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Customs – Rejection of Transaction value of consignment import, Postponement of duty payment – Appellant imported gold bars and declared a certain value in the Bills of Entry. The Revenue authorities sought to ascertain the correct transaction value as the duty was paid on the declared value, and the B/E were assessed based on the declared value. Upon scrutiny of the details provided by the appellant, it was found that the amount actually remitted to the foreign suppliers was higher than the value declared in the B/E - Whether the addition under the guise of short-payment of duty, which related to the actual remittance... [Read more]

Customs – Rejection of Transaction value of consignment import, Postponement of duty payment – Appellant imported gold bars and declared a certain value in the Bills of Entry. The Revenue authorities sought to ascertain the correct transaction value as the duty was paid on the declared value, and the B/E were assessed based on the declared value. Upon scrutiny of the details provided by the appellant, it was found that the amount actually remitted to the foreign suppliers was higher than the value declared in the B/E - Whether the addition under the guise of short-payment of duty, which related to the actual remittances made by the appellant to its foreign suppliers as compared to the declared/transaction value at the time of import, is justified in law – HELD - The appellant has claimed that the gold was imported on a consignment basis, and the ownership remained with the supplier. The appellant, being a nominated bank, had imported the gold on a consignment basis, and the remittances towards the cost of import were made as and when the sales took place, in accordance with the provisions of the agreement entered into between the overseas supplier and the appellant-bank. The duty was paid on the declared value, which was the internationally prevailing gold price as on the date of import, based on the suppliers' invoices. Any postponement of duty payment cannot have any impact on the transaction value, as the transaction value is the one admittedly paid at the time of import. The rejection of the transaction value is unjustified, and so is the demand of the alleged short-payment made by the Revenue - the impugned Order-in-Appeal is set aside and the appeal is allowed [Read less]

GST - Detention, seizure and confiscation of goods under Sections 129 and 130 of the CGST Act, 2017, Amendment to Sections 129 and 130 of the CGST Act, made effective from 01.01.2022 by virtue of the Finance Act, 2021 - The petitioners challenged the action of the respondent-authorities for confiscation of goods seized during transit under Section 129 of the CGST Act – Petitioners contend that confiscation of goods cannot be resorted to by invoking Section 130 of the CGST Act without completing the entire procedure contemplated under Section 129 of the CGST Act - Whether the respondent-authority/Proper Officer, who seize... [Read more]

GST - Detention, seizure and confiscation of goods under Sections 129 and 130 of the CGST Act, 2017, Amendment to Sections 129 and 130 of the CGST Act, made effective from 01.01.2022 by virtue of the Finance Act, 2021 - The petitioners challenged the action of the respondent-authorities for confiscation of goods seized during transit under Section 129 of the CGST Act – Petitioners contend that confiscation of goods cannot be resorted to by invoking Section 130 of the CGST Act without completing the entire procedure contemplated under Section 129 of the CGST Act - Whether the respondent-authority/Proper Officer, who seizes and detains goods and conveyance in transit by exercising powers under Section 129 of the CGST Act, is required to complete the entire procedure prescribed under Section 129 before invoking Section 130 of the CGST Act for confiscation of the goods or conveyance – HELD - On the deletion of the sub-section (2) of Section 129, vide Finance Act, 2021, the provisional release of goods as provided under Section 67(6) for the goods seized and detained under Section 129 will no longer will be available - The legislative intent behind the amendments to Sections 129 and 130 of the CGST Act was to delink the transit-related proceedings under Section 129 from the proceedings of confiscation under Section 130. There is no statutory bar on the authorities from invoking Section 130 of the CGST Act for confiscation of goods that were initially seized and detained under Section 129 of the CGST Act. The 129 and 130 are independent and mutually exclusive provisions, and the authorities can resort to Section 130 even if the goods or conveyance is released upon payment of tax and penalty under Section 129 - The retention of the non-obstante clause in Section 129 only means that the entire procedure prescribed under Section 129 has to be followed, and the action of seizure of goods and conveyance is required to be brought to its logical end as per the provisions of Section 129. However, the goods and conveyance which are seized can still be confiscated under Section 130 of the CGST Act, if they involve an element of "intention to evade payment of tax". The deletion of the non-obstante clause from Section 130 does not create any conflict between the two sections, as they operate in different spheres – While upholding the independent and mutually exclusive nature of Sections 129 and 130 of the CGST Act, the respondent-authorities are directed to re-examine the notices issued for confiscation under Form MOV-10 or orders under Form MOV-11 – The petition is disposed of - Effect of deletion of non-obstante clause from Section 130 of the CGST Act – HELD - Albeit the non-obstante clause has been retained in Section 129 of the Act, and will have an overriding effect on other provisions of the Act including Section 130, however, it will have no impediment on the operation of the Section 130 of the Act. On an overall analysis of the scope and sphere of operation of both the Section, it is evident that there is no conflict in both the Sections. The quintessential feature which distinguishes and enlarges the scope of Section 130 from Section 129 of the Act is the “intent to evade the payment of tax”. There is no conflict between the sections as far as the forming an opinion on intention of evasion of tax. The provisions of Section 129 are stand alone provisions as far as no element of intention of evasion of tax is involved - As held by this Court in case of Synergy Fertichem Private Ltd, there is no bar in invoking the provision of Section 130 of the act for confiscation at threshold, if on the seizure of goods and conveyance it is found that the entire transaction reveals the intention to evade the tax. We are not convinced to take a different view as expressed by the coordinate bench, merely because the provisions have been amended, by deleting the non-obstante clause from Section 130 of the Act, while retaining it in Section 129 - Limitations for examining evasion of tax for goods and conveyance seized during transit – HELD - The proper officer, at the time of seizure and detention of the goods under Section 129 of the Act has to form an opinion regarding “intention” to evade payment of tax, and such intention can be gathered from the attendant circumstances. Since the action of confiscation is the last resort, and invites serious consequences, the same cannot be resorted to only on suspicion, bereft of any concrete material, and on ipse dixit. The proper officer has to examine the genuineness of the documents, invoices, e-way bills, consignment note, registration particulars produced at the time of interception. The formation of opinion of ‘intent to evade tax’, on the act or omission of a person, who is not proximately or directly linked to such activity with the dealer cannot be made the foundation for confiscation of goods – Further, the proper officer cannot venture into the assessment and valuation of goods at the time of interception of vehicle, and resort to seizure and confiscation of goods and conveyance by resorting to the entries in portal, and digging out the evasion of tax, etc of third parties - Time line for forming the opinion of evasion of tax for the goods in transit – HELD - the limitation of preparing the final report FORM- MOV-04, after inspection and verification of the conveyance and goods cannot be extended beyond the period of six days. In case, it is found that there is blatant evasion of tax, then the goods and conveyance can be seized, and FORM MOV-10 can be issued. Hence, for the goods which are in intercepted and are in transit, the opinion of “intention to evade the payment of tax’, has to be confined within the aforesaid period for confiscation, and if no opinion is formed, the goods and conveyance are required to be released by resorting to the provisions of Section 129 of the CGST Act. [Read less]

Service Tax - Renting of immovable property, advertisement rights, Taxability of revenue sharing agreement - Appellant had rented out its property for shops, offices, restaurants and food plazas - Appellant entered into an agreement with advertising agency to display advertisements in its mall, for which the appellant received 40% to 50% of the charges - Whether the revenue share received by the appellant from M/s. Noel Media & Advertising Pvt. Ltd. for granting advertisement rights in the Citi Centre Mall is liable to service tax under the 'Sale or Space or Time for Advertisement' Service - HELD - The activity of the appe... [Read more]

Service Tax - Renting of immovable property, advertisement rights, Taxability of revenue sharing agreement - Appellant had rented out its property for shops, offices, restaurants and food plazas - Appellant entered into an agreement with advertising agency to display advertisements in its mall, for which the appellant received 40% to 50% of the charges - Whether the revenue share received by the appellant from M/s. Noel Media & Advertising Pvt. Ltd. for granting advertisement rights in the Citi Centre Mall is liable to service tax under the 'Sale or Space or Time for Advertisement' Service - HELD - The activity of the appellant as per the MoU would not be exigible to service tax. The purpose of a contract is the joint intent of the parties and it must be determined from the entirety of the contract. The MOU involved revenue sharing between the parties, and both parties had their own responsibilities and rights. This was in the nature of a self-service arrangement to maximize their own individual share of the revenue, and not a service provided by one party to the other. An activity carried on by a person for his own benefit cannot be termed as a 'service rendered' - The appellant was not liable to pay service tax on the revenue share received under the MoU – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Permanent establishment, Installation of software by Indian subsidiary - Appellant imported customized software from foreign suppliers for use in relation to the purchase of diamond processing machines. The Indian subsidiary of the foreign suppliers provided installation and maintenance services – Dept raised demand of service tax under the category of "Information Technology Software Service" under RCM contending that the Indian subsidiary cannot be considered a permanent establishment of the foreign suppliers - Whether the appellant is liable to pay service tax under the reverse charge mechanism when the ... [Read more]

Service Tax - Permanent establishment, Installation of software by Indian subsidiary - Appellant imported customized software from foreign suppliers for use in relation to the purchase of diamond processing machines. The Indian subsidiary of the foreign suppliers provided installation and maintenance services – Dept raised demand of service tax under the category of "Information Technology Software Service" under RCM contending that the Indian subsidiary cannot be considered a permanent establishment of the foreign suppliers - Whether the appellant is liable to pay service tax under the reverse charge mechanism when the foreign supplier has an Indian subsidiary providing installation and maintenance services – HELD - The Indian subsidiary should be considered a permanent establishment of the foreign supplier. Since the services were provided through the Indian subsidiary, the appellant cannot be fastened with the liability to pay service tax under the Reverse Charge Mechanism – Further, the appellant had a bona fide interpretation that they were not liable to pay service tax as the suppliers were providing services through their Indian arm having a fixed establishment in India - The extended period of limitation cannot be invoked in the present case as there was no wilful suppression of facts by the appellant - The appeal of the appellant is allowed, both on merits and on the ground of limitation [Read less]

GST – West Bengal AAR - Classification of supply of Aerated Beverages in Restaurant - The applicant is a hotel operator that offers various services such as accommodation, dining, and others - Applicable rate of GST on the supply of aerated beverages in the restaurant, whether supplied independently or as part of a composite supply with food - Whether the supply of aerated beverages when supplied independently should be taxed at the rate applicable to the supply of goods, or as part of a composite supply of restaurant services; and whether the supply of aerated beverages when supplied along with food should be taxed as p... [Read more]

GST – West Bengal AAR - Classification of supply of Aerated Beverages in Restaurant - The applicant is a hotel operator that offers various services such as accommodation, dining, and others - Applicable rate of GST on the supply of aerated beverages in the restaurant, whether supplied independently or as part of a composite supply with food - Whether the supply of aerated beverages when supplied independently should be taxed at the rate applicable to the supply of goods, or as part of a composite supply of restaurant services; and whether the supply of aerated beverages when supplied along with food should be taxed as part of a composite supply of restaurant services – HELD - In the context of the facts presented by the applicant, the supply of aerated beverages, whether supplied independently or along with food, should be treated as a composite supply of service, with the principal supply being restaurant service – The aerated beverages are not merely supplied in their original packaged form, but are customized and served to the customers within the restaurant premises, using the infrastructure, staff, and facilities of the restaurant - The definition of "composite supply" under Section 2(30) of the CGST Act, 2017 and the provisions of Schedule II, treats the supply of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor), where such supply is for cash, deferred payment or other valuable consideration, as a supply of service – Further, since the applicant's hotel is a "specified premises" for the relevant financial year, the supply of restaurant services, including the supply of aerated beverages, would be taxable at the rate of 18% GST in accordance with the provisions of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - The supply of aerated beverages, whether supplied independently or along with food, should be treated as a composite supply of service, with the principal supply being restaurant service, and taxed accordingly at the rate of 18% GST – Ordered accordingly [Read less]

GST – West Bengal AAR – Definition of "body corporate" - Whether the applicant, a non-profit organization incorporated under the Companies Act, is a "body corporate" for the purposes of Notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017, particularly in relation to the liability for payment of GST on sponsorship services provided by it - HELD - It is clear from the inclusive definition of “body corporate” in clause (11) of Section 2 of the Companies Act, 2013, only two kinds of entities are excluded from the definition of the term viz. a co-operative society registered under any law relating to co-opera... [Read more]

GST – West Bengal AAR – Definition of "body corporate" - Whether the applicant, a non-profit organization incorporated under the Companies Act, is a "body corporate" for the purposes of Notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017, particularly in relation to the liability for payment of GST on sponsorship services provided by it - HELD - It is clear from the inclusive definition of “body corporate” in clause (11) of Section 2 of the Companies Act, 2013, only two kinds of entities are excluded from the definition of the term viz. a co-operative society registered under any law relating to co-operative societies, and any other body corporate (not a company as defined in the Companies Act, 2013) which the Central Government may specify in this behalf - The applicant is neither a co-operative society registered under any act related to co-operative societies of the country nor the company has been notified by the Union Government under Section 2(11) of the Companies Act, 2013. The applicant was incorporated on 16.10.1909 as a company under the erstwhile Companies Act, 1882 and was registered under the same act on 25.02.1911. The applicant satisfies the definition of “company” as well as “body corporate” as defined in the Companies Act, 2013 - The legal form of incorporation, rather than the profit-making nature of the entity, is the determinative factor in classifying an entity as a "body corporate" under the GST law. Further, the applicant cannot be treated as a "trust" for GST purposes, as it is neither registered under the Indian Trusts Act, 1882 nor has the characteristics of a trust under the law - The services provided by the applicant by way of sponsorship to any body corporate or partnership firm located in the taxable territory will not qualify for the Reverse Charge Mechanism. Accordingly, the GST liability on such sponsorship services is to be discharged by the applicant under the forward charge – Ordered accordingly [Read less]

GST – West Bengal AAR - Taxability of Homeopathic Medicaments – Applicant manufacturer of Medicaments consisting of single constituents and two or more constituents, manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 or Homeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homeopathic Pharmacopoeia – Applicable HSN code and tax rate of medicaments consisting of single constituents and manufactured exclusively in accordance with the formulae described in the a... [Read more]

GST – West Bengal AAR - Taxability of Homeopathic Medicaments – Applicant manufacturer of Medicaments consisting of single constituents and two or more constituents, manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 or Homeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homeopathic Pharmacopoeia – Applicable HSN code and tax rate of medicaments consisting of single constituents and manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 or Homoeopathic Pharmacopoeia of India or USA or UK or Germany – HELD – The medicaments manufactured by the applicant that consist of a single constituent and are manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 or Homoeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homoeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such pharmacopoeia, will be covered by Tariff item no. 30049014 and accordingly it will come under entry no. 234 of Schedule I of Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017, as amended up to date and the rate of applicable 5% GST – Ordered accordingly - Applicable HSN code and tax rate of medicaments manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 or Homoeopathic Pharmacopoeia of India or USA or UK or Germany having two or more constituents – HELD - The medicaments manufactured by the applicant that consist of two or more constituents mixed together for therapeutic or prophylactic uses and are not put up in measured doses or in forms or packing for retail sale will be covered by Tariff item no. 30039014 and accordingly it will come under entry no. 233 of Schedule I of Notification No. 1/2017 Central Tax (Rate) Dated 28.06.2017, as amended up to date. If the same medicaments are put up in measured doses (including those in the form of transdermal administration systems) or in forms or packing for retail sale, they will be covered by Tariff item no. 30049014 and accordingly it will come under entry no. 234 of Schedule I of Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017, as amended up to date. In both the cases, the rate of applicable GST is 5%. [Read less]

Service Tax - Import of technical know-how, Design services, Permanent transfer of Intellectual Property Rights, Extended period of limitation - Appellant had entered into product development and purchase agreements with their group companies based in Germany and Netherlands for importing technical know-how, designs and drawings for manufacturing of wind turbine generators (WTGs) in India. The customs authorities had initially assessed the imported goods under the 'goods' category and allowed clearance at 'nil' rate of customs duty. Subsequently, the service tax department conducted an audit and issued show cause notices a... [Read more]

Service Tax - Import of technical know-how, Design services, Permanent transfer of Intellectual Property Rights, Extended period of limitation - Appellant had entered into product development and purchase agreements with their group companies based in Germany and Netherlands for importing technical know-how, designs and drawings for manufacturing of wind turbine generators (WTGs) in India. The customs authorities had initially assessed the imported goods under the 'goods' category and allowed clearance at 'nil' rate of customs duty. Subsequently, the service tax department conducted an audit and issued show cause notices alleging that the imported technical know-how should be classified under the 'design services' category, making the appellants liable to pay service tax under Reverse Charge - Whether the activities undertaken by the appellants pursuant to the agreements with their group companies would fall within the scope and ambit of 'design services' as defined under the Finance Act, 1994 – HELD - The transactions in question cannot be categorized as 'design services'. The agreements clearly provided for a one-time transfer of intellectual property rights (IPRs), including technical know-how, designs and drawings, from the group companies to the appellants for manufacturing of WTGs in India. The appellants became the absolute owners of these IPRs for the Indian territory and had the right to further license, sell or assign them. Such permanent transfer of IPRs cannot be considered as a 'service' under the service tax law. Further, the IPRs transferred were not covered under any Indian law, and hence would not fall within the scope of 'IPR services' as per the statutory provisions. Therefore, the activities of the appellants do not fall under the taxable category of 'design services' - the impugned order is set aside and the appeals are allowed in favour of the appellants, both on the grounds of merits as well as limitation - Whether the department was justified in invoking the extended period of limitation for issuing the SCNs – HELD - The show cause notices were issued beyond the normal period of one year, by invoking the extended period of five years on the grounds of fraud, collusion, wilful misstatement or suppression of facts. However, there is no evidence to suggest that the appellants had deliberately attempted to evade payment of service tax. The appellants had reasonably believed that the imported technical know-how should be classified as 'goods' rather than 'services' - Further, the department had conducted the audit based on the records maintained by the appellants, and there was no indication that the appellants had suppressed any material information from the department. Therefore, the ingredients required for invoking the extended period of limitation were not satisfied, and the demands could only be confirmed within the normal period of one year. [Read less]

Service Tax - Short payment of service tax, Wrong categorization of services in ST-3 return – Appellant had booked expenditure towards bank guarantee commission, technical assistance, legal and professional fees, and communication charges under the heading 'Business Auxiliary Services' (BAS) instead of 'Management and Business Consultation Services' (MBC) in its ST-3 returns, thereby not appropriately depositing the service tax under the Reverse Charge Mechanism - Whether the payment of service tax under a wrong heading can be considered as discharge of the liability, even though the description of service was not accura... [Read more]

Service Tax - Short payment of service tax, Wrong categorization of services in ST-3 return – Appellant had booked expenditure towards bank guarantee commission, technical assistance, legal and professional fees, and communication charges under the heading 'Business Auxiliary Services' (BAS) instead of 'Management and Business Consultation Services' (MBC) in its ST-3 returns, thereby not appropriately depositing the service tax under the Reverse Charge Mechanism - Whether the payment of service tax under a wrong heading can be considered as discharge of the liability, even though the description of service was not accurate – HELD - Description of service has become redundant with effect from 1.07.2012 after introduction of Negative list as Section 65A(3) of the Finance Act, 1994 says that those provisions shall not apply with effect from 1.07.2012 and therefore, merely because a column is available to put description of service in ST-3 Return, in which a wrong service description is entered by the appellant, it would never mean that the entire payment made by the appellant would not get credited to the account of the Government and it would be required to pay the same tax once again - The tax already paid under a wrong category can always be considered towards the discharge of liability under another category/new category – Further, the extended period of limitation cannot be invoked as there was no suppression of facts, and the entire data was taken by the audit team to prepare its report – The impugned order is set aside and the appeal is allowed [Read less]

GST – West Bengal AAR - Supply of operation and maintenance services provided to Municipalities and Municipal Corporations - Whether the operation and maintenance services provided to Municipalities and Municipal Corporations are exempt from GST under Notification No. 12/2017 – Central Tax (Rate) vide Entry no. 3 or 3A – HELD - Supply of unskilled labour and driver for special cleanliness drive, supply of manpower for cleaning & maintenance of municipality office and supply of manpower for regular sweeping, cutting of grass, cleaning of wedges with equipments in municipality parks being pure services will fall under ... [Read more]

GST – West Bengal AAR - Supply of operation and maintenance services provided to Municipalities and Municipal Corporations - Whether the operation and maintenance services provided to Municipalities and Municipal Corporations are exempt from GST under Notification No. 12/2017 – Central Tax (Rate) vide Entry no. 3 or 3A – HELD - Supply of unskilled labour and driver for special cleanliness drive, supply of manpower for cleaning & maintenance of municipality office and supply of manpower for regular sweeping, cutting of grass, cleaning of wedges with equipments in municipality parks being pure services will fall under serial no. 3 of the table in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended - If the value of supply of goods in respect of the rest of the works being composite supplies is not more than 25% of the total value of such supply, such services will fall under serial no. 3A of the table in Notification No. 02/2018–Central Tax (Rate) dated 25.01.2018, as amended - If the value of supply of goods in respect of the above works being composite supplies is more than 25% of the total value of such supply, such services having SAC 9987 will fall under serial no. 25 of Notification No. 11/2017 – Central Tax (Rate) Dated 28.06.2017, as amended and liable to be taxed at 18% GST – Ordered accordingly [Read less]

GST – West Bengal AAR - GST on Supply of security personnel to Government hospitals - Whether the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals is exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – HELD - A hospital cannot function effectively in the absence of security services and scavenging services, both of which are essential support services to the activity of providing public health services - Both security services and scavenging services are activities in relation to both ‘Health and sanitation, includin... [Read more]

GST – West Bengal AAR - GST on Supply of security personnel to Government hospitals - Whether the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals is exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – HELD - A hospital cannot function effectively in the absence of security services and scavenging services, both of which are essential support services to the activity of providing public health services - Both security services and scavenging services are activities in relation to both ‘Health and sanitation, including hospitals, primary health centres and dispensaries’ and ‘Public health, sanitation conservancy and solid waste management’ - the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals are exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – Ordered accordingly [Read less]

The Sec.16(2)(aa) of the CGST Act is read down to the extent that in case of non-payment of tax by supplier, before denying the ITC benefits, the purchaser should be given an opportunity to prove their bonafides by tax invoices and other documents.

Central Excise – Cenvat Credit on Management Consultancy Services - Whether the Cenvat credit of the service tax paid on Management Consultancy Services is covered under Rule 6(5) of the Cenvat Credit Rules 2004 – HELD - The Tribunal had earlier held that the Cenvat credit of the service tax paid on Management Consultancy Services, which is covered under Section 65(105)(r) of the Finance Act 1994, is eligible for availment in full under Rule 6(5) of the Cenvat Credit Rules 2004. This provision allows the entire Cenvat credit to be availed even if the service is used for manufacturing of dutiable and exempted goods and ... [Read more]

Central Excise – Cenvat Credit on Management Consultancy Services - Whether the Cenvat credit of the service tax paid on Management Consultancy Services is covered under Rule 6(5) of the Cenvat Credit Rules 2004 – HELD - The Tribunal had earlier held that the Cenvat credit of the service tax paid on Management Consultancy Services, which is covered under Section 65(105)(r) of the Finance Act 1994, is eligible for availment in full under Rule 6(5) of the Cenvat Credit Rules 2004. This provision allows the entire Cenvat credit to be availed even if the service is used for manufacturing of dutiable and exempted goods and providing taxable and exempted services - Since the Tribunal had already decided this issue in favor of the appellant in the earlier order, the order of the Commissioner (Appeals) directing the reversal of proportionate Cenvat credit attributable to exempted services, ignoring the provisions of Rule 6(5), cannot be sustained - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Area-based exemption, Refund of excise duty - Non-speaking order - Appellant availed the exemption under Notification No. 56/2002-CE and/or Notification No. 01/2010-CE and filed refund claims for the periods September 2014 to November 2014 and December 2014 to March 2015 – Rejection of refund on the ground that the refund claims exceeded the admissible refund over and above the value addition norm under Notification No. 01/2010-CE, as the appellant commenced commercial production after the issuance of the said Notification – HELD - The appellant had themselves opted to avail the exemption under Notif... [Read more]

Central Excise – Area-based exemption, Refund of excise duty - Non-speaking order - Appellant availed the exemption under Notification No. 56/2002-CE and/or Notification No. 01/2010-CE and filed refund claims for the periods September 2014 to November 2014 and December 2014 to March 2015 – Rejection of refund on the ground that the refund claims exceeded the admissible refund over and above the value addition norm under Notification No. 01/2010-CE, as the appellant commenced commercial production after the issuance of the said Notification – HELD - The appellant had themselves opted to avail the exemption under Notification No. 01/2010-CE and even filed appeals before the CESTAT against the orders of the jurisdictional Commissioner regarding the fixation of special rates under the said notification - the Commissioner (Appeals) had not adequately addressed the appellant's objection regarding the absence of a speaking order by the original authority. The Commissioner's reasoning that the original authority had no role to play with respect to the CESTAT's directions to the jurisdictional Commissioner for a de novo decision was not valid, as it did not absolve the original authority from issuing a speaking order. The original order having been issued in contravention of the principles of natural justice, should have been set aside by the Commissioner and the matter remanded to the original authority for fresh consideration following the principles of natural justice - The impugned order is set aside and the matter is remanded to the original authority with a direction to consider all the submissions of the appellant and pass a speaking order, while following the principles of natural justice – The appeal is disposed of [Read less]

Service Tax - Discrepancy between the taxable values declared in the ST-3 returns and the commissions reported in the financial statements - Whether the appellant was liable to pay the differential tax along with interest and penalties based on the discrepancy between the taxable values declared in the ST-3 returns and Financial Statements - HELD - The original authority noted that the appellant had agreed to pay the differential tax amount along with interest, and the first appellate authority had also recorded this acquiescence. However, the appellant has now resiled from their earlier position of acquiescence - It does ... [Read more]

Service Tax - Discrepancy between the taxable values declared in the ST-3 returns and the commissions reported in the financial statements - Whether the appellant was liable to pay the differential tax along with interest and penalties based on the discrepancy between the taxable values declared in the ST-3 returns and Financial Statements - HELD - The original authority noted that the appellant had agreed to pay the differential tax amount along with interest, and the first appellate authority had also recorded this acquiescence. However, the appellant has now resiled from their earlier position of acquiescence - It does not appear that the Original Authority has made a mistake in recording the acquiescence as the appellant has not filed an application for rectification of mistake before the said Authority or even resiled on that position before the Commissioner Appeals – Further, it is shocking to see the appellant's submissions in their Appeal Memorandum, which show a lack of respect for the First Appellate Authority—an office with significant responsibility in the scheme of quasi-judicial dispute resolution - Averments grounded on relevant facts and supported by appropriate case law, presented in a dignified and measured language, are without doubt more persuasive and credible than relying on rhetoric or attempting to obscure weak arguments or hide facts by immoderate language against the earlier authorities when litigating the matter up the appeal ladder – Since the appellant has now resiled from their earlier position of acquiescence, issues of fact and law were not examined earlier due to the appellant accepting to pay duty and the perceived lack of supporting evidence, needs to be addressed. The matter hence needs to be examined afresh - The impugned order is set aside and matter is remitted back to the original authority for fresh disposal in accordance with the law – The appeal is disposed of [Read less]

GST – West Bengal AAR - Classification of transportation services, GTA services - Applicant is engaged in B2B trading of goods, proposed to implement a new business model wherein it would provide transportation services of goods exclusively by road to customers purchasing such goods from various e-commerce operator (ECO) portals. Under this model, the applicant would collect the goods from a designated "Source Mother Hub" and deliver them to the address specified by the end-customer at the time of purchasing goods on the ECO's portal. The transportation activity may involve multiple transit points and the applicant propo... [Read more]

GST – West Bengal AAR - Classification of transportation services, GTA services - Applicant is engaged in B2B trading of goods, proposed to implement a new business model wherein it would provide transportation services of goods exclusively by road to customers purchasing such goods from various e-commerce operator (ECO) portals. Under this model, the applicant would collect the goods from a designated "Source Mother Hub" and deliver them to the address specified by the end-customer at the time of purchasing goods on the ECO's portal. The transportation activity may involve multiple transit points and the applicant proposed to issue a single consignment note from the Source Mother Hub to the Delivery Address - Whether the services provided by the applicant to customers would qualify as "Goods Transport Agency" (GTA) services – HELD - The applicant is a "person" as defined under the GST Act and is providing the service of transporting goods exclusively by road - The applicant will issue a consignment note containing all the required details, which is a sine qua non for classification as a GTA as per the settled judicial precedents - The scope of GTA services includes not only the actual transportation of goods, but also any intermediate/ancillary services provided in relation to such transportation, such as loading/unloading, packing/unpacking, trans-shipment, temporary warehousing etc. Therefore, the services provided by the applicant to customers would qualify as "Goods Transport Agency" services. The authority also held that the ancillary services provided by the applicant, such as loading/unloading, packing/unpacking, transshipment, and temporary warehousing, in the course of transportation of goods, will be treated as part of the composite supply of GTA services – Ordered accordingly - Whether the services provided by the applicant to unregistered customers through the e-commerce operator's portal would be eligible for exemption in terms of Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 – HELD - The transportation services provided by the applicant, being a GTA, to unregistered customers/recipients who order goods through the ECO's portal would be eligible for the exemption under Sl. No. 21A of the Notification - Since the applicant is a GTA, the services provided by it to unregistered recipients (individual customers) would be covered by the exemption - As per the proposed model, the end-customer is the recipient of the transportation services provided by the applicant and would be liable to pay the consideration for such services. The incidental/ancillary services provided by the applicant in the course of transportation of goods would also be covered under the said exemption as per the clarification issued by the CBIC. [Read less]

Central Excise – Confiscation of goods – Demand of duty – Officers conducted search at factory premises which was used for manufacturing and sale of Gutkha under names of non-existent units – Case of revenue is that Appellant is the owner of factory and goods found there – After investigation, department issued show cause notice proposing confiscation of goods along with currency seized from residence of Appellant and demand of duty – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Appellant has any conne... [Read more]

Central Excise – Confiscation of goods – Demand of duty – Officers conducted search at factory premises which was used for manufacturing and sale of Gutkha under names of non-existent units – Case of revenue is that Appellant is the owner of factory and goods found there – After investigation, department issued show cause notice proposing confiscation of goods along with currency seized from residence of Appellant and demand of duty – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Appellant has any connection with alleged factory premises – HELD – Case of revenue is that Appellant is the owner of alleged factory premises and therefore, he is liable to pay duty on clandestinely cleared Gutkha from said factory premises. Revenue had relied on statement of Appellant’s wife. Specific case of Appellant is that his wife’s statement was recorded under pressure and coercion. Adjudicating Authority was required to examine as to either statements were voluntary or not before relying upon the statements. Adjudication order does not show that this exercise had been conducted by Adjudicating Authority. Statements relied upon by revenue are not admissible evidence and same are required to be eschewed from consideration. Apart from statements, there is no evidence to link goods found at Appellant’s residence with raw material found at alleged factory premises. No adverse inference can be drawn against Appellant merely because some goods were found at residence of Appellant. Appellant had no connection with alleged factory premises. Confiscation of goods and currency seized from Appellant’s residence cannot be upheld. Demand of duty and imposition of penalty on Appellant is also set aside – Appeals allowed [Read less]

Customs - Duty-Free Replenishment Certificate (DFRC) - Whether the Customs Broker (CHA/CB) can be held liable for penalty under Section 112 of the Customs Act, 1962, for allegedly aiding, abetting, and colluding in the use of forged DFRC licenses – HELD - The evidence presented did not prove that CHA had knowingly aided, abetted, or conspired in the use of forged DFRC licenses. Simply meeting individuals, accepting money into bank accounts, not depositing cheques received with the bank, interacting with an importer's intermediary, receiving and passing on documents to an intermediary, or shipping goods according to the i... [Read more]

Customs - Duty-Free Replenishment Certificate (DFRC) - Whether the Customs Broker (CHA/CB) can be held liable for penalty under Section 112 of the Customs Act, 1962, for allegedly aiding, abetting, and colluding in the use of forged DFRC licenses – HELD - The evidence presented did not prove that CHA had knowingly aided, abetted, or conspired in the use of forged DFRC licenses. Simply meeting individuals, accepting money into bank accounts, not depositing cheques received with the bank, interacting with an importer's intermediary, receiving and passing on documents to an intermediary, or shipping goods according to the intermediary's instructions, does not amount to evidence that the CHA aided, abetted, or conspired with Shri Bajaj in any illegal activity. The findings are merely based on assumptions and presumptions are not sustainable in the eye of the law - The penalty under the Customs Act 1962 cannot be sustained for an alleged breach of the provisions of the Customs House Agents Licensing Regulations (CHALR) 2004 by the CHA/CB - The portion of the impugned order that relates to the appellant-CHA is set aside and the appeal is allowed [Read less]

Customs - Mis-declaration of goods, Confiscation - The DRI investigation found that the goods were of excess weight and the fabric was classified as "Fabric with cut pile" instead of the declared "100% Polyester Knitted Long Pile Fabric". Additionally, some undeclared goods such as wall clocks, mirrors, and plush pillows were also found - Whether the goods should be classified as "100% Polyester Knitted Cut Pile Fabric" under CTI 6001 92 00 instead of "100% Polyester Knitted Long Pile Fabric" under CTI 6001 10 90 – HELD - The Customs Tariff Heading 6001 has three sub-headings - long pile fabrics, looped pile fabrics, and... [Read more]

Customs - Mis-declaration of goods, Confiscation - The DRI investigation found that the goods were of excess weight and the fabric was classified as "Fabric with cut pile" instead of the declared "100% Polyester Knitted Long Pile Fabric". Additionally, some undeclared goods such as wall clocks, mirrors, and plush pillows were also found - Whether the goods should be classified as "100% Polyester Knitted Cut Pile Fabric" under CTI 6001 92 00 instead of "100% Polyester Knitted Long Pile Fabric" under CTI 6001 10 90 – HELD - The Customs Tariff Heading 6001 has three sub-headings - long pile fabrics, looped pile fabrics, and others. Since the fabrics were found to be neither long pile nor looped pile, they were correctly classified under the 'others' category, which is further classified based on the fiber content, and the polyester fabrics fell under CTI 6001 92 00 - The reclassification of the goods as "100% Polyester Knitted Cut Pile Fabric" under CTI 6001 92 00, which attracted a higher rate of duty is upheld – Since the goods were vastly mis-declared in terms of quantities and type of goods, and therefore, they were correctly confiscated - The facts showed that the goods were mis-declared in terms of quantity and nature, and some goods were not declared at all. The appellant is liable for the penalties under Sections 112(a) and 114AA. Further, the mandatory penalty under Section 114A is correctly imposed on the importer, as the duties were short paid due to the mis-declarations – The appeals are dismissed [Read less]

GST - Taxation on Confectionery Products - Dept raised demand for short payment of GST on the petitioner's confectionery products. The petitioner had filed a reply to the Show Cause Notice, which was ignored by the adjudicating authority - Whether the petitioner's confectionery products are liable for GST at 12% or 18% - HELD - In the impugned order, the adjudicating authority had incorrectly interpreted the CRCL, Delhi report, which had opined that the petitioner's products meet the requirements of 'sugar boiled confectionery'. The adjudicating authority had wrongly held that the CRCL report did not confirm that the petit... [Read more]

GST - Taxation on Confectionery Products - Dept raised demand for short payment of GST on the petitioner's confectionery products. The petitioner had filed a reply to the Show Cause Notice, which was ignored by the adjudicating authority - Whether the petitioner's confectionery products are liable for GST at 12% or 18% - HELD - In the impugned order, the adjudicating authority had incorrectly interpreted the CRCL, Delhi report, which had opined that the petitioner's products meet the requirements of 'sugar boiled confectionery'. The adjudicating authority had wrongly held that the CRCL report did not confirm that the petitioner's products were sugar boiled confectionery. This is a glaring error in the impugned order - The Department is directed to file an affidavit explaining how the CRCL report had been misinterpreted, and if the department is unable to justify the interpretation, the petitioner would be entitled to the relief sought. However, at this stage, no coercive measures shall be taken against the Petitioner in respect of the impugned order – Ordered accordingly [Read less]

GST – West Bengal AAR - Transfer of business as a going concern - Applicant is an entity newly incorporated to take over the business assets along with the liabilities of M/s. Horizen, a proprietorship concern - Whether the transfer of business assets and liabilities amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply under GST – HELD - As per the facts, all the business assets (except personal assets) and liabilities of transferor-M/s. Horizen are being transferred to the applicant, and the applicant will carry on the business as a going co... [Read more]

GST – West Bengal AAR - Transfer of business as a going concern - Applicant is an entity newly incorporated to take over the business assets along with the liabilities of M/s. Horizen, a proprietorship concern - Whether the transfer of business assets and liabilities amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply under GST – HELD - As per the facts, all the business assets (except personal assets) and liabilities of transferor-M/s. Horizen are being transferred to the applicant, and the applicant will carry on the business as a going concern. The financial statements of M/s. Horizen indicate that the company is a going concern. The Schedule II of the CGST Act provides that the transfer of a business as a going concern shall be treated as a supply of service, and Notification No. 12/2017-Central Tax (Rate) exempts such supply from GST. Therefore, the transfer of business from transferor company to the applicant as a going concern is an exempt supply - The transfer of assets and liabilities forming part of the business amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply as classified under Sl. No. 2 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly - Taxability of services provided by the applicant - The applicant will carry out certain works and issue invoices in furtherance of or as an extension of the original work orders commenced under the name of the transferor, M/s. Horizen - Whether the supplies and/or invoices to be issued by the applicant in furtherance of or as an extension of the original work orders commenced under the name of M/s. Horizen shall be deemed to possess the identical taxability as if such transactions had remained with M/s. Horizen or new tax treatment would apply due to the business transfer - HELD - It is clear from the statutory provisions that the questions on which this authority has already pronounced ruling is binding only on the concerned applicant and the concerned jurisdictional officer and none else. On the other hand, the facts and circumstances supporting the earlier ruling have changed due to transfer of business of M/S Horizen. So the advance ruling dated 11.12.2024 in the case of M/s Horizen is not applicable for the present applicant - The work orders are of pure services, without any works contract service or other composite supply involving supply of goods, and are provided to the Government of West Bengal represented by the PHED. These services are in relation to the functions entrusted to panchayats under Article 243G and municipalities under Article 243W of the Constitution of India, and hence qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. [Read less]

GST – West Bengal AAR - Exemption for Pure Services under Notification No. 12/2017-Central Tax (Rate) – Applicant is engaged in providing various services to the Public Health Engineering Department (PHED) of the Government of West Bengal - Whether the services of field level data validation of FHTC and organizing orientation programs are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - The services provided by the applicant are "pure services" as they do not involve any supply of goods and are provided to the Government of West Bengal represented by the PHED. Further, these servic... [Read more]

GST – West Bengal AAR - Exemption for Pure Services under Notification No. 12/2017-Central Tax (Rate) – Applicant is engaged in providing various services to the Public Health Engineering Department (PHED) of the Government of West Bengal - Whether the services of field level data validation of FHTC and organizing orientation programs are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - The services provided by the applicant are "pure services" as they do not involve any supply of goods and are provided to the Government of West Bengal represented by the PHED. Further, these services are in relation to the functions entrusted to Panchayats under Article 243G and Municipalities under Article 243W of the Constitution, specifically the function of "drinking water" as mentioned in the Eleventh and Twelfth Schedules. Therefore, the services satisfy all the conditions required for exemption under Sl. No. 3 of the Notification – Ordered accordingly - Whether the potential services of collecting different components of Piped Water Supply Schemes (PWSS) and land information are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - Similar to the other services, the potential services of collecting PWSS components and land information are also "pure services" provided to the Government of West Bengal represented by the PHED, and are in relation to the function of "drinking water" entrusted to Panchayats and Municipalities under the Constitution. Hence, these services also qualify for exemption under Sl. No. 3 of the Notification. [Read less]

Central Excise – Manufacture of goods – Demand of duty – Appellant manufactures a range of polypropylene products by using imported and domestic raw materials obtained duty free under Customs Notification 52/2003-Cus – During audit, Internal Audit Party found that quantity of raw materials were consumed over and above Standard Input Output Norms (SION) fixed by DGFT – Department issued show cause notice to Appellant by proposing demand of duty for non-compliance to SION norms – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant's consumption of inputs is in compliance with SION... [Read more]

Central Excise – Manufacture of goods – Demand of duty – Appellant manufactures a range of polypropylene products by using imported and domestic raw materials obtained duty free under Customs Notification 52/2003-Cus – During audit, Internal Audit Party found that quantity of raw materials were consumed over and above Standard Input Output Norms (SION) fixed by DGFT – Department issued show cause notice to Appellant by proposing demand of duty for non-compliance to SION norms – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant's consumption of inputs is in compliance with SION as prescribed in Notification No.52/2003-Cus – HELD – Main allegation against Appellant is that master batches and other raw materials were used in excess as compared to admissible SION. No presumption can be drawn from SION norms alone that materials procured were in excess of requirement. There was no specific evidence to indicate that materials procured vis-à-vis final products were not accounted for nor unsubstantiated to indicate any excess materials have been imported or procured locally. Various contentions raised by Appellant have not been considered nor any findings rendered thereon in impugned Order-in-Original. Matter requires to be remanded for de novo proceedings. Matter is remanded back to Original Adjudicating Authority to consider submissions of Appellant and Department afresh and pass a well-reasoned speaking order in strict compliance to principles of natural justice – Appeals disposed off [Read less]

Customs - Customs Broker, Penalty, Verification of KYC - Whether the penalty imposed under Section 114(i) for failure to verify KYC and antecedents of the exporter is sustainable – HELD - In a separate proceeding under the Customs Broker Licensing Regulations, 2013, the charges of not verifying KYC and antecedents were dropped against the appellant. The penalty cannot be imposed on a Customs Broker when the allegation of mis-declaration has not been established against them. Thus, the penalty under Section 114(i) was set aside – As for penalty under Section 114AA for using forged/fabricated documents, the containers ex... [Read more]

Customs - Customs Broker, Penalty, Verification of KYC - Whether the penalty imposed under Section 114(i) for failure to verify KYC and antecedents of the exporter is sustainable – HELD - In a separate proceeding under the Customs Broker Licensing Regulations, 2013, the charges of not verifying KYC and antecedents were dropped against the appellant. The penalty cannot be imposed on a Customs Broker when the allegation of mis-declaration has not been established against them. Thus, the penalty under Section 114(i) was set aside – As for penalty under Section 114AA for using forged/fabricated documents, the containers exported under the two shipping bills filed by the appellant were checked and cleared by Customs without any objection. There was no evidence to substantiate the allegation that the appellant submitted any forged or fabricated documents. As a Customs Broker, the appellant had no authority or scope to examine the contents of the sealed containers. The entire case against the appellant was based on conjectures and surmises without any concrete evidence. Accordingly, the penalty under Section 114AA as well is set aside - The penalties imposed under Sections 114(i) and 114AA of the Customs Act, 1962 are set aside and the appeal is allowed [Read less]

Service Tax – Promotion of goods – Receipt of commission – Demand of tax – Appellant is engaged in providing services of sales promotion and marketing of goods of various foreign companies in India and were getting commission from them for these services – Department issued show cause notice to Appellant by proposing demand of Service Tax on commission received by Appellant from foreign companies – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay service tax on commission amount received from foreign clients for sales promotion of their goods in Indian Territ... [Read more]

Service Tax – Promotion of goods – Receipt of commission – Demand of tax – Appellant is engaged in providing services of sales promotion and marketing of goods of various foreign companies in India and were getting commission from them for these services – Department issued show cause notice to Appellant by proposing demand of Service Tax on commission received by Appellant from foreign companies – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay service tax on commission amount received from foreign clients for sales promotion of their goods in Indian Territory – HELD – W.e.f. 1-10-2014, definition of Intermediary also covered broker, an agent or any other person who arranges or facilitates a provision of a service or supply of goods between two or more persons. Since Appellant was engaged in promotion of sale of goods of their foreign clients in India, they fall within definition of intermediary w.e.f. 1-10-2014 and therefore, they are liable to pay service tax only after this date. Appellant claimed to have paid service tax on amount of commission received after this date. Matter is remitted to Adjudicating authority to verify correctness of payment of service tax and pass order for recovery of service tax in case of any short payment or recovery of interest in case of delayed payment of service tax – Appeals disposed of [Read less]

Service Tax – Denial of exemption – Demand of tax – Appellants are engaged in manufacture and sale of various fast moving consumer goods – Vide licensing agreements, licensors granted Appellants the non-exclusive right to use Intellectual Property Rights (IPR) in connection with design, production, marketing and sale of products – Appellant classified services under category of IPR and claimed benefit of Exemption Notification – Department issued show cause notice alleging that services received by Appellant were classifiable under category of Franchise Service and therefore, Appellant was not eligible to avail... [Read more]

Service Tax – Denial of exemption – Demand of tax – Appellants are engaged in manufacture and sale of various fast moving consumer goods – Vide licensing agreements, licensors granted Appellants the non-exclusive right to use Intellectual Property Rights (IPR) in connection with design, production, marketing and sale of products – Appellant classified services under category of IPR and claimed benefit of Exemption Notification – Department issued show cause notice alleging that services received by Appellant were classifiable under category of Franchise Service and therefore, Appellant was not eligible to avail benefit of Exemption Notification – Commissioner confirmed demand of Service Tax – Whether services received by Appellant from their overseas companies are services related to IPR or Franchise Service – HELD – According to Appellant, services received by Appellant would fall under category of IPR service, while according to Department, services received by Appellant would fall under category of franchise service. Agreement between Appellant and licensors is only in relation to grant of license with respect to IPR in connection with design, production, distribution, marketing and sale of products. Arrangement between Appellant and licensors will not constitute a franchisee agreement, since licensor does not have any significant control over operations of Appellant. Services are rightly classified by Appellant under IPR Service and same are not classifiable as Franchise Service and therefore, Appellant is eligible to avail benefit of Exemption Notification. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Service Tax – Rule 6(3)(II) of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in executing various works contracts and employed in taxable and exempted services – Appellant had reversed proportionate CENVAT Credit in terms of formula provided under Rule 6(3)(II) of the Rules – While considering the reversible CENVAT Credit, Appellant had taken into account only common input service credit and not total CENVAT Credit – Revenue issued show cause notice alleging that Appellant was required to take into account the total input credit, by invoking ex... [Read more]

Service Tax – Rule 6(3)(II) of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in executing various works contracts and employed in taxable and exempted services – Appellant had reversed proportionate CENVAT Credit in terms of formula provided under Rule 6(3)(II) of the Rules – While considering the reversible CENVAT Credit, Appellant had taken into account only common input service credit and not total CENVAT Credit – Revenue issued show cause notice alleging that Appellant was required to take into account the total input credit, by invoking extended period of limitation – Commissioner confirmed demand as proposed in show cause notice – Whether Revenue had established its case for invoking extended period of limitation – HELD – Mens rea is central to all grounds for invoking extended period. To establish mens rea, assessee must have actively concealed, misrepresented, or taken affirmative steps to hide facts, rather than just failing to declare something they might have genuinely overlooked or misunderstood. When Appellant have been filing returns showing amount reversed by them, veracity of calculation could have been verified by department. Revenue missed that opportunity by not scrutinizing returns filed by Appellants. Extended period cannot be invoked in absence of any positive act with intention to evade payment of duty on part of Appellant. Revenue had not made any case for invoking extended period. On this count alone, impugned order is liable to be set aside – Appeal allowed [Read less]

GST - Condonation of delay in filing appeal – Rejection of appeal by the Appellate Authority on the ground of limitation, as the appeal was filed with a delay of 305 days - Whether the delay in filing the appeal can be condoned considering the circumstances and reasons provided by the petitioner - HELD - The sufficiency of the cause for the delay in filing the appeal had not been categorically discussed by the Appellate Authority – The petitioner could not file the appeal within the stipulated time due to the reason that the order under-challenge was not communicated to the petitioner within the stipulated period - Whi... [Read more]

GST - Condonation of delay in filing appeal – Rejection of appeal by the Appellate Authority on the ground of limitation, as the appeal was filed with a delay of 305 days - Whether the delay in filing the appeal can be condoned considering the circumstances and reasons provided by the petitioner - HELD - The sufficiency of the cause for the delay in filing the appeal had not been categorically discussed by the Appellate Authority – The petitioner could not file the appeal within the stipulated time due to the reason that the order under-challenge was not communicated to the petitioner within the stipulated period - While procedures are handmaid to justice, they should not be treated as the master of it. Considering the facts and circumstances of the case, the valuable right of the petitioner deserves to be decided after hearing the rival submissions on merits - The matter was remanded back to the Appellate Authority for reconsideration on merits, upon the petitioner depositing a cost of Rs. 25,000/- with the Department – The petition is allowed [Read less]

Central Excise – Demand of duty on replacement of parts during warranty period – Appellant cleared certain parts to Indian Railways during the impugned period and paid the applicable duty. During this period, some of the parts were not working properly, and the appellant replaced them free of cost to the buyers under the warranty - Whether the appellant is liable to pay duty on the parts replaced free of cost during the warranty period – HELD - Since the original goods were cleared by the appellant on payment of duty along with a warranty, and no amount was recovered towards replacing the parts during the warranty pe... [Read more]

Central Excise – Demand of duty on replacement of parts during warranty period – Appellant cleared certain parts to Indian Railways during the impugned period and paid the applicable duty. During this period, some of the parts were not working properly, and the appellant replaced them free of cost to the buyers under the warranty - Whether the appellant is liable to pay duty on the parts replaced free of cost during the warranty period – HELD - Since the original goods were cleared by the appellant on payment of duty along with a warranty, and no amount was recovered towards replacing the parts during the warranty period, the question of demanding duty does not arise. When the original goods were cleared on payment of duty, and the replacement of parts was done free of cost during the warranty period, no further duty is payable by the appellant - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of one-time seals with RFID tags - Appellant imported one-time seals with RFID tags and classified them under Customs Tariff Item (CTI) 8523 59 10 as "proximity cards and tags". The Customs authorities re-classified the goods under CTI 8309 90 30 as "other seals" - Whether the one-time seals with RFID tags imported by the appellant are correctly classifiable under CTI 8523 59 10 as "proximity cards and tags" or under CTI 8309 90 30 as "other seals" – HELD - In determining the essential character of a goods, what needs to be seen is what the goods is intended to be and how it is sold and bought in... [Read more]

Customs - Classification of one-time seals with RFID tags - Appellant imported one-time seals with RFID tags and classified them under Customs Tariff Item (CTI) 8523 59 10 as "proximity cards and tags". The Customs authorities re-classified the goods under CTI 8309 90 30 as "other seals" - Whether the one-time seals with RFID tags imported by the appellant are correctly classifiable under CTI 8523 59 10 as "proximity cards and tags" or under CTI 8309 90 30 as "other seals" – HELD - In determining the essential character of a goods, what needs to be seen is what the goods is intended to be and how it is sold and bought in the market, rather than the additional functions it may perform. While the RFID tags provide additional functionality in terms of tracking and monitoring the container, the primary purpose of the goods is to seal the container, which is the essential character. The fact that the RFID tags have a higher value compared to traditional seals does not change the essential character of the goods. Therefore, the classification of the goods under CTI 8309 90 30 as "other seals" is upheld and the appeal is dismissed [Read less]

Customs – Recovery of dues from Auction purchasers, liquidation of company - Appellants were purchasers during the course of official liquidation of various assets a 100% EOU - Whether the Department can recover customs or excise duties from the auction purchasers of the assets of the liquidated company – HELD – the Hon’ble High Court of Gujarat vide its order dated 07.03.2002 directed winding up of M/s. Varun Seacon Ltd. which was operating as 100% EOU. The High Court directed that the purchaser shall be liable to pay all statutory dues, if any, due and payable on the subject properties of the company for the peri... [Read more]

Customs – Recovery of dues from Auction purchasers, liquidation of company - Appellants were purchasers during the course of official liquidation of various assets a 100% EOU - Whether the Department can recover customs or excise duties from the auction purchasers of the assets of the liquidated company – HELD – the Hon’ble High Court of Gujarat vide its order dated 07.03.2002 directed winding up of M/s. Varun Seacon Ltd. which was operating as 100% EOU. The High Court directed that the purchaser shall be liable to pay all statutory dues, if any, due and payable on the subject properties of the company for the period after the date of the winding-up order, and the payment of such dues for the pre-liquidation period shall be settled as per the provisions of the Companies Act, 1956 - As per the High Court's order, only sales tax is to be paid by the purchaser, and all other dues for the pre-liquidation period, including any excise duties or Customs duties, shall be considered settled as per the provisions of the Companies Act, 1956 – The Department has not shown any non-obstante clause in the relevant fiscal legislations that can prevail over the provisions of the Companies Act, 1956 and allow the Department to bypass the official liquidator - The auction purchasers cannot be held liable for the arrears incurred by the previous licensee or industry, and that the dues of the Government do not constitute a charge over the property. Therefore, the notice issued to the appellants demanding the arrears of tax or duty foregone by the previous owner is without jurisdiction and set aside - The appeals filed by the appellants are allowed [Read less]

Customs - Confiscation of gold bars, gold jewelry/ornaments, Penalty under sections 112(b)(i) and 114AA of the Customs Act, Admissibility of statements under section 108 of the Customs Act - Whether the statements made by the appellant under section 108 of the Customs Act can be considered as relevant evidence to hold the appellant as the owner of the gold bars - HELD - The statements made under section 108 of the Customs Act cannot be considered as relevant evidence as the mandatory procedure under section 138B(1)(b) of the Customs Act was not followed. Unless the person who made the statement is examined as a witness bef... [Read more]

Customs - Confiscation of gold bars, gold jewelry/ornaments, Penalty under sections 112(b)(i) and 114AA of the Customs Act, Admissibility of statements under section 108 of the Customs Act - Whether the statements made by the appellant under section 108 of the Customs Act can be considered as relevant evidence to hold the appellant as the owner of the gold bars - HELD - The statements made under section 108 of the Customs Act cannot be considered as relevant evidence as the mandatory procedure under section 138B(1)(b) of the Customs Act was not followed. Unless the person who made the statement is examined as a witness before the adjudicating authority and the authority forms an opinion that the statement should be admitted in evidence, the statements recorded under section 108 cannot be treated as relevant – In the present case, since the mandatory procedure was not followed, the Commissioner could not have drawn the conclusion that the appellant was the owner of the gold bars based on the statements recorded under Section 108 - The appellant had produced various documents and affidavits to establish that the seized gold jewelry/ornaments were either brought on approval basis for marketing or were manufactured out of gold procured from legitimate sources. The Commissioner had rejected these documents and affidavits without valid reasons and without calling the deponents for cross-examination - The Department failed to establish that the appellant had any connection with the importation of the gold prior to the actual import. Accordingly, the gold jewelry/ornaments could not be confiscated under the Customs Act - Since the gold bars could not be held liable for confiscation and the gold jewelry/ornaments could not be confiscated, the penalties under sections 112(b)(i) and 114AA of the Customs Act could not be imposed on the appellant - The impugned order is set aside in so far as it imposed penalties under sections 112(b)(i) and 114AA of the Customs Act on the appellant – The appeal is allowed [Read less]

Service Tax - BAS, Commission income, Indenting Agent – Providing of support services in respect of imports from foreign suppliers and selling locally to customers directly, as well as selling such goods on 'high seas sale' basis - The appellant received commissions on account of providing these services to their foreign suppliers – Demand of service tax under the category of Business Auxiliary Service (BAS) - Whether the services provided by the appellant and the receipt of commission earned by them for such services in the form of commission on 'high seas sales' and indenting commission charges, are liable for levy o... [Read more]

Service Tax - BAS, Commission income, Indenting Agent – Providing of support services in respect of imports from foreign suppliers and selling locally to customers directly, as well as selling such goods on 'high seas sale' basis - The appellant received commissions on account of providing these services to their foreign suppliers – Demand of service tax under the category of Business Auxiliary Service (BAS) - Whether the services provided by the appellant and the receipt of commission earned by them for such services in the form of commission on 'high seas sales' and indenting commission charges, are liable for levy of service tax - HELD - The appellants act as indenting agent and provides the service of selling the goods directly to the customers of such foreign entities, including sale on high seas sales basis, for which they only get commission/indenting commission. There is no evidence of an arrangement between the appellants and the foreign entities wherein the appellants are empowered to make any obligation on behalf of the overseas entity or to bind overseas entity to any contractual obligation - The content in the agreement clearly provide that no services were provided by the appellants to the end customers on behalf of the overseas entity. Thus, under such circumstances, it cannot be said that the appellant has acted as an intermediary in the dealings between the overseas entities and their customers in India - The services provided by the appellant to the overseas entities qualify as export in terms of Rule 3 of the Export of Service Rules, 2005. As per the CBIC Circular, the accrual of benefit from the services provided by the appellant and their use for the benefit of foreign entity would qualify for export, and there does not involve service of BAS - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Refund, Export of services, Place of provision of service rules – Appellant is engaged in providing consultancy, support services in respect of certain goods to foreign suppliers who sell these products directly to customers in India. The appellant had entered into agreements with the foreign clients and had paid service tax under protest on the consideration received for these services. The appellant filed a refund claim for the service tax paid, contending that the services provided were in the nature of exports under the Place of Provision of Service (POPS) Rules, 2012 - Whether the services provided b... [Read more]

Service Tax – Refund, Export of services, Place of provision of service rules – Appellant is engaged in providing consultancy, support services in respect of certain goods to foreign suppliers who sell these products directly to customers in India. The appellant had entered into agreements with the foreign clients and had paid service tax under protest on the consideration received for these services. The appellant filed a refund claim for the service tax paid, contending that the services provided were in the nature of exports under the Place of Provision of Service (POPS) Rules, 2012 - Whether the services provided by the appellant to its foreign clients are in the nature of export of services, making the appellant eligible for a refund of the service tax paid – HELD - The services provided by the appellant to its foreign clients should be considered as 'export of services' under Rule 3 of the POPS Rules, 2012. The agreements clearly demarcated the appellant's role as a consultant providing information and advisory services to the foreign clients, without any authority to negotiate or conclude contracts on their behalf with Indian customers. The benefits of the services accrued to the foreign clients, and there was no privity of contract between the appellant and the Indian customers of the foreign clients – Further, the Department had accepted the appellant's refund claims for the subsequent periods on similar grounds, and it would not be permissible for the department to take a contrary stand before the Tribunal - The mere fact that the beneficiary of the service is located in India would not be a determinant factor for the levy of service tax, as the service is, in fact, provided to a recipient located outside India - The appellant is eligible for a refund of the service tax paid on the services exported to its foreign clients. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Demand of service tax on incentives received from brand owner, promotion of trademarks - Appellant received certain amounts under the head "net incentive" and "Support and Other Receipt" from brand owner for advertising, promotion, and marketing of brand/trademark - Whether the amounts received by the appellant from M/s. Pepsi Foods Private Limited (PFL) for advertising, promotion, and marketing of Pepsi brand/trademark can be subjected to service tax under the category of BAS – HELD - The definition of BAS under Section 65(19)(ii) of the Finance Act, 1994 covers services in relation to promotion or marke... [Read more]

Service Tax – Demand of service tax on incentives received from brand owner, promotion of trademarks - Appellant received certain amounts under the head "net incentive" and "Support and Other Receipt" from brand owner for advertising, promotion, and marketing of brand/trademark - Whether the amounts received by the appellant from M/s. Pepsi Foods Private Limited (PFL) for advertising, promotion, and marketing of Pepsi brand/trademark can be subjected to service tax under the category of BAS – HELD - The definition of BAS under Section 65(19)(ii) of the Finance Act, 1994 covers services in relation to promotion or marketing of the goods produced or provided by the client. In the present case, the goods produced by the client PFL were "concentrates," and the appellant was promoting the Pepsi brand/trademark, which does not fall within the ambit of BAS under the said provision - The Tribunal in its earlier decision in the matter of the same appellant had set aside the demand of service tax on BAS. The impugned order demanding service tax on the incentives received by the appellant is not sustainable and set aside – The appeal is allowed [Read less]

Customs – Sections 108, 112(b)(i) and 138B of Customs Act, 1962 – Imposition of penalty – Sustainability – Officials of Directorate of Revenue Intelligence intercepted Appellants at Railway Station and recovered gold bars and Indian currency from them – After investigation, department issued show cause notice to 10 noticees including Appellants – Commissioner confirmed demand of penalty on Appellants under Section 112(b)(i) of the Act – Whether Commissioner is justified in imposing penalties upon Appellants under Section 112(b)(i) of the Act – HELD – Appellants, in their replies to show cause notice, have... [Read more]

Customs – Sections 108, 112(b)(i) and 138B of Customs Act, 1962 – Imposition of penalty – Sustainability – Officials of Directorate of Revenue Intelligence intercepted Appellants at Railway Station and recovered gold bars and Indian currency from them – After investigation, department issued show cause notice to 10 noticees including Appellants – Commissioner confirmed demand of penalty on Appellants under Section 112(b)(i) of the Act – Whether Commissioner is justified in imposing penalties upon Appellants under Section 112(b)(i) of the Act – HELD – Appellants, in their replies to show cause notice, have clearly stated that Mahesh Soni had given gold bars along with currency to Prem Singh on job work basis, however, as Mahesh Soni was not keeping well, he executed a will naming his brother Mukesh Soni as the inheritor of his properties including gold bars. After death of Mahesh Soni, Prem Singh had called Appellants to deliver gold bars and cash to Mukesh Soni. Appellants have clearly explained possession of gold bars and cash amount. Case of department is based on statements made under Section 108 of the Act. Said statements cannot be considered as relevant, as procedure contemplated under Section 138B of the Act had not been followed. There is nothing on record to establish that Appellants had smuggled the gold bars. Impugned order passed by Commissioner to extent it imposes penalties upon Appellants under Section 112(b)(i) of the Act cannot be sustained and is set aside – Appeals allowed [Read less]

Customs – Revocation of customs broker licence – Forfeiture of security deposit – Appellant is a licenced Customs Broker had filed shipping bills on behalf of Exporter for export of readymade garments to UAE – On examination by officers of Customs Preventive, it was found that goods were mis-declared by exporter – Department issued show cause notice alleging that Appellant had violated Regulation 10(a), 10(d) and 10(n) of the Regulations – Commissioner revoked Customs Broker licence of Appellant, forfeited entire amount of security deposit furnished by Appellant and imposed penalty on Appellant – Whether Appe... [Read more]

Customs – Revocation of customs broker licence – Forfeiture of security deposit – Appellant is a licenced Customs Broker had filed shipping bills on behalf of Exporter for export of readymade garments to UAE – On examination by officers of Customs Preventive, it was found that goods were mis-declared by exporter – Department issued show cause notice alleging that Appellant had violated Regulation 10(a), 10(d) and 10(n) of the Regulations – Commissioner revoked Customs Broker licence of Appellant, forfeited entire amount of security deposit furnished by Appellant and imposed penalty on Appellant – Whether Appellant had violated provisions of Regulations 10(a), 10(d) and 10(n) of the Regulations – HELD – Appellant had obtained an authorization from exporter before filing shipping bills along with all KYC documents. Failure of SIIB officers to find authorization does not prove that it did not exist on that date. Case of department is that since exporter had mis-declared the description and value of goods, it proves that Appellant had not advised exporter to follow relevant provisions. It is perfectly possible that Appellant had advised exporter to follow the Rules, but exporter still mis-declared the goods. Customs Broker is a processor of documents and he had no right to either examine goods or determine their value. All that can be expected from Customs Broker is that he files Shipping Bills or Bills of Entry correctly as per documents which have been made available to him. There is no recording whatsoever as to what incorrect information was provided by Appellant to its client. Appellant had not violated Regulations 10(a), 10(d) and 10(n) of the Regulations. Consequently, revocation of Customs Broker’s licence of Appellant, forfeiture of security deposit and imposition of penalty cannot be sustained. Order under challenge is set aside – Appeal allowed [Read less]

GST – Evasion, Rejection of bail application - The petitioners are accused of facilitating the onboarding of certain companies with online payment aggregators for receiving online gaming revenues without payment of GST. The prosecution alleged that the companies had collectively received transactions towards online gaming services, resulting in GST evasion - The petitioners were arrested on 12.09.2025 and their bail applications were rejected by the lower court - Whether the petitioners were entitled to bail considering the gravity of the alleged GST evasion – HELD - Under the Section 132 of the CGST Act, where the amo... [Read more]

GST – Evasion, Rejection of bail application - The petitioners are accused of facilitating the onboarding of certain companies with online payment aggregators for receiving online gaming revenues without payment of GST. The prosecution alleged that the companies had collectively received transactions towards online gaming services, resulting in GST evasion - The petitioners were arrested on 12.09.2025 and their bail applications were rejected by the lower court - Whether the petitioners were entitled to bail considering the gravity of the alleged GST evasion – HELD - Under the Section 132 of the CGST Act, where the amount of tax evaded exceeds Rs. 5 crores, the offence is cognizable and non-bailable, and attracts imprisonment up to five years. Given the massive scale of the alleged tax evasion, the statutory rigour attendant to large-scale tax frauds was applicable - the prima facie evidence, including the petitioners' own admissions, search and seizure, and the documentary and electronic material, provided a strong basis for the prosecution's case. There was also a real risk of the petitioners tampering with evidence and fleeing the jurisdiction considering the involvement of multiple payment aggregators, numerous UPI IDs/VPAs, and foreign connections - The gravity of the offence, the magnitude of the alleged evasion, the propensity to tamper with evidence, and the risk of absconding were relevant factors in rejecting bail – Further, the petitioners had approached the Court with unclean hands by concealing the true scale of evasion - The bail applications are dismissed [Read less]

Service Tax – CHA Service, taxability of reimbursable expenses - Whether the reimbursable expenses collected by the appellant from its clients should be included in the gross value for the purpose of charging service tax on the CHA service provided by the appellant – HELD - The appellant had incurred the certain expenses on behalf of his customers and since payments were made on behalf of the client, the appellant was collecting these reimbursable charges on actual basis by raising separate bills - The issue of levy of service tax on reimbursable expenses by invoking Rule 5(1) of the Service Tax (Determination of Value... [Read more]

Service Tax – CHA Service, taxability of reimbursable expenses - Whether the reimbursable expenses collected by the appellant from its clients should be included in the gross value for the purpose of charging service tax on the CHA service provided by the appellant – HELD - The appellant had incurred the certain expenses on behalf of his customers and since payments were made on behalf of the client, the appellant was collecting these reimbursable charges on actual basis by raising separate bills - The issue of levy of service tax on reimbursable expenses by invoking Rule 5(1) of the Service Tax (Determination of Value of Service) Rules, 2006 is no longer res integra - In view of the settled legal position, the impugned Order-in-Appeal is set aside and the appeal is allowed [Read less]

Service Tax - Exemption from service tax, SEZ Act, overriding effect, services provided to SEZ units – Appellant provided rent-a-cab services to a SEZ unit for employee transportation without collecting service tax, believing these services were exempt under Notification No. 4/2004-ST dated 31.03.2004 - Department issued a show-cause notice alleging that the appellant had wrongly availed the exemption, as the services were not consumed within the SEZ - Whether the appellant is eligible for exemption from service tax for the rent-a-cab services provided to the SEZ unit – HELD - The SEZ Act is a self-contained Act that p... [Read more]

Service Tax - Exemption from service tax, SEZ Act, overriding effect, services provided to SEZ units – Appellant provided rent-a-cab services to a SEZ unit for employee transportation without collecting service tax, believing these services were exempt under Notification No. 4/2004-ST dated 31.03.2004 - Department issued a show-cause notice alleging that the appellant had wrongly availed the exemption, as the services were not consumed within the SEZ - Whether the appellant is eligible for exemption from service tax for the rent-a-cab services provided to the SEZ unit – HELD - The SEZ Act is a self-contained Act that provides exemptions on taxes, duties, cess, drawbacks, and concessions on imports and exports of goods and on the supply of services to the developers and units within an SEZ for carrying on authorized operations. Section 51 of the SEZ Act provides for the overriding effect of the SEZ Act over anything inconsistent contained in any other law, which would include the Finance Act – The Section 26(1)(e) of the SEZ Act states that every developer and entrepreneur shall be entitled to exemption from service tax on taxable services provided to a developer or unit to carry on the authorized operations in an SEZ. The situs of rendering the services is not relevant in connection with carrying on the authorized operations, so long as the taxable services are provided to a developer or unit in an SEZ. Therefore, the said taxable services would be exempt from the whole of the service tax leviable thereon under Section 66 of the Finance Act as per the provisions of the SEZ Act and the rules framed thereunder - The appellant is eligible for exemption from service tax for the rent-a-cab services provided to the SEZ unit as per the overriding effect under Section 51 of the SEZ Act and the exemption provided by Section 26 of the SEZ Act – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Application of period of Limitation in refund of service tax paid on non-taxable service under mistake of law – Appellant-assessee, made a deposit of amount during an investigation by the Department even though the services rendered were exempt from service tax - Department subsequently issued a closure letter confirming that no tax liability existed. The appellant filed a refund application, which was rejected by the Adjudicating Authority and upheld by the Appellate Tribunal on the ground of limitation - Whether the appellant is entitled to the refund of the amount deposited despite the refund applicati... [Read more]

Service Tax – Application of period of Limitation in refund of service tax paid on non-taxable service under mistake of law – Appellant-assessee, made a deposit of amount during an investigation by the Department even though the services rendered were exempt from service tax - Department subsequently issued a closure letter confirming that no tax liability existed. The appellant filed a refund application, which was rejected by the Adjudicating Authority and upheld by the Appellate Tribunal on the ground of limitation - Whether the appellant is entitled to the refund of the amount deposited despite the refund application being filed beyond the statutory six-month period – HELD - When the tax is paid under a mistake of law or without legal authority, the Department is duty-bound to refund the amount, irrespective of procedural technicalities. The limitation period prescribed under Section 102(3) of Finance Act, 1994 cannot be interpreted in a rigid manner to defeat the substantive right of the taxpayer, especially when the Department itself acknowledged the absence of any tax liability – The appellant acted promptly and filed the refund claim shortly after the closure of the investigation, which established the non-taxable nature of the services. Denying the refund would amount to unjust enrichment of the Government and violate the constitutional mandate under Article 265 that no tax shall be collected except by authority of law - The appellant’s claim for refund is legitimate, and it is both legally and equitably appropriate to allow the refund along with applicable interest, thereby upholding the principles of fairness, natural justice, and statutory entitlement – The impugned order is set aside and the appeal is allowed [Read less]

GST – Gujarat AAR - Section 2(30) and Section 2(90) of the CGST Act, 2017 - Composite Supply vs. Mixed Supply - The applicant plans to provide sachets of instant Premix Tea as an introductory offer along with its various tea products - Classification of supplies where the applicant intends to provide sachets of its "Jivaraj Samaara Masala Instant Premix Tea" along with its other tea products as an introductory offer - Whether such bundled supplies would be considered as "Composite Supply" or "Mixed Supply" – HELD – The bundling of premix tea with other tea is not the perception of the customer as the customer does no... [Read more]

GST – Gujarat AAR - Section 2(30) and Section 2(90) of the CGST Act, 2017 - Composite Supply vs. Mixed Supply - The applicant plans to provide sachets of instant Premix Tea as an introductory offer along with its various tea products - Classification of supplies where the applicant intends to provide sachets of its "Jivaraj Samaara Masala Instant Premix Tea" along with its other tea products as an introductory offer - Whether such bundled supplies would be considered as "Composite Supply" or "Mixed Supply" – HELD – The bundling of premix tea with other tea is not the perception of the customer as the customer does not expect any such bunching when he buys tea. The premix tea is not an ancillary commodity which is required to be supplied with the other tea. The premix tea and the other tea is not normally advertised as a package. It is only for testing the market that the applicants have decided to bunch it with the other tea. Further, the premix is not integral to the overall supply such that if it is removed the nature of the supply is affected - The various indicators to ascertain whether the supplies are naturally bundled, such as consumer perception, industry practice, and the nature of the supplies, are not present in the instant case. Therefore, the supply of Instant Premix tea with other tea will not constitute a composite supply - The bundled supplies would be considered as "Mixed Supply" and not "Composite Supply" as the premix tea and the other tea products are not naturally bundled and supplied in conjunction with each other in the ordinary course of business - Since the GST rate on all the tea products, including the premix tea, is 5%, the rate of tax for the "Mixed Supply" would also be 5% and any of the HSN codes of the supplies in the mixed supply can be used, as long as the tax rates are the same – Ordered accordingly [Read less]

GST - Transitional Input Tax Credit for Input Service Distributor (ISD) - Whether the petitioner, as an ISD, was entitled to carry forward the transitional ITC under Section 140(7) of the CGST Act, 2017 – HELD - A perusal of Section 140(7) of the CGST Act would show that the ITC which was available on account of any services received prior to the appointed date by the ISD shall be eligible for distribution as credit within the time and manner as may be prescribed - While the CGST Act provided for distribution of ITC by an ISD, the specific timeline for such distribution was not prescribed. The court relied on the Bombay ... [Read more]

GST - Transitional Input Tax Credit for Input Service Distributor (ISD) - Whether the petitioner, as an ISD, was entitled to carry forward the transitional ITC under Section 140(7) of the CGST Act, 2017 – HELD - A perusal of Section 140(7) of the CGST Act would show that the ITC which was available on account of any services received prior to the appointed date by the ISD shall be eligible for distribution as credit within the time and manner as may be prescribed - While the CGST Act provided for distribution of ITC by an ISD, the specific timeline for such distribution was not prescribed. The court relied on the Bombay High Court's orders in Siemens Ltd. v. Union of India, which had directed the GST Council to consider the effect of Section 140(7) on the transition of ITC for ISDs. The petitioner could not be deprived of the legitimate ITC due to technical glitches in the GST portal – In the present case, due to a glitch in the GST portal, the Petitioner could not file the form TRAN-01 and since the form could not be filed in time, the distribution could not take place as per Rule 39(1)(a) of the CGST Rules within one month. Hence, the Petitioner cannot be deprived of the benefit of the ITC due to mere technical glitches or transitional creases which were ironed out subsequently - The Department is directed to reflect the amount on the Electronic Credit Ledger (ECL) of the petitioner within three months. If the reflection of the credit on the ECL requires the cooperation of the GST Network (GSTN), the GSTN shall also give effect to the order within the same timeline. Once the amount is reflected on the ECL, the petitioner shall have one month to distribute the credit to its sub-offices - The writ petition is disposed of [Read less]

GST - Rejection of IGST refund application on the ground of excess availment of Input Tax Credit during the previous Financial Year - Whether the respondent can withhold the refund of IGST for the year 2024 on the ground of excess ITC availed in the FY 2019-20 without issuing a show cause notice under Sections 73 or 74 of the CGST Act, 2017 – HELD - The issuance of a show cause notice is a mandatory pre-condition for raising any demand under the GST regime. In the absence of a show cause notice, the Department cannot proceed against the assessee for recovery, especially in proceedings which were pending in respect of ret... [Read more]

GST - Rejection of IGST refund application on the ground of excess availment of Input Tax Credit during the previous Financial Year - Whether the respondent can withhold the refund of IGST for the year 2024 on the ground of excess ITC availed in the FY 2019-20 without issuing a show cause notice under Sections 73 or 74 of the CGST Act, 2017 – HELD - The issuance of a show cause notice is a mandatory pre-condition for raising any demand under the GST regime. In the absence of a show cause notice, the Department cannot proceed against the assessee for recovery, especially in proceedings which were pending in respect of returns. Further, the audit report for the period 2018-2024 did not mention any wrongfully claimed ITC for the financial year 2019-20 - The respondent department cannot withhold the refund of IGST for the year 2024 on the ground of excess ITC availed in the financial year 2019-20 without issuing a SCN under Sections 73 or 74 of the CGST Act - The impugned order is set aside and the respondent is directed to pay the total IGST refund to the petitioner along with the applicable statutory interest within a period of two months – The petition is disposed of [Read less]

Haryana Value Added Tax Act, 2003 - Delay and Laches, Issue of recovery notice - Challenging to various orders related to VAT assessment including reassessment order and recovery notice - Whether the writ petition entertainable despite the delay – HELD - The petitioner had failed to provide any reasonable explanation for the delay in filing the writ petition, even after the reassessment order was passed on 30.03.2022. Though there is no limitation for filing of writ petition but at the same time, it is a settled position that litigant should approach the Court within a reasonable period of time - The petitioner is unable... [Read more]

Haryana Value Added Tax Act, 2003 - Delay and Laches, Issue of recovery notice - Challenging to various orders related to VAT assessment including reassessment order and recovery notice - Whether the writ petition entertainable despite the delay – HELD - The petitioner had failed to provide any reasonable explanation for the delay in filing the writ petition, even after the reassessment order was passed on 30.03.2022. Though there is no limitation for filing of writ petition but at the same time, it is a settled position that litigant should approach the Court within a reasonable period of time - The petitioner is unable to point out any ground whatsoever for explaining the delay in filing the present petition. Even after passing of re-assessment order on 30.03.2022, no steps were admittedly taken by petitioner – There is no merit in the argument by the petitioner that as business was closed since 2014, an opportunity should be afforded at this stage as prayed for - The writ petition is dismissed on the ground of delay and laches [Read less]

GST – Electricity Regulatory Commission, Exemption to Regulatory Bodies, Quasi-Judicial Functions - Whether the regulatory and adjudicatory functions performed by the KERC, a quasi-judicial body, would fall within the scope of "supply of goods or services" under the CGST Act, 2017, thereby making the receipts/fees earned by the Commission liable to GST – HELD - The regulatory and adjudicatory functions performed by the KERC, which is a quasi-judicial body established under the Electricity Act, 2003, would not fall within the scope of "supply of goods or services" under the CGST Act - The Court relied on the judgment of... [Read more]

GST – Electricity Regulatory Commission, Exemption to Regulatory Bodies, Quasi-Judicial Functions - Whether the regulatory and adjudicatory functions performed by the KERC, a quasi-judicial body, would fall within the scope of "supply of goods or services" under the CGST Act, 2017, thereby making the receipts/fees earned by the Commission liable to GST – HELD - The regulatory and adjudicatory functions performed by the KERC, which is a quasi-judicial body established under the Electricity Act, 2003, would not fall within the scope of "supply of goods or services" under the CGST Act - The Court relied on the judgment of the Delhi High Court in a similar matter involving the Central Electricity Regulatory Commission (CERC) and the Delhi Electricity Regulatory Commission (DERC), which was upheld by the Supreme Court - The functions of the regulatory commissions are in the nature of a tribunal, which is expressly excluded from the ambit of "supply of goods or services" under Schedule III of the CGST Act. The fees/receipts earned by the Commission cannot be construed as "consideration" for any "supply of goods or services" in the course or furtherance of "business" as defined under the CGST Act. Accordingly, the impugned order and show cause notice demanding GST from the petitioner are invalid and unsustainable - The impugned order and show cause notice are quashed and the writ petition is allowed [Read less]

Central Excise – Cross-Utilization of CENVAT Credit for discharging its Service Tax liability – SCN issued alleging that the credit involved in the input services received for use in or in relation to the final products cannot be utilized by the appellant for discharging its Service Tax liability on account of the output service rendered by it, as there was no nexus or integral connection between the input services and the output service - Whether the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service – HELD - The Cenvat Credit ... [Read more]

Central Excise – Cross-Utilization of CENVAT Credit for discharging its Service Tax liability – SCN issued alleging that the credit involved in the input services received for use in or in relation to the final products cannot be utilized by the appellant for discharging its Service Tax liability on account of the output service rendered by it, as there was no nexus or integral connection between the input services and the output service - Whether the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service – HELD - The Cenvat Credit Rules provide that the manufacturer or producer of the final product or a provider of output service shall be allowed to take credit on various duties, including Service Tax. The cross-utilization of credit on goods and services is not covered by any restrictive provision, prohibition, or embargo under the Cenvat Credit Rules - the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service - the impugned order is set aside and the appeal is allowed [Read less]

Andhra Pradesh Value Added Tax Act, 2005 - Statutory Interpretation of "Actual Refund" – Petitioner seeking direction to the respondent authorities to pay interest on the belated refund amount - Whether the petitioner is entitled to interest on the refund amount for the delay beyond the statutory period of 90 days, as per Section 38 of the APVAT Act and Rule 35(8) of the APVAT Rules, 2005 - HELD - The plain language of Rule 35(8)(c) of the APVAT Rules, 2005 clearly provides for payment of interest if the refund amount is not actually refunded within 90 days from the date of the claim. The liability for payment of interes... [Read more]

Andhra Pradesh Value Added Tax Act, 2005 - Statutory Interpretation of "Actual Refund" – Petitioner seeking direction to the respondent authorities to pay interest on the belated refund amount - Whether the petitioner is entitled to interest on the refund amount for the delay beyond the statutory period of 90 days, as per Section 38 of the APVAT Act and Rule 35(8) of the APVAT Rules, 2005 - HELD - The plain language of Rule 35(8)(c) of the APVAT Rules, 2005 clearly provides for payment of interest if the refund amount is not actually refunded within 90 days from the date of the claim. The liability for payment of interest arises from the date after the expiry of 90 days till the date of actual refund, and not merely on the date of passing the order for refund - The principles of statutory interpretation laid down by the Supreme Court is that in interpreting a taxing statute, the plain and unambiguous language of the provision has to be preferred, and no words can be read into the statute which the legislature has deliberately not incorporated - The liability for interest arises from the date of actual refund, which was beyond the statutory period and the extension of limitation due to COVID-19 would not be applicable to the present case - The statute does not permit any reason as an excuse, for non-payment, within the statutory period. Such period is also not subject to extension on any ground. Once time has been prescribed by the statute for doing an act, it has to done within the period prescribed and if not so done, the consequences provided under the statute shall necessarily follow - the respondents are directed to pay the interest on the belated refund amount as per the statutory provisions – The writ petition is allowed [Read less]

Service Tax – Cenvat Credit, Invoice addressed to third party - Appellant is engaged in providing maintenance and repair services for program logic controlled operations at thermal power stations - Whether the denial of Cenvat Credit on the bill issued by the service provider which was addressed to the appellant's architect instead of the appellant, is justified – HELD - The denial of credit on the ground that the bill was addressed to the appellant's architect instead of the appellant, when it is not disputed that the final bill was on the appellant's account and the payment for the services was directly made by the a... [Read more]

Service Tax – Cenvat Credit, Invoice addressed to third party - Appellant is engaged in providing maintenance and repair services for program logic controlled operations at thermal power stations - Whether the denial of Cenvat Credit on the bill issued by the service provider which was addressed to the appellant's architect instead of the appellant, is justified – HELD - The denial of credit on the ground that the bill was addressed to the appellant's architect instead of the appellant, when it is not disputed that the final bill was on the appellant's account and the payment for the services was directly made by the appellant, is not proper. If the transaction is genuine and the identity of the supplier is established, the benefit of credit should not be denied merely due to a technical breach. The averments of the service provider and the appellant's architect also corroborated the appellant's claim. Considering the peculiar facts and circumstances, the denial of Cenvat Credit is set aside. However, the denial of Cenvat Credit on the workstations is upheld. The penalties imposed are set aside - The appeal is partly allowed - Denial of Cenvat Credit on the workstations on the ground that the workstations were classifiable as furniture and not capital goods – HELD - The denial of Cenvat Credit on the workstations is rightly made, as the workstations were classifiable under CETH 9403 and not within the definition of capital goods under the Cenvat Credit Rules, 2004. [Read less]