the entire interest, contending that it cannot be liable for the period during which the goods remained seized and adjudication was pending - Whether interest on the liability arising from confiscation proceedings can be computed from the date of original assessment - HELD - Following the Hon'ble Apex Court, the liability under Section 125(2) arises when the owner exercises the option to redeem and the Department accepts it, the duty is assessed under Section 28, and statutory interest follows once Section 28 applies. The liability arising from confiscation proceedings is distinct from the original assessment of the Bill of Entry, which was based on the declaration of the goods as Bitumen and was followed by examination, seizure and initiation of confiscation proceedings. The consequences of confiscation stood determined only by the Order-in-Original. Interest cannot be calculated for a period during which the liability sought to be subjected to interest had itself not been determined, and the period anterior to determination cannot be treated as delayed payment of the subsequently determined liability. Departmental delay by itself does not extinguish a statutory liability to pay interest, and no blanket waiver can be granted for the period after determination. The EDI System cannot create a liability not authorised by the Act, and the question is one of correct computation - The computation of interest treating the period prior to the date of the Order-in-Original as delayed payment is set aside, the Respondent is directed to recompute interest, if any, from the date of determination taking into account the re-assessment and payments already made, and the petition is partly allowed [Read less]

2026-VIL-1790-CESTAT-ALH-CU | CESTAT CUSTOMS

Customs - Penalty under Section 112(b) of the Customs Act, 1962 on Customs Officer for Alleged Failure to Stop Passenger at DFMD - Appellant, a Havildar posted in the customs arrival hall of the airport, was alleged to have assisted in smuggling of gold as the DFMD light turned red when the passenger passed through but he neither stopped him nor informed the seniors - Gold bars were recovered from the passenger by DRI, and penalty under Section 112(b) imposed on the Appellant was upheld by FAA - Appellant contended that the DFMD was faulty, that he was not a proper officer and that no duty was assigned to him at the DFMD - Whether penalty under Section 112(b) can be sustained on the allegation of inaction at the DFMD - HELD - The DFMD turned red more than 20 times within about 20 minutes, which shows that the machine was faulty. The Appellant is not a proper officer under Notification No. 40/2012-Cus (N.T.) dated 02.05.2012 for the powers under Sections 100 and 103, and the duty roster does not show that he was deputed at the DFMD. All officers posted in the arrival hall are collectively responsible for any lapse, so the allegation cannot be sustained only against the Appellant. Omission, inaction and negligence in duty cannot be a proof of abetment in smuggling - The main accused did not implicate the Appellant, and in another case from the same flight the FAA had set aside the penalty on an identical allegation - Penalty on this allegation is not sustainable and the impugned order is set aside - Customs - Reliance on Call Details and WhatsApp Chats Without Certification under Section 138C of the Customs Act, 1962 for Imposing Penalty - Revenue alleged that the Appellant colluded with the handler and the co-accused in smuggling of gold, and relied on call details and WhatsApp chats of the co-accused with the Appellant - FAA considered only the number of calls as abnormal while upholding the penalty - Appellant contended that the electronic evidence was not certified under the Evidence Act, 1872 - Whether call details and WhatsApp chats can be relied upon to impose penalty - HELD - Only the number of calls was considered as abnormal and the contents of the calls are absent. The call details show that there was no call after 11.08.2021, so no conversation was held between 12.08.2021 and the date of the incident, and no adverse conclusion can be drawn on the number of calls. The call details and WhatsApp chats cannot be used as evidence as they were not certified under Section 138C, and the procedure under Section 65B of the Evidence Act, 1872 was not followed - The allegation of collusion based on such evidence is not sustainable, and the penalty cannot be upheld on this basis - Customs - Admissibility of Statement Recorded under Section 108 of the Customs Act, 1962 Without Following Procedure of Section 138B and Denial of Cross-Examination - Appellant, a Havildar posted at the airport, was arrested by DRI and his statement recorded under Section 108 allegedly admitted involvement with the accused in smuggling of gold - Appellant retracted the statement at the first opportunity stating that it was recorded under duress and threat, and his requests for cross-examination of the Superintendent and the co-accused were not granted - Penalty under Section 112(b) imposed on the basis of the statement was upheld by FAA - Whether penalty can be imposed solely on the statement recorded under Section 108 without following the procedure under Section 138B - HELD - Under Section 138B, the person who made the statement has to be first examined as a witness before the adjudicating authority, which has to form an opinion whether the statement should be admitted in evidence in the interests of justice. Thereafter an opportunity of cross-examination has to be given. The statements under Section 108 acquire relevance only when this procedure is followed. The procedure was not followed here and the crucial witnesses were neither examined nor offered for cross-examination despite the request, so none of the statements is admissible against the Appellant. The statement is the sole basis for the penalty and cannot be accepted blindly without corroborative evidence - The Appellant was penalised solely on a statement given under duress without proper opportunity of hearing, and the order of the FAA is set aside with consequential relief, if any, as per law. [Read less]

2026-VIL-180-AAR | Advance Ruling Authority SGST

GST – Maharashtra AAR - Eligibility to concessional rate of 5% on marine engines and their parts supplied as parts of fishing vessels of heading 8902, Sl. No. 252 of Schedule I of Notification No. 1/2017-Central Tax (Rate) - Applicant proposed to import marine propulsion engines of heading 8407 and 8408 and their spare parts of heading 8409 and to sell them to fishermen for use in fishing boats - Whether marine engines and their parts attract the concessional rate of 5% when supplied as parts of fishing vessels of heading 8902 - HELD - The word part is not defined in GST law, so its meaning was examined as understood in common parlance through dictionary definitions and judicial decisions. A marine engine is an essential part of a ship or vessel without which the vessel would not be complete and cannot sail, as it is essential for main propulsion and for providing auxiliary power. Sl. No. 252 covers parts of goods of heading 8902 falling under any chapter. Hence any goods, irrespective of classification, must satisfy the condition of being a part of a vessel of the specified headings - Circular No. 52/26/2018-GST also clarifies that marine engines supplied for fishing vessels attract 5% GST by virtue of Sl. No. 252. The concessional rate is conditional upon use as a part of such vessels and is not available if the goods are used in goods other than those of the specified headings. A supplier must demonstrably know and prove the end-use at the time of supply. Mere possibility of use or a buyer's declaration is insufficient unless supported by verifiable documentation - GST at 5% is applicable only when marine engines or their parts are supplied as parts of fishing vessels of heading 8902 and the applicant establishes such end-use through verifiable documentary evidence. In absence of such evidence, the normal rate applicable to heading 8407, 8408 and 8409 remains applicable – Ordered accordingly - Eligibility to concessional rate of 5% on marine engines and their parts supplied for vessels used for defence, patrolling, flood relief and rescue operations under Sl. No. 252 of Schedule I of Notification No. 1/2017-Central Tax (Rate) - Whether 5% GST can be charged on marine engines and their parts supplied for use in vessels of heading 8901, 8904, 8905, 8906 and 8907 for defence, patrolling, flood relief and rescue operations - HELD - Entry at Sl. No. 252 covers parts of goods of the specified headings falling under any chapter. Any goods, irrespective of classification, must therefore satisfy the condition of being a part of a vessel of the said headings. Marine engines are essential parts of a ship or vessel as a vessel cannot sail without them - Engines of heading 8407 and 8408 and their parts therefore attract 5% GST when supplied as parts of vessels of heading 8901, 8904, 8905, 8906 and 8907. The benefit is not available if the goods are used in goods other than those of the specified headings. The concessional rate is conditional upon proof of end-use. Mere possibility of use or a buyer's declaration is insufficient unless supported by verifiable documentation - GST at 5% is applicable only when the marine engines or their parts are supplied as parts of vessels used for defence, patrolling, flood relief or rescue operations of heading 8901, 8904, 8905, 8906 and 8907 and the applicant adequately establishes such end-use through verifiable documentary evidence. In absence of verification or clear end-use evidence, the normal rate applicable to heading 8407, 8408 and 8409 remains applicable. [Read less]

2026-VIL-181-AAR | Advance Ruling Authority SGST

GST – Maharashtra AAR - Liability to pay GST on transfer of reward goods against redemption of reward points under a dealer incentive scheme - Applicant launched a scheme under which dealers and retailers earn reward points on purchases and redeem them through an app for goods such as mobile, refrigerator and television - The Applicant purchases these goods from suppliers and transfers them under delivery challan without issuing a tax invoice or realising any monetary consideration - Whether the Applicant is liable to discharge GST on supply of reward goods to dealers and retailers against redemption of points under the scheme - HELD - The scheme is a sales promotional scheme meant to promote sale of the Applicant's products and is not mandatory, as participation is left to the discretion of dealers and retailers. The reward points are not in the nature of an actionable claim. They are only a mechanism to identify the persons to be rewarded commensurate with their purchases - The scheme terms provide that the Applicant is not liable for compensation or damages, that rewards may change with or without notice, and that the Applicant's decision is final. No contract is signed that bestows an actionable claim on dealers and retailers. The goods are given voluntarily on fulfilment of criteria decided solely by the Applicant and are in the nature of gifts – The supply of promotional goods against redemption of reward points, cannot be said to be against any actionable claim or extinguishment of such claim against the applicant. As there is not monetary or valuable consideration in the transaction of supply of promotional goods, these transactions cannot be considered as supply under Section 7 of the CGST Act - The Applicant is not liable to discharge GST on transfer of reward goods against redemption of points – Ordered accordingly - Eligibility to input tax credit on promotional goods given as rewards against redemption of points - Blocked credit under Section 17(5)(h) of the CGST Act, 2017 - Applicant purchased goods from suppliers on which GST was charged and transferred them to dealers and retailers against redemption of reward points under its scheme - Whether the Applicant is eligible to avail input tax credit of tax charged by suppliers on goods subsequently given as rewards under the scheme - HELD - Section 17(5) begins with a non obstante clause. Even if Section 16(1) allows credit, Section 17(5)(h) blocks it in respect of goods disposed of by way of gift or free samples - The linking of reward points to the extent of purchases is an incentive scheme for promoting sales and brand loyalty, and the products are clearly in the nature of gifts. The Madras High Court has held that credit on goods purchased for sales promotional activity is not available under Section 17(5)(h) - The promotional goods that are transferred by the applicant to various persons against redemption of points under 'Dhan Barse Scheme' of the applicant, are 'gifts' and are covered by section 17(5)(h) of GST Act and not eligible for input tax credit. [Read less]

2026-VIL-182-AAR | Advance Ruling Authority SGST

GST – Maharashtra AAR - Classification of long-term leasing of electric vehicles without operator - Financial leasing services under heading 9971 or leasing or rental services without operator under heading 9973 - Applicant, engaged in leasing electric vehicles, entered into a Vehicle Lease Agreement with a lessee for leasing e-bikes without operator for a period of forty eight months - The lessee uses the vehicles for renting out to its customers, bears maintenance, repairs, insurance and statutory compliance and has an option to purchase the vehicles on expiry of the lease - Whether leasing of electric vehicles without operator is classifiable under heading 9973-Leasing or rental services without operator under Sl. No. 17 of Notification No. 11/2017-CT (Rate) - HELD - The arrangement between the Applicant and the lessee does not merely involve short-term rental of vehicles. Instead, the agreement creates a structured leasing arrangement extending over a substantial period of forty-eight months, during which the lessee utilizes the vehicles for its commercial operations. Further, the lessee assumes substantial responsibilities relating to operation of the vehicles. Such features indicate that the arrangement goes beyond mere rental of goods. Therefore, the present transaction does not fit squarely within the typical scope of Heading 9973 – The arrangement is in substance a finance lease where the lessor finances the acquisition of equipment and recovers the cost through lease rentals. If the agreement is Financial Lease agreement, then it would be squarely falls under Heading 9971 - Financial and related services Sl. No. 15(ii)- Financial leasing services including equipment leasing and hire purchase of Notification No. 11/2017-CT (Rate) dated 28.06.2017 and the applicable rate of tax shall be the same rate of tax as applicable on supply of like goods involving transfer of title in goods – The leasing of Electric Vehicles (E-Bikes/EVs) without operator by the Applicant is classifiable under SAC 9971 - Financial and related services and covered under Sl. No. 15(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 20/2019-Central Tax (Rate) dated 30.09.2019 and the applicable rate of tax will be the same rate as applicable on supply of like goods involving transfer of title in goods – Ordered accordingly [Read less]

2026-VIL-183-AAR | Advance Ruling Authority SGST

GST – Maharashtra AAR - Rate of tax on maintenance, repair and overhaul services of Reverse Osmosis plant installed on warships and other vessels - Entry 25(ib) and entry 25(ii) of Notification No. 11/2017-Central Tax (Rate) - Applicant executed contracts with the Indian Navy and Indian Coast Guard for maintenance and repair of RO plants installed on board ships, involving preventive and routine maintenance, inspection of safety controls, supply of consumables and replacement of parts wherever required - Whether maintenance, repair and overhaul services of RO plant installed on ships fall under entry ‘services in respect of ships and other vessels, their engines and other components or parts’ - HELD - An earlier ruling of the Authority has held that RO plants are independent machinery used for purification of water, classifiable under HSN 8421, and are not integral parts of ships as ships can exist and function without them - The expression ‘in respect of used’ in entry 25(ib) has a wide connotation but cannot be read in isolation. The service must still be in respect of the ship, its engines or its components or parts. As the RO plant is not a component or part of the vessel, its maintenance is maintenance of independent machinery. The mere location of the RO plant on a vessel does not alter the essential character of the supply - The doctrine of noscitur a sociis applies only where the statutory expression is ambiguous and is of limited application here. Where spare parts are supplied along with maintenance, the transaction is a composite supply with maintenance of machinery as the principal supply and the entire supply is taxable at the rate applicable to such principal supply. The activity cannot be treated as works contract as RO plants installed on ships are movable machinery - The RO system is a separate plant and not a component or part of the vessel. The services of repair, maintenance and overhaul of RO plant do not fall under entry 25(ib) and are liable to GST at 18% under entry 25(ii) of Notification No. 11/2017-Central Tax (Rate) – Ordered accordingly [Read less]

2026-VIL-1798-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Determination of Annual Capacity of Production and applicable rate of duty under compounded levy scheme - Rule 96ZP(3) of Central Excise Rules read with Section 3A of Central Excise Act, 1944 - Appellant's Unit II opted to pay duty under Rule 96ZP(3) for re-rolled products of non-alloy steel and furnished the re-measured parameters, which were verified by the officers of the Department. The Appellant calculated the capacity on that basis, with the 'd' measurement within 160mm, and sought final determination at the lower rate. The Commissioner nevertheless finalised a much higher capacity without any break-up and confirmed the demand at the higher rate - Whether the Annual Capacity of Production was correctly determined and the Appellant was liable to duty at the rate applicable under Rule 96ZP(3) - HELD - The determination of Annual Capacity of Production was not made correctly by the Commissioner. It is required to be made on the basis of the verification made by the Assistant Commissioner and the Technical Expert, and on that basis the capacity of the rolling mill comes to the figure computed by the Appellant. Since the measurement of 'd' was within 160mm and the Appellant had declared to pay duty under Sub-rule (3) of Rule 96ZP, the lower rate specifically provided in that Sub-rule applies instead of the higher rate. As the determination of capacity by the Commissioner was not correct, the demand founded on it is not sustainable - The impugned order is set aside and the appeal is allowed - Liability to duty for the period of closure of factory and entitlement to refund of excess payment under compounded levy scheme - Rule 96ZP of Central Excise Rules - Unit II of the Appellant did not run after February, 1999 and the Unit I rolling mill ran only up to March, 1999, after which the factory was permanently closed with no production in either rolling mill. The demand was raised for a period of 31 months, whereas the Appellant contended that the factory had run for a shorter period and that excess duty had been paid - Whether duty is payable for the period when the factory was closed and whether the Appellant is entitled to refund of the excess payment - HELD - The rolling mills and the factory ran only for the period from 01.09.1997 to 31.03.1999, and thereafter the factory was permanently closed with no production. The demand for the entire period of 31 months, which includes the period of closure, is therefore not sustainable. The Appellant, having paid duty in excess of the amount payable for the period of actual running on the correct capacity and rate, is eligible for refund of the excess payment - The impugned order is set aside and the appeal is allowed - Adjudication beyond the scope of Show Cause Notice - Confirmation of demand on a capacity figure not proposed in SCN - The SCN proposed the demand on the basis of a particular Annual Capacity of Production finally determined by the Department. The Adjudicating Authority, without considering the reply to the SCN, arrived at a new figure of Annual Capacity of Production which was not mentioned in the SCN and confirmed the demand for 31 months - Whether the Adjudicating Authority could confirm the demand on a basis different from that set out in the SCN - HELD - The Adjudicating Authority has travelled beyond the scope of the SCN, which is not permissible in law. The demand confirmed on a figure of capacity that was not part of the SCN cannot be sustained, and on this ground alone the impugned order cannot be sustained. The impugned order is set aside and the appeal is allowed - Interest and penalty under Rule 96ZP of Central Excise Rules - Validity of provisions relating to interest and penalty under compounded levy scheme - Interest and penalty were imposed on the Appellant under Rule 96ZP in the proceedings relating to the compounded levy scheme - Whether interest and penalty can be sustained under Rules 96ZO, 96ZP and 96ZQ - HELD - The Hon'ble Supreme Court has declared the provisions pertaining to interest and penalty contained in Rules 96ZO, 96ZP and 96ZQ of the Rules to be ultra vires. Interest and penalty imposed under Rule 96ZP therefore cannot be sustained - The impugned order is set aside and the appeal is allowed. [Read less]

2026-VIL-1795-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Issuance of SCN where Cenvat credit is reversed and tax under Reverse Charge Mechanism is paid with interest before SCN - Section 73(3) of Finance Act, 1994 - Audit of the Appellant's books for the relevant period revealed inadmissible Cenvat credit availed on car hire and health insurance charges and non-payment of Service Tax under Reverse Charge Mechanism on certain services - Whether the SCN was required to be issued when the Appellant had reversed the credit and paid the tax with interest before its issuance - HELD - The Appellant had taken Cenvat credit wrongly and reversed the same along with interest before issuance of the SCN. The tax liability under Reverse Charge Mechanism was likewise discharged and intimated to the Department before the SCN. In these circumstances the SCN was not required to be issued to the Appellant in terms of Section 73(3) of the Finance Act, 1994. The impugned proceedings are therefore not sustainable against the Appellant and are void ab initio - The impugned order is set aside and the appeal is allowed - Imposition of penalty under Section 78 of Finance Act, 1994 where payment is made under Section 73(3) before SCN - Absence of willful misstatement or suppression of facts - The Appellant paid the Service Tax and interest at the instance of the Department before the issue of SCN and intimated such payment to the Department. Penalty under Section 78 was nevertheless imposed on the ground of deliberate suppression of facts with intent to evade payment of Service Tax - Whether penalty under Section 78 can be imposed on the Appellant - HELD - For the removal of doubts, it is declared that no penalty under any of the provisions of the Act or rules made thereunder shall be imposed in respect of payment of Service Tax under Section 73(3) and interest thereon. If payment is made under Sub-section (3) of Section 73, whether suo motu or at the instance of the Department before issue of the SCN, and such payment is intimated to the Department, no penalty under Section 76, Section 77 or Section 78 can be imposed. Further, no evidence of deliberate short payment was adduced in the SCN, and no conclusive findings were recorded in the Order-in-Original and the impugned order with respect to willful misstatement or suppression of facts. Imposition of penalty under Section 78 is therefore unwarranted and bad in law - The penalty is set aside and the appeal is allowed - Invocation of extended period of limitation - Suppression of facts - The adjudicating authority invoked the extended period of limitation under the proviso to Section 73(2) of the Finance Act, 1994 to confirm the demand of Service Tax under Reverse Charge Mechanism and the recovery of Cenvat credit on the allegation of suppression of facts - Whether the allegation of suppression and the invocation of the extended period can be sustained - HELD - The issue is covered by the decision of the Hon'ble Supreme Court, which held that the allegation of suppression and invocation of the larger period cannot be sustained when all relevant facts are well within the knowledge of the Authority. The issue is also squarely covered by a decision of this Tribunal, which has been affirmed by the Hon'ble Calcutta High Court. No evidence of willful misstatement or suppression of facts is adduced in the SCN or recorded in the impugned order - The impugned order is set aside and the appeal is allowed. [Read less]

2026-VIL-1182-GUJ-CE | High Court CENTRAL EXCISE

Central Excise - Refund of duty deposited pursuant to audit objection - Limitation under Section 11B of the CEA, 1944 - Absence of words 'under protest' - Respondent deposited differential duty on sales tax recovered under the head of other charges, after an audit objection was raised, and similar duty was paid by its other units. The issue was later decided in favour of the Respondent on merits in the case of its other unit - Respondent then claimed refund, which was rejected as barred by limitation, but the Tribunal allowed the appeal. The Appellant (Revenue) contended that the payment was voluntary and therefore the one year limitation under Section 11B applied - Whether duty deposited at the instance of the department, without the words 'under protest', is a voluntary payment so as to attract the limitation under Section 11B - HELD - The Tribunal recorded a finding of fact that the Respondent had not paid the duty suo moto but had deposited it at the behest of the department pursuant to the audit objection. The adjudicating authority itself had observed in the interest proceedings that the Respondent had not paid the duty voluntarily - Once the issue attained finality in favour of the Respondent, the nature of the payment is that of payment under protest, and it makes no difference whether the amount was deposited by one unit or another. The time limit of one year under Section 11B is therefore not applicable, and in any case the refund claim was filed within one year from the date of the Tribunal's decision - The Tribunal was justified in allowing the refund claim, no substantial question of law arises - The appeal of the Revenue is rejected - Refund claim based on decision rendered in case of another unit of the same assessee - Respondent claimed refund of duty paid by one of its units on the strength of the Tribunal's decision on merits in the case of its other unit, which had attained finality – Appellant-Revenue contended that the two units had different registration numbers, that the other unit was 'another person' and refund cannot be claimed on the basis of a decision in another person's case - HELD - Even on merits, the department was not entitled to recover the duty, and it makes no difference whether the duty related to one unit or another unit of the assessee. The ruling relied upon by the Revenue is not applicable in the facts of the case, as the assessee cannot be said to have relied on the decision in the case of another person. The definition of 'person' under Section 4(3) of the Act for valuation of excisable goods includes inter-connected undertakings - The ruling of the Apex Court in Mafatlal Industries relied upon by the Revenue is not applicable - The appeal is rejected [Read less]

2026-VIL-1789-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs - Eligibility of Thermic Fluid Imported for Initial Charging of Continuous Polycondensation Plant as Capital Goods for Exemption under Notification No. 104/2009-Customs dated 14.09.2009 - Appellant, a manufacturer of polyester filament yarn, imported the Continuous Polycondensation plant under EPCG authorisation without thermic fluid and subsequently imported heat transfer fluid separately by utilising SHIS scrips under the Foreign Trade Policy 2009-2014 - SCN proposed recovery of customs duty on the allegation that the fluid is a chemical and not capital goods, and the Commissioner confirmed the duty demand with i... [Read more]

2026-VIL-1203-GUJ-CU | High Court CUSTOMS

Customs - Premature Demand of IGST on Goods Imported Under EPCG Authorization, Revenue Neutrality - Section 130 of the Customs Act, 1962 - Respondent-assessee imported goods under EPCG authorization availing the benefit of Zero Duty Export Promotion Scheme, and cleared the goods at Nil IGST under Customs Notification No. 16/2015-Cus dated 01.04.2015 as amended by Notification No. 79/2017-Cus dated 13.10.2017 - Revenue alleged that the notification was violated as the export obligation was not fulfilled, and the adjudicating authority confirmed the demand of IGST along with penalty and confiscation of the goods - Tribunal held that the proceedings were premature as the export obligation could be met within six years of the authorization. The Tribunal further held, on the data placed by the assessee, that the IGST paid would be available as Input Tax Credit, making the situation revenue neutral, and set aside the demand - Revenue contended that once the proceedings were held premature, the Tribunal could not have gone into revenue neutrality, and that such observations would bind the Revenue in fresh proceedings after the expiry of the authorization period - Whether the Tribunal was justified in examining revenue neutrality after holding the proceedings premature, and whether the order calls for interference - HELD - Once the Tribunal recorded the finding that the action initiated by the Revenue was premature, it ought to have stopped at that stage and left the matter to be considered by the Revenue in accordance with law. However, when the assessee placed on record various data, the Tribunal ventured to consider the same and recorded findings on revenue neutrality which are based on such data and are subject to verification by the Revenue. In such circumstances, no interference with the order of the Tribunal is warranted - It is open to the Revenue to verify the data in the fresh verification which may be initiated and to decide the matter in accordance with law - The appeal is disposed of [Read less]

2026-VIL-1181-GUJ-CU | High Court CUSTOMS

Customs - Exemption under EPCG Notification on exit from EOU scheme - Non-registration of authorisation at port of import, non-production for debit and non-filing of undertaking as procedural lapses – Respondent-EOU was permitted to exit from the EOU scheme after payment of duty on closing stock and after obtaining an EPCG authorisation. It cleared capital goods without payment of duty on the strength of that authorisation, and the final exit order and no dues certificate were issued by the Development Commissioner and the department – Appellant-Revenue denied the exemption on the grounds that the authorisation was not registered at the port of import, was not produced for debit and that the undertaking was not furnished in the prescribed form. The Tribunal allowed the Respondent's appeal - Whether non-compliance with the conditions of the exemption Notification, namely registration of the authorisation at the port of import, production for debit and execution of undertaking, is a procedural lapse that cannot defeat the benefit of exemption - HELD - The condition of registration at the port of import applies where exemption is normally claimed under the EPCG scheme at the time of import - Where the Respondent had already sought exit from the EOU scheme and moved to the EPCG scheme after submitting all details, such condition is merely procedural, and its breach cannot be a ground to deny the benefit. The authorisation was submitted to the Department while exiting the EOU scheme, so it was available for debit of the capital goods and the department could have called for it. The undertaking required under the Notification is meant for regular imports, and the Respondent had already furnished an undertaking to discharge duty on any shortfall at the time of debonding, which was sufficient - The findings of fact recorded by the Tribunal show that the conditions were fulfilled and the export obligation was not in dispute - No substantial question of law arises from the order of the Tribunal and the appeal of the Revenue is dismissed [Read less]

2026-VIL-1204-KER | High Court VAT

Kerala Value Added Tax Act, 2003 - Credit for tax deducted at source by the awarder under Section 10 of the KVAT Act, 2003 - Assessment completed without extending credit for tax deducted and remitted – Petitioner, engaged in execution of works contract, raised invoices on the 4th Respondent-awarder, who deducted tax at source while making payments on periodical bills and remitted it to the Government - Petitioner claimed credit for such tax in the returns, but the assessment for the relevant year was completed granting credit only to the extent reflected in the portal of the department and raising a demand along with in... [Read more]

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