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Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains pro... [Read more]

Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains product-based exemption for anaesthetics without prescribing end-use requirement - HELD - Anaesthetic is identified by pharmacological character and therapeutic function namely ability to produce loss of sensation and not by identity of purchaser or ultimate user - Nitrous Oxide I.P. conforming to pharmacopoeial standards and manufactured as medical anaesthetic has character as anaesthetic determined at stage of manufacture and clearance unless relevant exemption notification expressly introduces end-use condition - Sl. No.17 of Notification neither prescribes end-use condition nor requires any certification or verification thereof and such condition cannot be read into notification by implication. The eligibility determined on basis of description of goods at time of clearance and not their subsequent use - Central Excise is duty on manufacture and eligibility to exemption determined by nature and description of goods at clearance not by subsequent distribution or consumption. There is no statutory requirement in Central Excise law that exempt goods must be supplied directly to ultimate user - Once undisputed that goods cleared were Nitrous Oxide I.P. as anaesthetics covered by Sl. No.17 concession cannot be denied merely because purchaser is trader - Department's assumption that traders may divert goods for other uses purely speculative and legally irrelevant in absence of statutory end-use condition - Revenue failed to establish foundation fact of allegation that Nitrous Oxide I.P. sold to traders diverted for non-exempt purpose before onus shifted to appellant – The demand on merits unsustainable and extended period of limitation inapplicable – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority ... [Read more]

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority – Subsequent demands were issued and confirmed by respective authorities without considering special rates of value addition fixed – Whether Appellant entitled to benefit of special rate of value addition fixed by competent authority in terms of Notification No.19 & 34/2008 – HELD – Appellant is entitled to benefit of special rate of value addition in terms of Notification No.19 & 34. The hon'ble Supreme Court in VVF Ltd. clarified that refunds are not to be granted merely as per rates already prescribed in notification and authorities should give effect to all requirements and conditions contained in amending notifications – Impugned orders were passed disregarding the special rate of valuation fixed by competent authority. The authorities are required to re-do the whole exercise of demand calculation taking into account special rates of value addition fixed by competent authority – As the demand itself is not sustainable when calculated without special rates of value addition, interest is not payable – Appeals are allowed by way of remand to appellate authority with direction to recalculate demands taking into account special rates of value addition fixed by competent authority – The appeals are allowed by remand - Central Excise – Refund and Self-Credit – Duplication of demand – Appellant availed excess self-credit as refund under exemption notification – In several appeal periods, both excess availed refund and refund taken as self-credit and utilized for subsequent clearances were demanded and confirmed simultaneously – Whether demanding both excess refund and refund taken as self-credit utilized in subsequent clearances amounts to duplication of demand and double jeopardy to assessee – HELD – On one hand self-credit availed by Appellant under exemption notification has been confirmed and on other hand excise duty paid through self-credit in subsequent clearances has also been demanded; this is erroneous practice – Department should have demanded and confirmed only one of them. Demanding both excess refund and utilization of credit amounts to causing double jeopardy to assessees – The issue of duplication of demand needs to be looked into and rectified – Appeals are allowed by way of remand with direction to consider duplication of demand and allow only one of the demands instead of both. [Read less]

Service Tax – Exemption Notification No. 33/2012-ST – Turnover limit condition – Nil turnover in preceding financial year - Whether exemption under Notification No. 33/2012-ST applies to appellant for FY 2013-2014 when Form 26AS for preceding FY 2012-2013 shows nil turnover and current year turnover is less than Rs.10,00,000/- – HELD – The Form 26AS for FY 2012-2013 is reasonable document to rely upon to determine turnover; Form 26AS shows no payments to appellant in preceding FY 2012-2013 indicating nil turnover – Since there is no turnover on record of appellant for FY 2012-2013, appellant is entitled to bene... [Read more]

Service Tax – Exemption Notification No. 33/2012-ST – Turnover limit condition – Nil turnover in preceding financial year - Whether exemption under Notification No. 33/2012-ST applies to appellant for FY 2013-2014 when Form 26AS for preceding FY 2012-2013 shows nil turnover and current year turnover is less than Rs.10,00,000/- – HELD – The Form 26AS for FY 2012-2013 is reasonable document to rely upon to determine turnover; Form 26AS shows no payments to appellant in preceding FY 2012-2013 indicating nil turnover – Since there is no turnover on record of appellant for FY 2012-2013, appellant is entitled to benefit of exemption Notification No. 33/2012-ST for FY 2013-2014 – The condition of Notification that aggregate value of taxable services from preceding financial year should not exceed Rs.10,00,000/- is satisfied when preceding year turnover is nil. Since value of taxable services rendered during FY 2013-2014 is admittedly less than Rs.10,00,000/-, appellant is entitled to benefit of exemption – Demand of service tax is set aside and the appeal is allowed [Read less]

Service Tax – Renting of Immovable Property – Wrong assessment to partnership firm – SCN dated 01.10.2013 issued to partnership firm (M/s Chitkara Institute of Competitions) for period 01.04.2008 to 31.03.2013 proposing demand of service tax on renting of immovable property; however, records indicate it was property owner (Shri Mohit Chitkara) who rented out the premises to educational trust and was the actual service provider – Whether SCN issued to partnership firm instead of property owner can be sustained – HELD – Shri Mohit Chitkara was the person who rented out premises to educational trust and was actual... [Read more]

Service Tax – Renting of Immovable Property – Wrong assessment to partnership firm – SCN dated 01.10.2013 issued to partnership firm (M/s Chitkara Institute of Competitions) for period 01.04.2008 to 31.03.2013 proposing demand of service tax on renting of immovable property; however, records indicate it was property owner (Shri Mohit Chitkara) who rented out the premises to educational trust and was the actual service provider – Whether SCN issued to partnership firm instead of property owner can be sustained – HELD – Shri Mohit Chitkara was the person who rented out premises to educational trust and was actual service provider; SCN should have been issued to property owner, not to partnership firm – Following principle established by Hon'ble Supreme Court in Alcobex Metals case, the SCN issued to wrong person is liable to be set aside – On this count alone, the SCN issued to partnership firm is liable to be set aside and appeal is liable to be allowed - Service Tax – Mega Exemption Notification – Renting of Immovable Property to educational institution – Mega Exemption Notification No. 25/2012-ST dated 01.07.2012 provided exemption at Serial No.9 for services provided for educational institution in respect of auxiliary educational services and renting of immovable property; exemption was withdrawn w.e.f. 11.07.2014 – Whether service tax is leviable for period when exemption was available in Mega Exemption Notification – HELD – Mega Exemption Notification at Sl. No.9 provides exemption for services provided for educational institution in respect of renting of immovable property – Exemption was available from 01.07.2012 onwards; service tax became leviable only w.e.f. 11.07.2014 when exemption was withdrawn – No service tax can be levied for period up to 11.07.2014 when exemption was available in Mega Exemption Notification – The demand for services in respect of renting of immovable property provided to educational institution during period when exemption was available is not sustainable and is set aside. [Read less]

Service Tax – Foreign currency expenditure on imported services – Show Cause Notice issued treating foreign currency expenditure as taxable import of services – Appellant contended SCN was vague, mechanical and unintelligible as it failed to identify underlying service received, its classification or taxability without specifying amount of foreign currency expenditure incurred on each service – Whether SCN can be termed vague and mechanical when it does not separately identify expenditure service-wise – HELD – Purpose of SCN is to inform recipient of allegations so he can meet them effectively and is not prejud... [Read more]

Service Tax – Foreign currency expenditure on imported services – Show Cause Notice issued treating foreign currency expenditure as taxable import of services – Appellant contended SCN was vague, mechanical and unintelligible as it failed to identify underlying service received, its classification or taxability without specifying amount of foreign currency expenditure incurred on each service – Whether SCN can be termed vague and mechanical when it does not separately identify expenditure service-wise – HELD – Purpose of SCN is to inform recipient of allegations so he can meet them effectively and is not prejudiced by manifestly vague notice – Notice cannot be read as legislative enactment requiring exceptional lucidity but must convey allegations clearly enabling recipient to defend himself – What is required is whether allegations made have been conveyed and set forth to enable recipient to get opportunity to defend – SCN need not identify foreign currency expenditure service-wise if it identifies all services and makes allegations clear – If SCN was unintelligible and nothing could be made of it, appellant could not have given elaborate submissions service-wise; fact that appellant could identify different services and payments and give submissions accordingly indicates SCN was not vague and unintelligible – As long as SCN makes allegations clear so appellant can file suitable reply, SCN cannot be termed vague and unintelligible; non-identification of foreign currency expenditure service-wise has not been fatal to proceedings - Service Tax – Extended period of limitation – Invocation of extended period for foreign currency expenditure on imported services – SCN dated 20.10.2011 invoked extended period under proviso to Section 73(1) of Finance Act, 1994 based on CAG audit conducted 22-11-2010 to 26-11-2010 – Appellant contended extended period was not invocable as there was no suppression, fraud or wilful mis-statement by appellant – Whether extended period can be invoked based on mere audit findings without bringing out specific acts of fraud, wilful mis-statement or suppression with intent to evade – HELD – SCN must bring out specific acts of commission or omission on part of appellant which constitute fraud, collusion, wilful mis-statement or suppression of fact with intent to evade duty to justify invocation of extended period – SCN merely mentioning Section 73 provision without bringing out ingredients required for extended period is not sufficient – Ingredients required for invoking extended period must be brought out with evidence in SCN itself – When ingredients for extended period have not been brought out with evidence in SCN, extended period cannot be invoked – Extended period cannot be invoked based on mere audit findings without specific evidence – Demands based on extended period must be restricted to normal period - Service Tax – Multiple Show Cause Notices for same period – Appellant had two SCNs issued: first SCN dated 13.10.2011 based on Service Tax audit conducted and second SCN dated 20.10.2011 dated only 7 days later based on CAG audit – First SCN invoked extended period of limitation – Second SCN again invoking extended period for overlapping period – Whether it is permissible to issue another SCN for same period invoking extended period when SCN already issued for same period invoking extended period – HELD – It is not open for Department to issue subsequent SCN for same period invoking extended period when SCN has already been issued for same period and period, as held by Hon'ble Supreme Court in Nizam Sugar Factory versus Collector of Central Excise – Double issuance of SCN for same period by Department is not permissible – When one SCN has already been issued for a period invoking extended period, subsequent SCN for same period with extended period should not have been issued - Service Tax – Secondment of employees – Payment for seconded employees from overseas entities – Appellant contended deputation of employees from overseas entities did not constitute import of service and employees were absorbed and remained under control and management of appellant – Whether service tax payable on secondment/deputation of employees from overseas entities – HELD – Principle established by Hon'ble Supreme Court in Northern Operating Systems Pvt. Ltd. is applicable – Appellant was service recipient for service of manpower recruitment and supply services by overseas entity in regard to employees seconded to appellant for duration of their deputation – Service tax is payable on secondment of employees – However, invocation of extended period of limitation in respect of secondment demand is not tenable and unreasonable – Assessee is liable to discharge service tax liability on secondment for normal period only, not extended period – Demand on secondment of employees confirmed only for normal period; demand beyond normal period is set aside - Service Tax – Adjudication – Adjudicating authority's obligation to consider appellant's submissions backed by CA certificates – Whether Adjudicating Authority can confirm demands without properly considering and rationally addressing appellant's submissions backed by CA certificates – HELD – Adjudicating Authority must have rational and reasoned approach in confirming demands against appellant and must record findings so meaning is unequivocally conveyed – Adjudicating Authority cannot rely on figures and CA certificates for computation while rejecting arguments of appellant without recording satisfactory and rational findings – Where appellant submits issue is mistake/inadvertent error and not deliberate suppression, Adjudicating Authority must address such submissions with valid reasoning – Mistake does not cease to be mistake only because it occurred multiple times; Adjudicating Authority must properly appreciate appellant's explanations and accounting practices – Adjudicating Authority failed to properly appreciate submissions and must reconsider matters on remand taking into account appellant's submissions, evidence provided, accounting standards and procedures and ratio of cases decided after impugned order. 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Service Tax – Manpower supply and manufacturing services – Taxability of manufacture on job work basis – Appellant entered into agreements with clients to manufacture goods on job work basis on per piece rate basis – Whether Appellant liable to pay service tax when activity amounted to manufacture of goods instead of provision of service – HELD – Where an activity constitutes manufacture and not supply of service, it is not chargeable to service tax as per Notification No. 25/2012-ST dated 20.6.2012 Section No. 30(i). Once it is found as matter of fact that any activity was not chargeable to service tax or was ... [Read more]

Service Tax – Manpower supply and manufacturing services – Taxability of manufacture on job work basis – Appellant entered into agreements with clients to manufacture goods on job work basis on per piece rate basis – Whether Appellant liable to pay service tax when activity amounted to manufacture of goods instead of provision of service – HELD – Where an activity constitutes manufacture and not supply of service, it is not chargeable to service tax as per Notification No. 25/2012-ST dated 20.6.2012 Section No. 30(i). Once it is found as matter of fact that any activity was not chargeable to service tax or was exempted, service tax cannot be demanded or confirmed. Even if amount has been collected as representing service tax but service tax is not payable, amount collected must be deposited with Central Government as per Section 73A of Finance Act, 1994 – However, fact that amount was collected and deposited does not create charge of service tax – Demand under Section 73 of Act is for service tax not levied, not paid, short levied or short paid; the inherent supposition is that such service tax was payable but not paid – The amount to be deposited under Section 73A is only amount wrongly collected, not service tax. Department cannot demand additional amounts as if wrongly collected – Demand of service tax on activity of manufacture undertaken by appellant for client is not chargeable to service tax and is set aside - Service Tax – Valuation – Inclusion of reimbursable expenses in value of taxable services – Appellant provided manpower to clients and charged actual wages, PF, ESI and service charge – Department demanded service tax including reimbursable expenses for period up to 13.5.2015; Appellant claimed no service tax was chargeable on reimbursable expenses – Whether service tax chargeable on reimbursable expenses before 14.5.2015 when Section 67 was later amended to include reimbursable expenses – HELD – As per Supreme Court judgment in Union of India versus Inter-continental Consultants and Technocrats Ltd., no service tax could be charged on reimbursable expenses – Charge of service tax comes from charging section; service tax has to be paid at rate specified on value as per Section 67 – If Appellant wrongly paid service tax on reimbursable expenses in some invoices, it does not give Department right to charge similarly wrong service tax on other reimbursable expenses or in other invoices – Amounts wrongly collected as representing service tax must be deposited but neither has assessee responsibility to collect more money wrongly as service tax nor can officer issue order to that effect – Demand of service tax on reimbursable expenses for period up to 13.5.2015 is not sustainable and is set aside - Service Tax – Extended period of limitation – Appropriation of amount deposited during investigation – Whether appropriation of amount deposited during investigation is permissible for period beyond five years extended period of limitation – HELD – When SCN was issued on 6.1.2020, extended period of limitation could extend to five years i.e. up to January 2015 – Demand for period beyond extended period of limitation cannot be sustained – No demand was proposed in SCN for period April 2014 to September 2014; appropriation of amount deposited for this period in adjudication proceedings was beyond scope of SCN – Appropriation was not proposed in SCN but was done by Commissioner in impugned order – Since appropriation was part of adjudication proceedings, proceedings could not have extended beyond five year period – Appropriation of amount deposited by Appellant for period beyond extended period of limitation deserves to be set aside - Service Tax – Whether refund can be denied when amount was deposited for period not covered by SCN and not proposed for appropriation in SCN – HELD – Service tax was deposited by Appellant for period April 2014 to September 2014 – SCN covered periods both before and after this period but did not issue any proposal demanding service tax for this period nor was any proposal made to appropriate amount paid – Appropriation of amount in impugned order was clearly beyond scope of SCN – SCN could not have demanded duty for this period because it was beyond normal period of limitation – Since no SCN was issued either demanding duty or proposing to appropriate amount paid during investigation, Revenue was bound to refund amount so deposited – Rejection of refund by lower authorities is not correct – Service tax deposited by Appellant must be refunded along with interest. [Read less]

Customs – Classification of Classification of Body Control Module (BCM) and Integrated Body Unit (IBU) – Electronic Control Units – Appellant classified goods under CTH 9032 8910 claiming concessional duty under Notifications No. 152/2009 and 50/2017 – Revenue took view that goods were not automatic regulators of heading 9032 but constituted parts and accessories of motor vehicles, specifically body control systems classifiable under CTH 8708 9900 – Whether BCM and IBU are classifiable as automatic regulating or controlling instruments under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 87... [Read more]

Customs – Classification of Classification of Body Control Module (BCM) and Integrated Body Unit (IBU) – Electronic Control Units – Appellant classified goods under CTH 9032 8910 claiming concessional duty under Notifications No. 152/2009 and 50/2017 – Revenue took view that goods were not automatic regulators of heading 9032 but constituted parts and accessories of motor vehicles, specifically body control systems classifiable under CTH 8708 9900 – Whether BCM and IBU are classifiable as automatic regulating or controlling instruments under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 8708 9900 – HELD – BCM and IBU are sophisticated automotive electronic control systems that receive sensor inputs, process them through microprocessor, and control actuators while functioning as power distribution centre and communication gateway. These goods actively regulate vehicle functions by comparing sensor inputs with preset values and issuing control commands; they are not mere programmable logic controllers but programmable process controllers that continuously monitor and regulate variables. They satisfy description of automatic regulating apparatus under Note 7(b) to Chapter 90 and are appropriately classifiable under CTH 9032 8910 – The functional description clearly states impugned goods are multi-faceted electronic components supporting monitoring, controlling and regulating automotive body electronics without human interface, making them automatic in nature. This conclusion is binding as per Tribunal order in appellant's own case; Revenue has not placed any judgment or order of superior judicial forum reversing or modifying said order; judicial discipline requires following said order – Classification under CTH 9032 8910 stands concluded – The impugned order confirming duty demand with interest is set aside and the appeal is allowed - Customs – Classification of Electronic Control Units – Tyre Pressure Monitoring System – Appellant classified goods under CTH 9032 8910; Revenue proposed classification under CTH 8708 9900 – Whether TPMS is classifiable as automatic regulating apparatus under CTH 9032 8910 or as parts and accessories of motor vehicles under CTH 8708 9900 – HELD – TPMS continuously monitors tyre pressure and provides real-time safety regulation; it autonomously regulates functions by measuring variables and issuing electrical impulses to maintain desired values – TPMS satisfies description of automatic regulating apparatus under Heading 9032 and Chapter 90 Notes; it performs automatic control functions and is not mere data processor – Neither SCN nor impugned order sets out functional characteristics of TPMS as part of foundational facts necessary to justify proposed classification under Tariff Item 8708 9900; impugned order contains little independent analysis of nature, functions or basis for classification – Classification of each Electronic Control Unit must be considered separately based on its specific functions; Revenue failed to discharge burden of establishing proposed classification under Tariff Item 8708 9900 – Burden of proof in classification matters lies squarely upon Revenue; if Department intends to classify goods under heading different from that claimed by assessee, Department must adduce proper evidence and discharge burden of proof – TPMS is appropriately classifiable under CTH 9032 8910 as claimed by Appellant - Customs – Demand of differential customs duty – Classification determines rate of duty and chargeability – Appellant classified goods under CTH 9032 8910 and claimed concessional duty; Revenue proposed higher duty by reclassifying under CTH 8708 9900 – Demand of differential customs duty with interest and confiscation, penalty proposed – Whether differential duty demand can be sustained when classification proposed by Revenue is not established – HELD – Classification of goods is matter relating to chargeability and burden of proof is squarely upon Revenue – Demand of differential duty with interest cannot be sustained when Revenue fails to discharge burden of establishing its proposed classification – Since BCM, IBU and TPMS stand classifiable under CTH 9032 8910, the differential duty demand cannot be sustained. [Read less]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which ... [Read more]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which empowers the officer to search and thereupon seize documents or books or things. The power conferred under Section 67(4) can only be exercised upon initiation of the search proceedings and so long the search proceedings are continuing. Once the search proceedings have culminated with the seizure of the goods, documents, books or things, the power under Section 67(4) ceases to exist. The said power can only be exercised where access to such premises, almirah, electronic devices, box or receptacle is denied – Further, the documents or books or things seized should have a correlation to usefulness or relevancy to any proceedings under the Act. An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as “things” liable to confiscation under confiscation under Section 130 of the CGST Act - The sealing of the petitioner's office premises and keeping the premises under seal after the completion of search and seizure cannot be sustained in law. The records do not show that access to the Petitioner's premises was denied at any point. The power under Section 67(4) is for the purpose of carrying out the search and seizure and not for using the premises as a store for retaining the seized goods or documents or things - The sealing of the office premises is illegal and unauthorized and contrary to the mandate of Section 67(4) of the Act - The Respondents are directed to de-seal the premises and hand over possession to the petitioner forthwith - At the time of de-sealing and handing over possession of the office premises to the Petitioner, the Respondents are granted the liberty to take custody of the books or documents if the same are still necessary for examination and for any inquiry or any proceedings – The writ petition is disposed of - Scope of Section 67(2) and First Proviso thereof - Petitioner's office equipment including air conditioners, refrigerators, inverters, batteries, laptops and printers were made subject of an Order of Prohibition restricting removal or dealing with such goods - The Petitioner contended that these goods were merely office equipment used for providing tax consultancy services and were not goods liable to confiscation - HELD - The first proviso to Section 67(2) of the Act refers only to goods and not documents or books or things. The Order of Prohibition issued under the Rules is only limited to goods which are liable for confiscation. The term goods is defined in Section 2(52) of the Act to mean every kind of movable property liable to confiscation under Section 130 of the Act. The goods mentioned in the Order of Prohibition, namely, air conditioners, refrigerators, inverters, batteries, laptops and printers cannot under any circumstances be said to be goods liable for confiscation under Section 130 of the Act – An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as documents or books or things. The goods not liable for confiscation cannot be seized or retained - Custody of Seized Documents, Books and Things - Petitioner's office documents and electronic items seized under Section 67(2) of the were handed over to the Petitioner with a direction that the Petitioner shall not remove or part with such items - HELD - Section 67(2) of the Act empowers search and seizure and upon seizure of goods or books or documents or things, the said items should remain in the custody of the Proper Officer or the Authorized Officer. Sub-section (2) permits the Proper Officer or the Authorized Officer to search and seize the documents or books or things and the custody of the seized items remain with such officers as the same would be useful for or relevant to any proceedings under the Act. The second proviso to Section 67(2) stipulates that documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act - The act on the part of the officer in handing over custody of the books or documents or things seized to the Petitioner gives an impression that the documents or books or things seized were no longer necessary else the custody would not have been handed over. The custody of the books or documents or things should always remain with the Proper Officer or Authorized Officer till issuance of notice under the Act and under no circumstances beyond thirty days from the date of notice - The action of handing over custody of seized documents and books and things to the Petitioner cannot be sustained in law. [Read less]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original A... [Read more]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original Authority rejected on ground service provider did not raise classification dispute - Whether service receiver is eligible to claim refund of service tax collected wrongly when service provider did not challenge assessment - HELD - Creation of new entry for Supply of Tangible Goods Service and conclusive finding of Supreme Court in Indian National Shipowners Association lead to irresistible conclusion that respondent as service recipient eligible for refund of service tax paid erroneously under Mining Service classification. The payment of tax due to mistake of law and misclassification can never carry character of lawful levy to satisfy mandate of Article 265 of Constitution - Limitation prescribed under Section 11B of Central Excise Act not applicable for refund claims for service tax paid under mistake of law. The tax collected by mistake and retained by Department constitutes unjust enrichment and violates Article 265 - Concurrent findings by Appellate Authority and Tribunal that service tax was passed on to respondent and burden of unjust enrichment discharged not subject to interference – The service recipient is entitled to claim refund without relying on civil suit or writ petition when factual findings made in favour of assessee and no dispute regarding classification and passing of tax - Authorities below rightly exercised jurisdiction to grant relief as retention of tax against spirit of Constitution - The refund order is upheld and Civil Miscellaneous Appeal dismissed [Read less]

Customs - Refund of IGST on exports to Bhutan - Failure to file Shipping Bills - New procedure under CGST regime - Appellant exported goods to Bhutan and paid IGST but did not file Shipping Bills as required under the new export procedure that came into effect w.e.f. 01.07.2017, instead following the procedure applicable prior to that date - Whether Appellant is eligible for refund of IGST paid when the new Shipping Bill procedure was not followed - HELD - The IGST paid by the Appellant stands undisputed as evidenced from the tax invoices. A harmonious reading of tax invoices, Bhutan invoices, details of consignments being... [Read more]

Customs - Refund of IGST on exports to Bhutan - Failure to file Shipping Bills - New procedure under CGST regime - Appellant exported goods to Bhutan and paid IGST but did not file Shipping Bills as required under the new export procedure that came into effect w.e.f. 01.07.2017, instead following the procedure applicable prior to that date - Whether Appellant is eligible for refund of IGST paid when the new Shipping Bill procedure was not followed - HELD - The IGST paid by the Appellant stands undisputed as evidenced from the tax invoices. A harmonious reading of tax invoices, Bhutan invoices, details of consignments being signed by CGST officials and import declaration from Bhutan authorities shows that though the Appellant has not followed the new procedure prescribed requiring the exporter to file Shipping Bills, all requisite documents as per the earlier procedure have been prepared. Neither the CGST official sealing the container nor the border Checkpost officials allowing the consignment to go out of India raised any objection towards non-filing of Shipping Bills - If the procedure followed was not correct, the Appellant should have been guided to follow the new correct procedure, which was not done. The lapse, if any, is equally attributed to CGST and Customs officials. The Appellant is eligible for refund of IGST paid along with applicable interest. The penalty imposed is set aside – The appeal is allowed [Read less]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular... [Read more]

GST – Uttarakhand AAR - Exemption of uncoated paper used for exercise books and notebooks - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 - Whether the supply of such uncoated paper qualifies for exemption from GST under Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) or is exigible to GST under Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 - HELD - Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 exempts uncoated paper and paperboard of a kind used for writing printing or other graphic purposes in rolls or rectangular sheets used for exercise books graph books laboratory notebooks and notebooks from the whole of central tax leviable thereon. The legislative scheme undoubtedly creates a use-based distinction within Heading 4802 whereby uncoated paper is exempt when used for exercise books and notebooks but attracts 18% GST when used for other purposes - The expression used for in Entry No. 128 denotes a factual relationship between the goods and the specified use and at the point when the supplier effects the supply the future utilization of the paper by the purchaser has not yet occurred - The CGST Act 2017 and the Rules made thereunder and the notifications dated 17.09.2025 do not prescribe any statutory procedure mechanism or documentary requirements for determining end-use verification. However, no provision recognizes purchaser declarations purchase orders or contractual stipulations as conclusive proof of fulfillment of the end-use condition. The Authority cannot rewrite or supplement the notification by introducing additional conditions creating procedural safeguards or prescribing evidentiary standards absent from the law - The application is answered to the extent that Entry No. 128 of Notification No. 10/2025-Central Tax (Rate) exempts uncoated paper used for exercise books and notebooks however no advance ruling can be pronounced on the procedure or manner for availing the exemption being outside the purview of Section 97(2) of the CGST Act 2017 – Ordered accordingly [Read less]

Central Excise - Cenvat Credit - Liability of recipient to verify manufacture by supplier - Department contended that the vendor's activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and therefore Appellant is not eligible for taking Cenvat Credit - Whether the recipient of inputs is liable to determine whether the supplier's activity amounts to manufacture - HELD - The Department does not dispute the receipt of Fuel Oil by the Appellant and usage of the same in the Appellant's own manufacturing activities. The Excise Duty paid by the supplier cannot be questioned at the recipie... [Read more]

Central Excise - Cenvat Credit - Liability of recipient to verify manufacture by supplier - Department contended that the vendor's activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and therefore Appellant is not eligible for taking Cenvat Credit - Whether the recipient of inputs is liable to determine whether the supplier's activity amounts to manufacture - HELD - The Department does not dispute the receipt of Fuel Oil by the Appellant and usage of the same in the Appellant's own manufacturing activities. The Excise Duty paid by the supplier cannot be questioned at the recipient's end. According to established Tribunal jurisprudence, the responsibility of the recipient of inputs or capital goods is to ensure that duty has been paid, accounted for and utilized properly - The recipient is not required to determine the duty payable or whether the supplier's activity amounts to manufacture, as assessment and determination of duty payable is required to be done by the supplier. The recipient is eligible to take Cenvat Credit of duty paid which is specified in the invoices – Further, the Appellant has taken the Cenvat Credit and shown the same in the ER-1 Returns, therefore no case has been made out towards suppression against the appellant. The Department did not raise any objection when the Returns were filed. The demand for extended period is time barred – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Business Support Services – Reimbursement of operating costs of employees by Group companies – Appellant's employees worked for Group companies and Appellant raised debit notes on Group companies for reimbursement of operating costs of such employees – Whether such reimbursement amounts to 'Business Support Service' requiring 'outsourcing' of business functions – HELD – For any activity to be covered under Business Support Service, the service recipient must be a business entity using services in relation to business or commerce and must have 'outsourced' its functions to the service provider. In ... [Read more]

Service Tax – Business Support Services – Reimbursement of operating costs of employees by Group companies – Appellant's employees worked for Group companies and Appellant raised debit notes on Group companies for reimbursement of operating costs of such employees – Whether such reimbursement amounts to 'Business Support Service' requiring 'outsourcing' of business functions – HELD – For any activity to be covered under Business Support Service, the service recipient must be a business entity using services in relation to business or commerce and must have 'outsourced' its functions to the service provider. In the present case, Group companies had not 'outsourced' any of their business functions to the Appellant; rather Appellant had excess manpower which was utilized by performing activities in relation to business functions of Group companies – Since there is no 'outsourcing' of activities or business functions involved, merely sharing of expenses or cost relating to employees performing common activities cannot be categorized as rendering of Business Support Service – Further, no Service Tax is payable on reimbursement of expenses – The demand of service tax confirmed on 'reimbursement of employee costs' under the category of Business Support Services is not sustainable and is set aside – The appeal is allowed - Service Tax – 'Deemed Sale' of goods – Appellant entered into contractual arrangements with entities wherein multi-function printers installed by Appellant remained in possession of customers for their use throughout contract period – Appellant charged customers on basis of number of prints or copies at pre-determined per page price and was responsible for supplying toner and consumables – Whether transaction involving transfer of right to use goods amounts to 'deemed sale' beyond purview of service tax – HELD – A transaction involving transfer of right to use goods would amount to 'deemed sale' which is beyond the purview of service tax – Appellant satisfied all five attributes for transfer of right to use goods as laid down in Supreme Court judgment. Once the printers were delivered to customers and installed at their location, there was exclusion of transferor – Merely because maintenance of equipment was undertaken by Appellant, absence of effective control or right to use by customers cannot be presumed – Further, Notification No. 12/2003-ST dated 20.6.2003 provides exemption from Service Tax to value equivalent to value of goods and materials sold by service provider to service recipient – In present case, Appellant transferred possession and property in spare parts, toner, consumables during maintenance of multi-function printers and regularly discharged VAT on said materials. The value of goods and materials supplied is thus exempted from Service Tax under Notification No. 12/2003-ST – The demand of service tax confirmed on consideration received for provision of print services is not sustainable and is set aside - Service Tax – Commercial Training and Coaching Services – Supply of course material – Appellant engaged independent service providers to impart courses and operate Career Development Centers – Students approached service providers, enrolled and paid fees directly to them – Appellant merely sold course material to independent service providers as evidenced by Agreement dated 1.12.2010 and invoices – Whether Appellant was engaged in providing 'Commercial Training or Coaching Service' or was merely selling course material – HELD – Appellant is not engaged in providing Commercial Training or Coaching Service – Instead it merely sold course material to independent service providers – The transaction is between student and service provider and Appellant is not party to it. Even if it were assumed that Appellant is engaged in providing Commercial Training or Coaching Service, the value of goods sold in course of provision of such service is liable to be excluded from value of such services – This view is supported by decision in Cerebral Learning Solutions Pvt Limited case wherein it was held that value of books or course material supplied by assessee to students is required to be included in value of taxable service but Notification No. 12/2003-ST dated 20.6.2003 exempts so much of value of taxable services as is equal to value of goods and material sold by service provider – The demand of service tax confirmed on value of course material supplied under category of Commercial Training or Coaching Service is not sustainable - Service Tax – Advertising Agency Service – Display of Intel logo on computers – Appellant merely displayed logo of Intel on computers manufactured by it – Logos were provided by Intel and Appellant did not design or make such logos – Whether activity of mere printing, displaying of Intel logo qualifies as 'Advertising Agency Service' – HELD – Term 'Advertising Agency' is not defined under Section 65B of Act prevailing under negative list regime. Under positive list regime prevailing till 30.6.2012, scope of 'advertising agency' covered making, preparation, display or exhibition of advertisement – The CBIC vide Circular No. 345/4/97-TRU dated 16.8.1999 clarified that if assessees were engaged in designing, visualizing and conceptualizing advertisements, then only they would be liable to pay service tax – Thus, Circular has interpreted 'Advertising Agency Service' as something more than mere printing of advertisement – In present case, Appellant is merely displaying logo of Intel on computers manufactured by it. Such logos are provided by Intel and Appellant does not design or make such logos – Appellant has not rendered any service in relation to conceptualizing, visualizing or designing advertisement – Activity of mere printing, displaying of Intel logo does not qualify as 'Advertising Agency Service' and no service tax is leviable on said transaction - Service Tax – Comprehensive Service and Maintenance Contracts – Abatement under Notification No. 12/2003-ST – Appellant provided Comprehensive Service and Maintenance Contracts services supplying toner, developer, spares during provision of maintenance services and paid appropriate sales tax on value of materials and goods involved – Commissioner denied benefit of abatement under Notification No. 12/2003-ST on ground that Appellant did not provide details relating to value of goods used for providing services – Whether Appellant entitled to benefit of abatement under Notification No. 12/2003-ST when VAT already paid on goods supplied – HELD – It is undisputed fact that Appellant provided goods like toner, developer, spares during provision of maintenance service and paid appropriate VAT on value of materials and goods involved as per State sales tax legislations, evidenced by invoices and Chartered Accountant certificate – Appellant has not availed any CENVAT credit on such spare parts, toner, consumables – Appellant has been regularly discharging VAT liability on spare parts, toner, consumables supplied during provision of CSMC services. Thus, Appellant fulfilled all conditions prescribed in Notification 12/2003-ST for goods supplied in course of provision of CSMC services – Appellant entitled to avail benefit of abatement under Notification No. 12/2003-ST – Once VAT or Sales Tax has been paid on said transaction, demand of service tax on same transaction is untenable – The demand of service tax confirmed on CSMC services is not legally sustainable and is set aside - Service Tax – Extended Period of Limitation – Time bar – SCN issued on 23.10.2015 for period July 2010 to June 2015 – Demand raised for period up to September 2014 is beyond normal period of limitation – Special audit conducted approximately 3.5 years prior to issuance of SCN; relevant documents and information available with Department since 2012 – Whether demand for period up to September 2014 is time-barred and whether inordinate delay of 3 years in issuing [Read less]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoki... [Read more]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoking discretion in terms of sub-section (4) of Section 107 as the appeal has been filed within condonable period. There appears sufficient cause for the petitioner to file appeal beyond the period stipulated under sub-section (1) of Section 107. There is no evidence put forth to establish that the contentions of the petitioner are not genuine and germane. The petitioner is required to be given one opportunity to justify that the delay occurred due to circumstance beyond control - The impugned rejection order is set aside and petitioner is directed to appear before the Appellate Authority and file response to the show-cause notice and the authority concerned shall consider the same by affording opportunity of hearing to the petitioner – The petition is disposed of [Read less]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider reque... [Read more]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider request for revocation of cancellation order. Permanent cancellation of registration inflicts civil death to livelihood of petitioner as he cannot do business - Petitioner filed return within 15 days from date of cancellation paid taxes and deposited late fee and case deserves reconsideration - Competent authority should consider application for revocation of cancellation and not merely remand to Appellate Authority - Instead of remanding the matter to the Appellate Authority, it would be just and proper to remit the matter to the respondent-authority who is competent to consider the request of the petitioner for revocation of the order of cancellation of registration - The impugned orders rejecting revocation application set aside and matter remitted to competent authority for fresh consideration - Assistant Commissioner directed to consider application for revocation of cancellation and pass appropriate order – The petition stands allowed [Read less]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full kn... [Read more]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full knowledge of the technical features of the products conforming to the correct classification but chose to classify them under different tariff headings inconsistently and deliberately. The inconsistency in adoption of classification by the appellant is not an innocuous consequence but pre-meditated tactics to avail ineligible exemptions and evade applicable duty - The appellant uploaded an Equipment Type Approval certificate on e-sanchit which stated the equipment type as GPON ONT and made no mention of subscriber end equipment, showing the appellant was fully aware of the incorrect classification and claim of ineligible exemption - The appellant failed to exercise due diligence while making self-assessment of duties in the Bills of Entry as mandated and the appellant had continued to classify items under the claimed heading and avail exemption benefit. The mala fides and intent to evade customs duty is evident from the conduct of the appellant - The extended period of limitation applies as the case involves intentional availment of exemption benefits with intent to evade duty - The appeals are dismissed [Read less]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to pro... [Read more]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to produce any evidence on record that the hotel proprietors had any knowledge or relation with the activity of the persons who were apprehended - No evidence has been produced to show that the appellants were involved in the activity of smuggling of gold - Penalty imposed on the driver and hotel proprietors are not sustainable and accordingly dropped - The vehicle confiscated during the course of seizure of gold is not liable for confiscation and directed to be released. The appeals are allowed [Read less]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to al... [Read more]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to all goods except compound alcoholic preparations of a kind used for the manufacture of beverages with alcoholic strength exceeding 0.5 percent by volume - The exclusion applies only to goods that are compound alcoholic preparations of a kind used for the manufacture of beverages and unless the Revenue proves the above conditions the benefit cannot be denied - Revenue relied on previous test report for different import without drawing any test report for the present consignment to deny the benefit. The previous decision of the Tribunal in the appellant's own case held that beverage flavours used for manufacture of beverages are not eligible for exemption but categorically stated that for flavours not sold to manufacture of beverages it must be established that they are of a kind used for manufacture of beverages - The Revenue failed to categorically establish that the goods in the present case were of a kind used for manufacture of beverages - The purchase order was placed by M/s. Godfrey Phillips India Ltd. who are major manufacturers of tobacco products establishing that goods were not sold to beverage manufacturers - The Revenue has failed to conclusively prove that the goods were used in the manufacture of beverages which is a condition precedent to deny the benefit of notification - The impugned order is set aside and benefit of notification is extended to the appellant – The appeal is allowed [Read less]

Service Tax - Liability of service tax on expenses incurred for Marketing and Promotion of Music Rights – Tribunal held that the assessee-appellant\'s activities do not fall within the definition of \"service\" under Section 65B(44) of the Finance Act, 1994 – Revenue in appeal – SC HELD – There is no reason to interfere with the impugned order passed by the Tribunal – The CESTAT Order is upheld and the Revenue appeal is dismissed

Customs - SAFTA exemption - Mismatch in tariff classification - Denial of Country of Origin benefit - Appellant imported textile items from Bangladesh and claimed exemption under Notification No. 99/2011 (SAFTA) on the basis of Country of Origin certificate issued by the exporting country. The adjudicating authority found classification mismatch between the codes mentioned in the Certificate of Origin and the codes redetermined by customs authorities and denied the benefit of exemption. Goods were also proposed for confiscation - Whether mismatch in tariff classification at 6-digit level between Country of Origin certifica... [Read more]

Customs - SAFTA exemption - Mismatch in tariff classification - Denial of Country of Origin benefit - Appellant imported textile items from Bangladesh and claimed exemption under Notification No. 99/2011 (SAFTA) on the basis of Country of Origin certificate issued by the exporting country. The adjudicating authority found classification mismatch between the codes mentioned in the Certificate of Origin and the codes redetermined by customs authorities and denied the benefit of exemption. Goods were also proposed for confiscation - Whether mismatch in tariff classification at 6-digit level between Country of Origin certificate and customs authorities' determination invalidates the Country of Origin certificate and disentitles the appellant from exemption benefit - HELD - There was no misdeclaration found on the description of the goods. Even if there is a mismatch in tariff classification, this does not disentitle the appellant from the benefit available on the basis of Country of Origin as none of the conditions under Rule 2 of CAROTAR 2020 for denying COO have been satisfied. The redetermined tariff headings remain well covered within the benefit of the exemption notification - Article 14 of SAFTA Rules states that minor discrepancies between statement made in certificate of origin and documents shall not invalidate the certificate. Under Section 28DA and CAROTAR rules, no provision exists to reject Country of Origin certificate merely on basis of classification mismatch when Country of Origin of goods is not in dispute. Appellant is entitled to benefit of exemption as claimed - Differential duty, interest, penalty, confiscation and redemption fine all set aside – The appeal is allowed - Customs - Valuation - Branded goods - Redetermination of value on basis of NIDB data - Appellant declared value of textile items on basis of supplier's invoice. Adjudicating authority redetermined the value citing NIDB data for similar branded goods without investigating whether goods were counterfeits - Whether valuation can be enhanced based on NIDB data for branded goods without investigating counterfeiting and without following valuation procedure - HELD - Adjudicating authority found that no brands on the goods were registered with Customs and no infringement of Intellectual Property Rights arose. However, value was enhanced by adopting price of branded goods without basis. No investigation was carried out to establish whether goods were counterfeits. Simply naming a brand does not make goods branded or counterfeit. Value of textile items depends on nature and quality of fabric which is vital to arrive at price. Value enhancement was done arbitrarily without following procedure prescribed under Valuation Rules. Declared transaction value cannot be rejected and redetermined value is not sustainable - Redetermined value set aside and transaction value declared by appellant is upheld. [Read less]

GST – Gujarat AAR Classification of PTFE braided gland packing - Tariff classification under HSN 59119090 (Textile products and articles for technical uses) versus HSN 39209949 (Other articles of plastics) - Applicable GST rate - Applicant engaged in manufacture of PTFE braided gland packing by interlocked or cross-plaited braiding of pure PTFE fibre yarn on braiding machines into flexible packing of square or round cross-section supplied in coils for use as stuffing-box packing in industrial pumps and valves - Whether PTFE braided gland packing should be classified as textile product under HSN 59119090 or as plastic art... [Read more]

GST – Gujarat AAR Classification of PTFE braided gland packing - Tariff classification under HSN 59119090 (Textile products and articles for technical uses) versus HSN 39209949 (Other articles of plastics) - Applicable GST rate - Applicant engaged in manufacture of PTFE braided gland packing by interlocked or cross-plaited braiding of pure PTFE fibre yarn on braiding machines into flexible packing of square or round cross-section supplied in coils for use as stuffing-box packing in industrial pumps and valves - Whether PTFE braided gland packing should be classified as textile product under HSN 59119090 or as plastic article under HSN 39209949 and what is the applicable GST rate - HELD – The PTFE braided gland packing is entirely made from Polytetrafluroethylene (PTFE), a plastic material classifiable under heading 39046100 of Chapter 39 which covers plastics and articles thereof - Note 1(g) of Section XI specifically excludes monofilament of plastics whose cross-sectional dimension exceeds 1mm from Section XI (Textile and Textile Articles) and directs such goods to Chapter 39, and since the applicant's product has cross-sectional dimensions of 3mm to 25mm, far exceeding 1mm, the goods are excluded from Section XI at the threshold and heading 5911 is out of bounds regardless of how closely the product matches the notes for that heading in Chapter 59 - Under the Textiles Committee Act, 1963, textile is defined as any fabric or cloth or yarn or garment made wholly or in part of cotton, wool, silk, artificial silk or other fibre, and nowhere in the said definition of fibre or textile, plastic has been mentioned as a commodity to be included in the definition of textile - The Hon'ble High Court of Madhya Pradesh in M/s. Raj Packwell Ltd. v. UOI has authoritatively held that HDPE woven sacks made from plastic strips are articles of plastic and not textile articles, despite being woven like fabric. The said principle applies to PTFE braided gland packing which, although obtained by interlocking or cross-plaiting braiding of pure PTFE fibre yarn, is made entirely of plastic material and therefore constitutes an article of plastic irrespective of the braiding process employed - Classification of goods under GST must be determined in accordance with relevant tariff entries, chapter notes, section notes and explanatory notes based on the actual nature and composition of goods, and classification adopted by other manufacturers cannot be relied upon to justify classification of similar products - The product is appropriately classified under sub-heading 39209949 of the First Schedule to the Customs Tariff Act, 1975 as it is an article of plastic and not textile - The product falls under Entry No. 121 of Schedule-II of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and is liable to 18% GST – Ordered accordingly [Read less]

Customs – Classification of Polyester Quilt Covers – Goods imported declared as Polyester Quilt Covers under CTH 63022200 with transaction value of USD 1.20 to USD 1.25 per piece – Department formed opinion that goods were folded polyester fabrics capable of being converted into bed sheets by removing stitches and rejected classification – Whether goods can be re-characterized merely because they are capable of subsequent conversion into bed sheets – HELD – Imported goods must be assessed in the condition in which they are presented to Customs; Classification is based on goods as imported, not on what they may ... [Read more]

Customs – Classification of Polyester Quilt Covers – Goods imported declared as Polyester Quilt Covers under CTH 63022200 with transaction value of USD 1.20 to USD 1.25 per piece – Department formed opinion that goods were folded polyester fabrics capable of being converted into bed sheets by removing stitches and rejected classification – Whether goods can be re-characterized merely because they are capable of subsequent conversion into bed sheets – HELD – Imported goods must be assessed in the condition in which they are presented to Customs; Classification is based on goods as imported, not on what they may become after further processing – Examination report revealed imported articles were folded and stitched and were presented as quilt covers ready for use. Department misread Note 7 to Section XI which speaks of goods produced in finished condition requiring only separation by cutting dividing threads; De-stitching cannot be wrongly equated with cutting dividing threads – Imported articles were already stitched articles ready for use and therefore answered statutory definition of made-up articles – Textile Committee, the designated expert body, had opined in identical matter that similar goods are Polyester Woven Printed Quilt Covers classifiable under Heading 6302 – Adjudicating authority ignored expert evidence completely. It is settled principle that goods are classifiable according to their condition at the time of clearance and made-up textile articles cannot be treated merely as fabrics because further processing is possible – The goods imported by appellant are Polyester Woven Printed Quilt Covers appropriately classifiable under CTH 6302 - Customs – Valuation – Rejection of Transaction Value – Appellant imported goods at declared transaction value of USD 1.20 to USD 1.25 per piece CIF – Department rejected declared transaction value under Rule 12 of Customs Valuation Rules, 2007 solely on basis of comparison with contemporaneous imports of bed sheets - Whether transaction value can be enhanced solely on basis of contemporaneous imports without satisfying mandatory requirements of Customs Valuation Rules – HELD – The Rule 12 of Valuation Rules permits rejection of transaction value only where Customs possesses reasonable doubt supported by objective evidence. In present case no evidence of additional remittance, no evidence of relationship between parties, no evidence of fabricated invoices, no evidence that declared price was false. The contemporaneous goods cited by Revenue were not legally comparable; Department merely relied on imports of bed sheets without comparison regarding manufacturer, quality, GSM, fabric construction, brand, finish, commercial level or quantity – Declared transaction value cannot be rejected without legal grounds; burden to establish undervaluation lies entirely on Revenue – Invoice value is to be accepted unless Customs proves otherwise with positive evidence – Previous acceptance of identical invoice values is relevant circumstance in favour of importer – Transaction Value declared by Appellant cannot be rejected - Customs – Confiscation and Redemption Fine – Goods confiscated under Section 111(m) on allegation of mis-classification and undervaluation and redemption fine imposed – Whether confiscation under Section 111(m) and redemption fine under Section 125 can survive when mis-classification and undervaluation are not legally established – HELD – Once allegations of mis-classification and undervaluation are not established and proved, there is no foundation for invoking Section 111(m) for effecting confiscation of goods – Section 111(m) provides for confiscation only when goods are mis-declared as to value or otherwise mis-declared; confiscation cannot be sustained when mis-classification and undervaluation allegations are not proved – Once order of confiscation is not sustained, imposing Redemption fine in lieu of confiscation as provided under Section 125 is not warranted – Order of confiscation as well as redemption fine imposed is set aside - Customs – Penalty imposed on allegation of mis-classification and undervaluation of goods – Whether penalty under Section 112(a) is sustainable when allegations of mis-classification and undervaluation are not legally established – HELD – Ingredients required for imposing penalty under Section 112(a) of Customs Act do not exist when allegations against importer are not established – Penalty under Section 112(a) is imposable only when there is contravention of Customs law including mis-declaration as to value; once allegations against Appellant are not established, foundation for imposing penalty is absent – Penalty imposed under Section 112(a) of Customs Act, 1962 is not sustainable and is set aside. [Read less]

GST - Refund of IGST exports of goods and services - Omission of Rule 96(10) - Applicability to pending proceedings - Petitioner claimed refund of IGST paid on goods and services exported out of India. Rule 96(10) of CGST Rules 2017 was omitted by Notification No. 20/2024 effective 08.10.2024 which imposed restrictions on refund claims - High Court held omission applies to all pending proceedings - Whether omission of Rule 96(10) without saving clause applies to pending proceedings or only prospectively - HELD - Constitution Bench principle in Kolhapur Canesugar Works case holds that omission of a Rule obliterates it from ... [Read more]

GST - Refund of IGST exports of goods and services - Omission of Rule 96(10) - Applicability to pending proceedings - Petitioner claimed refund of IGST paid on goods and services exported out of India. Rule 96(10) of CGST Rules 2017 was omitted by Notification No. 20/2024 effective 08.10.2024 which imposed restrictions on refund claims - High Court held omission applies to all pending proceedings - Whether omission of Rule 96(10) without saving clause applies to pending proceedings or only prospectively - HELD - Constitution Bench principle in Kolhapur Canesugar Works case holds that omission of a Rule obliterates it from statute completely as if it never existed. General Clauses Act Section 6 applies only to Central Acts or regulations not to Rules. When Rule is omitted without saving clause or provision for continuance of initiated proceedings, the omission applies to all pending proceedings - The GST Council recommendation for prospective application is only advisory and not mandatory. Legislature's intention to omit Rule 96(10) without saving clause was to end unnecessary complications once and for all including in pending proceedings not to keep complications alive. High Court judgment well-reasoned and no interference warranted. Omission of Rule 96(10) applies to all pending proceedings without restriction on refund claims previously imposed by Rule 96(10) – There are many proceedings pending before the various High Courts and conflicting decisions have also been passed. The Bench hopes that such proceedings would get closure with this judgment - The appeals are dismissed [Read less]

GST - Registration cancellation - Appeal dismissed on ground of delay - Petitioner's GST registration was cancelled effective 31.01.2024 for non-filing of GST returns for six months. The petitioner, a proprietorship firm, had engaged an accountant or local advocate to handle statutory compliances but was not informed about the requirement to file GST returns or the issuance of Show Cause Notice - HELD - The GST registration cancellation is virtually a civil death that brings business operations to a standstill. Petitioner was entirely dependent on accountant for statutory compliance who failed to inform about filing requir... [Read more]

GST - Registration cancellation - Appeal dismissed on ground of delay - Petitioner's GST registration was cancelled effective 31.01.2024 for non-filing of GST returns for six months. The petitioner, a proprietorship firm, had engaged an accountant or local advocate to handle statutory compliances but was not informed about the requirement to file GST returns or the issuance of Show Cause Notice - HELD - The GST registration cancellation is virtually a civil death that brings business operations to a standstill. Petitioner was entirely dependent on accountant for statutory compliance who failed to inform about filing requirements and did not file returns for the relevant period. Petitioner remained under bona fide belief that compliances were being handled and was unaware of Show Cause Notice issuance and order in original. The reasons mentioned for non-compliance appear to be genuine and justify condonation of delay. Previous coordinate bench decisions of this Court have entertained similar appeals on merits despite delay. Order dismissing appeal without considering merit is unsustainable – The impugned order set aside and appellate authority directed to consider and decide appeal on own merits subject to statutory deposits – The petition is disposed of [Read less]

GST on online gaming and betting - Petitioner challenged constitutional and statutory validity of levy of GST on online gaming and fantasy sports transactions - Whether levy of GST on actionable claims arising from betting and gambling transactions including online gaming and fantasy sports is constitutionally valid - HELD - The Supreme Court has addressed all substantive issues raised in the writ petition - The writ petition filed by the petitioners had made five substantive prayers. All the contentions and prayers made by the petitioners in the writ petition were also substantive issues before the Supreme Court and the S... [Read more]

GST on online gaming and betting - Petitioner challenged constitutional and statutory validity of levy of GST on online gaming and fantasy sports transactions - Whether levy of GST on actionable claims arising from betting and gambling transactions including online gaming and fantasy sports is constitutionally valid - HELD - The Supreme Court has addressed all substantive issues raised in the writ petition - The writ petition filed by the petitioners had made five substantive prayers. All the contentions and prayers made by the petitioners in the writ petition were also substantive issues before the Supreme Court and the Supreme Court has pronounced its verdict on all such issues. There is no issue raised in the present writ petition, which requires any consideration beyond the pronouncement of the Supreme Court - The writ petition is dismissed and disposed of in terms of the judgment of the Supreme Court - The writ petition is dismissed [Read less]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particu... [Read more]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particulars of original manufacturers and duty paid thereon - Consideration for transactions was discharged through recognized banking channels including RTGS and account-payee cheques with corresponding ledger accounts reflecting realization of sale proceeds. Service tax on GTA services was duly discharged under reverse charge mechanism and reflected in statutory ST-3 Returns - These contemporaneous statutory records lend considerable assurance to bona fides of transactions and cannot be brushed aside without convincing evidence to the contrary - Department nowhere alleged or established that appellant procured non-duty-paid scrap from any undisclosed source - Mere verification of vehicle registration numbers without independent investigation of actual transportation chain is insufficient to sustain serious allegation of fraudulent availment. The investigation remained conspicuously incomplete with no investigation at transporters' end, no verification at suppliers' premises, no physical stock discrepancy and no evidence regarding diversion of inputs elsewhere - Isolated discrepancies in vehicle numbers regarding handful of cases out of more than 150 consignments and nearly 80 transport vehicles cannot justify inference that entire series of transactions was fictitious - Statements recorded do not contain categorical admission of non-receipt and do not inspire confidence with internal contradictions considerably eroding evidentiary value - No evidence of fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation. The entire proceedings barred by limitation - The impugned order is set aside and appeals are allowed [Read less]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD... [Read more]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD - Mere verification of vehicle registration numbers through VAHAN portal without independent investigation is wholly insufficient to establish non-receipt of inputs. The Department failed to investigate suppliers themselves, record statements from suppliers or verify their records to ascertain whether disputed inputs had been sold and dispatched to the appellant - The appellant manufactured substantial quantities of finished excisable goods during the relevant period and discharged applicable central excise duty thereon, which undisputed production cannot be reconciled with the allegation that over 6383 MT of inputs were never received - The appellant produced contemporaneous records including transport documents, transporters' invoices, carriage inward accounts, ledger accounts evidencing payments and statutory records maintained in ordinary course of business - The evidentiary basis adopted by the Revenue suffers from serious infirmities including data reflected on VAHAN portal containing technical inaccuracies and deficiencies – The communications received from alleged vehicle owners relate only to an insignificant fraction and were obtained years after alleged transportation without compliance with Section 14 requirements - No cogent and convincing evidence has been brought on record establishing fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation - The impugned order does not merit judicial sustenance and is set aside – The appeals are allowed [Read less]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained fina... [Read more]

GST - Issuance of show cause notices for re-examination of settled issues - Petitioner sought to quash show cause notice regarding classification of tobacco product as ‘manufactured tobacco’ whereas an earlier show cause notice for similar period and similar issue had already been set aside by the High Court which decided that the product is unmanufactured tobacco - HELD - The very allegations regarding use of machines and addition of aroma and menthol had already been specifically considered in the Advance Ruling - The issuance of show cause notices reflects an attempt to reopen issues which have already attained finality without any legal basis and such exercise is contrary to the scheme of the statute - A subordinate authority is bound by the findings of a higher or competent authority unless such findings are set aside in accordance with law and principles of judicial discipline require that orders of higher appellate authorities must be followed unreservedly by subordinate authorities - The mere fact that the order of appellate authority is not acceptable to the department and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court - The controversy already stands adjudicated by the Division Bench and there is no reason to take a different view - The impugned show cause notices are quashed and set aside as being without jurisdiction – The writ petition is allowed [Read less]

Central Excise - Valuation - Place of removal – Inclusion of Freight and insurance - Show Cause Notice proposing to add freight and insurance charges to the assessable value on the ground that buyer's premises constitute the place of removal. The adjudicating authority confirmed the demand invoking extended period of limitation - Whether freight and insurance are includible in assessable value when already in-built in the price charged and not separately collected from customers - HELD - The cost of freight and insurance cannot be included in the assessable value when the same is in-built in the price of goods and is not... [Read more]

Central Excise - Valuation - Place of removal – Inclusion of Freight and insurance - Show Cause Notice proposing to add freight and insurance charges to the assessable value on the ground that buyer's premises constitute the place of removal. The adjudicating authority confirmed the demand invoking extended period of limitation - Whether freight and insurance are includible in assessable value when already in-built in the price charged and not separately collected from customers - HELD - The cost of freight and insurance cannot be included in the assessable value when the same is in-built in the price of goods and is not separately collected. The burden lies on the department to prove that extra amount towards freight and insurance has been collected by appellant in addition to price charged. No such proof has been provided except a bald statement in an internal report. The issue of includeability of freight and insurance is settled law in favour of appellant by Supreme Court judgment in Escorts JCB Ltd. case and Ispat Industries Ltd. case which hold that customer's premises cannot be the place of removal. The demand confirmed by including cost of freight and insurance is not sustainable - Demand set aside and the appeal is allowed - Place of removal - Buyer's premises - Appellant sold goods both at factory gate and to depots with uniform prices. The adjudicating authority held buyer's premises as the place of removal and included freight and insurance in assessable value. Relying on the amended definition of place of removal in Section 4, the Revenue contended that since goods were insured in transit, place of removal should be deemed as buyer's premises - Whether buyer's premises can be treated as place of removal for purpose of including freight and insurance in assessable value - HELD - Buyer's premises cannot be treated as place of removal since there is no further removal from the buyer's premises. The ownership passing to buyer and transit insurance do not determine the place of removal. The Supreme Court in Escorts JCB Ltd. case held that mere arrangement of transport and transit insurance by seller does not mean ownership is retained by seller till delivery. In Ispat Industries Ltd. case, Supreme Court categorically held that cost of transportation from place of removal to place of delivery is to be excluded from assessable value. Sales from factory were made FOR Works and not FOR Destination. Therefore, factory or depot from which goods were sold remains the place of removal - Demand set aside - Show Cause Notice - Vague allegations - Hypothetical methodology - The Show Cause Notice computed demand assuming 80% of goods attracted freight at Rs. 6 per kg. and 20% at Rs. 45 per kg. The basis for applying different values was not clear. The Notice did not specify whether quantities related to factory to depot or depot to actual customer movements. The Notice did not refer to price list filed on 18-09-1996 which stated freight would not be deducted from assessable value post Finance Bill 1996. Subsequent price declarations clearly reflected no deduction of freight or insurance was claimed - Whether a vague Show Cause Notice based on hypothetical methodology of computation denies proper opportunity of defence - HELD - The Show Cause Notice is vague and adopted hypothetical methodology for computation of demand which is not permissible. The basis of applying different freight rates to 20% and 80% of clearances is not clear. No actual determination of freight or insurance amount was done. The SCN is the foundation on which department must build its case and if allegations are vague, it is sufficient to hold that noticee was not given proper opportunity to meet the allegations as per Supreme Court judgment in CCE vs. Brindavan Beverages. The demand being vague is liable to be set aside on this ground itself - Demand set aside - Extended period of limitation - Absence of fraud or suppression - Whether extended period of limitation can be invoked where there is no fraud, collusion, suppression or wilful misstatement and all facts were known to department - HELD - There has been no fraud, collusion, suppression or wilful misstatement by appellant on the part of appellant. The fact regarding inclusion of freight in price was informed to department as early as September 1996 in price list and in subsequent correspondences. All facts were in the knowledge of department as yearly audits were conducted. No evidence of separate collection of freight from customers has been produced except bald statement in internal report. Appellant has been regularly filing price lists with jurisdictional officers. Extended period of limitation cannot be invoked where facts were known to department at the time of filing of price lists - Demand set aside. [Read less]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural... [Read more]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural justice besides being contrary to statutory requirements of CGST Act - Order passed in wholly mechanical manner without application of mind appearing to be cut and pasted from another case as opening portion records order passed in another case even though cause title names petitioner-company – The impugned order is vitiated by violation of Section 75(4) of CGST and non-application of mind. The order passed in absence of petitioner's representative without proper hearing constitutes jurisdictional error - Respondent authorities required to pass fresh order after affording petitioner opportunity of personal hearing upon issuing fresh notice fixing next date of hearing - The impugned order is set aside and the writ petition is allowed [Read less]

GST - Anticipatory bail – Allegation of wrongful availment of Input Tax Credit - Petitioners purchased aluminium scrap from suppliers and obtained invoices. After a raid by authorities, suppliers were arrested for issuing concocted invoices for bogus supply of goods resulting in wrongful availment of ITC - Petitioners were summoned under Section 70 and apprehended arrest. Petitioners claimed they had paid invoice value and tax to suppliers through bank transactions and filed periodic returns with invoices. Learned Sessions Court rejected their bail application - Whether registered purchasers who have complied with GST fr... [Read more]

GST - Anticipatory bail – Allegation of wrongful availment of Input Tax Credit - Petitioners purchased aluminium scrap from suppliers and obtained invoices. After a raid by authorities, suppliers were arrested for issuing concocted invoices for bogus supply of goods resulting in wrongful availment of ITC - Petitioners were summoned under Section 70 and apprehended arrest. Petitioners claimed they had paid invoice value and tax to suppliers through bank transactions and filed periodic returns with invoices. Learned Sessions Court rejected their bail application - Whether registered purchasers who have complied with GST framework and paid through bank channels are entitled to anticipatory bail despite suppliers being involved in fraudulent activities - HELD - GST framework is built on self-assessment and voluntary compliance. Purchaser is entitled to input tax credit only if tax invoice is possessed, goods actually received, tax charged by supplier is paid by purchaser through proper channels, and returns are filed by recipient along with invoices - In present case petitioners are in possession of invoices, have paid invoice value and tax through bank transactions and have periodically filed returns. Principal offender under Section 132 of the CGST Act, 2017 is the supplier who has been granted regular bail. In genuine case where purchaser has paid invoice value and GST and submitted returns periodically, purchaser cannot be held liable for default of supplier except under exceptional circumstances - Custodial interrogation of purchaser not necessary unless prima facie material shows collusion with supplier. Nature of punishment prescribed maximum five years is compoundable offence under Section 138 of Act - Petitioners do not have antecedents and have undertaken to cooperate and produce documents to prove receipt of goods. Arrest cannot be made to merely investigate whether conditions are being met but only when Commissioner has formulated duly recorded opinion that requirements are satisfied based on evidence as held in Radhika Agarwal case - Anticipatory bail granted subject to appearing on specified date, personal bond, cooperation with authorities, mobile phone operational, location dropping on google map, and passport surrender - The petitions are allowed [Read less]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the conte... [Read more]

GST - Maintainability of Writ Petition - Alternative Remedy - Petitioner challenge the impugned order contending that two simultaneous orders have been passed in respect of the same period and the proceedings were barred by Section 6(2)(b) of the CGST Act - Whether the Court ought to entertain a writ petition when an efficacious statutory remedy of appeal exists - HELD - The Show Cause Notice under Section 74 of the CGST Act was issued on 22-03-2023 whereas the notices by the State GST Authorities came subsequently on 25-09-2023, 05-12-2023 and 29-03-2024 - The chronology placed before the Court demonstrates that the contention based on Section 6(2)(b) of the CGST Act does not disclose such a jurisdictional infirmity as would warrant bypassing the statutory remedy of appeal - The order dated 06-09-2022 pertained to proceedings relating to goods seized during search whereas the order dated 11-01-2025 came to be passed after investigation and consideration of the reply - The two proceedings cannot merely on that basis be treated as parallel adjudication of the same subject matter - The availability of an alternative remedy does not render a writ petition not maintainable - The petitioner is relegated to the statutory remedy of appeal under Section 107 of the CGST Act – The writ petition is disposed of [Read less]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequac... [Read more]

GST - Violation of Principles of Natural Justice - Reliance on Electronic Evidence and Kachcha Parchis - Maintainability of Writ Petition - HELD - The orders-in-original are appealable under Section 107 of the CGST Act and the appellate remedy constitutes a complete efficacious and comprehensive statutory mechanism for redressal of grievances and the appellate authority is vested with wide powers to examine both questions of fact and law re-appreciate the material placed on record scrutinise the findings and determine the legality as well as correctness of the orders - Questions relating to appreciation of evidence adequacy of material correctness of factual findings compliance with procedure relating to personal hearing admissibility of electronic evidence denial of cross-examination and correctness of findings are matters relating to the merits of adjudication appropriately examined by the appellate authority - The procedural grievances urged by the petitioners are not uniform across the batch and to the extent they arise in individual cases require examination with reference to the respective adjudication records and the prejudice if any caused to the concerned petitioner - None of the circumstances disclosed disclose circumstances warranting bypass of the statutory appellate mechanism - The writ petitions are dismissed leaving it open to the concerned petitioners to avail the statutory remedy of appeal [Read less]

Customs – Utilization of Status Holder Incentive Scrips (SHIS) for import of goods falling beyond the permissible scope of exemption notification - Import of capital goods - Scope of capital goods - Appellant, a manufacturer of steel products accorded Trading House status, imported goods such as gaskets, bushings, bearings, gear reducers, main springs, whims bottom parts and shock absorbers under Status Holder Incentive Scrips (SHIS) licences in January 2013 to November 2013 for setting up Coke Oven Plant, Pellet Plant, Arc Furnace, Steel Melting Shop, Blast Furnace and modernization of captive power plant - SCN issued a... [Read more]

Customs – Utilization of Status Holder Incentive Scrips (SHIS) for import of goods falling beyond the permissible scope of exemption notification - Import of capital goods - Scope of capital goods - Appellant, a manufacturer of steel products accorded Trading House status, imported goods such as gaskets, bushings, bearings, gear reducers, main springs, whims bottom parts and shock absorbers under Status Holder Incentive Scrips (SHIS) licences in January 2013 to November 2013 for setting up Coke Oven Plant, Pellet Plant, Arc Furnace, Steel Melting Shop, Blast Furnace and modernization of captive power plant - SCN issued alleging that the goods imported were parts/spares/components of capital goods and duty had been debited in excess of the permissible ceiling of 10% of the value of SHIS scrips, in violation of Conditions 4(i) and 4(iii) of Notification No. 104/2009-Cus. dated 14.09.2009. The lower authority confirmed demand of duty along with interest and penalty - Whether the goods imported by the appellant constitute capital goods under Notification 104/2009 or only parts/spares subject to 10% restriction - HELD - The definition of capital goods in Notification 104/2009 is of wide import and covers plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, including those required for replacement, modernization, technological upgradation or expansion - All the items imported by the appellant squarely fit within the definition of capital goods as defined in the Notification. The goods imported are not merely spares or parts but are capital goods required for modernization of the plant. The restriction of 10% applies only to components, spares or parts of capital goods imported earlier, and not to fresh import of capital goods including accessories. The appellant has correctly availed the benefit of Notification 104/2009 for import of the said goods - Demand of duty set aside and penalty is not sustainable – The appeal is allowed [Read less]

Customs – Misdeclaration of country of origin – Evidentiary value of unauthenticated overseas customs documents – Appellants imported dry dates declared as originating from Saudi Arabia; Department obtained Transshipment Bill of Entry documents from Federal Customs Authority, UAE showing goods originated from Pakistan and were transshipped through Dubai; Department relied on unauthenticated photocopies of documents alleged to be obtained from overseas customs authority to establish misdeclaration – Whether unauthenticated documents obtained from overseas customs authority without proper authentication and without s... [Read more]

Customs – Misdeclaration of country of origin – Evidentiary value of unauthenticated overseas customs documents – Appellants imported dry dates declared as originating from Saudi Arabia; Department obtained Transshipment Bill of Entry documents from Federal Customs Authority, UAE showing goods originated from Pakistan and were transshipped through Dubai; Department relied on unauthenticated photocopies of documents alleged to be obtained from overseas customs authority to establish misdeclaration – Whether unauthenticated documents obtained from overseas customs authority without proper authentication and without supply of copies to appellants can be relied upon as conclusive evidence to establish country of origin – HELD – Whether unauthenticated overseas customs documents or COIN reports can be used as reliable evidence depends entirely on strength of facts and how well they are corroborated – Raw, unverified intelligence or unauthenticated photocopies are not sufficient to reject declared transaction or establish allegation; such reports treated merely as starting point for investigation, not final proof of violation – When foreign authorities provide specific, verified investigative report backed by strong independent facts and completely corroborated, evidence becomes reliable and admissible – In present case, documents are not authenticated; documents do not bear stamps and seals of overseas customs authority; manner of obtaining and procuring documents not explained satisfactorily; copy of forwarding letter by which officer posted abroad claimed to have sent report was not provided to appellants – Documents being merely printouts from website which are not stamped or signed cannot be treated as conclusive evidence – Unauthenticated photocopies forwarded by officer posted in Dubai cannot be treated as gospel truth to establish allegation against appellants – Allegation of misdeclaration of country of origin not established by credible authentic evidence - Customs – Country of Origin of imported goods – Verification of country of origin certificate – Whether country of origin can be determined without conducting formal verification with certificate issuing authority as per Rule 6 of Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 – HELD – In absence of verification from country of declared origin, allegation of misdeclaration of country of origin does not survive – Where country of origin and country of re-export are different, phytosanitary certificate for re-export along with attested copy of phytosanitary certificate from country of origin is mandatory – Custom authorities cannot challenge or reject country of origin certificate issued by government authorities of other country without conducting verification from certificate issuing authority – Authenticity of certificate must be enquired from issuing country; certificate cannot be discarded without checking authenticity – When certificate of origin, phytosanitary certificate and markings on bags all show same country of origin and no enquiry was conducted from exporting country to prove certificate false, mere suspicion is not enough to discard documents – Conclusion on country of origin cannot be arrived at without causing authentic enquiry on authenticity of certificate issued by country authorities – In present case, genuineness of certificate not enquired from issuing country; allegation that country of origin is Pakistan not established conclusively - Customs – Confiscation – Goods imported and already cleared for home consumption – Whether goods already cleared for home consumption and seized cease to be imported goods and can be confiscated – HELD – Goods once imported and cleared for home consumption cease to be imported goods as per Section 2(f) of Customs Act, 1962 – It is not open for revenue to propose confiscation of goods which have been imported and cleared by authorities for home consumption after due examination and after satisfying themselves as to whether conditions required for clearance are met – Clearing of goods by customs officers including by SIIB after due examination creates presumption of proper clearance; confiscation cannot be based on allegations which were not conclusively established through authentic evidence – However, goods which were seized and not cleared by appellants for violation of Phytosanitary certificate requirements can be confiscated as such goods are still imported goods and were not cleared for home consumption – Confiscation of goods already cleared for home consumption is not sustainable and is set aside - Customs – Confiscation – Violation of Phytosanitary certificate requirements –Whether goods can be confiscated and redemption fine imposed for violation of phytosanitary requirements when goods were not cleared by customs – HELD – Goods imported in violation of mandatory phytosanitary certificate requirements are prohibited goods under Section 2(33) of Customs Act and are liable to be confiscated under Section 111 – Where goods were seized and not cleared by appellants and phytosanitary certificates were not produced, goods cannot be released and are liable to be confiscated – However, when confiscation is proposed, redemption fine imposed under Section 125 should be reasonable and should take into consideration facts of case, profit margin and detention and demurrage charges that may have to be borne by appellants – In present case, goods seized for violation of phytosanitary requirements are liable to be confiscated; however, appellants given option to redeem goods on payment of reasonable redemption fine subject to submission of necessary phytosanitary certificate - Customs – Penalty – Imposition of penalty not proposed in show cause notice - Whether penalty can be imposed when same was not proposed in show cause notice – HELD – Penalty under Section 112 can be imposed only when proposed in show cause notice; imposition of penalty beyond purview of show cause notice is not permissible and is contrary to principles of natural justice – Adjudicating authority must confine itself to issues and grounds raised in show cause notice; expanding scope of demand or penalty beyond show cause notice denies assessee opportunity to respond to fresh allegations – In present case, penalty under Section 112 was not proposed in show cause notices but was imposed by adjudicating authority which is beyond permissible scope; imposition of penalty not proposed in SCN is set aside. 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Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rend... [Read more]

Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rendered in respect of repair and maintenance of road goes to the root of the matter - Exemptions from Service Tax are conditional and require strict compliance with stipulated conditions. The onus is entirely on the assessee to prove eligibility through clear, cogent and admissible documentary evidence - The Original Authority decided the case without examining the nature of the services in detail and the documents provided by Appellant require proper evaluation for determining exemption – The appeal is allowed by remand [Read less]

GST – Gujarat AAR - Classification and applicable GST rate on Ophthalmic Binocular Surgical Microscope - Tariff classification under CTH 9018 versus competing headings 9011 and 9012 - Whether the product should be classified under CTH 9018 (Instruments and appliances used in medical, surgical, dental or veterinary sciences) or under CTH 9011 (Compound optical microscopes) or CTH 9012 (Microscopes other than optical microscopes) - HELD - The product is an instrument used in medical and surgical sciences and is specifically designed and used exclusively by ophthalmologists for performing complex surgeries on the eye - Comp... [Read more]

GST – Gujarat AAR - Classification and applicable GST rate on Ophthalmic Binocular Surgical Microscope - Tariff classification under CTH 9018 versus competing headings 9011 and 9012 - Whether the product should be classified under CTH 9018 (Instruments and appliances used in medical, surgical, dental or veterinary sciences) or under CTH 9011 (Compound optical microscopes) or CTH 9012 (Microscopes other than optical microscopes) - HELD - The product is an instrument used in medical and surgical sciences and is specifically designed and used exclusively by ophthalmologists for performing complex surgeries on the eye - Compound optical microscopes classified under CTH 9011 are generic in nature used by amateurs, teachers, and for industrial and research laboratory use providing only two-dimensional magnification whereas the Ophthalmic Binocular Surgical Microscope provides three-dimensional stereoscopic view with multi-directional coaxial illumination and specialized features for precise eye surgery - HSN notes to heading 9011 specifically exclude ophthalmic binocular-type microscopes and expressly refer such instruments to heading 9018 - Microscopes under CTH 9012 including electron microscopes, proton microscopes and electron diffraction apparatus are used in forensic science, biological research, industrial analysis, nanotechnology and material science studies and cannot be used for eye surgeries - The Ophthalmic Binocular Surgical Microscope possesses all the attributes of an instrument within the meaning prescribed in the Oxford dictionary as a tool or device used for special, delicate or scientific work and is identifiable as being for medical or surgical use - The product ‘Ophthalmic Binocular Surgical Microscope’ is appropriately classified under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975 - The product falls within Sr. No. 483 of Schedule-I of Notification No. 9/2025-CT (Rate) dated 17.09.2025 which covers Instruments and appliances used in medical, surgical, dental or veterinary sciences attracting 5% GST – Ordered accordingly [Read less]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central ... [Read more]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central Excise Act, 1944 - HELD - The chemical composition of the inputs and the final diluted and repackaged materials remain identical. As per the principle laid down by the Supreme Court, there must be a transformation and a new and different article must emerge having a distinctive name, character or use for a process to amount to manufacture - Different tests conducted indicated that the raw material as well as the impugned goods are having same chemical characters - The process of dilution of inputs does not result in emergence of a new product to qualify as manufacturing - The classification adopted by the Appellant is correct and the goods cleared merit classification as claimed – The issues have been settled by the Tribunal in the respondent’s own case for the prior period as well as for its other unit - The Department cannot take a contrary view for subsequent periods when it has already accepted a particular legal position in the Appellant's case for the prior period - The appeal filed by Revenue is without merit and accordingly dismissed [Read less]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. T... [Read more]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. The CENVAT Credit for Service Tax paid on rental charges of storage cannot be denied - The matter is identical to the previous period for 2013-14 wherein the Tribunal held that appellant would be eligible for CENVAT Credit of Service Tax paid on rental charges. No reason to take a different view as the matter concerns the same appellant with identical facts - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Refund of service tax collected and deposited by petitioner and subsequently recovered from service recipient – Rejection of refund claim on ground of limitation – Petitioner engaged in providing manpower recruitment and supply agency services, collected service tax during the period when such services were subject to reverse charge mechanism from 01.04.2015 onwards - subsequently the service recipient was audited and found liable to pay the same service tax under reverse charge mechanism and accordingly paid service tax to the Department and issued a debit note to the petitioner - Petitioner filed a re... [Read more]

Service Tax – Refund of service tax collected and deposited by petitioner and subsequently recovered from service recipient – Rejection of refund claim on ground of limitation – Petitioner engaged in providing manpower recruitment and supply agency services, collected service tax during the period when such services were subject to reverse charge mechanism from 01.04.2015 onwards - subsequently the service recipient was audited and found liable to pay the same service tax under reverse charge mechanism and accordingly paid service tax to the Department and issued a debit note to the petitioner - Petitioner filed a refund application under Section 11B of the Central Excise Act, 1944 which was rejected by the Department on the ground that it had been filed beyond the prescribed period of limitation and the appeal preferred by petitioner before the appellate authority was also dismissed – Whether refund claim of petitioner can be rejected solely on the ground of limitation when the Department itself recovered the service tax twice, first from the petitioner and thereafter from the service recipient while retaining the amount earlier deposited by petitioner – HELD – The refund claim cannot be rejected solely on the ground of limitation in these peculiar and exceptional circumstances where the Department has become the beneficiary of unjust enrichment by collecting service tax twice, first from the petitioner despite having no authority in law to do so after 01.04.2015 and thereafter from the service recipient, while the petitioner became aware of such position only when the service recipient issued the debit note thereby constrained to file the refund application. In such exceptional circumstances when the Department itself committed illegality by accepting tax deposited without authority in law and subsequently collecting the same tax again from the service recipient, the respondent authorities cannot reject the claim of the petitioner on the ground of limitation – The impugned orders are quashed and set aside and the respondents are directed to refund the amount to the petitioner within six weeks, failing which the amount shall carry interest at the prescribed rate per annum until the date of actual payment – The petition is allowed [Read less]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic tes... [Read more]

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic test, and repurchased the certified seeds - Whether certified seeds so prepared fall within the exemption notification dated 29.04.2006 which exempts seeds of all types other than imported seeds used for sowing purpose from tax - HELD - The Government Notification dated 29.04.2006 clearly exempts seeds of all types other than imported seeds used for sowing purpose from tax - The Respondent is not importing any seeds and the seeds in question are used only for sowing purposes - The certified seeds are prepared under the research and development program of the Respondent wherein the Respondent remains present in the farms and undertakes proper research such as germination test, grow out test and genetic test to produce certified seeds which are packed and sold with compensation paid on kilo rate basis - Such seeds which are prepared through research and development program cannot be said to be seeds of business and purchase warranting levy of purchase tax under Section 9(1) of the Act - The subsequent determination order in case of M/s. King and Queen Seeds Corporation wherein the determining authority held that seeds prepared under research and development program cannot be said to be of business and purchase is applicable to the case of the Respondent - The earlier determination order in case of M/s. Green India Farm Biotech is distinguishable as no one remained present before the determining authority in that case and hence the decision taken was that purchase tax was leviable - The Revision Application filed by the Respondent challenging the revisional order which sought to levy purchase tax is allowed and the revisional order is set aside - The writ petition challenging the Tribunal's order is dismissed [Read less]

Central Excise – Refund of duty paid on galleries of stenter machines – Rejection of refund claims on ground that determination of Annual Production Capacity was not challenged and presumption against appellants under Section 12B could not be discharged – Appellants engaged in manufacture of excisable goods under compounded levy scheme filed refund claims for duty paid on galleries of stenter machines for the period from 16.12.1998 to 28.02.2000, contending that galleries should not be included in the dimensions of hot air stenter for determining Annual Production Capacity - Commissioner (Appeals) allowed the appeals... [Read more]

Central Excise – Refund of duty paid on galleries of stenter machines – Rejection of refund claims on ground that determination of Annual Production Capacity was not challenged and presumption against appellants under Section 12B could not be discharged – Appellants engaged in manufacture of excisable goods under compounded levy scheme filed refund claims for duty paid on galleries of stenter machines for the period from 16.12.1998 to 28.02.2000, contending that galleries should not be included in the dimensions of hot air stenter for determining Annual Production Capacity - Commissioner (Appeals) allowed the appeals holding the levy unconstitutional and accordingly not governed by the provisions of Section 11B and Section 12B - Tribunal allowed the Revenue's appeals observing that the principle of unjust enrichment and consequently refund claims cannot be sustained – Whether the determination of Annual Production Capacity is an appealable order and whether the principle of unjust enrichment applies when the levy is unconstitutional – HELD – The determination of Annual Production Capacity by the prescribed authority is an administrative exercise and not a quasi-judicial order and therefore does not give rise to any appealable order, consequently where a refund claim arises on account of erroneously collected duty on account of inclusion of galleries in the Annual Production Capacity, the assessee is entitled to claim refund without challenging the determination of Annual Production Capacity - When the levy itself is found to be unconstitutional as clarified by the Hon'ble Apex Court and the Rules of 2000, the provisions of Section 11B relating to limitation and the burden under Section 12B to prove that duty was not passed on to third parties would not apply as the principle of unjust enrichment enunciated in Mafatlal Industries applies only to levies which are otherwise valid but erroneously collected, and not to levies which are unconstitutional – The impugned order of the Tribunal is quashed and set aside, the order of Commissioner (Appeals) is restored with a direction to the Commissioner to redetermine the Annual Production Capacity of the appellant excluding the galleries of the stenter in accordance with the applicable Rules and thereafter determine the duty payable and process the refund claim accordingly - Tax Appeals are dismissed [Read less]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - ... [Read more]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - HELD – The Section 128A opens with a wider non obstante clause than Section 75(12) reading "notwithstanding anything to the contrary contained in this Act" and if Parliament intended to exclude self-assessed tax from Section 128A, it would have inserted a qualifying phrase such as "other than cases falling within Section 75(12)" similar to the exclusion in Section 80. The absence of such exclusion coupled with the width of the non obstante clause indicates Parliament did not intend to exclude self-assessed tax from Section 128A - The initiation of proceedings under Section 73 is a sine qua non for filing an application under Section 128A and once the Revenue decides to determine liability under Section 73, whether in relation to self-assessed tax or otherwise, it is open to the taxable person to file an application under Section 128A. The Circular No.238 cannot curtail the scope and ambit of the statute as a Circular issued by CBIC cannot override statutory provisions. The Explanation to Section 75(12) is not applicable to proceedings pertaining to the period from 01.07.2017 to 31.03.2020 - The implied exclusion of cases relating to self-assessed tax cannot be read into Section 128A and petitioners are entitled to waiver benefits under Section 128A if they satisfy the substantive conditions thereof – Ordered accordingly - Time Limits under Rule 164 of the CGST Rules, 2017 - Mandatory or Directory - Petitioners applied for waiver of interest and penalty under Section 128A but some applications were filed after the stipulated deadline of three months from the notified date - Revenue contended that the time limit prescribed in sub-rule (6) of Rule 164 is directory in nature and not mandatory and the doctrine of substantial compliance applies - Whether the time limits prescribed in Rule 164 are mandatory or directory - HELD – The Sub-rule (6) opens with the phrase "Any person who wishes to file an application" which shows the taxable person has an option of filing or not filing the application, however if the taxable person opts to file such application the time limit becomes applicable. Upon holistic consideration of Rule 164, the entire process of consideration and disposal of waiver applications is time bound with prescribed time limits for issuance of show cause notices under sub-rule (8), responses under sub-rule (9) and approval or rejection orders under sub-rule (13). Sub-rule (14) prescribes the drastic consequence of deemed approval and conclusion of proceedings if an order is not issued within the prescribed period. These are clear indications that the time limits form part of the substance of the scheme - The time limit for filing an application forms part of the substance and not a procedural or directory requirement. The doctrine of substantial compliance may apply to formal or procedural defects in filing the application but not to the substantive requirement of filing within the prescribed time limit. - The time limits prescribed in Rule 164 including that in sub-rule (6) are mandatory and not directory and applications filed after the expiry of the prescribed time limit are liable to be rejected - Void Orders - Conditions for Issuance - When can Form GST SPL-05 Approval Orders be declared Void - In some cases, the proper officer issued an order in Form GST SPL-05 accepting the waiver application and subsequently issued another order declaring the earlier Form GST SPL-05 order to be void on the ground that the applicant was not eligible for waiver under Section 128A - The petitioners contended that such void orders were issued without authority under the statute or rules - Whether approval orders issued in Form GST SPL-05 can be declared void by issuing a separate void order - HELD – The Sub-rules (16) and (17) of Rule 164 are the only provisions that prescribe when orders issued in Form GST SPL-05 or Form GST SPL-06 become void. Sub-rule (16) applies when the taxpayer fails to pay additional amounts of tax liability as per the second proviso to sub-section (1) of Section 128A within the prescribed time. Sub-rule (17) applies when the taxpayer fails to pay interest or penalty relating to erroneous refund or demands pertaining to periods other than 01.07.2017 to 31.03.2020 within three months from the date of issuance of the order in Form GST SPL-05 or SPL-06. Except in these situations specified in sub-rules (16) and (17), neither the statute nor the rule enables the issuance of a separate void order after accepting the application and issuing an order in Form GST SPL-05 – The issuance of void orders by invoking Section 161 or otherwise in circumstances other than those enumerated in sub-rules (16) and (17) is unauthorized and without jurisdiction – The void orders issued in cases where the conditions in sub-rules (16) and (17) do not apply are invalid and liable to be set aside and the original Form GST SPL-05 approval orders shall remain valid - Deemed Approval - Conclusion of Proceedings - Non-issuance of Order within Prescribed Time - Sub-rule (14) of Rule 164 prescribes consequences when proper officer fails to issue approval or rejection order within prescribed time - If application for waiver is not disposed of within the time limits specified in sub-rule (13) then the application shall be deemed to be approved and proceedings shall be deemed to be concluded - Whether deemed approval operates unconditionally or is subject to satisfaction of substantive conditions of Section 128A - HELD - The benefit of deemed approval and conclusion of proceedings under sub-rule (14) shall only accrue to an applicant for waiver who satisfies the substantive conditions stipulated in Section 128A. Any other construction would allow a subordinate legislation to override a provision in the parent statute which is impermissible. The deemed approval operates as an incentive for the proper officer to expedite disposal and for taxpayers to file applications within the prescribed time and satisfy the substantive requirements of Section 128A – The applications shall be deemed to be approved and proceedings concluded only when the applicant has complied with all substantive conditions of Section 128A and the proper officer fails to issue an order within the prescribed time limit. [Read less]

Service Tax – Waiver of penalties imposed for short-payment of service tax under Business Support Service category – Penalties imposed under Sections 76 and 78 of the Finance Act – Appellant-Department filed appeals challenging the Tribunal's order of setting aside the penalties – Whether the Tribunal was right in waiving the penalties under Sections 76 and 78 by invoking Section 80 of the Finance Act based on the plea of financial incapacity and non-wilful short-payment of service tax – HELD – When an assessee establishes financial incapacity or financial distress and that the short-payment of tax was not wilf... [Read more]

Service Tax – Waiver of penalties imposed for short-payment of service tax under Business Support Service category – Penalties imposed under Sections 76 and 78 of the Finance Act – Appellant-Department filed appeals challenging the Tribunal's order of setting aside the penalties – Whether the Tribunal was right in waiving the penalties under Sections 76 and 78 by invoking Section 80 of the Finance Act based on the plea of financial incapacity and non-wilful short-payment of service tax – HELD – When an assessee establishes financial incapacity or financial distress and that the short-payment of tax was not wilful in nature, the Tribunal is justified in invoking Section 80 for waiver of penalties. The fact that the assessee reported profits in the financial statements does not per se negate the existence of financial incapacity particularly when there is financial distress arising from outstanding dues from clients. The subsequent events over the years and the financial incapacity of the assessee as recorded by the Tribunal fortify the reasoning given for financial incapacity. While Section 80 of the Finance Act provides for waiver of penalties, such waiver cannot be granted indiscriminately but must be based on sound reasons and evidence showing the inability of the assessee to pay coupled with non-wilful short-payment. In the present case, both these conditions were satisfied on the facts and findings recorded – The appeals filed by the Appellant-Department are dismissed and the order of the Tribunal setting aside the penalties is upheld [Read less]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on ba... [Read more]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on basis of misclassification without proof of fraud, collusion, wilful misstatement or suppression with intent to evade payment of tax - HELD - Respondent entertained bona fide belief that it was correctly discharging tax liabilities by classifying services under CICS head as no SCN was issued within normal period of limitation despite Department's audit - Mere inaction, omission or classification of services under incorrect head does not amount to fraud, collusion, wilful misstatement or suppression of facts. Something positive other than mere inaction or failure or conscious deliberate withholding of information with knowledge otherwise is required to invoke extended period - Suppression means failure to disclose full information with intent to evade payment of duty and has to be construed strictly being deployed in company of strong words as fraud and collusion - Incorrect statement cannot be equated with wilful misstatement as latter implies making statement with knowledge it was not correct - Department failed to adduce cogent evidence of positive act by respondent evincing intent to evade payment of tax - Respondent had throughout filed returns classifying services under CICS head and Revenue never objected within ordinary period of limitation - Burden cast upon Department to prove suppression of fact with intent to evade tax. Extended period of limitation cannot be invoked merely on basis of misclassification without establishing fraud, collusion, wilful misstatement or suppression with intent to evade – The Ld. CESTAT correctly held no element of fraud, collusion, wilful misstatement or suppression of facts was established – The findings of CESTAT is upheld and the Revenue appeal is dismissed [Read less]