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Customs – Import of E-bikes in CKD condition – The goods were assessed at a higher customs duty rate of 50% instead of 15% under Notification No. 50/2017-Cus. dated 30.06.2017 as the consignment did not contain the battery pack and electric compressor - Whether the goods imported by the appellant being declared as E-Bike in CKD Condition, merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017 at the rate of 15% Customs duty - HELD – On the E-Bikes in CKD Condition the benefit of reduced Customs duty/BCD of 15% is available in case of disassembled battery pack and that of 25% is avai... [Read more]

Customs – Import of E-bikes in CKD condition – The goods were assessed at a higher customs duty rate of 50% instead of 15% under Notification No. 50/2017-Cus. dated 30.06.2017 as the consignment did not contain the battery pack and electric compressor - Whether the goods imported by the appellant being declared as E-Bike in CKD Condition, merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017 at the rate of 15% Customs duty - HELD – On the E-Bikes in CKD Condition the benefit of reduced Customs duty/BCD of 15% is available in case of disassembled battery pack and that of 25% is available to preassembled battery pack. For any other form of knocked down kit of e-bike the duty to be paid is at the rate of 50% - The benefit of Notification No. 50/2017-Cus. dated 30.06.2017 under S.No. 531A(1)(b) was rightly denied to the appellant as the impugned goods did not contain the battery pack, either disassembled or pre-assembled, as required under the notification – The exemption notifications must be strictly construed and the burden of proving entitlement to the exemption is on the assessee - matter remanded to the original adjudicating authority to examine the appellant's alternate plea of classifying the goods under CTH 87141090 as parts of e-bikes - The appeal is allowed by way of remand [Read less]

Customs – Import of gold under Advance Authorization, Diversion of duty-free gold, Provisional release of seized gold - Appellant imported gold under an Advance Authorization Scheme, which was subsequently seized by the DRI on the allegation that the gold was kept outside the declared premises with the intention of diversion. The appellant filed an application for provisional release of the seized gold, which was rejected by the Commissioner of Customs - Whether the seized gold could have been provisionally released to the appellant - HELD - the High Court had prima facie found merit in the appellant's contention that th... [Read more]

Customs – Import of gold under Advance Authorization, Diversion of duty-free gold, Provisional release of seized gold - Appellant imported gold under an Advance Authorization Scheme, which was subsequently seized by the DRI on the allegation that the gold was kept outside the declared premises with the intention of diversion. The appellant filed an application for provisional release of the seized gold, which was rejected by the Commissioner of Customs - Whether the seized gold could have been provisionally released to the appellant - HELD - the High Court had prima facie found merit in the appellant's contention that the 53 kgs of gold was found at the declared premises and could not have been seized. The appellant was prevented from fulfilling the export obligation under the Advance Authorization Scheme due to the seizure of the gold within a short period of its import. The appellant should be allowed to apply for extension/re-validation of the Advance Authorization Scheme, as per the directions of the Delhi High Court, and the seized gold should be provisionally released to the appellant - the order of the Commissioner is set aside and the appellant's application for provisional release of the seized gold is allowed - Whether the absence of a fully mechanized facility could be a ground to reject the provisional release of the seized gold - HELD - The finding of the Commissioner regarding the lack of a fully mechanized facility was not based on any evidence. The panchanama dated 13/14.08.2020 had mentioned the presence of two machines for manufacturing jewellery and the Commissioner had assumed, without any further inquiry, that these machines were not fully mechanized. It was imperative for the Commissioner to have obtained a report on the nature of the machines before recording a finding on the absence of a fully mechanized facility. [Read less]

Service Tax - Refund of accumulated cenvat credit in terms of Rule 5 of the Cenvat Credit Rules, 2004 – whether the cenvat credit availed by the appellant during April 2007 to May 2008 be recoverable under the Cenvat Credit Rules, 2004 on the ground that the output services provided by the appellant was not taxable prior to 16.05.2008 – HELD - the appellant is a 100% EOU registered under the STPI scheme and during the relevant period, pursuant to the agreement entered into with the overseas companies the appellants have exported software services and rendered services to the overseas companies. Since there was no clear... [Read more]

Service Tax - Refund of accumulated cenvat credit in terms of Rule 5 of the Cenvat Credit Rules, 2004 – whether the cenvat credit availed by the appellant during April 2007 to May 2008 be recoverable under the Cenvat Credit Rules, 2004 on the ground that the output services provided by the appellant was not taxable prior to 16.05.2008 – HELD - the appellant is a 100% EOU registered under the STPI scheme and during the relevant period, pursuant to the agreement entered into with the overseas companies the appellants have exported software services and rendered services to the overseas companies. Since there was no clearance to the domestic market and entire services were exported, the appellant had filed cash refund claims of accumulated cenvat credit - Initially the said refund claims were rejected on the ground that the output services provided by them became taxable only w.e.f. 16.05.2008; hence the cenvat credit availed itself is inadmissible – earlier the Tribunal remanded the matter to the adjudicating authority for de novo consideration. In the de novo proceeding, the adjudicating authority allowed the cash refund claims for the period April 2007 to May 2008. In such circumstances, the demand which arose consequent to the rejection of the refund cannot be sustained - the impugned order is set aside and the appeal is allowed [Read less]

Customs – Refund of CVD, Unjust Enrichment - Appellant imported mobile phones paying Countervailing duty (CVD) at 12.5% under protest - After re-assessment, the appellant was required to pay only 1% CVD. The appellant filed a refund claim of the excess amount paid, which was initially sanctioned. However, the department challenged the refund order before the Commissioner (Appeals), who held that the refund amount should be credited to the Consumer Welfare Fund as the appellant failed to prove that the burden of duty was not passed on to the customers - Whether the appellant had sufficiently proved that the burden of the ... [Read more]

Customs – Refund of CVD, Unjust Enrichment - Appellant imported mobile phones paying Countervailing duty (CVD) at 12.5% under protest - After re-assessment, the appellant was required to pay only 1% CVD. The appellant filed a refund claim of the excess amount paid, which was initially sanctioned. However, the department challenged the refund order before the Commissioner (Appeals), who held that the refund amount should be credited to the Consumer Welfare Fund as the appellant failed to prove that the burden of duty was not passed on to the customers - Whether the appellant had sufficiently proved that the burden of the excess CVD paid was not passed on to the customers, and therefore, the refund amount should be paid to the appellant instead of being credited to the Consumer Welfare Fund - HELD - The appellant had sufficiently proved that the burden of the excess CVD paid was not passed on to the customers - The Tribunal relied on the Financial Statements and the Certificates issued by the Chartered Accountant to conclude that the excess CVD paid was shown as a "Customs Duty Receivable" in the Books of Accounts, which indicated that the burden of duty was not passed on to the customers - there is no requirement in law that the Certificate should be issued only by statutory auditors, for so long as the Certificate is issued by a Chartered Accountant and it is consistent with the accounts such as the Financial Statement, the Certificate issued by a Chartered Accountant should be accepted - once the appellant had proved that the burden of duty was not passed on, the legal presumption under Section 28D of the Customs Act stood rebutted and the burden shifted to the Revenue to prove otherwise, which they failed to do. The Tribunal relied on several decisions that held that when the differential customs duty is shown as "receivables" in the Balance Sheet/Financial Statement, it would follow that the duty has not been passed on to the customers, and the legal presumption under Section 28 of the Customs Act stands rebutted - the impugned order of the Commissioner (Appeals) is set aside and the appellant is entitled to the refund of the excess CVD paid, along with interest – The appeal is allowed [Read less]

Central Excise - Importation, procurement, packing, labeling, and sale of parts and components of earthmoving equipment, Manufacture - Appellants are engaged in importation, procurement, packing, labeling, and sale of parts and components of earthmoving equipment - Appellants paid applicable customs duties on import but did not pay central excise duty on the packing, labeling and sale activities as they considered it not amounting to "manufacture" under the Central Excise Act - Department issued show cause notices demanding central excise duty, confiscation of goods and penalties, contending that the packing and labeling a... [Read more]

Central Excise - Importation, procurement, packing, labeling, and sale of parts and components of earthmoving equipment, Manufacture - Appellants are engaged in importation, procurement, packing, labeling, and sale of parts and components of earthmoving equipment - Appellants paid applicable customs duties on import but did not pay central excise duty on the packing, labeling and sale activities as they considered it not amounting to "manufacture" under the Central Excise Act - Department issued show cause notices demanding central excise duty, confiscation of goods and penalties, contending that the packing and labeling activities amounted to "manufacture" under the Act - Whether the packing, labeling and sale activities carried out by the appellants on the imported parts and components of earthmoving equipment amounted to "manufacture" under the Central Excise Act, thereby making them liable to pay central excise duty – HELD - The Larger Bench of the Tribunal held that the earthmoving equipment like hydraulic excavators, dozers, wheel loaders, etc. cannot be considered as "automobiles" for the purpose of levy of excise duty on their parts and components - The definition of "automobile" under other statutes like the Motor Vehicles Act, 1988 and the Air (Prevention and Control of Pollution) Act, 1981 cannot be imported to interpret the meaning of "automobile" under the Central Excise Act, as the term is not defined therein. The Tribunal relied on the dictionaries to understand the general sense in which the term "automobile" is understood, which is a conveyance for transportation of passengers and goods on road - The amendment made in the Third Schedule to the Central Excise Tariff Act by the Finance Act, 2011 w.e.f. 29.04.2010, adding serial no. 100A, is prospective in nature. Therefore, the packing, labeling and sale activities carried out by the appellants prior to 29.04.2010 cannot be considered as "manufacture" attracting central excise duty - the impugned order is set aside and the appeals are allowed [Read less]

Service Tax - Extended Period of Limitation, Best Judgment Assessment- Appellant is a Psychoanalyst, Psychotherapist and a Mental Healthcare professional providing related healthcare services – Demand of service tax based on the income disclosed in the income tax returns - Department applied the best judgment method under Section 72 of the Finance Act, 1994 to raise the demand, invoking the extended period of limitation - Whether the service tax demand can be raised solely based on the income tax returns, without identifying the specific taxable service and the service recipients - HELD - Merely based on the income tax r... [Read more]

Service Tax - Extended Period of Limitation, Best Judgment Assessment- Appellant is a Psychoanalyst, Psychotherapist and a Mental Healthcare professional providing related healthcare services – Demand of service tax based on the income disclosed in the income tax returns - Department applied the best judgment method under Section 72 of the Finance Act, 1994 to raise the demand, invoking the extended period of limitation - Whether the service tax demand can be raised solely based on the income tax returns, without identifying the specific taxable service and the service recipients - HELD - Merely based on the income tax returns, without any independent inquiry to ascertain the nature of services provided and the service recipients, the department cannot raise a service tax demand by invoking the best judgment assessment under Section 72 – The appellant was under the bonafide belief that he is not liable for service tax and therefore neither he applied for service tax registration nor filed the service tax returns. The appellant had shown the entire amount received in his income-tax return and the tax liability under direct tax was duly discharged by the appellant. These facts establish that there was no malafide intention on the part of the appellant to evade payment of service tax – The information derived from the income-tax returns solely cannot be made the basis to confirm the demand of service tax herein by invoking the extended period of limitation as the department has failed to bring on record any positive act or malafide intention on the part of the appellant to evade the service tax - the demand of service tax is set aside and the appeal is allowed [Read less]

Service Tax - Outdoor Catering Services, Hospital canteen, Air Conditioning Facility - Appellant provided outdoor catering services in the canteen of a hospital and claimed benefit of exemption under Serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012 – Denial of exemption on the ground that the hospital premises where the appellant was providing the catering services had an air conditioning facility - Whether the appellant is eligible for the service tax exemption under Serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012, considering the presence of air conditioning facility in the hospital premises ... [Read more]

Service Tax - Outdoor Catering Services, Hospital canteen, Air Conditioning Facility - Appellant provided outdoor catering services in the canteen of a hospital and claimed benefit of exemption under Serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012 – Denial of exemption on the ground that the hospital premises where the appellant was providing the catering services had an air conditioning facility - Whether the appellant is eligible for the service tax exemption under Serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012, considering the presence of air conditioning facility in the hospital premises where the appellant was providing the catering services – HELD - The serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012 exempts services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year – the appellant is running a canteen which is located in the Hospital and the said Hospital is having the facility of air-conditioning - the appellant was running a canteen which was an integral part of the hospital establishment and the hospital premises had the facility of air conditioning - exemption notifications should be interpreted strictly, and the burden of proving the eligibility for an exemption rests on the taxpayer claiming the exemption. The appellant did not provide any positive evidence to show that the specific area where the catering services were provided did not have an air conditioning facility - since the hospital premises were air conditioned, the appellant does not qualify for the service tax exemption under Serial No. 19 of Notification No. 25/2012-ST dated 20.06.2012 - the impugned order is upheld and the appeal is dismissed [Read less]

GST - Collection of Agriculture Produce Marketing Cess, GST regime – Challenge to levy and collection of cess under the Assam Agricultural Produce Market Act, 1972 – Validity of levy and collection of cess by the respondent authorities under the Assam Agricultural Produce Market Act, 1972, post GST regime – HELD - The cess which was collected by virtue of the Act of 1972 had been subsumed by the CGST Act, 2017 as well as AGST Act, 2017. Under such circumstances, the levy of cess by the respondent-Board of the Market Committees after the notification issued by the Central Government and the State Government, which bro... [Read more]

GST - Collection of Agriculture Produce Marketing Cess, GST regime – Challenge to levy and collection of cess under the Assam Agricultural Produce Market Act, 1972 – Validity of levy and collection of cess by the respondent authorities under the Assam Agricultural Produce Market Act, 1972, post GST regime – HELD - The cess which was collected by virtue of the Act of 1972 had been subsumed by the CGST Act, 2017 as well as AGST Act, 2017. Under such circumstances, the levy of cess by the respondent-Board of the Market Committees after the notification issued by the Central Government and the State Government, which brought the GST regime into effect, was unconstitutional and ultra vires the provisions of the CGST Act, 2017 and AGST Act, 2017 – The writ petition is disposed of with the observations that the collection of cess from the petitioner by the respondent authorities is unconstitutional and ultra vires the CGST Act, 2017 and AGCST, 2017, but no relief for refund of the amount already collected is granted – Ordered accordingly [Read less]

The supplier inadvertently raised invoices reflecting petitioner’s address and GSTN number in another State. Rejection of ITC merely based on minor error in invoice would cause substantial loss to petitioner, therefore, rejection of ITC is set aside.

Customs - Valuation, Royalty Payment, Time Barred - Commissioner (Appeals) dismissed the Departmental appeal as time-barred on the ground that the Review Order authorising the department to prefer the appeal was passed beyond the 90-day period prescribed under Section 129D(3) of the Customs Act, 1962 - Whether the dismissal of the departmental appeal as time-barred was correct in law - HELD - The proviso to Section 129D(3) of the Customs Act, 1962 mandates that the Board may, on sufficient cause being shown, extend the period for passing the Review Order by another 30 days. However, the Department failed to produce any evi... [Read more]

Customs - Valuation, Royalty Payment, Time Barred - Commissioner (Appeals) dismissed the Departmental appeal as time-barred on the ground that the Review Order authorising the department to prefer the appeal was passed beyond the 90-day period prescribed under Section 129D(3) of the Customs Act, 1962 - Whether the dismissal of the departmental appeal as time-barred was correct in law - HELD - The proviso to Section 129D(3) of the Customs Act, 1962 mandates that the Board may, on sufficient cause being shown, extend the period for passing the Review Order by another 30 days. However, the Department failed to produce any evidence that it had obtained such an extension from the Board or filed an application for condonation of delay before the Commissioner (Appeals) in the absence of the Board's sanction - Tribunal relied on the Supreme Court's decision in CCE, Delhi III v KAP Cones, which held that the requirement of obtaining the Board's order under the proviso is sacrosanct to obviate the necessity of filing an application for condonation of delay. Since the Department did not comply with the statutory requirements, the Tribunal found no justifiable reason to interfere with the Commissioner (Appeals)'s order dismissing the appeal as time-barred - The appeal filed by the Department is dismissed [Read less]

Customs - Valuation, Undervaluation, Sequencing under Customs Valuation Rules - Appellant imported 'Oath Tokens' and declared the unit price as USD 6.5. Later investigations revealed that identical goods from the same supplier were assessed at unit price of USD 50, which was accepted by the appellant and cleared on payment of appropriate duty - Commissioner redetermined the value under Rule 4 of the Customs Valuation Rules, confirming the demand and interest and also upheld imposition of equivalent penalty - Whether the Commissioner's order to redetermine the value based on the earlier acceptance of the value at USD 50 can... [Read more]

Customs - Valuation, Undervaluation, Sequencing under Customs Valuation Rules - Appellant imported 'Oath Tokens' and declared the unit price as USD 6.5. Later investigations revealed that identical goods from the same supplier were assessed at unit price of USD 50, which was accepted by the appellant and cleared on payment of appropriate duty - Commissioner redetermined the value under Rule 4 of the Customs Valuation Rules, confirming the demand and interest and also upheld imposition of equivalent penalty - Whether the Commissioner's order to redetermine the value based on the earlier acceptance of the value at USD 50 can be sustained - HELD - The appellant had cleared identical products earlier on payment of USD 50, the Commissioner's order to redetermine the value based on the earlier acceptance of the value at USD 50 cannot be found fault with. The Tribunal relied on the Supreme Court's decision in Century Metal Recycling Pvt. Ltd. vs. UOI, which held that the proper officer can reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value, and proceed to determine the value sequentially in accordance with Rules 4 to 9 of the Customs Valuation Rules – Further, the appellant had admitted that the differential duty and interest has been voluntarily paid and requested to drop all proceedings and that the goods were received free of charge under no charge invoice. However, the appellant's claim that the assessments were provisional and hence the question of investigation and imposition of penalty without finalizing the assessments does not arise - the impugned order is set aside and matter remanded back to the department for finalizing the assessments - Appeal is allowed by way of remand [Read less]

GST - Arrest, Bail, Notice of Appearance – Petitioner was arrested in connection with a case registered by the DGGI for offences punishable under Sections 132(1)(a), 132(1)(b), and 132(1)(i) read with 132(5) of the CGST Act, 2017 - Petitioner was alleged to have raised fake invoices to avail inadmissible input tax credit without actually supplying goods or rendering services - Petitioner challenged the arrest on the ground of non-compliance with the statutory requirement for the issuance of a notice of appearance under Section 35(3) of the Bharatiya Nyaya Sanhita, 2023 (BNSS) (corresponding to Section 41-A of the CrPC, 1... [Read more]

GST - Arrest, Bail, Notice of Appearance – Petitioner was arrested in connection with a case registered by the DGGI for offences punishable under Sections 132(1)(a), 132(1)(b), and 132(1)(i) read with 132(5) of the CGST Act, 2017 - Petitioner was alleged to have raised fake invoices to avail inadmissible input tax credit without actually supplying goods or rendering services - Petitioner challenged the arrest on the ground of non-compliance with the statutory requirement for the issuance of a notice of appearance under Section 35(3) of the Bharatiya Nyaya Sanhita, 2023 (BNSS) (corresponding to Section 41-A of the CrPC, 1973) – Maintainability of petition filed by the petitioner under Section 528 of BNSS (Section 482 of CrPC) and Articles 226 and 227 of the Constitution – Whether the issuance of a summons under Section 70 of the CGST Act, 2017 can be equated with the notice of appearance that must be mandatorily issued under Section 35(3) of BNSS (Section 41-A of CrPC) - HELD - the instant petition is maintainable under Section 528 of BNSS (Section 482 of CrPC) as well as under Articles 226 and 227 of the Constitution - the provisions of BNSS (CrPC) are applicable to criminal proceedings arising under the CGST Act, 2017, unless a specific provision to the contrary exists in the latter - Where the challenge involves the legality of an arrest and the continued remand of the accused, the High Court can exercise its inherent powers under Section 528 of BNSS as well as its writ jurisdiction under Articles 226 and 227 of the Constitution - the issuance of a summons under Section 70 of the CGST Act, 2017 cannot be equated with the notice of appearance under Section 35(3) of BNSS (Section 41-A of CrPC) - Summons under Section 70 can be issued to any person whose attendance is necessary for the conduct of an inquiry and all persons so appearing are bound to state the truth. However, the notice of appearance under Section 35(3) of BNSS (Section 41-A of CrPC) is issued at the stage of investigation when a formal accusation has been made against the person or there exists a reasonable suspicion of the commission of a cognizable offence, thereby warranting an arrest - the petitioner was an arrestee who had complied with the summons issued under Section 70 of the CGST Act and the challenge was to the subsequent arrest made without the issuance of a notice of appearance - the arrest of the petitioner for an offence punishable with imprisonment of up to seven years, without the issuance of a notice of appearance under Section 35(3) of BNSS (Section 41-A of CrPC), is vitiated - the petitioner is directed to be released on bail subject to certain conditions – The petition is partly allowed [Read less]

Customs – Classification of Wind Turbine Towers – DRI issued notice alleging that the appellant-importer misclassified the towers under Customs Tariff Heading (CTH) 8503 instead of the more appropriate CTH 7308. The original authority confirmed the reclassification and the consequent demand for differential customs duty - Whether the wind turbine towers should be classified under CTH 8503 as declared by the importer or under CTH 7308 as contended by the Revenue – HELD - The CTH 8503 covers parts suitable for use solely or principally with the machines of headings 8501 or 8502, which include wind-powered electric gene... [Read more]

Customs – Classification of Wind Turbine Towers – DRI issued notice alleging that the appellant-importer misclassified the towers under Customs Tariff Heading (CTH) 8503 instead of the more appropriate CTH 7308. The original authority confirmed the reclassification and the consequent demand for differential customs duty - Whether the wind turbine towers should be classified under CTH 8503 as declared by the importer or under CTH 7308 as contended by the Revenue – HELD - The CTH 8503 covers parts suitable for use solely or principally with the machines of headings 8501 or 8502, which include wind-powered electric generators. The description in the Bills of Entry clearly indicated that the towers were exclusively used as parts of Wind Operated Electric Generators (WOEG) - The Tribunal relied on a Supreme Court judgment and a Board Circular which recognized that towers are parts of wind power generators and should be classified accordingly - Considering the specific use of the towers, it is concluded that the classification declared by the importer under CTH 8503 was correct and the reclassification under CTH 7308 made by the Revenue is set aside – The appeal is allowed [Read less]

Service Tax - Works Contract, Valuation, Payment of VAT - Appellant is engaged in the business of manufacturing, supply, erection, commissioning, and maintenance of lifts and elevators - Dept issued a statement under Section 73(1A) of the Finance Act, 1994, demanding service tax based on the grounds that the appellant had been discharging VAT on 80% of the contract value and service tax on the remaining 20% of the value, which was not in accordance with the law - Whether the appellant was correctly discharging service tax on the value of the works contract by paying VAT on 80% of the contract value and service tax on the r... [Read more]

Service Tax - Works Contract, Valuation, Payment of VAT - Appellant is engaged in the business of manufacturing, supply, erection, commissioning, and maintenance of lifts and elevators - Dept issued a statement under Section 73(1A) of the Finance Act, 1994, demanding service tax based on the grounds that the appellant had been discharging VAT on 80% of the contract value and service tax on the remaining 20% of the value, which was not in accordance with the law - Whether the appellant was correctly discharging service tax on the value of the works contract by paying VAT on 80% of the contract value and service tax on the remaining 20% of the value – HELD - The appellant was correctly discharging service tax on the value of the works contract by paying VAT on 80% of the contract value and service tax on the remaining 20% of the value. The Tribunal relied on the amended Rule 2A of the Service Tax (Determination of Value) Rules, 2006, which provides that the value adopted for the purpose of payment of value-added tax is to be treated as the value of the property in goods transferred in the execution of the works contract - Tribunal also noted that in its earlier order where it had set aside the demand for the period from July 1, 2012, to March 31, 2014, on the grounds that the show cause notices were not properly issued and that the demand was made even when there were changes in the provisions of the law. The reasons for setting aside the demand for the earlier period were equally applicable to the present case - the demand is set aside and the appeal is allowed [Read less]

Customs – Refund of Special Additional Duty (SAD), Documentation, Unjust Enrichment - Adjudicating Authority sanctioned the refund claim after scrutinizing the documents submitted by the appellant, including a Chartered Accountant certificate evidencing payment of SAD and certifying that the issue of unjust enrichment was not there - Revenue filed an appeal before the Commissioner (Appeals) on the ground that the appellant had produced only 10 Bills of Entry and related documents before the Adjudicating Authority, and no original Bills of Entry, TR 6 Challans, and relevant documents were submitted for the remaining Bills... [Read more]

Customs – Refund of Special Additional Duty (SAD), Documentation, Unjust Enrichment - Adjudicating Authority sanctioned the refund claim after scrutinizing the documents submitted by the appellant, including a Chartered Accountant certificate evidencing payment of SAD and certifying that the issue of unjust enrichment was not there - Revenue filed an appeal before the Commissioner (Appeals) on the ground that the appellant had produced only 10 Bills of Entry and related documents before the Adjudicating Authority, and no original Bills of Entry, TR 6 Challans, and relevant documents were submitted for the remaining Bills of Entry - Whether the Ld. Commissioner (Appeals) was justified in setting aside the Order-in-Original sanctioning the refund claims - HELD - The claim of the Revenue that the appellant had produced only 10 Bills of Entry and related documents before the Adjudicating Authority was not supported by any evidence. Similarly, the claim that no original Bills of Entry, TR 6 Challans, and relevant documents were submitted by the appellant before the Sanctioning Authority was also not supported by any evidence - The Ld. Adjudicating Authority had gone through the documents submitted by the appellant, including the Chartered Accountant's certificate, and was satisfied that the appellant was eligible for the refund - There was no ground raised by the Revenue against the findings given by the Ld. Adjudicating Authority while sanctioning the refunds. The Adjudicating Authority had rightly sanctioned the refund claims and there was no merit in the rejection of the refund claims by Commissioner (Appeals) - the impugned order is set aside and the appeal is allowed [Read less]

GST - Mismatch in GSTR-1 and GSTR-3B, Non-speaking order, Opportunity of hearing - Petitioner submitted a reply explaining the mismatch between GSTR-1 and GSTR-3B filings, stating that there was a mistake in data entry which was corrected in GSTR-3B, and that there was no tax liability - The impugned order discarded the petitioner's reply in a single sentence stating it was "not convincing and non-explanatory" - Whether the impugned order is a valid speaking order and whether the petitioner was granted adequate opportunity of hearing - HELD - The impugned order is a non-speaking order as it simply discarded the petitioner'... [Read more]

GST - Mismatch in GSTR-1 and GSTR-3B, Non-speaking order, Opportunity of hearing - Petitioner submitted a reply explaining the mismatch between GSTR-1 and GSTR-3B filings, stating that there was a mistake in data entry which was corrected in GSTR-3B, and that there was no tax liability - The impugned order discarded the petitioner's reply in a single sentence stating it was "not convincing and non-explanatory" - Whether the impugned order is a valid speaking order and whether the petitioner was granted adequate opportunity of hearing - HELD - The impugned order is a non-speaking order as it simply discarded the petitioner's reply in a single sentence without any analysis or reasoning. Discarding a reply by a mere sentence that it is not convincing cannot amount to a speaking order - The officer ought to have issued a speaking order after verifying the petitioner's claim that the mistake was bonafide and the tax liability was cleared through available ITC. The failure to grant the petitioner an opportunity of hearing despite the petitioner's specific request also renders the order non-compliant with principles of natural justice - the impugned order is set aside and the respondent is directed to reconsider the matter after granting the petitioner an opportunity of hearing and examining the documents the petitioner may produce to justify its reply - The writ petition is allowed [Read less]

GST - Non-filing of Certified Copy, Rejection of appeal - Petitioner had filed an appeal against the demand order but the appeal was dismissed on the ground that the certified copy of the impugned order was not filed as per the requirements of Rule 108 of the CGST Rules, 2017 - Whether the condition to physically file the certified copy of the impugned order within 7 days is mandatory or merely procedural in nature – HELD - The Delhi High Court in the case of Chegg India Private Limited v. Union of India has held that the condition to physically file the certified copy of the impugned order is not mandatory but only proc... [Read more]

GST - Non-filing of Certified Copy, Rejection of appeal - Petitioner had filed an appeal against the demand order but the appeal was dismissed on the ground that the certified copy of the impugned order was not filed as per the requirements of Rule 108 of the CGST Rules, 2017 - Whether the condition to physically file the certified copy of the impugned order within 7 days is mandatory or merely procedural in nature – HELD - The Delhi High Court in the case of Chegg India Private Limited v. Union of India has held that the condition to physically file the certified copy of the impugned order is not mandatory but only procedural in nature - if the appeal is preferred along with all documents, including the copy of the impugned order, the filing of the certified copy is not required - in the present case, it is not disputed that the petitioner had filed the appeal along with the copy of the impugned order - the impugned order is quashed and matter is remanded matter back to the appellate authority for consideration of the appeal on merits – The petition is allowed [Read less]

Customs – Applicable rate of IGST on import of lithium-ion batteries, parts of cellular mobile phones – Appellant imported lithium-ion batteries and discharged IGST at 12% under S. No. 203 of Schedule II to Notification No. 01/2017 - IT (Rate) - Department found that as per S. No. 376AA of Schedule III to the same notification, inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018, the IGST rate on lithium-ion batteries was 18% - Demand of differential duty along with interest and penalty - Whether the lithium-ion batteries imported by the appellant are eligible for the 12% IGST rate under S. No. 203 of Schedu... [Read more]

Customs – Applicable rate of IGST on import of lithium-ion batteries, parts of cellular mobile phones – Appellant imported lithium-ion batteries and discharged IGST at 12% under S. No. 203 of Schedule II to Notification No. 01/2017 - IT (Rate) - Department found that as per S. No. 376AA of Schedule III to the same notification, inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018, the IGST rate on lithium-ion batteries was 18% - Demand of differential duty along with interest and penalty - Whether the lithium-ion batteries imported by the appellant are eligible for the 12% IGST rate under S. No. 203 of Schedule II to Notification No. 01/2017 - IT (Rate) as "parts for manufacture of Telephones for cellular networks or for other wireless networks" or are liable to 18% IGST under S. No. 376AA of Schedule III to the same notification – HELD - The lithium-ion batteries imported by the appellant are correctly liable to 18% IGST under S. No. 376AA of Schedule III to Notification No. 01/2017 - IT (Rate), as inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018 - as per the Customs Tariff, lithium-ion batteries are classifiable under Heading 8507 and there is a specific entry at S. No. 376AA covering "lithium-ion batteries". Applying the principles of interpretation, when a specific entry is available, the general entry cannot be resorted to - The appellant failed to establish before the original authority that the imported lithium-ion batteries were "parts" of cellular mobile phones and mere assertions cannot be accepted without supporting evidence - The duty rate notifications for Customs and for IGST purposes are not in pari materia and the description of goods in a customs notification will not help decide the matter either way – Further, the end-use of a product is not determinative of its classification and a residuary entry cannot be taken refuge of in the presence of a specific entry - The demand for IGST on “lithium-ion batteries” @ 18% as per S. No. 376AA of Schedule III to Notification No. 01/2017 – IT (Rate), is upheld. However, the demand for interest is set aside – The appeal is partly allowed - Whether interest is leviable on the differential IGST demand – HELD - Interest is not leviable on the differential IGST demand for the period prior to the substitution of Section 3(12) of the Customs Tariff Act, 1975 by the Finance (No. 2) Act, 2024, which specifically included "interest" among the borrowed provisions from the Customs Act, 1962. The Tribunal relied on the decisions of the Bombay High Court and the Supreme Court in the case of Mahindra & Mahindra Ltd. v. Union of India, wherein it was held that in the absence of a specific provision for levy of interest, the same cannot be charged. [Read less]

Service Tax - Refund, Service Tax, CENVAT Credit, Exempt Services, Premature Claim - Appellants paid an amount of Rs. 86.70 crores under protest as CENVAT credit reversal on alleged exempt services. They later filed a refund claim which was rejected as premature by the original authority on the ground that the issue of taxability of the disputed services was pending adjudication. The first appellate authority upheld the rejection - Whether the refund claim filed by the appellants is premature and liable to be rejected - HELD - The appellants had placed on record the fact that the demand for CENVAT credit reversal was subse... [Read more]

Service Tax - Refund, Service Tax, CENVAT Credit, Exempt Services, Premature Claim - Appellants paid an amount of Rs. 86.70 crores under protest as CENVAT credit reversal on alleged exempt services. They later filed a refund claim which was rejected as premature by the original authority on the ground that the issue of taxability of the disputed services was pending adjudication. The first appellate authority upheld the rejection - Whether the refund claim filed by the appellants is premature and liable to be rejected - HELD - The appellants had placed on record the fact that the demand for CENVAT credit reversal was subsequently dropped entirely by the Commissioner, Service Tax-IV Commissionerate. Once the demand has been dropped, the amount paid under protest becomes refundable as there is no confirmed demand - the rejection of the refund claim as premature was neither appropriate nor had the sanction of law. The eligibility for refund should have been decided by the authorities taking into consideration the final outcome on the taxability of the disputed services - The Tribunal set aside the impugned order and remanded the matter back to the original authority to decide the refund claim afresh on merits, providing a reasonable opportunity of personal hearing to the appellants - the principles of unjust enrichment would not apply to amounts deposited under protest during the pendency of adjudication proceedings - The appeal is allowed by way of remand to the original authority for a fresh decision on the merits of the refund claim in accordance with law - the impugned order is set aside and the appeal is allowed by way of remand [Read less]

Central Excise - Packing, repacking and relabelling of spare parts of earthmoving equipment - Respondent is engaged in the manufacture of construction machines – Appellant undertakes the activity of packing, repacking and relabelling of spare parts of earthmoving equipment. Department had initiated show cause proceedings for demand of central excise duty for the period from June 2006 to May 2010, contending that the activity of packing, labelling etc. amounts to 'manufacture' under the Central Excise Act, 1944 - Whether the activity of packing, labelling, repacking and relabelling of spare parts of earthmoving equipment ... [Read more]

Central Excise - Packing, repacking and relabelling of spare parts of earthmoving equipment - Respondent is engaged in the manufacture of construction machines – Appellant undertakes the activity of packing, repacking and relabelling of spare parts of earthmoving equipment. Department had initiated show cause proceedings for demand of central excise duty for the period from June 2006 to May 2010, contending that the activity of packing, labelling etc. amounts to 'manufacture' under the Central Excise Act, 1944 - Whether the activity of packing, labelling, repacking and relabelling of spare parts of earthmoving equipment by the respondent amounts to 'manufacture' under the CEA, 1944 thereby making the respondent liable to pay excise duty – HELD - The Larger Bench of the Tribunal held that the earth moving machines involved in the present case are not "automobiles" and it would not be appropriate to borrow the meaning of the word "automobile" or motor vehicle under the Motor Vehicles Act, 1988 or the Air (Prevention and Control of Pollution) Act, 1981 merely because the word "automobile" has not been defined in the Central Excise Act, Central Excise Tariff Act or the Notifications issued by the Central Government - The Larger Bench referred to the dictionaries to find out the general sense in which the word "automobile" is understood in common parlance, and concluded that automobiles are conveyances for transportation of passengers and goods on road. Since the earth moving equipment in the present case do not fall under the category of "automobiles", the activity of packing, labelling, repacking and relabelling of their spare parts by the respondent cannot be considered as 'manufacture' under the Central Excise Act. Accordingly, the Larger Bench held that the adjudged demands for the period prior to 29.04.2010 are not sustainable - the issue is no longer res integra. In view of the decision given by the Larger Bench - the appeal filed by Department is dismissed [Read less]

Central Excise - Manufacture, Classification, Cross-examination - Appellants are engaged in the activity of drawing and re-drawing of copper strips/patta/patti and re-drawing of copper rods into copper wires - Department considered this activity as amounting to manufacture and issued show-cause notices demanding excise duty along with interest and penalties - Whether the process of drawing and re-drawing of copper flats into copper patta/patti amounts to 'manufacture' under the Central Excise Act, 1944 – HELD - The process of drawing or re-drawing of copper flats into copper patta/patti does not amount to 'manufacture' u... [Read more]

Central Excise - Manufacture, Classification, Cross-examination - Appellants are engaged in the activity of drawing and re-drawing of copper strips/patta/patti and re-drawing of copper rods into copper wires - Department considered this activity as amounting to manufacture and issued show-cause notices demanding excise duty along with interest and penalties - Whether the process of drawing and re-drawing of copper flats into copper patta/patti amounts to 'manufacture' under the Central Excise Act, 1944 – HELD - The process of drawing or re-drawing of copper flats into copper patta/patti does not amount to 'manufacture' under the Central Excise Act, 1944 - the relevant provisions of the Central Excise Tariff Act, 1985 and the Chapter Notes, and found that the process of drawing or re-drawing is not mentioned as a process amounting to manufacture for the products under heading 7409, which covers copper plates, sheets and strips - the mere reduction in thickness or weight of the product does not automatically lead to the conclusion that a new product has been manufactured - the reliance placed by the Adjudicating Authority on the judgment in Laminated Packings (P) Ltd. case was misplaced as the facts were entirely different. Therefore, the process undertaken by the appellants does not amount to 'manufacture' for the purpose of levy of central excise duty - the impugned order is set aside and the appeal is allowed - Whether the statements of the witnesses recorded by the Department can be relied upon as evidence without providing an opportunity for cross-examination to the appellants – HELD - the statements of the witnesses cannot be relied upon as evidence without providing the appellants an opportunity for cross-examination, as per the provisions of Section 9D of the Central Excise Act, 1944. The Tribunal relied on the judgments of the Delhi High Court and the Punjab & Haryana High Court, which have held that the procedure prescribed in the statute has to be followed for proving the truth of the statements. The Adjudicating Authority had not conducted the cross-examination of the witnesses, and therefore, their statements cannot be considered as admissible evidence. [Read less]

Central Excise - Valuation of goods cleared to Inter-connected Undertaking, Related Persons - Department found that for the purpose of income tax, the appellants had shown M/s Shree Vaishnav Ispat Private Limited as their associated company. However, the appellants failed to pay central excise duty at the rate of 110% on the clearance of 'Misrolls' to their associated company – Appellant contention that valuation of goods cleared to Inter-connected Undertaking would be covered under Rule 10 of Central Excise Valuation Rules of 2000 - Whether the clearance of excisable goods by the appellants to an 'inter-connected undert... [Read more]

Central Excise - Valuation of goods cleared to Inter-connected Undertaking, Related Persons - Department found that for the purpose of income tax, the appellants had shown M/s Shree Vaishnav Ispat Private Limited as their associated company. However, the appellants failed to pay central excise duty at the rate of 110% on the clearance of 'Misrolls' to their associated company – Appellant contention that valuation of goods cleared to Inter-connected Undertaking would be covered under Rule 10 of Central Excise Valuation Rules of 2000 - Whether the clearance of excisable goods by the appellants to an 'inter-connected undertaking' is to be done under Rule 8 & 9 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000 or under Rule 10 of the Valuation Rules – HELD - There is no provision under which name of a legal person under the Income Tax Act, would enable such persons to be treated as ‘related person’ under the Central Excise law - In the absence of specific determination of the relationship between the appellants and the interconnected undertaking, being related to each other in terms of Section 4(3) of the Central Excise Act, 1944, there is no merit in the impugned order insofar as it has treated the transaction between these two, as related party transaction - Mere mention of the name of M/s Shree Vaishnav Ispat Pvt Ltd as an associated company in the income tax return does not make them 'related persons' under the Central Excise Act - in the absence of evidence to establish the relationship between the appellants and their inter-connected undertaking as prescribed under Section 4(3)(b) of the CEA, 1944 the transaction value cannot be rejected and the valuation should be done as per Rule 10 of the Central Excise Valuation Rules, 2000 - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Supply of DG set, Supply of Tangible Goods, Works Contract Service – Demand of service tax under the head "supply of tangible goods service" and "works contract service" based on the appellant's supply of DG sets to customers - Whether the supply of DG sets by the appellant to its customers amounted to "Supply of Tangible goods service" chargeable to service tax under section 65(105)(zzzzj) of the Finance Act, 1994 – HELD - There are two types of lease contracts-where the effective possession and control is given to the transferee and VAT/ sales tax is payable and where there is no effective possession an... [Read more]

Service Tax - Supply of DG set, Supply of Tangible Goods, Works Contract Service – Demand of service tax under the head "supply of tangible goods service" and "works contract service" based on the appellant's supply of DG sets to customers - Whether the supply of DG sets by the appellant to its customers amounted to "Supply of Tangible goods service" chargeable to service tax under section 65(105)(zzzzj) of the Finance Act, 1994 – HELD - There are two types of lease contracts-where the effective possession and control is given to the transferee and VAT/ sales tax is payable and where there is no effective possession and control to the transferee and service tax is chargeable - the supply of DG sets by the appellant to its customers, where the effective possession and control of the DG sets was transferred to the customers, would amount to deemed sales under Article 366(29A) of the Constitution and would therefore be chargeable to VAT/sales tax and not to service tax under "Supply of Tangible Goods Service" - Tribunal relied on Supreme Court's judgment in BSNL case, which laid down five criteria to determine whether effective possession and control of goods has been transferred. All five criteria were satisfied in the present case and therefore the demand of service tax under ‘supply of tangible goods’ service could not be sustained - the demands of service tax under both the heads of "supply of tangible goods service" and "works contract service" are set aside - The impugned order is set aside and the appeal is allowed - Whether the sale of DG sets by the appellant to its customers, along with installation and commissioning services, amounted to "works contract service" chargeable to service tax - HELD - The predominant nature of the contract was the sale of DG sets, and the installation and commissioning services provided by the appellant were incidental to the sale. Merely because the appellant provided these incidental services, it did not automatically mean that the contract was a "works contract service" chargeable to service tax. It is common for sellers of large equipment to also provide installation and commissioning services to ensure the equipment is in working order and this would not convert the sale into a works contract. Therefore, the demand of service tax under the head "works contract service" was also not sustainable. [Read less]

Service Tax - Supply of goods, VAT Assessment Order, Form 26AS Statement, Taxable Value - Based on information obtained from the Income Tax Department, the Department issued a demand-cum-show cause notice to the appellant for service tax - The appellant submitted that it was engaged in providing security guard services as well as supply of edible materials like wheat and flour, and had filed VAT returns and obtained a VAT assessment order for the supply of goods - Whether the service tax demand on the appellant is sustainable, given the VAT assessment order for supply of goods – HELD - The service tax demand cannot be su... [Read more]

Service Tax - Supply of goods, VAT Assessment Order, Form 26AS Statement, Taxable Value - Based on information obtained from the Income Tax Department, the Department issued a demand-cum-show cause notice to the appellant for service tax - The appellant submitted that it was engaged in providing security guard services as well as supply of edible materials like wheat and flour, and had filed VAT returns and obtained a VAT assessment order for the supply of goods - Whether the service tax demand on the appellant is sustainable, given the VAT assessment order for supply of goods – HELD - The service tax demand cannot be sustained solely on the basis of the Form 26AS statement obtained from the Income Tax Department, without any enquiry into the nature of the transactions. The Tribunal observed that transactions held to be sale of goods under the VAT assessment order of the state authorities should be treated as sales and not subjected to service tax - The revenue authorities have the onus to establish that the appellant has rendered taxable services, which they have failed to do in this case. The revenue authorities did not make any enquiries with regard to the supplies made by the appellant and the subsequent assessment by the VAT department - sale of goods under assessment order of the State Authorities will be treated as sales. The Service Tax demanded only on the basis of Form 26AS statement of the Income Tax Department is not sustainable - the impugned order is set aside and the appeal is allowed [Read less]

Customs - Section 28(1), Section 28(4) of the Customs Act, 1962 – Issue of Show Cause Notice by Change of Opinion, Suppression of Facts - Petitioner challenged two Show Cause Notices (SCNs) issued by the Respondents. The first SCN was issued under Section 28(1) of the Customs Act, 1962 on 25 July 2023 and the second SCN was issued under Section 28(4) of the Act on 01 September 2023. Both SCNs alleged that the petitioner had misclassified the imported goods as parts of mobile phones instead of complete mobile sets in CKD condition, and thereby evaded payment of applicable customs duty - Whether the issuance of the second ... [Read more]

Customs - Section 28(1), Section 28(4) of the Customs Act, 1962 – Issue of Show Cause Notice by Change of Opinion, Suppression of Facts - Petitioner challenged two Show Cause Notices (SCNs) issued by the Respondents. The first SCN was issued under Section 28(1) of the Customs Act, 1962 on 25 July 2023 and the second SCN was issued under Section 28(4) of the Act on 01 September 2023. Both SCNs alleged that the petitioner had misclassified the imported goods as parts of mobile phones instead of complete mobile sets in CKD condition, and thereby evaded payment of applicable customs duty - Whether the issuance of the second SCN under Section 28(4) is valid and maintainable when a prior SCN under Section 28(1) was already issued on a similar factual matrix – HELD - The Sections 28(1) and 28(4) of the Customs Act operate in different scenarios and cannot be used interchangeably. Section 28(1) is applicable where the elements of Section 28(4), namely collusion, wilful misstatement or suppression of facts, are absent. Since a prior SCN under Section 28(1) had already been issued, the issuance of the subsequent SCN under Section 28(4) on a similar factual matrix is not maintainable - Further, the two SCNs were almost identical in every respect, except for the different provisions under which they were issued. The Court relied on the principles laid down by the Supreme Court in cases like State of U.P. v. Aryaverth Chawal Udyog and Commr. of Customs v. G.C. Jain, and held that the issuance of the second SCN within a short span of 6 weeks, based on the same facts and reports, amounted to a "change of opinion" by the authorities, which rendered the impugned SCN unsustainable - The impugned SCN under Section 28(4) is set aside and the writ petition is allowed - Whether the impugned SCN under Section 28(4) fulfills the requirements of the provision - HELD - The Respondents had not been able to establish the requirements of Section 28(4), namely collusion, wilful misstatement or suppression of facts, to justify the issuance of the SCN under that provision. A genuine dispute over the classification of goods cannot be elevated to "suppression of facts", and in the absence of any evidence of collusion or wilful misstatement, the impugned SCN under Section 28(4) did not fulfill the requirements of the provision. [Read less]

Customs - Mis-declaration of quantity, Confiscation, Valuation - Appellant imported consignments of different consumer goods and upon 100% examination, the goods were found to be in excess quantity than the quantity declared in the Bills of Entry - Department re-determined the assessable value of the goods and demanded differential duty - Whether the goods found in excess quantity and the undeclared goods are liable for confiscation – HELD - in respect of some goods declared in the Bills of Entry, the quantities were found to be in excess than the declared quantity. Some of the items were found to be not declared - The c... [Read more]

Customs - Mis-declaration of quantity, Confiscation, Valuation - Appellant imported consignments of different consumer goods and upon 100% examination, the goods were found to be in excess quantity than the quantity declared in the Bills of Entry - Department re-determined the assessable value of the goods and demanded differential duty - Whether the goods found in excess quantity and the undeclared goods are liable for confiscation – HELD - in respect of some goods declared in the Bills of Entry, the quantities were found to be in excess than the declared quantity. Some of the items were found to be not declared - The confiscation of the impugned goods have been done on account of mis-declaration of quantity as well as mis-declaration of value - the explanation given by the appellant that the supplier has loaded excess goods by mistake is not acceptable. The appellant has failed to produce any evidence to show that the goods loaded in excess were due to mistake of the supplier - the mis-declaration of the goods in respect of the Bills of Entry filed by the appellant is established. Accordingly, the confiscation of the goods found to be in excess than the declared quantities in the bills of Entry and the non-declared goods is upheld. However, the confiscation of the goods declared in the bills of entry is set aside - Matter remanded to the adjudicating authority for recalculating the duty payable in respect of the excess quantity of goods found on the declared goods and the non-declared goods and the quantum of redemption fine imposable in consonance with the same – The appeal is partly allowed - Whether the differential duty demanded on account of enhancement of value is sustainable - HELD - The Department did not provide any documentary evidence such as copies of invoices, Bills of Entry and relevant invoices to substantiate the higher value of contemporaneous imports of similar goods cited by the Revenue. The transaction value cannot be rejected on the basis of assumptions and presumptions and there should be cogent evidence for contemporaneous imports to substantiate the rejection of transaction value. In the absence of any allegation of extra payment made by the appellant over and above the transaction value declared in the invoices, the transaction value declared by the appellant is acceptable and the value declared in the invoices is to be adopted for the purpose of determination of Customs Duty payable by the importer - Whether penalties under Sections 114A and 114AA of the Customs Act are imposable on the appellant-company and its Director - HELD - The penalty equal to the differential customs duty which is confirmed on account of mis-declaration in quantity/non-declaration is liable to be imposed on the appellant-company under Section 114A of the Customs Act. However, the show cause notice neither discussed any role of the Director nor there were any allegations against him which would render him liable to any penalty. Accordingly, the penalties under Sections 114A and 114AA are not imposable on the Director of the appellant-company. [Read less]

Service Tax - Recipient Liability, Payment of service tax by Service Provider – Appellant was required to pay 75% of the applicable service tax payable on the “Security Services” as per Notification No. 45/2012-ST. However, the service provider inadvertently charged and collected the full 100% service tax - Department of the view that the appellant was liable to pay the 75% service tax despite the service provider having paid the full 100% - Whether the Appellant is liable to pay the 75% service tax when the service provider has already paid the full 100% service tax – HELD - Once the tax has been paid and appropri... [Read more]

Service Tax - Recipient Liability, Payment of service tax by Service Provider – Appellant was required to pay 75% of the applicable service tax payable on the “Security Services” as per Notification No. 45/2012-ST. However, the service provider inadvertently charged and collected the full 100% service tax - Department of the view that the appellant was liable to pay the 75% service tax despite the service provider having paid the full 100% - Whether the Appellant is liable to pay the 75% service tax when the service provider has already paid the full 100% service tax – HELD - Once the tax has been paid and appropriated by the department, it cannot be demanded from the other party. The Department, having retained the service tax paid by the service provider, cannot demand the same amount from the appellant as the recipient. Even if there were procedural violations, the appropriate penalty sections should have been invoked and not the sections relating to intent to evade tax – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Non-payment of Service Tax, Extended period of limitation, Waiver of penalties, – Appellant was providing taxable services of Maintenance & Repair Service and Manpower Recruitment Agency Service but did not discharge the service tax - Whether the extended period of limitation was rightly invoked by the authorities to demand service tax - HELD - The appellant did not contest the invocation of the extended period of limitation before the original or appellate authorities. The appellant admitted the short payment of service tax and was willing to pay the same along with interest. Since the appellant did not ... [Read more]

Service Tax – Non-payment of Service Tax, Extended period of limitation, Waiver of penalties, – Appellant was providing taxable services of Maintenance & Repair Service and Manpower Recruitment Agency Service but did not discharge the service tax - Whether the extended period of limitation was rightly invoked by the authorities to demand service tax - HELD - The appellant did not contest the invocation of the extended period of limitation before the original or appellate authorities. The appellant admitted the short payment of service tax and was willing to pay the same along with interest. Since the appellant did not dispute the demand, the authorities were right in invoking the extended period of limitation to raise the demand - The appellant, being a petty contractor, pleaded lack of knowledge and understanding of the complex service tax provisions. The appellant also submitted that it was willing to pay the short paid service tax along with interest. Considering the status of the appellant and its compliance intent, this is a fit case for waiver of penalties under Section 80 of the Finance Act, 1994 - the penalties imposed on the appellant under Sections 77 and 78 of the Finance Act, 1994 are set aside - The appeal is partly allowed [Read less]

Central Excise - Clandestine Removal, Extended Period of Limitation, Principles of Natural Justice, Burden of Proof - Appellant was manufacturing a mix of excisable and non-excisable final products. During an audit, it was observed that the quantitative details of liquid medicament in the tax audit report (Form 3CD) were in "KL" whereas in the monthly excise returns (ER-1) the reporting was in "Boxes/Units" - Notice issued to the appellant alleging clandestine manufacture and clearance of liquid medicaments based on the difference in quantities reported in Form 3CD and ER-1 returns - Whether the charge of clandestine remov... [Read more]

Central Excise - Clandestine Removal, Extended Period of Limitation, Principles of Natural Justice, Burden of Proof - Appellant was manufacturing a mix of excisable and non-excisable final products. During an audit, it was observed that the quantitative details of liquid medicament in the tax audit report (Form 3CD) were in "KL" whereas in the monthly excise returns (ER-1) the reporting was in "Boxes/Units" - Notice issued to the appellant alleging clandestine manufacture and clearance of liquid medicaments based on the difference in quantities reported in Form 3CD and ER-1 returns - Whether the charge of clandestine removal of goods can be sustained merely on the basis of difference in figures between Form 3CD and ER-1 returns without any corroborative evidence – HELD - the charge of clandestine removal is a serious allegation and cannot be based solely on inferences or assumptions. The initial burden of proof lies with the department to provide tangible evidence such as dispatch details, receipt details, transaction of sale money, transportation details, etc. to substantiate the allegation. In the present case, the Department has not conducted any independent investigation or provided any third-party evidence to prove the clandestine removal. The mere difference in figures between Form 3CD and ER-1 returns is not sufficient to establish the allegation of clandestine removal. Therefore, the charge of clandestine removal is not sustainable – The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation can be invoked in the present case – HELD - the extended period of limitation can only be invoked if the twin conditions of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any provision of the Excise Act or the rules made thereunder and intent to evade payment of duty are satisfied. In the present case, the entire case of the department is based solely on the discrepancy of figures in the two statutory returns, which are public documents. The department has failed to record any third-party statements or conduct any investigation to support the allegations of clandestine removal. Since there was no suppression of facts by the appellant, the extended period of limitation cannot be invoked - Violation of principles of natural justice – HELD - the personal hearing in the case was granted by one Commissioner in 2015, but the order was passed by another Commissioner in 2017 without providing the appellant an opportunity to present its case. This is held to be a violation of the fundamental principle of natural justice, i.e., the right to be heard. The haste to dispose of the matter resulted in the appellant not being provided adequate time to explain its case in person. Therefore, the impugned order is not sustainable on the ground of violation of principles of natural justice. [Read less]

Service Tax - Business Auxiliary Service - Appellant was engaged in the business of manufacturing, procurement and commissioning of ash handling equipment including EPC Projects for thermal power plants and also in providing operation and maintenance of ash handling projects - Appellant incurred expenses in foreign currency for "Technical Know-how", "Consultancy" and "Selling Commission". While the appellant discharged service tax under Reverse Charge Mechanism for the first two expenses, no service tax was paid on the "Selling Commission" paid for procurement of orders - Department alleged that the "Selling Commission" pa... [Read more]

Service Tax - Business Auxiliary Service - Appellant was engaged in the business of manufacturing, procurement and commissioning of ash handling equipment including EPC Projects for thermal power plants and also in providing operation and maintenance of ash handling projects - Appellant incurred expenses in foreign currency for "Technical Know-how", "Consultancy" and "Selling Commission". While the appellant discharged service tax under Reverse Charge Mechanism for the first two expenses, no service tax was paid on the "Selling Commission" paid for procurement of orders - Department alleged that the "Selling Commission" paid to the overseas entity was taxable under BAS under Section 65(105)(zzb) of the Finance Act, 1994 - Whether the appellant is liable to pay service tax on selling commission on RCM basis - HELD - The agreement between the appellant and M/s. Parah clearly evidences that the service provider was engaged to provide services of marketing and sale of appellant’s products in UAE. The payment made in convertible foreign exchange was under the head “selling commission” - the services provided by a commission agent are included in the category of taxable service termed as BAS, where 'service' is provided by a service provider who is based outside India to a service recipient who is based in India. Section 66A, inserted by the Finance Act, 2006 read with the Service Tax Rules, 1994 mandate that service tax liability is to be discharged by the service recipient - The services provided by M/s Parah International to the appellant in relation to the marketing or sale of the goods produced by the appellant are covered by the definition of 'Business Auxiliary Service' under Section 65(19) of the Finance Act, 1994. Therefore, the appellant as the recipient of the taxable service from the offshore service provider is liable to pay the service tax under Rule 2(1)(d)(iv) of the Service Tax Rules - However, the demand for the extended period is held to have been wrongly invoked in view of revenue neutrality. Penalties imposed under Section 77(2) and 78 is set-aside – The appeal is partly allowed [Read less]

Tamil Nadu VAT Act, 2006 - Exemption to notebooks, definition of "exercise books" – Petitioner, engaged in the business of marketing and selling student notebooks and stationery products, aggrieved by denial the exemption claimed on the sale of student notebooks - Whether the student notebooks manufactured and sold by the petitioner is eligible for the exemption granted under the term 'Graph and Exercise note books' – HELD - the student notebooks manufactured and sold by the petitioner, being regular ruled or unruled notebooks used for student exercises, would satisfy the definition of "exercise books" and are entitled... [Read more]

Tamil Nadu VAT Act, 2006 - Exemption to notebooks, definition of "exercise books" – Petitioner, engaged in the business of marketing and selling student notebooks and stationery products, aggrieved by denial the exemption claimed on the sale of student notebooks - Whether the student notebooks manufactured and sold by the petitioner is eligible for the exemption granted under the term 'Graph and Exercise note books' – HELD - the student notebooks manufactured and sold by the petitioner, being regular ruled or unruled notebooks used for student exercises, would satisfy the definition of "exercise books" and are entitled to the exemption granted under the G.O. dated 23.03.2007 - the GO clearly uses the term 'exercise notebooks' and there can be no two views on the position that the notebooks manufactured by petitioners, used by students for the purposes of academic exercises, would satisfy that definition - in a taxing statute, the language used should be interpreted strictly without any room for intendment. An "exercise book" falls within the ambit of the term "paper" as it is a collection of sheets of paper intended to be used for writing – petitioner had categorically stated that it manufactures only standard ruled and unruled exercise books and no material had been provided to the contrary - the impugned assessment order is set aside and the writ petitions are allowed [Read less]

Service Tax - Short Payment of service tax, Advances written off, Renting of Immovable Property - Show-cause notice demanding service tax alleging short payment of service tax - Whether the Department has correctly calculated the service tax liability of the appellant under the category of 'technical inspection and certification service' – HELD - The Department has only considered the short payment made by the appellant and ignored the excess payment during certain years – Further, the appellant has written off the advances received for the period prior to 31.03.2003 and produced a Chartered Accountant certificate to t... [Read more]

Service Tax - Short Payment of service tax, Advances written off, Renting of Immovable Property - Show-cause notice demanding service tax alleging short payment of service tax - Whether the Department has correctly calculated the service tax liability of the appellant under the category of 'technical inspection and certification service' – HELD - The Department has only considered the short payment made by the appellant and ignored the excess payment during certain years – Further, the appellant has written off the advances received for the period prior to 31.03.2003 and produced a Chartered Accountant certificate to this extent. The written off amount has been considered as income for the year and tax on the same has been demanded – Matter is remanded to the adjudicating authority to re-compute the service tax liability after verifying the availability of CENVAT credit and considering the written off amount on which no service tax is payable - The matter related to 'technical inspection and certification service' and 'renting of immovable property service' is remanded to the adjudicating authority for re-computation of the service tax liability - the demands related to services exported by the Japan branch and electricity charges collected from tenants are set aside - The demand related to maintenance charges collected from tenants is upheld - The appeal is partly allowed by remand - Whether the demand of service tax on services exported by the appellant's Japan branch to an Indian client is sustainable – HELD - The services were actually rendered by the Japan branch to the Indian client and not by the Kolkata branch of the appellant. Therefore, the demand of service tax on this count from the appellant is not sustainable - Whether the demand of service tax on electricity charges collected from tenants as a 'pure agent' is sustainable – HELD - the electricity charges collected by the appellant from the tenants were deposited to the electricity authorities and hence, these charges are in the nature of reimbursement. Accordingly, there is no liability to pay service tax on such electricity charges and set aside the demand. [Read less]

Service Tax - Renting of Immovable Property, Reimbursements, Pure Agent - Appellant, as owner of ITC Centre, Kolkata, and ITC Infotech Park, Bangalore, permitted certain entities to use portions of its premises under leave and licence agreements - The licensees were required to pay the monthly licence fee, electricity charges, and maintenance charges to ITC Limited – Dept alleged that appellant had recovered service tax from the licensees but not deposited the same with the government exchequer - Whether the demand of service tax can be confirmed on a ground different from the one stated in the show cause notice – HELD... [Read more]

Service Tax - Renting of Immovable Property, Reimbursements, Pure Agent - Appellant, as owner of ITC Centre, Kolkata, and ITC Infotech Park, Bangalore, permitted certain entities to use portions of its premises under leave and licence agreements - The licensees were required to pay the monthly licence fee, electricity charges, and maintenance charges to ITC Limited – Dept alleged that appellant had recovered service tax from the licensees but not deposited the same with the government exchequer - Whether the demand of service tax can be confirmed on a ground different from the one stated in the show cause notice – HELD - The show cause notice was issued on the allegation that appellant had recovered service tax from the licensees but not deposited the same with the government exchequer. However, the Ld. Commissioner in the impugned order had found that appellant had not collected any service tax from the licensees. After having found against the Department on the ground on which the show cause notice was issued, the Ld. Commissioner could not have confirmed the demand on any other ground. Accordingly, the demand confirmed in the impugned order was not sustainable and liable to be set aside on this ground alone - the impugned order is set aside and the appeal is allowed - Whether the amounts reimbursed by the licensees for electricity, telephone, and maintenance charges are includable in the assessable value for the purpose of levy of service tax on renting of immovable property – HELD - the appellant did not provide electricity, telephone, or maintenance services to the licensees. The payments received by ITC Limited were reimbursements of the actual costs incurred, without any mark-up. The Tribunal held that the amounts reimbursed by the licensees for electricity, telephone, and maintenance charges were not "consideration" for any service provided by ITC Limited in the course of providing renting of immovable property service. The Tribunal further held that ITC Limited acted as a "pure agent" in collecting and paying these charges to the concerned agencies. Accordingly, the Tribunal held that the reimbursements received by ITC Limited on account of electricity, telephone, and maintenance charges were not includable in the assessable value for the purpose of levy of service tax on renting of immovable property. [Read less]

Central Excise - Transit loss, Export warehousing – Appellant is engaged in the manufacture and clearance of excisable goods, i.e., petroleum products including Naphtha. HMEL cleared Naphtha from their refinery, without payment of duty/in-bond against CT-2 - Department observed that the entire quantity of Naphtha cleared against the CT-2 was not received at the warehouse, and HMEL claimed a transit loss during transportation - Department issued SCNs proposing the demand of Central Excise duty on the transit loss – Whether appellant is entitled to claim condonation of transit loss up to 1% in light of Circular dated 30.... [Read more]

Central Excise - Transit loss, Export warehousing – Appellant is engaged in the manufacture and clearance of excisable goods, i.e., petroleum products including Naphtha. HMEL cleared Naphtha from their refinery, without payment of duty/in-bond against CT-2 - Department observed that the entire quantity of Naphtha cleared against the CT-2 was not received at the warehouse, and HMEL claimed a transit loss during transportation - Department issued SCNs proposing the demand of Central Excise duty on the transit loss – Whether appellant is entitled to claim condonation of transit loss up to 1% in light of Circular dated 30.10.1985 – HELD - the issue is no longer res integra, as various courts have allowed the condonation of transit loss up to 1% in light of Circular dated 30.10.1985. The Department had misinterpreted the Circular and held that it is applicable not only for clearance for home consumption but also for export warehousing - The Tribunal relied on the decisions of the Gujarat High Court and the CESTAT, which had held that the Circular dated 30.10.1985 is still valid and applicable for transit loss up to 1% in case of export warehousing. The notification dated 26.06.2001, which provided for export warehousing, was never withdrawn, and the facility of removal of goods to a warehouse and subsequent export therefrom continues to be available. Therefore, the Tribunal upheld the order of the Commissioner (Appeals) which had allowed the condonation of transit loss up to 1% in accordance with the Circular dated 30.10.1985 – The Revenue appeal is dismissed [Read less]

Central Excise - CENVAT Credit, Input Service Distributor, Eligibility of CENVAT Credit, Rule 14 of CENVAT Credit Rules, 2004 - Recovery of CENVAT credit availed as an input service distributor (ISD) under rule 7 of CENVAT Credit Rules, 2004 and distributed to the appellant, a manufacturer of 'soft drinks'. The recovery was sought on the grounds of lack of 'nexus' of the 'input service' with the output on which duty liability was discharged under the Central Excise Act, 1944 - Whether the eligibility of the CENVAT credit distributed by the ISD can be scrutinized in the hands of the recipient manufacturer-appellant under th... [Read more]

Central Excise - CENVAT Credit, Input Service Distributor, Eligibility of CENVAT Credit, Rule 14 of CENVAT Credit Rules, 2004 - Recovery of CENVAT credit availed as an input service distributor (ISD) under rule 7 of CENVAT Credit Rules, 2004 and distributed to the appellant, a manufacturer of 'soft drinks'. The recovery was sought on the grounds of lack of 'nexus' of the 'input service' with the output on which duty liability was discharged under the Central Excise Act, 1944 - Whether the eligibility of the CENVAT credit distributed by the ISD can be scrutinized in the hands of the recipient manufacturer-appellant under the CENVAT Credit Rules, 2004 - HELD - The eligibility of the CENVAT credit taken and distributed by the 'input service distributor (ISD)' under rule 7 of the CENVAT Credit Rules, 2004 cannot be questioned in the hands of the recipient manufacturer-appellant. The Tribunal relied on its earlier decisions in Hindustan Coca-Cola Beverages Pvt Ltd v. Commissioner of CGST & Customs, Goa and Godfrey Philips India Ltd., wherein it was held that the eligibility of the CENVAT credit has to be examined at the end of the 'input service distributor (ISD)' only and the recipient manufacturer is not required to ascertain the eligibility or be cognizant of the source of the credit - The obligation under rule 3(1) of the CENVAT Credit Rules, 2004 cannot be transferred to the recipient of credit under rule 7. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

GST – Cancellation of registration – Order of cancellation without assigning any reasons – HELD – The order of cancellation has been issued without assigning any reasons to support the decision that the GST registration was liable to be cancelled. Even the Show Cause Notice only alludes to Section 29(2)(e) of the CGST Act and lays a bald allegation of the registration being liable to be cancelled on account of the same having been obtained by means of fraud, wilful misplacement and suppression of facts - The SCN too fails to allude or refer to any material on the basis of which the tentative opinion of a violation ... [Read more]

GST – Cancellation of registration – Order of cancellation without assigning any reasons – HELD – The order of cancellation has been issued without assigning any reasons to support the decision that the GST registration was liable to be cancelled. Even the Show Cause Notice only alludes to Section 29(2)(e) of the CGST Act and lays a bald allegation of the registration being liable to be cancelled on account of the same having been obtained by means of fraud, wilful misplacement and suppression of facts - The SCN too fails to allude or refer to any material on the basis of which the tentative opinion of a violation of Section 29(2)(e) was formed - on this short ground alone, the order of cancellation would not sustain and set aside – the writ petition is allowed [Read less]

Service Tax - Input Tax Credit, Single Entity – Appellant provides services like erection, installation, commissioning, and repair/maintenance to external customers as well as to the Steel Works division of TSL – Appellant cleared the goods in CKD/SKD form and pays Excise Duty. It also pays Service Tax on the services rendered to external customers, and claims CENVAT credit of the Service Tax reimbursed to subcontractors - Whether the appellant and the Steel Works division of TSL are separate legal entities, such that service provided by appellant to the Steel Works division would be subject to Service Tax – HELD –... [Read more]

Service Tax - Input Tax Credit, Single Entity – Appellant provides services like erection, installation, commissioning, and repair/maintenance to external customers as well as to the Steel Works division of TSL – Appellant cleared the goods in CKD/SKD form and pays Excise Duty. It also pays Service Tax on the services rendered to external customers, and claims CENVAT credit of the Service Tax reimbursed to subcontractors - Whether the appellant and the Steel Works division of TSL are separate legal entities, such that service provided by appellant to the Steel Works division would be subject to Service Tax – HELD – The appellant and the Steel Works division of TSL are not separate legal entities, but are parts of the same company, Tata Steel Limited - Relying on the decision of the Jharkhand High Court in the appellant's own case, the Tribunal noted that a company incorporated under the Companies Act is a single legal entity and its divisions/branches cannot have a separate identity - it is a settled legal position that input service credit can be utilized for payment of service tax on output services and there is no requirement of one-to-one correlation between the credits availed and the service tax paid. Therefore, appellant rightly availed the CENVAT credits of service tax paid, without any obligation to pay service tax on the services rendered to the Steel Works division, as they are part of the same legal entity - the impugned order is set aside and the appeal is allowed [Read less]

GST – Maharashtra AAR - Classification of ‘fish finders’ – Whether the item ‘fish finders’ merit classification as “Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907” - HELD - In the present case, the issue involved is not the classification of Fish Finders but to whether the Fish Finder is a part of vessels of Chapter headings 8901, 8902, 8904, 8905, 8906 or 8907 - Considering the meaning of an expression ‘Part’ as given in the dictionary and also the ratio as adopted by the Hon’ble Courts besides common parlance test, the Fish Finders are not a ‘part’ of fishing vessel or any of the ... [Read more]

GST – Maharashtra AAR - Classification of ‘fish finders’ – Whether the item ‘fish finders’ merit classification as “Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907” - HELD - In the present case, the issue involved is not the classification of Fish Finders but to whether the Fish Finder is a part of vessels of Chapter headings 8901, 8902, 8904, 8905, 8906 or 8907 - Considering the meaning of an expression ‘Part’ as given in the dictionary and also the ratio as adopted by the Hon’ble Courts besides common parlance test, the Fish Finders are not a ‘part’ of fishing vessel or any of the goods of Chapter headings 8901, 8902, 8904, 8905, 8906 or 8907 – Ordered accordingly [Read less]

Service Tax - Classification of services – Activity of designing, planning, developing, constructing, sponsoring and setting up of dairy industries and undertaking any other related promotional activity including the financing - whether scope of contract qualify to be "Work Contract" service as contended by the department or "Consulting Engineering Services' as contended by the appellant-assessee – The Tribunal held since there was no transfer of property in goods or immovable property from the appellant to the Project Authority, the contract cannot be classified to be a "Works Contract" and the impugned contract is cl... [Read more]

Service Tax - Classification of services – Activity of designing, planning, developing, constructing, sponsoring and setting up of dairy industries and undertaking any other related promotional activity including the financing - whether scope of contract qualify to be "Work Contract" service as contended by the department or "Consulting Engineering Services' as contended by the appellant-assessee – The Tribunal held since there was no transfer of property in goods or immovable property from the appellant to the Project Authority, the contract cannot be classified to be a "Works Contract" and the impugned contract is classifiable and taxable as "Consulting Engineering Service" – Revenue in appeal against the Tribunal Order – HELD - Concur with the view taken by the CESTAT - There is no merit in the Revenue appeal and the same is dismissed [Read less]

GST – Appeal under Section 107 of the CGST Act, 2017, Payment of Pre-deposit – Appeal against the order confirming tax demand and penalty – Dismissal of appeal filed by offline mode as well as online by the petitioner on the ground that petitioner has not made the mandatory pre-deposit along with the offline appeal and online appeal was filed beyond the prescribed time limit - Whether the petitioner had complied with the pre-deposit requirement and the appeal was filed within the prescribed limitation period – HELD – Prior to 18.04.2023, it was not essential to pay the pre deposit amount through form GST DRC-03 a... [Read more]

GST – Appeal under Section 107 of the CGST Act, 2017, Payment of Pre-deposit – Appeal against the order confirming tax demand and penalty – Dismissal of appeal filed by offline mode as well as online by the petitioner on the ground that petitioner has not made the mandatory pre-deposit along with the offline appeal and online appeal was filed beyond the prescribed time limit - Whether the petitioner had complied with the pre-deposit requirement and the appeal was filed within the prescribed limitation period – HELD – Prior to 18.04.2023, it was not essential to pay the pre deposit amount through form GST DRC-03 and pre-deposit amount could be paid by transferring the amount in Electronic Cash Ledger - the petitioner had sufficiently complied with the pre-deposit requirement by depositing the amount in his GST Electronic Cash Ledger before the order was uploaded on the GST portal, which made it impossible for him to pay through the prescribed GST APL-01 form - An appeal through electronic mode could not be filed until and unless the impugned order is uploaded on the GST portal. In the present matter, the impugned order was uploaded on 17.01.2023 and therefore, the petitioner could not file the appeal through electronic mode earlier, therefore, petitioner has not committed any error in depositing the amount in Electronic Cash Ledger and submitting the appeal through speed post - Merely because the petitioner could not pay the mandatory amount through GST APL-01 in the absence of uploading the Order-in-Original, petitioner cannot be held liable for transferring the amount in Electronic Cash Ledger as no other option was available with the petitioner – an appeal cannot be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre deposit of 10% of the tax liability and additional payments towards the disputed tax amount. The delay in preferring the appeal is condoned and the order dismissing the appeal is set aside – The writ petition is allowed [Read less]

West Bengal Value Added Tax Act 2003 – Carry forward of Input tax credit, Adjustment with Output tax – Petitioner seeking adjustment of the output tax demand for the period when the eligibility certificate was not renewed or rejected with the forwarded accumulated input tax credit - Whether the petitioner is entitled to adjust the forwarded accumulated input tax credit with the output tax demand for the period during which the eligibility certificate was not renewed or rejected – HELD – The lower authorities concurrently held that the question of adjustment with the forwarded accumulated ITC cannot be considered be... [Read more]

West Bengal Value Added Tax Act 2003 – Carry forward of Input tax credit, Adjustment with Output tax – Petitioner seeking adjustment of the output tax demand for the period when the eligibility certificate was not renewed or rejected with the forwarded accumulated input tax credit - Whether the petitioner is entitled to adjust the forwarded accumulated input tax credit with the output tax demand for the period during which the eligibility certificate was not renewed or rejected – HELD – The lower authorities concurrently held that the question of adjustment with the forwarded accumulated ITC cannot be considered because there is no provision under the West Bengal VAT Act, 2003 where input tax credit already carried forward to the next year can be brought back and adjusted with the output tax - the rejection of the renewal of the eligibility certificate will render the petitioner/dealer ineligible for output tax for discharging the liability and the dealer will have to pay the taxes. However, the claim of the petitioner/dealer to adjust the carry forward input tax which was carried forward to the subsequent quarter is not feasible as there is no such provision under the Act -the ld. Tribunal right in holding that the output liability for the rejected period was to be paid by the petitioner within 30 days of such rejection - The order of the ld. Tribunal is upheld and the writ petition is dismissed [Read less]

Uttar Pradesh Value Added Tax Act, 2008 - Taxability of composite set of mobile phone and mobile charger having a single MRP – Applicability of Nokia India case - HELD – The High Court correctly distinguished the judgment of this Court in Nokia India Private Limited case - When a cell phone is sold along with a charger, there is only one Maximum Retail Price (MRP) stated on the packaging and therefore, Entry 28 Part B Schedule II of the Uttar Pradesh VAT Act, 2008 has to be read in the said context – in view of the judgment of the Nokia India Private Limited case and in light of the detailed discussion made by the Hi... [Read more]

Uttar Pradesh Value Added Tax Act, 2008 - Taxability of composite set of mobile phone and mobile charger having a single MRP – Applicability of Nokia India case - HELD – The High Court correctly distinguished the judgment of this Court in Nokia India Private Limited case - When a cell phone is sold along with a charger, there is only one Maximum Retail Price (MRP) stated on the packaging and therefore, Entry 28 Part B Schedule II of the Uttar Pradesh VAT Act, 2008 has to be read in the said context – in view of the judgment of the Nokia India Private Limited case and in light of the detailed discussion made by the High Court distinguishing the aforesaid judgment, there is no reason to interfere with the impugned order. However, this order is not applicable to a case where a charger is de hors sold without a mobile phone and separately by itself - the Special Leave Petitions are dismissed [Read less]

The amendment to Explanation 2(e) to Sec. 54 vide N/No.02/2019-CT which restricted the limitation period is not applicable in the case where refund claim is for unutilized ITC on zero-rated supplies and not on account of inverted duty structure.

Central Excise - Delay in Adjudication, Revival of Proceedings - Petitioners engaged in the export of agricultural products including Soyabean De-Oiled Cake, were issued show cause notices and orders imposing penalties and disallowing duty drawback after a delay of over 11 years - The orders were later revived by the Department after the petitioners had successfully appealed against them, leading to further delays of around 7-8 years - Whether the adjudication of the SCNs and the revival of the proceedings by reinstating the Orders-in-Original is legal and valid - HELD - the adjudication of the show cause notices after a l... [Read more]

Central Excise - Delay in Adjudication, Revival of Proceedings - Petitioners engaged in the export of agricultural products including Soyabean De-Oiled Cake, were issued show cause notices and orders imposing penalties and disallowing duty drawback after a delay of over 11 years - The orders were later revived by the Department after the petitioners had successfully appealed against them, leading to further delays of around 7-8 years - Whether the adjudication of the SCNs and the revival of the proceedings by reinstating the Orders-in-Original is legal and valid - HELD - the adjudication of the show cause notices after a long gap of 11 years and the revival of the proceedings by reinstating the Orders-in-Original after a long gap of around 7-8 years is illegal and contrary to the principles of natural justice, as well as the practice and procedures of quasi-judicial forums - The Court relied on several High Court decisions that have held that revival of proceedings after inordinate delays without proper reasons is unlawful and arbitrary. The respondents failed to provide any appropriate reason for the delay in adjudication, which would have caused serious detriment and prejudice to the petitioners - the show cause notices, Orders-in-Original, and the Revision Orders are quashed – The petitions are allowed [Read less]

GST - Principles of Audi Alteram Partem, Duty to disclose the documents relied on, Opportunity of Hearing - Petitioner was alleged to have wrongly availed input tax credit and refund on the purchase of certain raw materials like glycerin, fatty acid and finishing chemicals. The authorities had also alleged that the petitioner had not produced proper evidence with regard to cancellation of e-way bills - Whether the impugned order imposing the tax demand, interest and penalty on the petitioner violates the principles of natural justice, particularly the Rule of audi alteram partem, and is thus arbitrary and illegal - HELD - ... [Read more]

GST - Principles of Audi Alteram Partem, Duty to disclose the documents relied on, Opportunity of Hearing - Petitioner was alleged to have wrongly availed input tax credit and refund on the purchase of certain raw materials like glycerin, fatty acid and finishing chemicals. The authorities had also alleged that the petitioner had not produced proper evidence with regard to cancellation of e-way bills - Whether the impugned order imposing the tax demand, interest and penalty on the petitioner violates the principles of natural justice, particularly the Rule of audi alteram partem, and is thus arbitrary and illegal - HELD - The impugned order fails to comply with the principles of natural justice. Firstly, the order was merely a copy-paste of the reply submitted by the petitioner, indicating a non-application of mind by the authorities. Secondly, the authorities had relied on certain documents and reports in issuing the show cause notice but failed to provide the same to the petitioner, thereby denying the petitioner an opportunity to rebut the same. Thirdly, the petitioner had provided expert opinions to establish that the raw materials were actually used in the manufacturing process, but the authorities had simply brushed aside this explanation without any further examination or testing of the fabrics - the principles of natural justice, particularly the rule of audi alteram partem, require that the person affected by an administrative or quasi-judicial decision must be given a reasonable opportunity to present their case. The authorities are also obligated to disclose the materials and documents relied upon in order to enable the affected party to effectively rebut the same. Failure to do so would amount to a violation of the principles of natural justice, rendering the decision arbitrary and illegal - the rules of natural justice are flexible and their applicability depends on the facts and circumstances of each case. However, the core of the principles, i.e. the guarantee of a fair and reasonable procedure, cannot be compromised. In the present case, the petitioner's rights had been severely prejudiced due to the failure of the authorities to comply with the principles of natural justice - the impugned order is set aside and the writ petition is allowed [Read less]