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Central Excise – Activity of importing and re-packing of Peanut Butter, Cenvat credit on CVD - Appellant was engaged in importing and re-packing Peanut Butter. The appellant availed Cenvat credit on CVD paid at the time of import and utilized the same towards duty paid on re-packed Peanut Butter and payment of SAD - The Department held that the goods were unconditionally exempted under Notification No. 03/2006-CE dated 01.03.2006, and therefore the appellant had wrongly taken and utilized the Cenvat credit - Whether Peanut Butter can be considered as "similar edible preparation" to Margarine and therefore excluded from t... [Read more]

Central Excise – Activity of importing and re-packing of Peanut Butter, Cenvat credit on CVD - Appellant was engaged in importing and re-packing Peanut Butter. The appellant availed Cenvat credit on CVD paid at the time of import and utilized the same towards duty paid on re-packed Peanut Butter and payment of SAD - The Department held that the goods were unconditionally exempted under Notification No. 03/2006-CE dated 01.03.2006, and therefore the appellant had wrongly taken and utilized the Cenvat credit - Whether Peanut Butter can be considered as "similar edible preparation" to Margarine and therefore excluded from the exemption notification – HELD – earlier in appellant’s own case, the Commissioner (Appeals) has clearly held the impugned goods were similar to Margarine and therefore clearly excluded from the exemption notification. The Department has not challenged this order and therefore, the view of the Commissioner (Appeals) has to be considered as the view of the Department. Therefore, when the Department itself has decided that demand is not sustainable in the given factual matrix, both on grounds of revenue neutrality as well as on account of its being similar edible preparation to Margarine, then now the demand raised on the similar issue cannot sustain to the extent of recovery of credit taken in respect of CVD utilized towards payment of duty on re-labelled Peanut Butter - Even otherwise, both Peanut Butter and Margarine are edible preparations directly fit for human consumption, with similar fat content, origin and usage. The expression “similar edible preparation” has to be interpreted expansively, and Peanut Butter and Margarine are similar edible preparations. Therefore, the demand for recovery of Cenvat credit is not sustainable and set aside. However, the demand of Cenvat Credit where the goods itself has not been utilized for manufacture or for that matter written off in books of accounts, is upheld – The appeal is partly allowed [Read less]

Customs - Confiscation of a luxury car, levy of penalties - A Mercedes Benz car was imported by importer-on-record. The Commissioner rejected the declared value, re-assessed the value and ordered confiscation under Section 111(d) with an option to redeem on payment of fine, and imposed penalty. The matter was remanded by the Tribunal for de-novo consideration - Meanwhile, the appellant purchased the car partly financed by a bank loan. Later on, the DRI commenced investigations into mis-declaration of imported luxury cars. A Show Cause Notice was issued alleging mis-declaration of the car as "new" to claim benefit under Not... [Read more]

Customs - Confiscation of a luxury car, levy of penalties - A Mercedes Benz car was imported by importer-on-record. The Commissioner rejected the declared value, re-assessed the value and ordered confiscation under Section 111(d) with an option to redeem on payment of fine, and imposed penalty. The matter was remanded by the Tribunal for de-novo consideration - Meanwhile, the appellant purchased the car partly financed by a bank loan. Later on, the DRI commenced investigations into mis-declaration of imported luxury cars. A Show Cause Notice was issued alleging mis-declaration of the car as "new" to claim benefit under Notification No. 21/2002-Customs, undervaluation, and collusion. Penalties were imposed on the appellants - Whether the car can be re-confiscated after it has already been confiscated and released on payment of redemption fine – HELD - Once the car has been confiscated and allowed to be redeemed on payment of redemption fine, it cannot be re-confiscated. After releasing the goods into the market and permitting the sale, the Department cannot initiate another proceeding to recover the alleged difference in valuation from the ultimate bona fide purchaser. The confiscation of the car in the impugned order is set aside – Further, the appellants had purchased the car in a bona fide manner and there was no breach of any legal provisions by them. Since there was no finding that the appellants had done any act or omission rendering the goods liable to confiscation under Section 111, or that they had abetted the illegal import of the car, there was no basis to impose penalties under Section 112(a) of the Customs Act - The penalty under Section 114AA was not applicable as there was no use of false or incorrect material by the appellants. The confiscation of the car and the penalties imposed on the appellants are set aside – The appeals are allowed [Read less]

Customs – Import of cars under EPCG scheme, discharge export obligation, foreign exchange earnings - Appellant imported cars under the EPCG scheme and claimed the benefit of Notification No. 49/2000 and Notification No. 44/2002 - Appellant fulfilled the export obligation by rendering various services related to tourism and travelling. The DGFT issued EODCs for two of the licenses. However, the third EODC was kept pending due to an investigation initiated by the DRI regarding the import of the cars - Whether the export obligation had to be fulfilled only through the exclusive use of the imported cars, or could it be fulfi... [Read more]

Customs – Import of cars under EPCG scheme, discharge export obligation, foreign exchange earnings - Appellant imported cars under the EPCG scheme and claimed the benefit of Notification No. 49/2000 and Notification No. 44/2002 - Appellant fulfilled the export obligation by rendering various services related to tourism and travelling. The DGFT issued EODCs for two of the licenses. However, the third EODC was kept pending due to an investigation initiated by the DRI regarding the import of the cars - Whether the export obligation had to be fulfilled only through the exclusive use of the imported cars, or could it be fulfilled through the overall foreign exchange earnings from the appellant's tourism and travel-related services – HELD - The requirement of scheme is actual use of the capital goods imported under EPCG Scheme to render services to earn foreign exchange, and not that services rendered through the exclusive use of capital goods imported would only be considered for considering fulfilment of export obligation - The foreign exchange earned by the appellant through its tourism and travel-related services, including hotel accommodation, food and beverages, and transportation of tourists, should be considered towards the discharge of the export obligation under the EPCG scheme. The DGFT clarification also stated that in the hotel, tourism and travel service industry, the vehicles are part of an overall package, and it is not practically possible to show export earnings separately from the use of these vehicles. The DGFT had explicitly stated that all earnings from the hotel, travel and tourism activities should be eligible for consideration towards the discharge of the export obligation - the appellant had fulfilled its export obligation under the EPCG scheme and was entitled to the benefit of the relevant notifications – The impugned order is set aside and the appeal is allowed - Whether the customs authorities had the jurisdiction to scrutinize the validity of the EODCs issued by the DGFT – HELD - Once the EODCs had been issued by the DGFT, the same was deemed to be the completion of all export obligations – Further, the Supreme Court had set aside the Tribunal's earlier observation that the holding of the EODC was not determinative of the fulfillment of the export obligation. The holding of the EODCs was determinative of the appellant completing its export obligations, and the Customs authorities did not have the jurisdiction to sit in judgment over the EODC issued by the DGFT. [Read less]

Service Tax demand on Corporate Guarantee - Whether the appellant is liable to pay service tax on the corporate guarantee provided by its overseas parent company under the category of BOFS – HELD - The issue is no longer res integra and has been settled in the appellant's favor in various cases. The provision of corporate guarantee does not qualify under the category of BOFS - The definition of BOFS is a comprehensive one and not an inclusive one. The services provided by only those persons who can be classified as a banking/non-banking company, financial institution, or any other body corporate or commercial concern eng... [Read more]

Service Tax demand on Corporate Guarantee - Whether the appellant is liable to pay service tax on the corporate guarantee provided by its overseas parent company under the category of BOFS – HELD - The issue is no longer res integra and has been settled in the appellant's favor in various cases. The provision of corporate guarantee does not qualify under the category of BOFS - The definition of BOFS is a comprehensive one and not an inclusive one. The services provided by only those persons who can be classified as a banking/non-banking company, financial institution, or any other body corporate or commercial concern engaged in the business of banking and financial services would be exigible to service tax under the BOFS category – Further, for an activity to be considered as a service, there must be an element of 'consideration,' which was not present in the instant case as the appellant did not charge any commission or fees for providing the corporate guarantee - The appellant is not liable to pay service tax on the corporate guarantee provided by its overseas parent company under the category of BOFS – The demand is set aside and the appeal is allowed [Read less]

Service Tax - Transfer of right to use tangible goods, Business Exhibition Service - Revenue observed that the appellant has leased out machineries to other companies, and the effective control of the machinery was not transferred to the lessees - Whether the leasing of machineries by the appellant amounts to a taxable service of "Transfer of Right to Use Tangible Goods" – HELD – The agreement between the appellant and the lessees showed that the possession of the machinery had been transferred to the lessees, and the conditions regarding repair, loss, and damage were of a general nature and did not indicate that the r... [Read more]

Service Tax - Transfer of right to use tangible goods, Business Exhibition Service - Revenue observed that the appellant has leased out machineries to other companies, and the effective control of the machinery was not transferred to the lessees - Whether the leasing of machineries by the appellant amounts to a taxable service of "Transfer of Right to Use Tangible Goods" – HELD – The agreement between the appellant and the lessees showed that the possession of the machinery had been transferred to the lessees, and the conditions regarding repair, loss, and damage were of a general nature and did not indicate that the right of effective control was not transferred. Unless both the conditions of transfer of right of possession and effective control are satisfied, the service cannot be said to be a supply of tangible goods. As the appellant had paid the applicable VAT on the deemed sale, the right of possession had been transferred, and the demand on this count cannot be sustained – The impugned order is set aside and the appeal is allowed - Whether the expenses incurred by the appellant on exhibitions held outside India are taxable under the "Business Exhibition Service" – HELD - The expenses related to the exhibition held outside India, including the purchase of material for display and ocean freight, were not exigible to service tax as the services were provided and received outside India. In terms of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, such services would have been taxable only if they were performed in India, which was not the case here - Whether the services availed by the appellant from foreign service providers for market research are taxable under the "Business Support Service" on a reverse charge basis – HELD - The services availed by the appellant from foreign service providers were for market research of their products in a particular country, and not about a particular customer, as alleged in the show cause notice. The Tribunal relied on the CBEC's clarification that Market Research Agency Services include research relating to the development of a market for a product, and such services rendered entirely outside India cannot be taxed in India by invoking RCM. [Read less]

GST - Uploading of order in "View Additional Notices and Orders" tab, Condonation of delay - Petitioners submitted that they were not aware of the order passed by the Adjudicating Authority as it was uploaded on the GST portal under the "View Additional Notices and Orders" tab - Whether the delay in filing the appeal should be condoned, considering the difficulties faced by the petitioners in accessing the order on the GST portal – HELD - It would not be expected of a registered taxpayer to open and look into the "View Additional Notices and Orders" tab for the purpose of checking main orders or orders passed disposing o... [Read more]

GST - Uploading of order in "View Additional Notices and Orders" tab, Condonation of delay - Petitioners submitted that they were not aware of the order passed by the Adjudicating Authority as it was uploaded on the GST portal under the "View Additional Notices and Orders" tab - Whether the delay in filing the appeal should be condoned, considering the difficulties faced by the petitioners in accessing the order on the GST portal – HELD - It would not be expected of a registered taxpayer to open and look into the "View Additional Notices and Orders" tab for the purpose of checking main orders or orders passed disposing of main proceedings. This difficulty had been recognized by Coordinate Benches in similar cases, and in one case, the delay was condoned despite the petitioner having responded to the show-cause notice - Considering the ends of justice, the matter is remanded back to the Appellate Authority for a decision on merits, by condoning the delay, subject to the petitioners making a payment of Rs. 15,000/- with the Calcutta High Court Legal Services Committee – The petition is disposed of [Read less]

Central Excise - Refund of duty paid on ambulances under "Arogya Kavacha" scheme – Appellant signed an MoU with the Government of Karnataka to run the "Arogya Kavacha" ambulance service, under which the appellant ordered vehicles from various manufacturers, which were then sent to a fabricator for conversion into ambulances - Dept of the view that the fabrication activities by fabricator amounted to "manufacture" and liable to duty. The fabricator-M/s BHPL paid the duty under protest and the appellant later filed a claim for refund of the duty paid claiming that they have paid the duty on behalf of the Government of Karn... [Read more]

Central Excise - Refund of duty paid on ambulances under "Arogya Kavacha" scheme – Appellant signed an MoU with the Government of Karnataka to run the "Arogya Kavacha" ambulance service, under which the appellant ordered vehicles from various manufacturers, which were then sent to a fabricator for conversion into ambulances - Dept of the view that the fabrication activities by fabricator amounted to "manufacture" and liable to duty. The fabricator-M/s BHPL paid the duty under protest and the appellant later filed a claim for refund of the duty paid claiming that they have paid the duty on behalf of the Government of Karnataka and M/s BHPL - Whether the appellant is eligible to claim the refund of the central excise duty paid, even though it is not the manufacturer or buyer of the vehicles - HELD - The appellant is neither the manufacturer nor the buyer/owner of the vehicles, and thus does not fulfill the eligibility conditions for claiming the refund under the Central Excise law and the relevant notification. The law recognizes only the manufacturer or the buyer as eligible for claiming refund, and the appellant could not establish its status as either - The conditions prescribed in the statute or notification for claiming an exemption or refund must be strictly complied with, and the burden is on the claimant to prove its eligibility. In the present case, the appellant failed to fulfill the mandatory conditions laid down in the notification for claiming the refund – Further, the MOU also doesn’t appear to recognize the appellants as owners of the vehicles. The MoU doesn’t mention of the reimbursement of taxes, if any paid by the appellant. If the appellant has undertaken the activity as per MOU or as part of Corporate Social Responsibility, they cannot enrich themselves at the cost of the Government - The appellant could not produce any evidence to show that they are the buyers or owners or the consumers of the vehicles who have borne the incidence of duty and have not passed on to others – the appellants are neither a manufacturer nor buyer nor the owners of vehicles and thus have not fulfilled the substantive conditions for refund – The impugned order is confirmed and the appeal is dismissed [Read less]

Customs - Mis-declaration of imported goods, Declaration of goods as per the documents supplied by the foreign exporter, Redemption fine and penalty, Valuation – Appellant imported Heavy Melting scrap and opted for first check. The Department alleged that 90% of the consignment was of re-rollable material scrap - The case was adjudicated by imposing redemption fine and penalty - Whether there was mis-declaration on the part of the appellant regarding the quality and quantity of the imported goods when the goods were declared as per the documents supplied by the foreign exporter - HELD – There is no evidence to suggest ... [Read more]

Customs - Mis-declaration of imported goods, Declaration of goods as per the documents supplied by the foreign exporter, Redemption fine and penalty, Valuation – Appellant imported Heavy Melting scrap and opted for first check. The Department alleged that 90% of the consignment was of re-rollable material scrap - The case was adjudicated by imposing redemption fine and penalty - Whether there was mis-declaration on the part of the appellant regarding the quality and quantity of the imported goods when the goods were declared as per the documents supplied by the foreign exporter - HELD – There is no evidence to suggest mis-declaration on the part of the appellant. The quantity declared was marginally different and could be attributed to the weighments scale correction. Further, the report given by the Chartered Engineer suggested that the imported scrap contained re-rollable material, and the fact that the appellant had opted for first check having declared the contents of the consignment as per import documents stands in favor of the appellant - a scrap is a scrap irrespective of its origin, and what is scrap to someone may not be the same to the other. As the Department did not allege that the imported goods were used as such and not melted, the allegation of mis-declaration did not survive - As regards the value of imported goods, there is no allegation and evidence thereof that the appellants have paid the differential value to the foreign suppliers over and above the value declared in the documents. In the absence of evidence to that effect, it cannot be alleged that there was under-valuation of the imported goods. The allegation of mis-declaration is incorrect - the appeal partially allowed by setting aside the redemption fine and penalty imposed - Whether the imposition of redemption fine and penalty was justified - HELD - In the absence of evidence that the appellants had paid the differential value to the foreign suppliers over and above the value declared in the documents, the allegation of under-valuation of the imported goods could not be sustained. The Tribunal accepted the appellant's argument that the enhanced prices were accepted as the clearance was being delayed, and the Revenue did not provide any evidence to the contrary. Therefore, the impugned order imposing redemption fine and penalty was not maintainable. [Read less]

Service Tax - Demand of service tax on commission paid to overseas commission agent, extended period of limitation - Appellant paid commission to their overseas commission agent on export of goods and on overseas sales promotion – Whether the demand of service tax under the category of "Management or Business Consultants Service", which was not proposed in the show cause notice, is sustainable – HELD - The Adjudicating Authority had admitted that the service covered by the invoices was not under the category of "Business Auxiliary Service," but still confirmed the demand under the Reverse Charge Mechanism. The Commissi... [Read more]

Service Tax - Demand of service tax on commission paid to overseas commission agent, extended period of limitation - Appellant paid commission to their overseas commission agent on export of goods and on overseas sales promotion – Whether the demand of service tax under the category of "Management or Business Consultants Service", which was not proposed in the show cause notice, is sustainable – HELD - The Adjudicating Authority had admitted that the service covered by the invoices was not under the category of "Business Auxiliary Service," but still confirmed the demand under the Reverse Charge Mechanism. The Commissioner (Appeals) then classified the service under "Management or Business Consultants Service," which was not even proposed in the show cause notice. The demand of service tax under a category not proposed in the show cause notice is not permissible in law. Therefore, levy of interest and imposition of penalty to this extent is also not sustainable and set-aside – The appeal is allowed - Whether the demand of service tax beyond the normal period of limitation is sustainable in the absence of any finding of fraud or collusion or wilful mis-statement or suppression of facts – HELD - The entire transactions were duly recorded in the books of accounts presented for audit. The Adjudicating Authority did not give any findings on how the extended period of limitation of five years could be invoked. The Commissioner (Appeals) also failed to rebut this basic fact - The demand of service tax beyond the normal period is not sustainable in the absence of any findings on the invocation of the extended period. [Read less]

Customs - Rejection of the transaction value, Duty Demand, Penalties and Confiscation - DRI conducted search and seizure operations and alleged that the appellants had undervalued the imported goods. Based on this, the Commissioner of Customs issued a show cause notice proposing demands of differential customs duty, interest, penalties and confiscation of goods - Whether the Adjudicating Authority was justified in rejecting the transaction value and re-determining the customs duty – HELD - The rejection of the transaction value is not in accordance with the Customs Valuation Rules, 2007. The Department has relied on revi... [Read more]

Customs - Rejection of the transaction value, Duty Demand, Penalties and Confiscation - DRI conducted search and seizure operations and alleged that the appellants had undervalued the imported goods. Based on this, the Commissioner of Customs issued a show cause notice proposing demands of differential customs duty, interest, penalties and confiscation of goods - Whether the Adjudicating Authority was justified in rejecting the transaction value and re-determining the customs duty – HELD - The rejection of the transaction value is not in accordance with the Customs Valuation Rules, 2007. The Department has relied on revised prices of other importers and Petrosil database, which did not represent the contemporaneous import price as per the Valuation Rules. Further, the Department did not follow the procedure prescribed under Rule 12 of the Valuation Rules before rejecting the declared value - The 'reason to doubt' the truth or accuracy of the declared value must be based on 'certain reasons' and not merely on suspicion or apprehension. In the absence of such 'certain reasons', the rejection of the transaction value is set aside and the appeal is allowed - Whether larger period of limitation is invokable in the facts and circumstances of the case – HELD - The Department had re-opened the finally assessed Bills of Entry without conducting a review under Section 129D or filing an appeal. The Tribunal observed that in the absence of any evidence of suppression of facts, the extended period of limitation under Section 28(4) could not be invoked. The Tribunal further noted that most of the Bills of Entry were finally assessed and the goods were released to the appellants, and the Department chose to re-look at the imports after a lapse of 4 years, which was prejudicial to the appellants. Accordingly, the Tribunal set aside the demands on the ground of limitation - Whether the penalties under Sections 112(a), 114A and 114AA imposed on the appellants are sustainable – HELD - Since the liability to confiscation under Section 111 was not proved, the penalty under Section 112 could not be sustained. Further, the penalty under Section 114A was inapplicable to the provisionally assessed Bills of Entry, and the penalty under Section 114AA was imposed without any specific allegation or finding in the show cause notice or the impugned order. Accordingly, the Tribunal set aside all the penalties imposed on the appellants. [Read less]

Service Tax – Taxability of Construction of dams and power houses, Limitation period for refund claims – Appellant executed construction work related to dams, including the Nagarjuna Sagar Tail Pond project and the construction of the Almaty Dam Power House. During an audit, the revenue authorities insisted that the appellant was liable to pay service tax for these construction activities, as they were not considered part of the dam construction. The appellant paid the demanded service tax along with interest. Thereafter, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Commi... [Read more]

Service Tax – Taxability of Construction of dams and power houses, Limitation period for refund claims – Appellant executed construction work related to dams, including the Nagarjuna Sagar Tail Pond project and the construction of the Almaty Dam Power House. During an audit, the revenue authorities insisted that the appellant was liable to pay service tax for these construction activities, as they were not considered part of the dam construction. The appellant paid the demanded service tax along with interest. Thereafter, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Commissioner (Appeals) - Whether the construction activity related to dams is exempt from payment of service tax – HELD - The Tribunal relied on the decisions in the cases of Continental Constructions Ltd. v. Commissioner of Service Tax, M/s C P Systems Pvt. Ltd. v. Commissioner of Service Tax, and M/s MCM Service Pvt. Ltd. v. Commissioner of Service Tax, wherein it was held that the construction of power houses and other structures that are integral to the dam project are also exempt from service tax, as they are considered part of the dam construction - The exclusion of dams and tunnels from the definition of "Commercial or Industrial Construction Services" would cover all the works related to the civil construction of dams and tunnels, including the construction of power houses. Therefore, the construction activities undertaken by the appellant are exempt from service tax - The impugned order is set aside and the appeal is allowed on merit. The original authority is directed to process the refund claim as per Section 11B of the Central Excise Act, 1944 – Ordered accordingly - Whether the amount paid as service tax based on the audit instructions can be considered as a deposit – HELD - In the present case the service tax has been paid under the respective heads accepting the observations of the audit. Once the tax is paid under the relevant provisions of the law, it cannot be considered as a deposit, and the refund can only be claimed under the provisions of Section 11B of the Central Excise Act, 1944, as made applicable to service tax. The tax paid by the appellant cannot be treated as a deposit, and the refund claim has to be filed within the time limit prescribed under the law. [Read less]

GST – Seizure of goods for non-availability of E-way Bill at the time of interception - Whether the seizure of goods by the authorities for non-availability of the e-way bill at the time of interception is valid - HELD – The record of the case shows that the e-way bill was not produced at the time of interception and the same was produced later on the date of detention, physical inspection and passing of the seizure order. Thus, the e-way bill was not generated immediately after the movement of goods, but the same was generated much after the interception of the goods - Once the e-way bill was not shown or generated be... [Read more]

GST – Seizure of goods for non-availability of E-way Bill at the time of interception - Whether the seizure of goods by the authorities for non-availability of the e-way bill at the time of interception is valid - HELD – The record of the case shows that the e-way bill was not produced at the time of interception and the same was produced later on the date of detention, physical inspection and passing of the seizure order. Thus, the e-way bill was not generated immediately after the movement of goods, but the same was generated much after the interception of the goods - Once the e-way bill was not shown or generated before commencement of journey, the impugned order is justified – The writ petition is dismissed [Read less]

GST - Detention of Goods, Issue of Delivery Challan/E-way Bill, Destination address is not declared as its additional place of business - The consignment was intercepted by the Mobile Squad on the ground that the manual delivery challan was not having the signature of the official of the petitioner, and the shipment address given in the document was not an additional place of business of the petitioner - Whether the proceedings initiated against the petitioner for detention of goods can be sustained - HELD - The goods in question were accompanying with the delivery challan/e-way bill. The goods were intercepted and seized ... [Read more]

GST - Detention of Goods, Issue of Delivery Challan/E-way Bill, Destination address is not declared as its additional place of business - The consignment was intercepted by the Mobile Squad on the ground that the manual delivery challan was not having the signature of the official of the petitioner, and the shipment address given in the document was not an additional place of business of the petitioner - Whether the proceedings initiated against the petitioner for detention of goods can be sustained - HELD - The goods in question were accompanying with the delivery challan/e-way bill. The goods were intercepted and seized on the premise that the delivery challan was not having the signature. Further, the additional place of business of the petitioner has not been declared - Once the valid e-way bill was accompanying the goods, the authorities should have released the vehicle. The mere non-disclosure of the place of destination in the registration cannot be a ground for seizure of goods. The Commissioner of State GST had issued a Circular stating that proceedings under Section 129 of the GST Act cannot be initiated on the ground that the destination address is not declared as an additional place of business of the party to whom the goods are being sent. There was neither any intention to evade the payment of tax nor any fault nor any contravention of the Act, as all valid documents were accompanying the goods as required under the Act - The impugned orders are quashed and petition is allowed [Read less]

Central Excise - Penalty under Rule 26 of the Central Excise Rules, 2002 - Requirement of confiscation of goods for imposing penalty under Rule 26 - Department alleged that there was a complex fraud scheme involving fraudulent availment of CENVAT credit and claiming illegal rebate of central excise duty - Whether the penalty under Rule 26 can be imposed on the appellant in the absence of any confiscation of goods - HELD - For imposing penalty under Rule 26, the requirement of confiscation of goods is sine qua non. The provisions of Rule 26 cannot be invoked for imposition of penalty when there are no goods involved which a... [Read more]

Central Excise - Penalty under Rule 26 of the Central Excise Rules, 2002 - Requirement of confiscation of goods for imposing penalty under Rule 26 - Department alleged that there was a complex fraud scheme involving fraudulent availment of CENVAT credit and claiming illegal rebate of central excise duty - Whether the penalty under Rule 26 can be imposed on the appellant in the absence of any confiscation of goods - HELD - For imposing penalty under Rule 26, the requirement of confiscation of goods is sine qua non. The provisions of Rule 26 cannot be invoked for imposition of penalty when there are no goods involved which are liable to confiscation. In cases where the Revenue alleged that there were no goods but the manufacturer availed benefits like Cenvat credit or refund or rebate on export by resorting to paper transactions, then Rule 26 was not attracted and no penalty thereunder can be imposed on any person - In the present case, there was no confiscation of goods, and the main allegation was about the rebate claims being wrongful and not justified. Therefore, the imposition of penalty on the appellant under Rule 26 is not justified and set aside – The appeal is allowed [Read less]

Customs - Import of Incomplete/unfinished e-rickshaw, classification under Customs Tariff Heading - Appellant, a manufacturer of e-rickshaws, imported various parts/spare parts of e-rickshaw for manufacture – Revenue alleged that the appellant had imported incomplete e-rickshaws in CKD/SKD condition, but classified them as parts of e-rickshaw to evade higher duty. The authorities invoked provisions of extended period of limitation and imposed penalties on the appellant and its officials - Whether the imported goods should be classified as incomplete e-rickshaws under CTH 8703 or as parts of e-rickshaw under CTH 8708 – ... [Read more]

Customs - Import of Incomplete/unfinished e-rickshaw, classification under Customs Tariff Heading - Appellant, a manufacturer of e-rickshaws, imported various parts/spare parts of e-rickshaw for manufacture – Revenue alleged that the appellant had imported incomplete e-rickshaws in CKD/SKD condition, but classified them as parts of e-rickshaw to evade higher duty. The authorities invoked provisions of extended period of limitation and imposed penalties on the appellant and its officials - Whether the imported goods should be classified as incomplete e-rickshaws under CTH 8703 or as parts of e-rickshaw under CTH 8708 – HELD - HSN General Explanatory Notes to Chapter 87 provide that an incomplete or unfinished vehicle can be classified as a complete or finished vehicle if it has the essential character of a finished vehicle. The office order dated 12.03.2014 relied upon in SCN, identifies five major components/assemblies (transmission, motor, axle, chassis, and controller) that provide the essential character to a complete e-rickshaw in CKD/SKD condition. If along with the motor, any two of these essential components were missing, the goods would be considered as parts of e-rickshaw under CTH 8708 - In the present case, the appellant did not import the motor, which is the most vital essential component as per the office order. Therefore, the imported goods should have been classified as parts of e-rickshaw under CTH 8708 and not as incomplete e-rickshaws under CTH 8703 - The Principal Commissioner has also drawn a presumption from the number of parts imported by the appellant to conclude that they would constitute a fixed number of e-rikshaws. A finding has been recorded that the appellant had imported many e-rikshaws in CKD/SKD condition. Liability cannot be fastened on the basis of presumption, more particularly when the conditions set out in the office order dated 12.03.2014 for an e-rikshaw to be in CKD/SKD were not satisfied - The impugned order is set aside and the appeals are allowed - Whether the extended period of limitation under Section 28(4) of the Customs Act could be invoked for previous Bills of Entry – HELD - The Supreme Court has held that mere suppression of facts is not enough and there has to be a deliberate attempt to evade payment of duty for invoking the extended period of limitation. The impugned order merely held that the appellant had not disclosed that it had imported incomplete e-rickshaws, but there was no finding that such suppression was with an intent to evade payment of duty. In the absence of such a finding, the extended period of limitation could not have been invoked. [Read less]

GST – Negative Blocking of Electronic Credit Ledger under Rule 86A of CGST Rules, 2017 - Whether Rule 86A permits the Commissioner or an authorized officer to block a taxpayer's ECL by an amount exceeding the credit available in the ECL at the time of issuing the order – HELD - The plain language of Rule 86A does not permit the blocking of ECL in excess of the available ITC. The availability of ITC in the ECL is a condition precedent for the exercise of power under Rule 86A. Without the ITC being available in the ECL, the authorities cannot create a 'negative blocking' or an artificial negative balance in the ECL - The... [Read more]

GST – Negative Blocking of Electronic Credit Ledger under Rule 86A of CGST Rules, 2017 - Whether Rule 86A permits the Commissioner or an authorized officer to block a taxpayer's ECL by an amount exceeding the credit available in the ECL at the time of issuing the order – HELD - The plain language of Rule 86A does not permit the blocking of ECL in excess of the available ITC. The availability of ITC in the ECL is a condition precedent for the exercise of power under Rule 86A. Without the ITC being available in the ECL, the authorities cannot create a 'negative blocking' or an artificial negative balance in the ECL - The impugned order/entry blocking the petitioner's ECL in excess of the available ITC is unsustainable and set it aside. Respondents are at liberty to undertake and resort to remedy available for recovery in accordance with law – The writ petition is allowed [Read less]

GST - Maintainability of Writ Petition challenging order under Section 73 of the CGST Act, 2017, Limitation for filing appeal, Availability of alternative remedy - Whether the writ petition filed by the petitioner challenging the order under Section 73 is maintainable, considering the availability of alternative remedy of appeal under the Act – HELD - The order impugned was passed on 22nd October, 2024, whereas the writ petition was filed on 23rd October, 2025, thereby indicating an inordinate delay of around one year on the part of the petitioner in approaching the Court. The Section 107 of the GST Act provides for an ... [Read more]

GST - Maintainability of Writ Petition challenging order under Section 73 of the CGST Act, 2017, Limitation for filing appeal, Availability of alternative remedy - Whether the writ petition filed by the petitioner challenging the order under Section 73 is maintainable, considering the availability of alternative remedy of appeal under the Act – HELD - The order impugned was passed on 22nd October, 2024, whereas the writ petition was filed on 23rd October, 2025, thereby indicating an inordinate delay of around one year on the part of the petitioner in approaching the Court. The Section 107 of the GST Act provides for an alternative remedy of appeal against any order passed by an adjudicating authority, and the petitioner had not explained the reason for the delay in not availing the statutory remedy - The existence of an alternative remedy is a sufficient ground for the Court to refuse to exercise its jurisdiction under Article 226, unless the unconstitutionality or illegality of the order is so apparent that the Court may interfere - the petitioner had attempted to circumvent the process of alternative remedy only to bypass the rigors of the conditions prescribed for filing an appeal under the GST Act - the present writ petition is not at all “maintainable”, much less “entertainable”. Further, rejection of claim of input tax credit essentially sets up disputed question of fact for adjudication by the authority conferred with power under the statute – The writ petition is dismissed [Read less]

GST – West Bengal AAR - Leasing or rental services, Mixed supply – Applicant provides fit-outs and related infrastructure support on hire to various tenants of the properties held by its subsidiaries - Applicant has entered into an agreement with Bengal Intelligent Parks Private Limited (BIPPL) to provide infrastructure support and facilities to the occupants at Bengal Intelligent Park – Classification and applicable GST rate on the services provided by the applicant by way of supplying fitted assets on hire basis - HELD -The assets provided by the applicant have lost their character as movable properties and have be... [Read more]

GST – West Bengal AAR - Leasing or rental services, Mixed supply – Applicant provides fit-outs and related infrastructure support on hire to various tenants of the properties held by its subsidiaries - Applicant has entered into an agreement with Bengal Intelligent Parks Private Limited (BIPPL) to provide infrastructure support and facilities to the occupants at Bengal Intelligent Park – Classification and applicable GST rate on the services provided by the applicant by way of supplying fitted assets on hire basis - HELD -The assets provided by the applicant have lost their character as movable properties and have become part of the immovable property (the building). The assets are attached to the building in such a way that they cannot be removed or relocated without causing damage to the building. The nature and function of the assets are such that they are to be attached and fixed to the building for their basic operations – Further, the assets are integrated in a manner that they cannot be removed and sold separately in the market. Therefore, the applicant is not involved in the supply of leasing or renting of goods, and the services provided by the applicant cannot be classified under serial no. 17(iii) of the Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 - the applicant is providing leasing or renting service of the benefits of the assets and machineries attached to the building for the smooth functioning of the tenants. The individual machinery as goods is not leased out to the tenants. The charge to the tenants is calculated on the basis of the specified super built area that a tenant is enjoying, and not on a goods-specific basis. Therefore, the supply of services by the applicant will qualify for leasing or rental services without operator under heading no. 9973, which finds entry under serial no. 17(viii) of the Notification No. 11/2017-Central Tax (Rate) Dated 28.06.2017. Accordingly, the supply being a mixed supply, it will attract the highest rate of tax, i.e. 18% GST – Ordered accordingly [Read less]

Central Excise - Cenvat Credit, exempted goods, Chipper dust, Manufacture of paper and paper board - Dept alleged that the appellant was not maintaining separate accounts for the Cenvat credit availed on the input services used in the manufacture of exempted goods, specifically sawdust/wood waste falling under Chapter sub-heading 44013000. The Revenue authorities demanded an amount under Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the chipper dust/waste, which arose during the course of chipping of wood for the manufacture of the final products, i.e., paper and paper boards, falls under Chapter 48 of the CETA, 198... [Read more]

Central Excise - Cenvat Credit, exempted goods, Chipper dust, Manufacture of paper and paper board - Dept alleged that the appellant was not maintaining separate accounts for the Cenvat credit availed on the input services used in the manufacture of exempted goods, specifically sawdust/wood waste falling under Chapter sub-heading 44013000. The Revenue authorities demanded an amount under Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the chipper dust/waste, which arose during the course of chipping of wood for the manufacture of the final products, i.e., paper and paper boards, falls under Chapter 48 of the CETA, 1985 and should be considered as an exempted final product, thereby making Rule 6(3) of the Cenvat Credit Rules, 2004 applicable for non-maintenance of separate records for dutiable and exempted goods – HELD - The issue is no longer res integra and is settled by the judgments of the Supreme Court in Union of India v. DSCL Sugar Ltd. and Union of India v. Indian Sucrose Limited. The Supreme Court has held that Rule 6(3) of the Cenvat Credit Rules, 2004 is not applicable to waste generated during the manufacture of a dutiable final product. The Board has also issued a circular rescinding its earlier circular dated 25.04.2016, which had treated such waste/by-products as exempted goods for the purpose of reversal of Cenvat credit - The chipper dust/waste arising during the course of chipping of wood for the manufacture of the final dutiable products, i.e., paper and paper boards, cannot be considered as exempted goods, and therefore, Rule 6(3) of the Cenvat Credit Rules, 2004 is not applicable. Accordingly, the impugned orders are set aside and appeal is allowed [Read less]

GST - Refund of unutilized input tax credit of GST Compensation cess, Zero-rated supplies – Petitioner purchased coal and paid GST compensation cess on the inward supplies. Refund claim of accumulated cess credit on the zero-rated supplies made with payment of IGST – Rejection of refund claims on the ground that refund is admissible only on zero-rated supplies made without payment of tax - Whether the petitioner company is entitled to claim refund of the unutilized input tax credit of the GST compensation cess paid on the inward supplies of coal, which was used for the manufacture of goods exported as zero-rated suppli... [Read more]

GST - Refund of unutilized input tax credit of GST Compensation cess, Zero-rated supplies – Petitioner purchased coal and paid GST compensation cess on the inward supplies. Refund claim of accumulated cess credit on the zero-rated supplies made with payment of IGST – Rejection of refund claims on the ground that refund is admissible only on zero-rated supplies made without payment of tax - Whether the petitioner company is entitled to claim refund of the unutilized input tax credit of the GST compensation cess paid on the inward supplies of coal, which was used for the manufacture of goods exported as zero-rated supplies with payment of IGST – HELD - Under the GST law, the provisions relating to the availment of input tax credit and refund of accumulated credits are applicable mutatis mutandis to the GST compensation cess as well - the zero-rated supplies made with payment of IGST but without payment of Cess as Cess is not leviable on the finished products, is required to be considered to be zero-rated supplies made without payment of Cess as far as the refund of the accumulated Cess credit is concerned - Relying on the earlier judgments, the Court held that the petitioner, having paid IGST on the zero-rated exports, is not required to pay the GST compensation cess on such exports, and therefore, the petitioner is entitled to the refund of the accumulated input tax credit of the cess - The impugned orders rejecting the refund claims are quashed and the respondent authorities are directed to process the refund applications and sanction the refund of the GST compensation cess claimed by the petitioner – The petition is allowed [Read less]

Kerala Value Added Tax Act, 2003 - Inclusion of Assessee Surcharge Tax (AST) under KGST Act, 1963 for computation of compounded tax liability under KVAT Act, 2003 - Petitioner contended that the Authorities had been wrongly including the Assessee Surcharge Tax (AST) under Section 5D of the Kerala General Sales Tax Act, 1963, for computing the compounded tax payable under Section 7 of the Act. The petitioner was challenging the assessment order passed by the Respondent No.4 under Section 8(f) of the KVAT Act, alleging that the Respondent had included the AST component under Section 5D of the KGST period in the base year whi... [Read more]

Kerala Value Added Tax Act, 2003 - Inclusion of Assessee Surcharge Tax (AST) under KGST Act, 1963 for computation of compounded tax liability under KVAT Act, 2003 - Petitioner contended that the Authorities had been wrongly including the Assessee Surcharge Tax (AST) under Section 5D of the Kerala General Sales Tax Act, 1963, for computing the compounded tax payable under Section 7 of the Act. The petitioner was challenging the assessment order passed by the Respondent No.4 under Section 8(f) of the KVAT Act, alleging that the Respondent had included the AST component under Section 5D of the KGST period in the base year while arriving at the compounded tax liability on the inception of KVAT - Whether the inclusion of AST under KGST Act for computation of compounded tax liability under KVAT Act is valid – HELD - Once the Revenue gives the option of compounded payment of tax to the assessee and it accepts that system, the Revenue cannot subsequently assess the assessee in the regular process and make a demand for additional tax under Section 5D of the KGST Act, 1963. The Assessing Authority had failed to apply the binding precedent of the Supreme Court in Bhima Jewellery by making a casual finding that the petitioner was not a party to the said decision. The reassessment applying the Bhima Jewellery decision alone is required in the matter. If the decision in Bhima Jewellery is applied, it is a matter of reworking the assessment at the hands of the Assessing Authority, removing the cascading effect of AST - the impugned assessment order is set aside and Respondents are directed to re-do the assessment in light of the decision in Bhima Jewellery after hearing the petitioner – The writ petition is allowed [Read less]

Central Excise - Eligibility of CENVAT credit on outward Goods Transport Agency (GTA) services for transportation of products from factories/depots to customer's premises - Whether the appellant is eligible to avail CENVAT credit on outward GTA services for transportation of goods up to the customer's premises, where the goods are sold on 'FOR' (Free on Road) basis – HELD - The issue regarding the place of removal extending to the customers' premises where the goods are delivered on FOR basis is no more res integra in view of the Tribunal's own previous decisions in the appellant's own case. The few sample invoices produ... [Read more]

Central Excise - Eligibility of CENVAT credit on outward Goods Transport Agency (GTA) services for transportation of products from factories/depots to customer's premises - Whether the appellant is eligible to avail CENVAT credit on outward GTA services for transportation of goods up to the customer's premises, where the goods are sold on 'FOR' (Free on Road) basis – HELD - The issue regarding the place of removal extending to the customers' premises where the goods are delivered on FOR basis is no more res integra in view of the Tribunal's own previous decisions in the appellant's own case. The few sample invoices produced by the appellant specifically mentioned that "Goods are sold for delivery on 'FOR' basis and the responsibility continues till the goods are handed over to the customer." Both the lower authorities overlooked these documents and recorded findings contrary to this fact - The impugned order is set aside and the matter is remanded to the First Appellate Authority to re-examine all the relevant evidence/documents and decide the issue afresh after providing a proper opportunity of hearing to the appellant – The appeal is allowed by remand [Read less]

Service Tax - Providing of computer training to Government employees - Commercial Coaching and Training Services, Online Information and Database Access or Retrieval Services - Appellant, a State Government Undertaking, was providing various services to the Government departments - Whether the services provided by the appellant under the category of Commercial Coaching and Training Services were taxable under the Finance Act, 1994 – HELD - For an institute to be considered a 'Commercial Training or Coaching Centre', the training or coaching provided should not necessarily result in the issuance of a degree or diploma rec... [Read more]

Service Tax - Providing of computer training to Government employees - Commercial Coaching and Training Services, Online Information and Database Access or Retrieval Services - Appellant, a State Government Undertaking, was providing various services to the Government departments - Whether the services provided by the appellant under the category of Commercial Coaching and Training Services were taxable under the Finance Act, 1994 – HELD - For an institute to be considered a 'Commercial Training or Coaching Centre', the training or coaching provided should not necessarily result in the issuance of a degree or diploma recognized by law. The appellant, being a State government undertaking, was providing computer training to Government employees, weaker sections of society, and women, as mandated by the State Government, and not for commercial consideration. Therefore, the services provided by the appellant could not be considered as 'Commercial Coaching and Training Services' and were not liable to service tax - the impugned order is set aside and the appeal is allowed - Whether the services provided by the appellant under the category of Online Information and Database Access or Retrieval Services were taxable under the Finance Act, 1994 – HELD - For a service to be taxable under this category, the dominant intention of the transaction should be to access or retrieve data or information, and not for any other ancillary services. In the present case, the appellant was providing various IT infrastructure services to the Government departments, such as creating websites, hosting web servers, and managing IT networks, and was not providing any online information or database access or retrieval services. Therefore, the services provided by the appellant could not be considered as 'Online Information and Database Access or Retrieval Services' and were not liable to service tax - Whether the services provided by the appellant under the category of Business Auxiliary Services were taxable under the Finance Act, 1994 – HELD - The impugned order had confirmed the demand only due to the lack of adequate information provided by the appellant, and the specific sub-category of Section 65(19) under which the services were being provided was not specified. It has been consistently held that a demand under this category without specifying the specific sub-clause of Section 65(19) cannot be sustained. [Read less]

Central Excise – EOU to DTA clearance – Payment of Education Cess and Secondary & Higher Education Cess – Appellant-EOU, cleared goods to the DTA – The Revenue of the view that the EC&SHEC must be taken into account twice - once after calculating the Basic Customs Duty and duty under Section 3(1) of CEA, 1944, and again after including Special Additional Duty under Section 3(5) of the Customs Tariff Act - Whether the Education Cess and Secondary & Higher Education Cess should be taken into account twice while calculating the duty payable on clearances made by the EOU to the DTA - HELD - The issue is no longer res i... [Read more]

Central Excise – EOU to DTA clearance – Payment of Education Cess and Secondary & Higher Education Cess – Appellant-EOU, cleared goods to the DTA – The Revenue of the view that the EC&SHEC must be taken into account twice - once after calculating the Basic Customs Duty and duty under Section 3(1) of CEA, 1944, and again after including Special Additional Duty under Section 3(5) of the Customs Tariff Act - Whether the Education Cess and Secondary & Higher Education Cess should be taken into account twice while calculating the duty payable on clearances made by the EOU to the DTA - HELD - The issue is no longer res integra and has been decided in favor of the appellant in Sarla Performance Fibres Ltd. case - the Education Cess and Secondary & Higher Education Cess are in the nature of a surcharge, which results in the enhancement of the tax. Once the aggregate of customs duties is determined, and the EC and SHEC are added to it, the measure of excise duty is complete. There cannot be an enhancement of the duty twice - The calculation of the aggregate of customs duties, including the Education Cess and Secondary & Higher Education Cess, is sufficient, and there is no need to add them again separately - the Education Cess and Secondary & Higher Education Cess should be taken into account only once while calculating the duty payable on clearances made by the EOU to the DTA - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand based on difference in ST-3 Returns and Income Tax Return – HELD - it is now settled in law that demand could not be made only on the basis of differences between ITR/TDS and ST-3 returns. It is necessary to investigate the causes of differences and then arrive at a finding with regards to the differences in the two - The exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof. Unless these four elements have been connected logically, demand of service tax cannot be confirmed merely on the basis of figures reflected in other statut... [Read more]

Service Tax - Demand based on difference in ST-3 Returns and Income Tax Return – HELD - it is now settled in law that demand could not be made only on the basis of differences between ITR/TDS and ST-3 returns. It is necessary to investigate the causes of differences and then arrive at a finding with regards to the differences in the two - The exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof. Unless these four elements have been connected logically, demand of service tax cannot be confirmed merely on the basis of figures reflected in other statutory records - Be it pre or post-Negative List regime, the Department is under obligation to prove that the appellants have rendered such and such service and to such and such persons and that the consideration was received towards the rendering of such service. Without doing the same, demand merely on the basis of figures does not survive – the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Works contract services, Statutory activities, liability of sub-contractor - Appellant was providing taxable services of construction of residential complex, laying of pipelines, construction of electric substations and laying of cables for Noida, HUDA and Ghaziabad Development Authority (GDA) - Whether the services provided by the appellant for laying of pipelines, construction of underground reservoirs and ranney wells for Noida and HUDA are exempt from service tax – HELD - Demand has been confirmed upon the appellant in respect of the services provided to Noida for laying of pipelines under the Ganga Jal... [Read more]

Service Tax - Works contract services, Statutory activities, liability of sub-contractor - Appellant was providing taxable services of construction of residential complex, laying of pipelines, construction of electric substations and laying of cables for Noida, HUDA and Ghaziabad Development Authority (GDA) - Whether the services provided by the appellant for laying of pipelines, construction of underground reservoirs and ranney wells for Noida and HUDA are exempt from service tax – HELD - Demand has been confirmed upon the appellant in respect of the services provided to Noida for laying of pipelines under the Ganga Jal Water Scheme construction of underground reservoirs etc. The period of demand is prior and post to 01.07.2012 - The Larger Bench in Lanco Infratech case has held that laying of pipelines/conduits for lift irrigation systems for transmission of water or for sewerage disposal undertaken for Government/Government undertakings is classifiable as Commercial or Industrial Construction Service (CICS) - In terms of the above decision of the Larger Bench, the services provided by the appellant are in nature of Commercial and Industrial construction services as has been held in the impugned order - the services provided to the statutory authorities or Government will not be exempt from payment of service tax, till it can be shown that the services provide are strictly falling within the purview of exemption notification - Whether the services provided by the appellant for construction of electric substations and laying of cables for UPPCL, which is a commercial undertaking of the Uttar Pradesh Government, are exempt from service tax – HELD - The UPPCL is a commercial undertaking engaged in production and distribution of electricity to public at large as well as to commerce and industry, and therefore the services provided by the appellant for construction of electric substations and laying of cables are not exempt from service tax. The Tribunal relied on the decisions of the Supreme Court and High Courts which held that the statutory activities of the government authorities have to be examined activity-wise and services provided for commercial activities are not exempt - Whether the appellant can claim exemption from service tax on the ground that the main contractor has already paid the service tax – HELD - The sub-contractor is liable to pay service tax even if the main contractor has discharged the service tax liability. The Cenvat Credit Rules allow the service recipient (i.e. main contractor) to take credit of the service tax paid at the preceding stage, and therefore there is no question of double taxation. The Tribunal overruled the contrary decisions relied upon by the appellant - Whether the extended period of limitation is correctly invoked in the present case – HELD - The Tribunal upheld the invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994. The appellant had resorted to suppression and mis-declaration of facts with a clear intention to evade payment of service tax, and therefore the extended period is rightly invoked. The Tribunal relied on various decisions which held that a bona fide belief has to be based on reasonable facts and evidence, which was lacking in the present case - Whether the penalties imposed under Sections 77, 78 of the Finance Act, 1994 are justified – HELD - The Tribunal upheld the penalties imposed on the appellant under Sections 77 and 78 of the Finance Act, 1994. The appellant had contravened the various provisions of the Act by not maintaining records, not determining and depositing the service tax by the due date, and not filing appropriate returns. The Tribunal relied on the Supreme Court decision in Gujarat Travancore Agency case which held that the element of mens rea is not required to be proved for imposition of penalties under such provisions. [Read less]

Delhi Value Added Tax Act, 2004 - Jurisdiction of VATO (Audit) to pass Assessment orders, delegation of powers - The VATO (Audit) had passed assessment orders determining tax, interest and penalty under Sections 32 and 33 of the DVAT Act, 2004, even though the jurisdictional VATO was different - Whether the VATO (Audit) was empowered under the DVAT Act to pass the assessment orders – HELD - In the cases of Capri Bathaid Pvt. Ltd. and Larsen & Toubro Ltd., it was held that the VATO (Audit) cannot pass assessment orders as they are not the jurisdictional VATO. Prior to April 2016, no specific authorizations were given to V... [Read more]

Delhi Value Added Tax Act, 2004 - Jurisdiction of VATO (Audit) to pass Assessment orders, delegation of powers - The VATO (Audit) had passed assessment orders determining tax, interest and penalty under Sections 32 and 33 of the DVAT Act, 2004, even though the jurisdictional VATO was different - Whether the VATO (Audit) was empowered under the DVAT Act to pass the assessment orders – HELD - In the cases of Capri Bathaid Pvt. Ltd. and Larsen & Toubro Ltd., it was held that the VATO (Audit) cannot pass assessment orders as they are not the jurisdictional VATO. Prior to April 2016, no specific authorizations were given to VATO officers to conduct audits and assessments outside their jurisdictions. Additionally, the mandatory Form DVAT-50 authorizing officers to exercise powers under Chapter X of the DVAT Act was not issued until October 2014 - In the absence of the necessary jurisdiction and authorization, the assessments passed by the VATO (Audit) in these cases were not valid - The assessment orders are quashed as the VATO (Audit) lacked the necessary jurisdiction and authorization to pass these assessments under the DVAT Act – The appeals stand disposed of [Read less]

Central Excise - Area-based exemption, fixation of special rate of value addition – Respondent-assessee is a manufacturer of 'Mosquito Repellents' and 'Cleaning Preparations' - Whether the respondents are eligible to be given the special rate of value addition for their manufactured products, in terms of the Area Based Exemption granted under certain Exemption Notifications – Maintainability of Revenue appeal before the High Court – HELD - The present appeals are not maintainable before it, as the issue raised pertains to the exemptions pertaining to the rate of value addition, in terms of the Exemption Notifications... [Read more]

Central Excise - Area-based exemption, fixation of special rate of value addition – Respondent-assessee is a manufacturer of 'Mosquito Repellents' and 'Cleaning Preparations' - Whether the respondents are eligible to be given the special rate of value addition for their manufactured products, in terms of the Area Based Exemption granted under certain Exemption Notifications – Maintainability of Revenue appeal before the High Court – HELD - The present appeals are not maintainable before it, as the issue raised pertains to the exemptions pertaining to the rate of value addition, in terms of the Exemption Notifications. Such an order of the Appellate Tribunal would be governed by Sections 35G and 35L of the Central Excise Act, 1944, which provide that an appeal against an order relating to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment, shall lie directly to the Supreme Court and not the High Court - The disputes regarding the applicability of exemption notifications, which would have a bearing on the rate of duty or valuation of goods, fall under the exclusive jurisdiction of the Supreme Court under Sections 35G and 35L of the CEA – The appeals are not maintainable and the same are dismissed [Read less]

GST - Statutory requirement for pre-deposit under GST Act - Petitioner contended that the appeal could not be filed as the petitioner was unable to access the portal to deposit the pre-requisite amount under Section 107(6) of the CGST Act, 2017 – Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) pre-deposit requirement is justified, even though the appeal was also decided on merits – HELD - The prior decisions relied upon by the petitioner were distinguishable on facts, as in those cases the appeals were dismissed solely on technical grounds without consideri... [Read more]

GST - Statutory requirement for pre-deposit under GST Act - Petitioner contended that the appeal could not be filed as the petitioner was unable to access the portal to deposit the pre-requisite amount under Section 107(6) of the CGST Act, 2017 – Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) pre-deposit requirement is justified, even though the appeal was also decided on merits – HELD - The prior decisions relied upon by the petitioner were distinguishable on facts, as in those cases the appeals were dismissed solely on technical grounds without considering the merits. In the present case, the appellate authority had dismissed the appeal on two grounds, for non-compliance with Section 107(6) and also on merits - Once the appellate authority has decided the case on merits, the High Court should be slow and circumspect in interfering with such an order, unless the findings are per se illegal, irrational or unreasonable. Even if one of the grounds is found to be perverse, the other ground justifying the ultimate conclusion should not be defeated. If the Court were to accept the petitioner's contention and remand the matter, it would only result in a duplication of the process, as the authority would have to permit the petitioner to comply with the pre-deposit requirement and then reaffirm its decision on merits - The findings of the appellate authority on merits is sustained and the petition is dismissed [Read less]

GST - Refund of IGST - Rejection of the refund claim by laconic, cryptic, unreasoned, and non-speaking order without application of mind - HELD - The appellate authority had merely stated that the reasons adduced by the Assistant Commissioner for rejecting the refund claim. The appellate authority failed to consider the various contentions raised by the petitioner and provide a reasoned order - The impugned appellate order is set aside and matter remitted back to the stage of the petitioner submitting a reply to the show-cause notice - The respondent authorities are directed to consider the same and pass appropriate orders... [Read more]

GST - Refund of IGST - Rejection of the refund claim by laconic, cryptic, unreasoned, and non-speaking order without application of mind - HELD - The appellate authority had merely stated that the reasons adduced by the Assistant Commissioner for rejecting the refund claim. The appellate authority failed to consider the various contentions raised by the petitioner and provide a reasoned order - The impugned appellate order is set aside and matter remitted back to the stage of the petitioner submitting a reply to the show-cause notice - The respondent authorities are directed to consider the same and pass appropriate orders in accordance with law – The writ petition is allowed by remand [Read less]

GST – Kerala AAR - Section 12(2)(a) and Section 31(3)(d) of the CGST Act, 2017 - Time of Supply, Issue of tax invoices towards advance payment - Applicant receives payments from customers in multiple stages, including an initial advance, part payments during manufacturing, and final payment upon delivery - Whether the applicant can issue tax invoices upon receipt of advance payments for the supply of goods and pay the corresponding GST, or is required to issue only a receipt voucher for advances and a single tax invoice at the time of delivery - HELD – The Notification No. 66/2017-Central Tax dated 15.11.2017, which pr... [Read more]

GST – Kerala AAR - Section 12(2)(a) and Section 31(3)(d) of the CGST Act, 2017 - Time of Supply, Issue of tax invoices towards advance payment - Applicant receives payments from customers in multiple stages, including an initial advance, part payments during manufacturing, and final payment upon delivery - Whether the applicant can issue tax invoices upon receipt of advance payments for the supply of goods and pay the corresponding GST, or is required to issue only a receipt voucher for advances and a single tax invoice at the time of delivery - HELD – The Notification No. 66/2017-Central Tax dated 15.11.2017, which provides that all registered persons who have not opted for the composition levy shall pay central tax on the outward supply of goods at the time of supply as specified in Section 12(2)(a) of the CGST Act and furnish returns accordingly. Since the Notification uses the word “shall”, the compliance is mandatory and the time of supply is to be determined as the earlier of the date of issue of invoice or the last date on which the invoice is required to be issued under Section 31. The notification thereby lays down a mandatory procedural rule for suppliers of goods namely, that the supplier shall pay tax at the time of supply as determined by Section 12(2)(a) of the Act - The applicant is not permitted to issue tax invoices at the time of receiving advance or part payment from customers towards the supply of goods - The advances received prior to the actual supply of goods must be documented through a receipt voucher as prescribed under Rule 50. A tax invoice may be issued only at or before the time of removal or delivery of goods, as stipulated under Section 31(1) of the CGST Act – Further, the applicant's proposal to issue a single tax invoice for the total value of the boat at the time of delivery and subsequently issue credit notes to adjust for the earlier invoices raised against advances is not in alignment with the statutory provisions, as the issuance of credit notes is governed by Section 34 of the CGST Act, which permits such adjustment only against valid tax invoices issued for completed supplies and within the prescribed time limits - The applicant must issue receipt vouchers at the time of receiving advances, and a single tax invoice should be issued at the time of final delivery of the goods. The corresponding E-way bill shall be generated against this final invoice, reflecting the entire value of the consignment – Ordered accordingly [Read less]

GST – Kerala AAR - Exemption under GST, Governmental Authority, Government Department - Applicant provides services to the Kerala Development and Innovation Strategic Council (K-DISC), which functions under the aegis of the Kerala Government - Whether the services provided to K-DISC are eligible for GST exemption under Entry 72 of Notification No. 12/2017-Central Tax (Rate) – HELD - The K-DISC, being a society registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Act, 1955 and functioning under the administrative control of the Government of Kerala, cannot be considered as the "State Gove... [Read more]

GST – Kerala AAR - Exemption under GST, Governmental Authority, Government Department - Applicant provides services to the Kerala Development and Innovation Strategic Council (K-DISC), which functions under the aegis of the Kerala Government - Whether the services provided to K-DISC are eligible for GST exemption under Entry 72 of Notification No. 12/2017-Central Tax (Rate) – HELD - The K-DISC, being a society registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Act, 1955 and functioning under the administrative control of the Government of Kerala, cannot be considered as the "State Government" or a "Government Department" for the purposes of the CGST Act or the exemption notification. While K-DISC may qualify as a "Governmental Authority" or "Government Entity," the exemption under Entry 72 is restricted to services provided to the Central Government, State Government, or local authority. The scope of exemption for services provided to Governmental Authorities and Entities was earlier broader but has been subsequently curtailed by amendments. Consequently, the services provided by ICTAK to K-DISC are not eligible for exemption under Entry 72 – Ordered accordingly - Eligibility of ICTAK to claim ITC on the GST charged by sub-contractors for providing services to K-DISC – HELD - The applicant is eligible to claim full ITC on the GST charged by sub-contractors on goods and services used for providing taxable training and skill development services to K-DISC, subject to fulfillment of the conditions prescribed under the CGST Act and Rules. The input services procured from sub-contractors are directly connected to applicant’s business activity and satisfy the basic condition for ITC entitlement under Section 16(1) of the CGST Act. Since the services provided to K-DISC have been held to be taxable, the entire input tax incurred on such procurements is eligible for full credit, subject to the provisions of Sections 16(2), 17(2), and 17(5) of the CGST Act. [Read less]

GST – Kerala AAR - Input tax credit on invoices issued for the periods prior to supplier (landlord) obtaining GST registration, Time limit for availing ITC - Applicant operates hospitals in rented premises. The landlord was unregistered under GST until June 15, 2022, during which time rent was paid without GST. After obtaining GST registration, the landlord issued two tax invoices dated June 30, 2022, covering the periods from April 1, 2021, to March 31, 2022, and from April 1, 2022, to June 30, 2022. The invoices were marked as B2C, without mentioning the applicant's GSTIN, but appeared as B2B supplies in the applicant'... [Read more]

GST – Kerala AAR - Input tax credit on invoices issued for the periods prior to supplier (landlord) obtaining GST registration, Time limit for availing ITC - Applicant operates hospitals in rented premises. The landlord was unregistered under GST until June 15, 2022, during which time rent was paid without GST. After obtaining GST registration, the landlord issued two tax invoices dated June 30, 2022, covering the periods from April 1, 2021, to March 31, 2022, and from April 1, 2022, to June 30, 2022. The invoices were marked as B2C, without mentioning the applicant's GSTIN, but appeared as B2B supplies in the applicant's GSTR-2A - Whether the applicant is eligible to claim ITC on the GST charged in the invoices issued by the landlord for the periods prior to the landlord obtaining GST registration – HELD – During the period prior to June 2022, the landlord was an unregistered person, and therefore, the invoices issued cannot be considered valid tax invoices for the purpose of availing ITC under Section 16(2)(a) of the CGST Act, 2017. Additionally, the invoices covering the period from April 2021 to March 2022 were issued on June 30, 2022, which is well beyond the 30-day time limit prescribed under Rule 47 of the CGST Rules for the issuance of invoices for services – Further, even under Section 31(3)(a) of the CGST Act, which allows a newly registered person to issue revised invoices within one month from the date of registration, the landlord could not retrospectively issue valid GST invoices for supplies made prior to June 15, 2022 - However, the applicant is eligible to claim ITC on the portion of GST paid for the rent pertaining to June 2022, as the landlord was a registered supplier during that month, and the invoice dated June 30, 2022, was issued within the time prescribed under Rule 47. The applicant can avail such ITC, provided it was claimed on or before November 30, 2023, as per the time limit specified in Section 16(4) of the CGST Act - Ordered accordingly [Read less]

GST – Kerala AAR - Classification of rental services without operator – Applicant operates a self-drive "Rent a Cab" service without drivers. The vehicles are GPS-enabled, allowing the company to retain control over their use - Whether the services rendered by the applicant fall under Chapter 99, Heading 9973 and Service Code 997311 – HELD - the applicant’s service falls squarely under “leasing or renting of goods” as contemplated in Serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - The 2019 amendments to the GST rate structure expressly excluded "without operator... [Read more]

GST – Kerala AAR - Classification of rental services without operator – Applicant operates a self-drive "Rent a Cab" service without drivers. The vehicles are GPS-enabled, allowing the company to retain control over their use - Whether the services rendered by the applicant fall under Chapter 99, Heading 9973 and Service Code 997311 – HELD - the applicant’s service falls squarely under “leasing or renting of goods” as contemplated in Serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended - The 2019 amendments to the GST rate structure expressly excluded "without operator" rental services from Heading 9966 and placed them under Heading 9973. Within 9973, passenger cars are considered "other goods" rather than machinery/equipment, and the residual code 997329 is the most appropriate classification - The applicant's services are correctly classifiable under Chapter 99, Heading 9973, Service Code 997329 ("Leasing or rental services concerning other goods, n.e.c.") and not under SAC 997311 – The serial No. 17(viia) of Notification No. 11/2017-Central Tax (Rate), which covers "Leasing or renting of goods", is the applicable entry for the applicant's services, and not the residual 17(viii) entry. 17(viia) prescribes the same GST rate as applicable to the supply of like goods, rather than 18% rate. The specific provision of 17(viia) takes precedence over the general 17(viii) entry as per the interpretative principle of generalia specialibus non derogant - The applicant's services are correctly classifiable under SAC 997329 under Heading 9973, and the applicable GST rate is the same as the rate on supply of like goods under Serial No. 17(viia) of the Notification, and not the 18% rate under 17(viii) – Ordered accordingly [Read less]