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Service Tax – Taxability of Commission and bonus payments made to foreign service providers - Appellant had imported marketing services from a foreign company but failed to discharge service tax on the same. The appellant was also alleged to have made bonus payments to the foreign service providers, which were considered as part of the consideration for marketing services - Whether the commission and bonus payments made to the foreign service providers are liable to service tax under the "Business Auxiliary Services" – HELD - The bonus payments made to the foreign shareholders under the Share Purchase Agreement constit... [Read more]

Service Tax – Taxability of Commission and bonus payments made to foreign service providers - Appellant had imported marketing services from a foreign company but failed to discharge service tax on the same. The appellant was also alleged to have made bonus payments to the foreign service providers, which were considered as part of the consideration for marketing services - Whether the commission and bonus payments made to the foreign service providers are liable to service tax under the "Business Auxiliary Services" – HELD - The bonus payments made to the foreign shareholders under the Share Purchase Agreement constitute consideration for the continued marketing and business promotion services rendered by the foreign entity and its managerial personnel, and are therefore liable to service tax under the "Business Auxiliary Services" category. The bonus payments were not automatic or assured payments but were contingent upon future events and liable to be forfeited entirely if the stipulated conditions were not fulfilled. The purchase of shares at an overvalued price and the subsequent bonus payments linked to future sales performance indicate that these payments are not towards the purchase of shares but are consideration for marketing services. Regarding the commission payments, the demand is upheld as the appellant had already paid the service tax with interest - The service tax demand on the bonus payments is upheld, while the penalty under Section 77 is set aside. The penalty under Section 78 is reduced to the amount of service tax demand on the bonus payments – The appeal is partly allowed [Read less]

Customs - Penalty under Customs Act 1962 – Imposition of penalty under Section 112(a) of the Customs Act, 1962 for alleged violation of the Drugs and Cosmetics Act, 1940 in relation to import of raw materials for manufacturing pharmaceuticals - HELD - The revenue has not made out a clear case for levy of penalty under Section 112(a) of the Customs Act, 1962 on the appellants. The only allegation against the appellants was the violation of CHALR, 2004, but no specific role was attributed to bring the alleged guilt within the meaning of Section 112 of the Customs Act – The CHA cannot be penalized under the Customs Act in... [Read more]

Customs - Penalty under Customs Act 1962 – Imposition of penalty under Section 112(a) of the Customs Act, 1962 for alleged violation of the Drugs and Cosmetics Act, 1940 in relation to import of raw materials for manufacturing pharmaceuticals - HELD - The revenue has not made out a clear case for levy of penalty under Section 112(a) of the Customs Act, 1962 on the appellants. The only allegation against the appellants was the violation of CHALR, 2004, but no specific role was attributed to bring the alleged guilt within the meaning of Section 112 of the Customs Act – The CHA cannot be penalized under the Customs Act in the absence of any positive evidence to show mala fide intention or to establish him as an abettor. Accordingly, the impugned order is set and the appeals are allowed [Read less]

Customs – Classification, parts and accessories of motor vehicles - The appellant imported track assembly, brake/case sub assembly, gear vertical adjuster, and bar seat track lock - Whether the goods imported by the appellant deserve to be classified under CTI 9401 90 00 as ‘parts of seats’ as claimed by the appellant or they deserve classification under CTI 8708 99 00 as ‘parts and accessories of motor vehicles’ as claimed by the department – HELD - The goods imported by the appellant, including track assembly, gear vertical adjuster, case sub-assembly seat vertical, brake sub-assembly vertical and bar seat tr... [Read more]

Customs – Classification, parts and accessories of motor vehicles - The appellant imported track assembly, brake/case sub assembly, gear vertical adjuster, and bar seat track lock - Whether the goods imported by the appellant deserve to be classified under CTI 9401 90 00 as ‘parts of seats’ as claimed by the appellant or they deserve classification under CTI 8708 99 00 as ‘parts and accessories of motor vehicles’ as claimed by the department – HELD - The goods imported by the appellant, including track assembly, gear vertical adjuster, case sub-assembly seat vertical, brake sub-assembly vertical and bar seat track lock, are parts of seats and classifiable under CTI 9401 90 00. The Commissioner acted in breach of judicial discipline by not following the binding precedent of the Tribunal, which had held that similar child parts imported by the appellant were classifiable under CTI 9401 90 00 as parts of seats - The Commissioner's reliance on Advance Rulings and the Supreme Court decision in Insulation Electrical is misplaced, as the Tribunal had distinguished those cases - It is not in dispute that the appellant had been selling the imported parts directly to the car seat manufacturers and not to the car manufacturers. The ‘track assembly’ is an integral part of a complete seat and is supplied to a car seat manufacturer for manufacture of the seats. ‘Gear vertical adjuster’ is affixed in a car seat at a particular location along with brake seat lifter. ‘Track assembly’ helps in the upward and downward seat adjustment. ‘Bar seat track lock’ is used to lock the position of the seat at the required position. Therefore, it cannot be doubted that all the four parts imported by the appellant are parts of car seats and cannot be described as ‘parts’ and ‘accessories’ of motor vehicles. The appellant, therefore, correctly classified the goods under CTI 9401 90 00 as ‘parts of seats’ - The impugned order is set aside and the appeal of the appellant is allowed [Read less]

Customs - Imposition of penalty on Customs Broker - Appellant was issued show cause notices for alleged fraudulent export carried out by two firms, where the appellant's firm provided contact and documents related to the exports – Dept alleged that the appellant’s employees were actively involved in facilitating the exports – HELD - There was nothing on record to expressly insinuate the appellant with the actions of certain persons who were not even the employees of the appellant at the material time. The appellant was not the Customs Broker concerned with the said exports, and there was no evidence to connect the ap... [Read more]

Customs - Imposition of penalty on Customs Broker - Appellant was issued show cause notices for alleged fraudulent export carried out by two firms, where the appellant's firm provided contact and documents related to the exports – Dept alleged that the appellant’s employees were actively involved in facilitating the exports – HELD - There was nothing on record to expressly insinuate the appellant with the actions of certain persons who were not even the employees of the appellant at the material time. The appellant was not the Customs Broker concerned with the said exports, and there was no evidence to connect the appellant with the exports or to suggest that the appellant had any knowledge about the material goods being exported or their inflated value - Mere providing of contact/reference and documents related to certain exports to a third person cannot itself be considered as an offending cause, liable for penal action under law, unless it is corroborated with clear evidence to suggest that such an exercise was pre-meditated with ill design. The Revenue failed to establish the nexus between the appellant and the fraudulent exports, and hence the imposition of penalty on the appellant was arbitrary and uncalled for - The orders of the lower authority imposing penalty on the appellant under Sections 114(iii) and 114AA of the Customs Act is set aside and the appeal is allowed [Read less]

Customs - Provisional release of seized drones and components seized from appellants’ premises - Appellants, authorized drone manufacturers, challenge rejection of request for provisional release - Whether the seized goods were prohibited imports under DGFT Notification No. 54/2015-20 or merely components that can be freely imported; Whether the doctrine of "benefit of doubt" applicable to ambiguous tariff classifications can be extended to national security prohibitions – HELD - The goods were not imported in complete knocked-down or semi-knocked-down condition to constitute a prohibited import of drones, as the compo... [Read more]

Customs - Provisional release of seized drones and components seized from appellants’ premises - Appellants, authorized drone manufacturers, challenge rejection of request for provisional release - Whether the seized goods were prohibited imports under DGFT Notification No. 54/2015-20 or merely components that can be freely imported; Whether the doctrine of "benefit of doubt" applicable to ambiguous tariff classifications can be extended to national security prohibitions – HELD - The goods were not imported in complete knocked-down or semi-knocked-down condition to constitute a prohibited import of drones, as the components were imported in uneven numbers through multiple bills of entry by two separate entities controlled by the same person. The Supreme Court judgment in Union of India v. Tarachand Gupta & Brothers, had explained the meaning of "completely knocked-down condition" as made or constructed so as to be capable of being knock-down or taken apart as for transportation in parts ready to be assembled and that the General Rules of Interpretation cannot be used to interpret the Foreign Trade Policy - The appellants were registered as authorized drone manufacturers supplying to the Indian defence and security agencies, and thus, the grounds of national security and public safety relied upon by the Commissioner are not tenable. Further, the Commissioner's reliance on the CBIC Circular No. 35/2017-Customs is invalid, as the Delhi High Court had declared the relevant part of the circular as ultra vires the Customs Act - The Commissioner is directed to provisionally release the seized goods upon execution of an indemnity bond and surety bond by the appellants - The appeals are allowed [Read less]

Service Tax - Invocation of extended period of limitation under Section 73(1) of Finance Act, 1994 - Demand of service tax on the basis of the difference between the gross receipts reflected in the appellant's ITR and the service tax paid by the appellant as per the ST-3 returns, invoking the extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 – HELD - The extended period of limitation cannot be invoked merely on the basis of the difference between the ITR and ST-3 returns, as there was no positive evidence of fraud, suppression of facts, willful mis-statement or deliberate contravention... [Read more]

Service Tax - Invocation of extended period of limitation under Section 73(1) of Finance Act, 1994 - Demand of service tax on the basis of the difference between the gross receipts reflected in the appellant's ITR and the service tax paid by the appellant as per the ST-3 returns, invoking the extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 – HELD - The extended period of limitation cannot be invoked merely on the basis of the difference between the ITR and ST-3 returns, as there was no positive evidence of fraud, suppression of facts, willful mis-statement or deliberate contravention with intent to evade payment of service tax. The appellant had been regularly filing ST-3 returns and paying service tax on receipt basis. The Department failed to adduce any evidence to show that the appellant had rendered taxable service to the category of persons who do not fall under the category liable to pay service tax on Reverse Charge Mechanism basis – Further, the demand cannot be raised solely on the basis of the difference between the ST-3 returns and the 26AS/ITR, as it is a settled principle of law that service tax can be levied only when there is a clear identification of the service provider, service recipient and the consideration paid for the same. In the absence of such evidence, the Department cannot raise demands on the basis of other statutory returns like ITRs or balance sheets - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Works Contract service, Service Tax on Agency Charges, Discharge of service tax through CENVAT credit, Invoking of extended period of limitation against PSU – Demand of service tax under various categories like commercial and industrial construction services, erection, commissioning and installation services, and consulting engineering services, along with denial of CENVAT credit - Whether the services provided by the appellant to BHEL, SAIL, CLW, and Rajendra Agricultural University are classifiable as works contract services and not commercial and industrial construction services, erection, commissionin... [Read more]

Service Tax – Works Contract service, Service Tax on Agency Charges, Discharge of service tax through CENVAT credit, Invoking of extended period of limitation against PSU – Demand of service tax under various categories like commercial and industrial construction services, erection, commissioning and installation services, and consulting engineering services, along with denial of CENVAT credit - Whether the services provided by the appellant to BHEL, SAIL, CLW, and Rajendra Agricultural University are classifiable as works contract services and not commercial and industrial construction services, erection, commissioning and installation services, or consulting engineering services – HELD - The appellant was responsible to provide labour, materials, consumables, and to use their own equipments, construct temporary storage sheds etc. This shows that material supply is an essential part of the Agreement. It is not a mere contract for providing the service alone - The services provided by the appellant to BHEL and SAIL are in the nature of works contract services and not the other categories proposed by the revenue. Relying on the Supreme Court decision in Larsen & Toubro, it is observed that the contracts involved supply of materials and were not mere service contracts. Therefore, the demands under commercial and industrial construction services, erection, commissioning and installation services, and consulting engineering services are set aside on merits - In respect of the demand on account of services rendered to BHEL, the same stands set aside both on account of merits as well as on account of time bar - In respect of services rendered to SAIL, balance confirmed demand stands admitted by the appellant. The service tax payment by way of debiting the Cenvat Credit account is to be verified by the Adjudicating authority. Once the debit gets confirmed, irrespective of whether it is shown in the ST 3 Return or not, the same is to be treated as proper discharge of the tax liability by the appellant - The appeal is disposed of - Service Tax on Agency Charges - Demand on services rendered to Rajendra Agricultural University – HELD - The appellant is the “Executing Agency?, who is responsible for the overall completion of the project, including appointing of sub-contractor, supply of materials, completion of the project as per the specified by the University. The sole responsibility to complete the project with proper quality and workmanship of the said project, is on the appellant. The appellant has raised the initial issue of the quantification of the demand. As per the appellant, while 8.5% has been mentioned as the “Agency Charges?, payable to the appellant, the same is nothing but the profit margin of the appellant. The Service Tax demand, if any, should have been made only on this 8.5% Agency Charges. However, the demand has been raised on the full construction value plus the 8.5% agency charges, because of which the quantification has been highly inflated – The demand could not have been made on value of the Project Cost + 8.5% thereon. Thus the Service Tax has been demanded on Rs.108.50, whereas the Service Tax, if any, would be demandable only on Rs.8.50 if the same is treated as “Consultancy Service?. Hence, the quantification of the value and Service Tax is required to be re-worked out - In respect of Consultancy Service except for the demand on the consideration of 8.5% [Agency Commission], no other amount can be added to arrive at the demand. Therefore, re-quantification of demand is required to be done and Service Tax is required to be paid on the Agency Charges - Invoking of extended period of limitation against Public Sector Undertaking (PSU) - Whether the extended period of limitation can be invoked to demand service tax - HELD - The appellant is a reputed PSU and is in the business of taking of Works Contract and other works for other PSUs and others. Prima facie, being a Govt. entity, they would not have any willful intent to evade the Service Tax payment - The extended period of limitation cannot be invoked against the appellant in the absence of any fraud or suppression of facts with the intent to evade tax. The appellant, being a government-owned entity, cannot be charged with suppression or fraud even if the tax was legally payable. Therefore, the demands for the extended period are set aside on the ground of limitation. [Read less]

Service Tax – Extended period of Limitation, Demand based on inference from Form 26AS data - Issue of demand-cum-show cause notice was issued alleging that the petitioner had wilfully suppressed material facts to evade payment of service tax – Maintainability of writ petition - HELD - While the general rule is that a party should first avail the statutory remedy, this rule is not inflexible. The High Court has the discretion to entertain a writ petition even if an alternative remedy is available, particularly where the authority has exceeded its jurisdiction or there is a violation of principles of natural justice - In... [Read more]

Service Tax – Extended period of Limitation, Demand based on inference from Form 26AS data - Issue of demand-cum-show cause notice was issued alleging that the petitioner had wilfully suppressed material facts to evade payment of service tax – Maintainability of writ petition - HELD - While the general rule is that a party should first avail the statutory remedy, this rule is not inflexible. The High Court has the discretion to entertain a writ petition even if an alternative remedy is available, particularly where the authority has exceeded its jurisdiction or there is a violation of principles of natural justice - In the present case, the revenue authorities had invoked the extended period of limitation without making the necessary findings required under the proviso to that section. The invocation of the extended period of limitation was contrary to the provisions of the Act and therefore, the assumption of jurisdiction by the revenue authorities was unauthorised - In the present case, the adjudicating authority took into consideration the information available in form 26AS of the Income Tax Act, the sole basis for the purpose of levy of service tax. The authority did not consider the services rendered by the petitioner were exempted from levy of service tax or the liability to pay the service tax on the said services was on the recipient on the services. Since the adjudicating authority did not take into consideration those relevant materials which it was bound to take into consideration and on the other hand it had taken into consideration factors and materials, which if not irrelevant and not germane for deciding the liability of the service tax, cannot establish the liability of the assessee, then the said actions of the adjudicating authority is certainly without jurisdiction - The primary reason for invoking the jurisdiction under section 73(1) is non furnishing of the required documents by the petitioner assessee to be full satisfaction of the respondent authorities. The mere non furnishing of documents or information in itself cannot be construed to have given rise to a situation under any or all of these five conditions under proviso to section 73(1) in order to levy service tax by extending limitation - For the Revenue to invoke the powers under section 73(1), there must be a conclusive finding by the Revenue that the assessee under the facts and circumstances, had wilfully and deliberately evaded or neglected to pay the tax. This conclusion by the Revenue authorities is not apparent and discernible from a plain reading of the impugned order in original - The invocation of extended period of limitation under section 73(1) is invalid and contrary to the prescriptions mandated by law. The impugned order is quashed and set aside – The writ petition is allowed [Read less]

Central Excise – Recovery of duty on raw material cleared ‘as such’, Denial of credit for the excess consumption of raw materials - Statements under Section 14 of Central Excise Act, 1944 - Whether statements recorded under Section 14 can be considered as relevant evidence if the procedure under Section 9D of the Act is not followed – HELD - The statements made under Section 14 cannot be considered as relevant evidence as the procedure contemplated under Section 9D of the Central Excise Act, 1944 was not followed. Section 9D(1)(b) mandates that for the statements recorded under Section 14 to be relevant, the person... [Read more]

Central Excise – Recovery of duty on raw material cleared ‘as such’, Denial of credit for the excess consumption of raw materials - Statements under Section 14 of Central Excise Act, 1944 - Whether statements recorded under Section 14 can be considered as relevant evidence if the procedure under Section 9D of the Act is not followed – HELD - The statements made under Section 14 cannot be considered as relevant evidence as the procedure contemplated under Section 9D of the Central Excise Act, 1944 was not followed. Section 9D(1)(b) mandates that for the statements recorded under Section 14 to be relevant, the person who made the statement has to be examined as a witness before the adjudicating authority and the authority has to form an opinion that the statement should be admitted in evidence in the interests of justice. This procedure to be mandatory, as statements recorded during investigation have a possibility of being made under coercion or compulsion, and it is to neutralize this possibility that the detailed procedure has been prescribed. Since the Department did not follow the mandatory procedure under Section 9D, the statements recorded under Section 14 cannot be relied upon, and the demand confirmed based on these statements deserves to be set aside - The impugned order is set aside on this ground alone and appeal is allowed - Extended period of limitation under Section 11A(4) of Central Excise Act, 1944 - Invocation - Whether the extended period of limitation could have been invoked in the facts and circumstances of the case – HELD - The allegations against the appellant were based on the figures obtained from the balance sheet, which is a public document. When the details are already reflected in the balance sheet and periodic returns filed by the appellant, there cannot be any suppression of facts to invoke the extended period of limitation. When the details are reflected in the public documents maintained by the assessee, the extended period of limitation cannot be invoked. Further, the officers could have sought clarifications or raised objections on the information provided by the appellant in the returns, but they did not do so. In these circumstances, the extended period of limitation could not have been invoked. [Read less]

Customs - Export of refined sugar, Restricted export - Eligibility for rebate under Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme – Denial of benefit of RoDTEP on the ground that export of refined sugar was a restricted export in view of the Notification No. 10/2015-2020 dated 24 May 2022 - HELD - Even though the export of sugar was restricted under Notification No.10/2015-20 dated 24 May 2022, the petitioners were granted specific permission to export sugar by the Directorate of Sugar. Therefore, the exports made by the petitioners with such specific permission cannot be considered as prohibited exp... [Read more]

Customs - Export of refined sugar, Restricted export - Eligibility for rebate under Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme – Denial of benefit of RoDTEP on the ground that export of refined sugar was a restricted export in view of the Notification No. 10/2015-2020 dated 24 May 2022 - HELD - Even though the export of sugar was restricted under Notification No.10/2015-20 dated 24 May 2022, the petitioners were granted specific permission to export sugar by the Directorate of Sugar. Therefore, the exports made by the petitioners with such specific permission cannot be considered as prohibited exports, and they should not be deprived of the RoDTEP benefits - No doubt that the export of sugar considering domestic need ought to be regulated, however the regulation is in terms of the notifications which certainly permit export of appropriate quota as may be approved by the Directorate of Sugar. If this is held to be an accepted position by the Department, then the benefits of the scheme cannot be denied to the petitioners, who have acted upon the scheme and have undertaken exports which certainly are conducive to the national interest and integral to the foreign trade policy - The department had already accepted the High Court of Gujarat's decisions in similar cases, granting the RoDTEP benefit to the exporters. Once the issue has attained finality, qua the department in view of an authoritative pronouncement by a High Court, similar contended issues ought not to be agitated by the department before the other High Courts - The respondents are directed to grant the RoDTEP benefit to the petitioners who had not received it, and to refund the amounts recovered from the petitioners who had previously availed the benefit, along with interest at 6% per annum – The writ petitions are allowed [Read less]

Central Excise - Undervaluation and clandestine removal of goods leading to short payment of central excise duty - Department carried out investigations and found evidence of systematic undervaluation, cash collection, and routing back of unaccounted sale proceeds. The adjudicating authority dropped the proceedings on the grounds that the computation of differential duty was arbitrary and the investigation was incomplete – HELD - The adjudicating authority did not appreciate the voluminous evidence brought on record by the department, which clearly demonstrated a well-planned modus operandi by the respondents-assessee fo... [Read more]

Central Excise - Undervaluation and clandestine removal of goods leading to short payment of central excise duty - Department carried out investigations and found evidence of systematic undervaluation, cash collection, and routing back of unaccounted sale proceeds. The adjudicating authority dropped the proceedings on the grounds that the computation of differential duty was arbitrary and the investigation was incomplete – HELD - The adjudicating authority did not appreciate the voluminous evidence brought on record by the department, which clearly demonstrated a well-planned modus operandi by the respondents-assessee for undervaluation and clandestine removal of goods resulting in short payment of duty. While the Department may not be able to prove the exact extent of undervaluation, the evidence on record was sufficient to establish a high probability of such undervaluation – The adjudicating authority's reliance on previous SCNs to deny the invocation of extended period is incorrect, as the present case was based on new evidence and facts. Accordingly, the impugned order is set aside and matter is remanded back to the adjudicating authority for fresh adjudication after comprehensively evaluating all the evidence on record – The appeal is allowed by remand [Read less]

Central Excise - Availability of Cenvat credit on insurance services, professional/consultancy fees for hedging services, tour and travel expenses - Appellant claimed Cenvat credit on service tax paid for various services including insurance, professional/consultancy fees, and tour and travel expenses, which were denied by the department - Whether the appellant is eligible for the claimed Cenvat credit on these services – HELD - The Cenvat credit on insurance services taken towards insurance of safety/performance of capital goods is eligible, as the service tax paid for obtaining these insurance policies was used in the ... [Read more]

Central Excise - Availability of Cenvat credit on insurance services, professional/consultancy fees for hedging services, tour and travel expenses - Appellant claimed Cenvat credit on service tax paid for various services including insurance, professional/consultancy fees, and tour and travel expenses, which were denied by the department - Whether the appellant is eligible for the claimed Cenvat credit on these services – HELD - The Cenvat credit on insurance services taken towards insurance of safety/performance of capital goods is eligible, as the service tax paid for obtaining these insurance policies was used in the business of the appellant, even though the policies covered risks of the appellant's sister concern as well. The provisions of Cenvat Credit Rules allow credit on duty/tax "paid" and not "payable" - The appellant imports certain material for its business purposes and export final products, as a result appellant has to pay through foreign exchange/currency. There are frequent variations in the currency rates when compared to Indian currency. The said variation may lead to losses if the foreign exchange is not dealt properly. Therefore, to escape from these losses, the method of hedging is chosen. Thus the aforesaid activity is indirectly related to manufacturing business of appellant. Thus, the Cenvat credit on professional / consultancy fees for hedging services used to manage foreign exchange risks related to the appellant's business is eligible, as the services are indirectly related to the manufacturing business. Similarly, the Cenvat credit on tour and travel expenses incurred for training the appellant's employees to enhance their skills and productivity, which are indirectly related to the manufacture of final products, is also eligible – The impugned order is set aside and the appeal is allowed [Read less]

GST - Refund of unutilised input tax credit on account of export of goods, Rejection of refund claims on the ground of time-barred - Relevant date and applicability of amendment to Explanation 2(e) of Section 54 of the CGST Act – Relevant date from which the two-year period under Section 54 of the CGST Act is to be calculated - Whether the amendment to Explanation 2(e) to Section 54 of the CGST Act, brought into effect from 1st February, 2019, would apply to refund claims pertaining to a period prior to the said amendment – HELD - The expression ‘relevant date’ is required to be construed with reference to the cate... [Read more]

GST - Refund of unutilised input tax credit on account of export of goods, Rejection of refund claims on the ground of time-barred - Relevant date and applicability of amendment to Explanation 2(e) of Section 54 of the CGST Act – Relevant date from which the two-year period under Section 54 of the CGST Act is to be calculated - Whether the amendment to Explanation 2(e) to Section 54 of the CGST Act, brought into effect from 1st February, 2019, would apply to refund claims pertaining to a period prior to the said amendment – HELD - The expression ‘relevant date’ is required to be construed with reference to the category under which the refund claim falls. The determination of the relevant date depends upon the nature of the refund amount as well as the nature of the supply of goods or services. In cases involving refund of unutilized ITC, either on account of zero-rated supplies or inverted duty structure, the relevant date would be as per the unamended Explanation 2(e) to Section 54 of the CGST Act, which provided that the relevant date would be the end of the financial year in which such claim for refund arises - The amendment to Explanation 2(e), which came into effect from 1st February 2019, would not apply retrospectively to refund claims pertaining to the period prior to the amendment to divest the vested rights of the petitioners. The application of amendment to Explanation 2(e) to Section 54 of the CGST Act is prospective in nature - The impugned orders holding the refund applications to be time-barred are not tenable and set aside. The Department is directed to process the refund applications of the petitioners on merits and pass appropriate orders, in accordance with law – The petitions are disposed of [Read less]

Central Excise - CENVAT Credit - Availment of CENVAT credit on Countervailing Duty (CVD) paid on imported steam coal at concessional rate under Notification No. 12/2012-Cus dated 17.03.2012, as amended by Notification No. 12/2013-Cus dated 01.03.2013 - Whether CVD paid at concessional rate is 'equivalent to duty of excise' and eligible for credit under Rule 3(1)(vii) of CENVAT Credit Rules, 2004 – HELD - The duty paid on imported steam coal under Section 3(1) of Customs Tariff Act remains eligible for credit irrespective of its nomenclature or the rate at which such duty is paid. The expression 'equivalent to duty of exc... [Read more]

Central Excise - CENVAT Credit - Availment of CENVAT credit on Countervailing Duty (CVD) paid on imported steam coal at concessional rate under Notification No. 12/2012-Cus dated 17.03.2012, as amended by Notification No. 12/2013-Cus dated 01.03.2013 - Whether CVD paid at concessional rate is 'equivalent to duty of excise' and eligible for credit under Rule 3(1)(vii) of CENVAT Credit Rules, 2004 – HELD - The duty paid on imported steam coal under Section 3(1) of Customs Tariff Act remains eligible for credit irrespective of its nomenclature or the rate at which such duty is paid. The expression 'equivalent to duty of excise' refers to the nature of the levy and not the quantum of duty. Several Tribunal decisions have consistently held that credit cannot be denied merely on account of concessional rate. Notifications prescribing concessional rates do not curtail the statutory right to credit. The Department's contention that concessional CVD is not 'equivalent to duty of excise' is not supported by the statutory text or judicial precedent. Denial of credit on this ground would defeat the purpose of the CENVAT scheme and lead to unintended consequences. The appellant is entitled to avail CENVAT credit on CVD paid under Notification - The impugned Order-in-Original is set aside and the appeal is allowed - Invocation of Extended Period and Penalty - The issue pertains to interpretation of eligibility of CENVAT credit and all relevant particulars were disclosed in statutory records. Mere difference in interpretation of law does not attract extended period. The essential ingredient of wilful suppression with intent to evade duty is absent. The CENVAT credit issue being subject to differing interpretations cannot be said to involve suppression of facts or intent to evade. Penalty under Section 11AC is attracted only when conditions of fraud, suppression or wilful misstatement are satisfied, which are absent in the present case - The invocation of extended period and imposition of penalty are not sustainable. [Read less]

GST - Failure to reverse input tax credit availed on supply of exempted goods. Dropping of proceedings based on reply and supporting documents. However, for the subsequent financial year, the Department issued another SCN raising the same issue. The petitioner again submitted detailed replies along with reconciliation of ITC reversal, but the impugned order was passed confirming the demand, stating that the matter was "sub-judice" on merits regarding applicability of ITC reversal - Whether the impugned order was passed without application of mind and proper consideration of the replies and submissions made by the petitione... [Read more]

GST - Failure to reverse input tax credit availed on supply of exempted goods. Dropping of proceedings based on reply and supporting documents. However, for the subsequent financial year, the Department issued another SCN raising the same issue. The petitioner again submitted detailed replies along with reconciliation of ITC reversal, but the impugned order was passed confirming the demand, stating that the matter was "sub-judice" on merits regarding applicability of ITC reversal - Whether the impugned order was passed without application of mind and proper consideration of the replies and submissions made by the petitioner – HELD - The impugned order suffered from complete non-application of mind. The department had earlier dropped the proceedings for the previous year after considering the petitioner's reply and perusing its books of accounts, indicating that the matter was not "sub-judice" on merits. However, the impugned order did not provide any cogent reasons for not accepting the petitioner's replies and merely stated that the matter was "sub-judice" without any explanation – There is not even a whisper as to the basis on which respondents came to the finding that the matter was “sub-judice” on merits especially when it was not disputed that after considering the reply, the department chose not to proceed against the petitioner firm in respect of the demand raised for financial year 2020-21 - Further, the order did not address the reconciliation provided by the petitioner or the circulars relied upon to support its argument regarding taxable supplies - The impugned order is unreasoned and passed without any application of mind, accordingly, the same is set aside - the writ petition is disposed of [Read less]

GST - Availability of alternative remedy - Demand order without considering the reply filed – HELD - The availability of an alternative remedy does not operate as a complete bar to the exercise of writ jurisdiction under Article 226 of the Constitution of India. The courts can interfere if there has been a violation of the principles of natural justice or if the order is a non-speaking order without any reasoning. In the present case, the impugned order did not consider the reply filed by the petitioner with relevant documents and simply stated that the taxpayer had not furnished any documentary evidence or supporting ma... [Read more]

GST - Availability of alternative remedy - Demand order without considering the reply filed – HELD - The availability of an alternative remedy does not operate as a complete bar to the exercise of writ jurisdiction under Article 226 of the Constitution of India. The courts can interfere if there has been a violation of the principles of natural justice or if the order is a non-speaking order without any reasoning. In the present case, the impugned order did not consider the reply filed by the petitioner with relevant documents and simply stated that the taxpayer had not furnished any documentary evidence or supporting material to substantiate its submissions - An order passed without any reasoning cannot be sustained and amounts to a violation of principles of natural justice. Accordingly, the impugned order is set aside and the respondent authority is directed to provide the petitioner an opportunity for a personal hearing and decide the matter afresh with due reasoning for acceptance or rejection of the petitioner's contentions - The writ petition is allowed [Read less]

GST – Cross-empowerment, Jurisdiction to detain goods and vehicle - Detention of goods on the ground of false declaration in e-way bill and delivery challan - Whether the authorities West Bengal have the jurisdiction to detain the goods and impose penalty when the excavator was being transported from Jharkhand to Meghalaya through West Bengal – HELD – The Section 6 of the CGST Act, 2017 and Section 4 of the IGST Act, 2017 provide for cross-empowerment of officers appointed under the State GST Act to act as proper officers under the Central GST Act and Integrated GST Act. The authorities, being proper officers under t... [Read more]

GST – Cross-empowerment, Jurisdiction to detain goods and vehicle - Detention of goods on the ground of false declaration in e-way bill and delivery challan - Whether the authorities West Bengal have the jurisdiction to detain the goods and impose penalty when the excavator was being transported from Jharkhand to Meghalaya through West Bengal – HELD – The Section 6 of the CGST Act, 2017 and Section 4 of the IGST Act, 2017 provide for cross-empowerment of officers appointed under the State GST Act to act as proper officers under the Central GST Act and Integrated GST Act. The authorities, being proper officers under the West Bengal GST Act, were empowered to act under the Integrated GST Act as well. The appellant's contention that West Bengal was merely a transport corridor and the authorities lacked jurisdiction is not acceptable as the delivery challan and e-way bill were found to be lacking proper verification and declaration, and there is no conclusive evidence to show that the goods were solely meant for the worksite in Meghalaya and would not be used in West Bengal. The false declaration by the appellant that he was an unregistered person, even though he was a registered person, amounted to concealment and tax evasion, irrespective of intent. The driver's signature on the delivery challan is also not acceptable as he was not the authorized signatory of the appellant - The appellant had represented that he was the only authorized signatory of the proprietorship concern. The driver, being merely the agent of the carrier and not the authorized representative of the appellant, could not be considered as the authorized signatory to sign the delivery challan on behalf of the appellant - The authority had acted as a proper officer duly empowered in causing the inspection and detention of the goods, well within their jurisdiction without any infraction of law – The judgment and order of the learned Single Judge is upheld and the appeal is dismissed [Read less]

GST – Challenge to classification of product as "chewing tobacco" under CETH 2403 99 10 instead of "unmanufactured tobacco" under CETH 2401 20 90, Maintainability of writ petition - The appellant had initially classified its product as "chewing tobacco" under CETH 2403 99 10 but later sought to reclassify it as "unmanufactured tobacco" under CETH 2401 20 90 - Whether the appellant is bound by the classification earlier made by them or whether the appellant is entitled to seek reclassification - HELD - Mere availability of an alternative remedy of appeal or revision would not oust the jurisdiction of the High Court and re... [Read more]

GST – Challenge to classification of product as "chewing tobacco" under CETH 2403 99 10 instead of "unmanufactured tobacco" under CETH 2401 20 90, Maintainability of writ petition - The appellant had initially classified its product as "chewing tobacco" under CETH 2403 99 10 but later sought to reclassify it as "unmanufactured tobacco" under CETH 2401 20 90 - Whether the appellant is bound by the classification earlier made by them or whether the appellant is entitled to seek reclassification - HELD - Mere availability of an alternative remedy of appeal or revision would not oust the jurisdiction of the High Court and render the writ petition "not maintainable" where the controversy is a purely legal one and does not involve disputed questions of fact but only questions of law. Calling upon the appellant to go before the authority would be a futile exercise. The contention of the department is overruled and held that the writ petition is maintainable – On merit, there is no estoppel against a party in a taxation matter and the assessee is not bound by the stand they had originally taken or by the admission made during enquiry. The principle of estoppel is invoked only when the other party changes their position pursuant to the representation made, which is not the case here as the Department cannot be heard to say that they stand prejudiced because of the shift in position by the assessee. The burden of proof lies on the department to justify the classification and the assessee is entitled to seek reclassification - The product made by the appellant is "unmanufactured tobacco" and not "chewing tobacco". The process adopted by the appellant, which involves drying, stripping, and dipping the raw tobacco in jaggery water, does not amount to a manufacturing process and the product continues to retain its original character. The Court relies on the Explanatory Notes to the HSN and the principles laid down by the Supreme Court in UOI v. Delhi Cloth and General Mills Co., Ltd. and Crane Betel Nut Powder Works v. CCE, Thiruppathi to conclude that the appellant's product is classifiable under CETH 2401 20 90 as "unmanufactured tobacco" - The order impugned in the writ petition as well as the order of the learned Single Judge are set aside and the writ petition is allowed, holding that the appellant's product is classifiable under CETH 2401 20 90 as "unmanufactured tobacco" – The petition is allowed [Read less]

Service Tax Liability on Residential Complex Construction – Demand of service tax on construction of a residential complex project consisting of 106 dwelling units, for the periods from April 2009 to June 2010 and July 2010 to March 2011 - Whether the appellant is liable to pay service tax on the construction of the residential complex project – HELD - The Tribunal's earlier order in the appellant's own case for the same project for the period from April 2006 to March 2009 had set aside the service tax demand on the ground that the residential complex was not constructed for the appellant's personal use, and therefore,... [Read more]

Service Tax Liability on Residential Complex Construction – Demand of service tax on construction of a residential complex project consisting of 106 dwelling units, for the periods from April 2009 to June 2010 and July 2010 to March 2011 - Whether the appellant is liable to pay service tax on the construction of the residential complex project – HELD - The Tribunal's earlier order in the appellant's own case for the same project for the period from April 2006 to March 2009 had set aside the service tax demand on the ground that the residential complex was not constructed for the appellant's personal use, and therefore, the exclusion under Section 65(91a) of the Finance Act, 1994 applied. The present proceedings were in respect of the same project for the subsequent periods, and hence, the earlier decision squarely applies - The appellant's contention that the construction activity was a composite works contract and not a service simpliciter is supported by the fact that the department had itself granted abatement while computing the service tax demand - For the period prior to July 1, 2010, if the construction activity is a composite works contract, no service tax is leviable – Further, the Adjudicating Authority had confirmed the demands solely by relying on the earlier order of the Commissioner, which had been set aside by the Tribunal in the appellant's own case. Therefore, the demands of service tax with interest are wholly untenable - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Service tax liability on hospital services provided under Government welfare scheme - The appellant hospital provided medical treatments to patients covered under various medical insurance schemes including the "Kalaignar Kapitu Thittam", a government welfare scheme - Department alleged that the appellant failed to pay service tax on the gross amount charged and received directly from insurance companies for the period from 01.07.2010 to 30.04.2011. The appellant had earlier opted for the Voluntary Compliance Encouragement Scheme (VCES) and paid some tax, but the department alleged that the appellant had not ... [Read more]

Service Tax - Service tax liability on hospital services provided under Government welfare scheme - The appellant hospital provided medical treatments to patients covered under various medical insurance schemes including the "Kalaignar Kapitu Thittam", a government welfare scheme - Department alleged that the appellant failed to pay service tax on the gross amount charged and received directly from insurance companies for the period from 01.07.2010 to 30.04.2011. The appellant had earlier opted for the Voluntary Compliance Encouragement Scheme (VCES) and paid some tax, but the department alleged that the appellant had not declared the correct taxable value - Whether the services provided by the hospital under the government welfare scheme are taxable under service tax – HELD - The nature of the transaction under the Kalaignar Kapitu Thittam (KKT) welfare scheme needs to be examined before levying service tax. The primordial question is whether the implementation of the welfare scheme by entrusting the work to an insurance company would make it an insurance policy, or whether it is a welfare scheme - The case involves an interpretational issue and there was considerable confusion as to whether the services rendered under a government scheme would fall within the category of taxable health services - The appeal is allowed by way of remand to the adjudicating authority to decide the issue afresh on merits in line with the Madras High Court's decision, and the penalties imposed on the appellant are set aside under Section 80 of the Finance Act, 1994 – The appeal is allowed by remand [Read less]

Service Tax - Whether the demand of short payment of service tax under Reverse Charge Mechanism with respect to architect service alleging non-payment of service tax on TDS payments in this respect is correct - HELD – Though the demand of Service Tax is under Reverse Charge Mechanism pertaining to services received from foreign service providers and Section 66A of the Finance Act as well as Rule 2(1)(d)(iv) of Service Tax Rules have been invoked, however the SCN does not refer to the Taxation of Services (provided from outside India and received in India under which the demand has to be raised and has thereby failed to p... [Read more]

Service Tax - Whether the demand of short payment of service tax under Reverse Charge Mechanism with respect to architect service alleging non-payment of service tax on TDS payments in this respect is correct - HELD – Though the demand of Service Tax is under Reverse Charge Mechanism pertaining to services received from foreign service providers and Section 66A of the Finance Act as well as Rule 2(1)(d)(iv) of Service Tax Rules have been invoked, however the SCN does not refer to the Taxation of Services (provided from outside India and received in India under which the demand has to be raised and has thereby failed to put the appellant to notice of the manner in which the taxability has arisen - The ascertainment of taxability of the services alleged to be received by the recipient with determination that they satisfy the requirement under any one of the three limbs of Rule 3 of the said Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, was a sine qua non to foist a liability of tax on the Appellant. Therefore, the SCNs suffer from a fundamental and incurable lacunae of having not put the appellant to notice of the applicable limb of Rule 3 of the Rules, 2006, and vitiate the consequent proceedings. The impugned orders holding the appellant liable to short paid/non paid tax under reverse charge mechanism for various services are unsustainable on this count alone – The impugned order is set aside and the appeal is allowed - Whether the demand of service tax under various services without bifurcating the consideration/amounts under each category is tenable - HELD - When the Department has chosen to demand service tax only on the figures taken from the financial statements (profit and loss account) and not from the invoices raised by the appellant, even though the appellant was admittedly audited, it is indicative of a failure of the Department, more so when there is no stated difficulty in collecting and collating the requisite evidence in respect of each such service received from the foreign service provider - The show cause notice is vague and unsustainable as it does not identify the relevant statutory provisions, detail how and why they are attracted, and quantify the consideration/amounts paid for each service, which is a sine qua non to raise a valid demand. The department failed to utilize its ample investigative powers to collect the requisite evidence and instead made a presumptive demand based on the profit and loss account, which is impermissible - Whether the denial of Cenvat credit of service tax paid on renting of immovable property is proper - HELD - The denial of Cenvat credit is not sustainable as the appellant has used the premises as a storage facility for its business, and there is no requirement under law that the input services must be received within the registered premises. The Tribunal relied on the decisions holding that no one-to-one correlation/nexus between the credit utilized and the service tax paid is required - Whether the invoking of extended period of limitation is tenable - HELD - The extended period of limitation is not invocable as there is no evidence of any positive act of suppression or willful misstatement with intent to evade payment of service tax on the part of the appellant - When the department had already conducted an audit and was aware of the appellant's activities, it could not have invoked the extended period in the subsequent notices. [Read less]

Customs - Classification of imported goods under CTH 8432 and applicability of IGST rate – Appellant imported various items under description of Tea Plucking/Pruning Machine/Spare Parts of Tea Pruning Machine and classified them under CTH 8432. The department, during post-clearance audit, issued a show cause notice alleging short levy of IGST at 18% instead of 12% as paid by the appellant - Whether the classification of the imported goods under CTH 8432 is correct, and whether the applicable IGST rate is 12% under entry no. 196 of Schedule II or 18% under entry no. 453 of Schedule III of the IGST Notification dated 28.06... [Read more]

Customs - Classification of imported goods under CTH 8432 and applicability of IGST rate – Appellant imported various items under description of Tea Plucking/Pruning Machine/Spare Parts of Tea Pruning Machine and classified them under CTH 8432. The department, during post-clearance audit, issued a show cause notice alleging short levy of IGST at 18% instead of 12% as paid by the appellant - Whether the classification of the imported goods under CTH 8432 is correct, and whether the applicable IGST rate is 12% under entry no. 196 of Schedule II or 18% under entry no. 453 of Schedule III of the IGST Notification dated 28.06.2017 - HELD - The Department did not contest the classification of the goods under CTH 8432 during the post-clearance audit. There cannot be one heading/tariff entry for the same goods for the purpose of levying Basic Customs Duty or BCD and another heading/tariff entry for the purpose of levying IGST. Since the goods were classified under CTH 8432, which was not challenged, the applicable IGST rate would be 12% under entry no. 196 of Schedule II of the IGST Notification - The extended period of limitation invoked by the department was not justified as there was no malafide on the part of the importer. The order of the Commissioner (Appeals) is set aside and the order of the adjudicating authority, which had dropped the demand is upheld - The appeal is allowed [Read less]

Customs - Classification dispute of imported 'charging case without power supply' for 'hearing aid' - The appellant imported charger cases for "hearing aids" and classified them under Tariff Item 9021 9010 as "parts and accessory of 'hearing aid'" paying duty @7.5% BCD - Department disputed the classification and re-assessed the goods under Tariff Item 85044030 "Electrical Transformer, static converter (for example rectifiers) and inductors" attracting 20% BCD, resulting in a demand of Rs. 1,18,93,367/- with interest and penalty – HELD - The burden of proof lies on the department to establish the classification made by t... [Read more]

Customs - Classification dispute of imported 'charging case without power supply' for 'hearing aid' - The appellant imported charger cases for "hearing aids" and classified them under Tariff Item 9021 9010 as "parts and accessory of 'hearing aid'" paying duty @7.5% BCD - Department disputed the classification and re-assessed the goods under Tariff Item 85044030 "Electrical Transformer, static converter (for example rectifiers) and inductors" attracting 20% BCD, resulting in a demand of Rs. 1,18,93,367/- with interest and penalty – HELD - The burden of proof lies on the department to establish the classification made by the appellant as incorrect. The charger cases were found to be only a medium between the wall plug adapter with USB cable and the "hearing aids" kept safely in the case, without any power conversion or battery charging capability. The Chartered Engineer's certificate and the product catalogue also confirmed that the charging case does not convert power supply or contain any battery - The power pack is an optional attachment to the charging case and the charging case combi is only a device intended to charge rechargeable “hearing aids”. Therefore, going by the Charter Engineer certificate as well as the product literature namely Catalogue, it can very well be said that neither the device possesses any equipment that would convert electric energy from one form to another namely from AC to DC voltage, so as to put it under the category of static converter to cover the same under Tariff Item 8504 40, nor it acts as a battery charger to charge battery of the “hearing aids” - Relying on the well-established principle that the classification made by the importer should be accepted unless proved otherwise, it is held that the appellant correctly classified the goods under Tariff Item 9021 9010 as "parts and accessory of 'hearing aid'". The department's invocation of extended period of limitation and the orders for confiscation and redemption fine as unsustainable and set aside – The order passed by the Commissioner is set aside and the appeal is allowed [Read less]

Service Tax - Classification of Service as Manpower Recruitment or Supply Agency Service or Job Work – Appellant provided services to the second appellant for the manufacturing of Hot Rolled Products - Dept classified the activity as 'Manpower Recruitment and Supply Agency Service' and demanded service tax from the appellants. The appellants contended that the activity was in the nature of job work and not a supply of manpower - Whether the arrangement between the parties is a contract of service (employer-employee relationship) or a contract for service (job work) - HELD - The arrangement between the parties was a contr... [Read more]

Service Tax - Classification of Service as Manpower Recruitment or Supply Agency Service or Job Work – Appellant provided services to the second appellant for the manufacturing of Hot Rolled Products - Dept classified the activity as 'Manpower Recruitment and Supply Agency Service' and demanded service tax from the appellants. The appellants contended that the activity was in the nature of job work and not a supply of manpower - Whether the arrangement between the parties is a contract of service (employer-employee relationship) or a contract for service (job work) - HELD - The arrangement between the parties was a contract for service (job work) and not a contract of service. The obligation was output-oriented, with the consideration fixed as job charges per metric tonne, which was linked to the results and not the manpower or time. The contractor bore the economic risk and reward, evidencing a real chance of profit and risk of loss, which is incompatible with employment - The contract expressly stipulated that the labour remains under the exclusive control of the contractor, with the principal exercising no control whatsoever, which conclusively negates a master–servant relationship. Applying the control test, mode of remuneration, integration test, and the multifactor economic test, it is concluded that the contractual arrangement qualifies as job work (contract for service) and not a contract of service. The tax planning done by an assessee that results in the mitigation of tax is not a blameworthy conduct inviting penal consequences, unless it is shown by the revenue to be triggered by a fraudulent intention, which was not established in the present case - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Demand based on discrepancies between the figures of inputs as reflected in balance sheet and RG-23A Part I and physical stock - Denial of CENVAT credit based on discrepancies between balance sheet and statutory records - Whether the appellants are liable to reverse the CENVAT Credit on the basis of the discrepancies between the figures of inputs as reflected in balance sheet and RG-23A Part I and physical stock as on 04.04.2001 – HELD - The balance sheet is foreign material for Central Excise Act, 1944 and is not a foolproof evidence for central excise purposes. The Revenue has to bring further cogent... [Read more]

Central Excise – Demand based on discrepancies between the figures of inputs as reflected in balance sheet and RG-23A Part I and physical stock - Denial of CENVAT credit based on discrepancies between balance sheet and statutory records - Whether the appellants are liable to reverse the CENVAT Credit on the basis of the discrepancies between the figures of inputs as reflected in balance sheet and RG-23A Part I and physical stock as on 04.04.2001 – HELD - The balance sheet is foreign material for Central Excise Act, 1944 and is not a foolproof evidence for central excise purposes. The Revenue has to bring further cogent evidence to prove the allegation that the inputs were only gathered merely on paper for availing credit and have not undergone consumption. The ld. Commissioner has missed out on the fact such an attempt to reconcile was not consequent to the detection and issuance of show cause notice by the Revenue. Rather, it was well before and precisely in the nearest time frame to the closure of financial year. Therefore, it is not correct on the part of the adjudicating authority to impute that the appellants have attempted to cover up the shortages by making the debit entries – Further, no evidence of suppression of purchase and clandestine manufacture/ removal has been placed on record. The adjudicating authority was directed to reconcile the discrepancy on the basis of the submissions made by the appellants. However, the impugned order failed to adhere to the directions of the Tribunal and relied on the discrepancies found during a physical verification conducted in 2001, which was not relevant for the earlier years. The present proceedings were without jurisdiction as the provision Rule 12 of CENVAT Credit Rules was not applicable during the relevant period when the alleged discrepancy occurred - The impugned order cannot be sustained on merits, limitation and on legal points. Accordingly, both the appeals are allowed [Read less]

M.P. Sthaniya Kshetra Me Mal Ke Pravesh Per Kar Adhiniyam, 1976 – Part of 'plant and machinery' or 'incidental goods' - Levy of Entry Tax on Grinding Media Balls and Rubber Liners brought into the local area, Integral parts of Ball Mill machinery - Whether Grinding Media Balls and Rubber Liners, which are fitted inside the Ball Mill as its constituent parts to enable the grinding of copper ore, are 'incidental goods' within the meaning of Section 2(hh) of the M.P. General Sales Tax Act, 1958, or whether they form part of 'plant and machinery' and are thus outside the scope of levy of entry tax as incidental goods under t... [Read more]

M.P. Sthaniya Kshetra Me Mal Ke Pravesh Per Kar Adhiniyam, 1976 – Part of 'plant and machinery' or 'incidental goods' - Levy of Entry Tax on Grinding Media Balls and Rubber Liners brought into the local area, Integral parts of Ball Mill machinery - Whether Grinding Media Balls and Rubber Liners, which are fitted inside the Ball Mill as its constituent parts to enable the grinding of copper ore, are 'incidental goods' within the meaning of Section 2(hh) of the M.P. General Sales Tax Act, 1958, or whether they form part of 'plant and machinery' and are thus outside the scope of levy of entry tax as incidental goods under the Entry Tax Act – HELD – The Grinding Media Balls and Rubber Liners, which are fitted inside the Ball Mill as its constituent parts to enable the grinding of copper ore, are not 'incidental goods' within the meaning of Section 2(hh) of the MPGST Act, 1958 but rather form part of 'plant and machinery' and are thus outside the scope of levy of entry tax as incidental goods under the Entry Tax Act. The Ball Mill cannot operate and perform its function of grinding copper ore unless the Grinding Media Balls and Rubber Liners are fitted inside it, and these components are the very means by which the Ball Mill grinds the ore - The Court relied on the established principle that parts or members of a machine which, when assembled, form a complete machine, may also be styled 'machinery', and that components essential to the functioning of a machine partake the character of the machine itself. The mere fact that these components undergo wear and tear and must be replaced periodically does not alter their character as integral parts of the Ball Mill machine. The components which are integral to the functioning of a plant or processing unit, and without which the machinery would be incomplete or inoperative, must be treated as 'plant and machinery' and not as 'incidental goods' - The consolidated revision order and the underlying assessment orders levying entry tax on Grinding Media Balls and Rubber Liners are quashed and set aside. The respondents are directed to give effect to this order and refund any amounts deposited pursuant to the impugned demand – The writ petition is allowed [Read less]

GST - Refund of IGST on export of service – Rejection of refund by non-speaking order – HELD - The impugned order rejecting the refund claim does not contain any specific findings on the submissions made by the Petitioner and is a non-speaking order - The impugned order is quashed and the matter is remanded to the Appellate Authority for de novo consideration of the Petitioner\'s refund claim after affording a reasonable opportunity of hearing to the parties and passing a reasoned and speaking order in accordance with law – The writ petition is disposed of

GST – Refund of accumulated input tax credit - Rejection of Refund Claim on the ground that the Petitioner had not submitted export invoices, foreign inward remittance certificates (FIRC) or foreign inward remittance advice (FIRA) - Violation of Principles of Natural Justice – HELD - The impugned order rejecting the refund claim was passed in violation of principles of natural justice as no personal hearing was afforded to the Petitioner despite its request to reschedule the hearing. The proviso to Rule 92(3) of the CGST Rules, 2017 mandates that an opportunity of being heard must be provided to the assessee prior to r... [Read more]

GST – Refund of accumulated input tax credit - Rejection of Refund Claim on the ground that the Petitioner had not submitted export invoices, foreign inward remittance certificates (FIRC) or foreign inward remittance advice (FIRA) - Violation of Principles of Natural Justice – HELD - The impugned order rejecting the refund claim was passed in violation of principles of natural justice as no personal hearing was afforded to the Petitioner despite its request to reschedule the hearing. The proviso to Rule 92(3) of the CGST Rules, 2017 mandates that an opportunity of being heard must be provided to the assessee prior to rejection of the refund claim application. The Petitioner's objection to the shorter time period of 7 days given to reply to the show cause notice, as opposed to the 15 days prescribed under Rule 92(3), may also be considered by the Respondents - The impugned show cause notice and order are quashed and set aside. A fresh show cause notice shall be issued to the Petitioner within 2 weeks, a personal hearing shall be granted within 2 weeks thereafter, and a speaking order shall be passed expeditiously in accordance with law - The Writ Petition is disposed of [Read less]

GST - Classification of nature of supply, Export of iron ore fines as supply of goods or composite supply of goods and services, effective alternative remedy – Petitioner contested the demand of tax, interest and penalty raised under Section 73 of the CGST Act, arguing that the export of iron ore fines with Fe content of more than 57% should be considered as 'supply of goods' and not 'composite supply of goods and services' – HELD - The determination of whether the transaction of export of iron ore fines is 'supply of goods' simpliciter or a 'composite supply of goods and services' involves a question of fact, which fa... [Read more]

GST - Classification of nature of supply, Export of iron ore fines as supply of goods or composite supply of goods and services, effective alternative remedy – Petitioner contested the demand of tax, interest and penalty raised under Section 73 of the CGST Act, arguing that the export of iron ore fines with Fe content of more than 57% should be considered as 'supply of goods' and not 'composite supply of goods and services' – HELD - The determination of whether the transaction of export of iron ore fines is 'supply of goods' simpliciter or a 'composite supply of goods and services' involves a question of fact, which falls within the domain of the fact-finding authorities vested with the power to adjudicate on both questions of fact and law. Where an effective alternative remedy is available, the High Court should refrain from exercising its jurisdiction under Article 226 of the Constitution - Petitioner is granted liberty to approach the appropriate forum to seek the desired relief – The petition is dismissed [Read less]

Central Excise - Clandestine removal of goods - The Revenue alleged clandestine removal of goods by the Appellant based on comparison of sale values in VAT and Excise Returns – HELD - The allegation of clandestine removal cannot be sustained merely on the basis of comparison of statutory returns, in the absence of any concrete and corroborative material evidence. The Appellant produced a Chartered Accountant's certificate explaining the differences in the returns, which was not properly considered by the Adjudicating Authority. The clinching evidence is required to establish the charge of clandestine removal beyond reaso... [Read more]

Central Excise - Clandestine removal of goods - The Revenue alleged clandestine removal of goods by the Appellant based on comparison of sale values in VAT and Excise Returns – HELD - The allegation of clandestine removal cannot be sustained merely on the basis of comparison of statutory returns, in the absence of any concrete and corroborative material evidence. The Appellant produced a Chartered Accountant's certificate explaining the differences in the returns, which was not properly considered by the Adjudicating Authority. The clinching evidence is required to establish the charge of clandestine removal beyond reasonable doubt, which was lacking in the present case – Further, the extended period of limitation cannot be invoked when the entire demand is raised based on the audit observations and statutory returns filed by the assessee, which were available with the Department. The proceedings are barred by limitation as the Show Cause Notice was issued much beyond the normal period from the date of the spot audit. Accordingly, the impugned demand is set aside as being time-barred and the appeal is allowed [Read less]

Service Tax - Quantification of service tax liability based on Form 26AS and Profit & Loss account - Department raised the demand based on the differential between the taxable value as per the financial records and the value declared in the ST-3 returns, treating it as best judgment assessment. The appellant argued that the service tax liability cannot be solely based on TDS deducted and reflected in Form 26AS, as the provisions under Service Tax law are different from Income Tax Act – HELD - the levy of service tax cannot be based solely on the amounts on which the TDS has been deducted and reflected in Form 26AS. The m... [Read more]

Service Tax - Quantification of service tax liability based on Form 26AS and Profit & Loss account - Department raised the demand based on the differential between the taxable value as per the financial records and the value declared in the ST-3 returns, treating it as best judgment assessment. The appellant argued that the service tax liability cannot be solely based on TDS deducted and reflected in Form 26AS, as the provisions under Service Tax law are different from Income Tax Act – HELD - the levy of service tax cannot be based solely on the amounts on which the TDS has been deducted and reflected in Form 26AS. The method adopted by the Assessing Officer of taking the differential amount by invoking the provisions of best judgment assessment is not in accordance with law - As the adjudicating authority has not examined the service rendered by the appellant, which are exempted service, being mainly the service provided by the appellant for use other than for commerce, industry or any other business or profession. If the appellant has provided the services for use other than for commerce, industry or any other business or profession, in that circumstances, the services provided by the appellant are exempted services. The same is to be examined by the adjudicating authority on the basis of work orders supplied by the appellant - The adjudicating authority is directed to examine the nature of services, applicable rate of tax, value of services and the person liable to pay tax, based on the relevant statutory provisions, instead of solely relying on the Form 26AS and financial records - The impugned order is set aside and the matter is remanded back to the adjudicating authority to examine the issue of extended period of limitation based on the documents provided by the appellant – The appeal is disposed of by remand [Read less]

GST – Recovery of tax without prior notice – Challenge to notice issued under Section 79(1)(c) of CGST Act, 2017, through which the petitioner’s Bank was directed to pay a sum towards the petitioner's tax dues. The petitioner contended that the respondent authorities issued the impugned notice without initiating any adjudication proceedings as provided under Sections 73 or 74, and without providing any prior notice to the petitioner – HELD - The issuance of the impugned notice under Section 79 without prior notice to the petitioner is valid. The Section 79 does not mandate the requirement of prior notice to the def... [Read more]

GST – Recovery of tax without prior notice – Challenge to notice issued under Section 79(1)(c) of CGST Act, 2017, through which the petitioner’s Bank was directed to pay a sum towards the petitioner's tax dues. The petitioner contended that the respondent authorities issued the impugned notice without initiating any adjudication proceedings as provided under Sections 73 or 74, and without providing any prior notice to the petitioner – HELD - The issuance of the impugned notice under Section 79 without prior notice to the petitioner is valid. The Section 79 does not mandate the requirement of prior notice to the defaulting dealer before issuing notice to a third party from whom money is due or may become due to the defaulting dealer. The judgments relied upon by the petitioner, wherein the Courts had quashed the notices under Section 79 due to the absence of prior determination of the actual tax liability, is distinguishable. In the present case, the Assessment Order against the petitioner had attained finality, therefore, no illegality in the issuance of the impugned notice under Section 79 for the recovery of the tax dues - The issuance of the impugned notice under Section 79 without prior notice to the petitioner is valid – The writ petition is dismissed - Authorization for issuance of notice under Section 79 of APGST Act, 2017 - The petitioner contended that the Asst. Commissioner, who issued the impugned notice under Section 79, was not authorized to do so - Whether the Asst. Commissioner was authorized to issue the notice under Section 79 of APGST Act, 2017 – HELD - The Asst. Commissioner, who issued the impugned notice, was the proper officer authorized to exercise the powers under Section 79 of APGST Act, 2017. The Gazette Notification dated 14.12.2022 issued by the Chief Commissioner of State Tax, Andhra Pradesh, designated the Deputy Assistant Commissioner (ST-II), Airport Circle, Visakhapatnam-II Division as the proper officer for the purpose of exercising powers under Section 79. The provision of Section 79 itself does not require any prior authorization from a competent authority before issuing the notice - The Asst. Commissioner was the proper officer authorized to issue the notice under Section 79 of APGST Act, 2017, and therefore, the contention of the petitioner regarding the lack of authorization does not merit consideration. [Read less]

GST - Rejection of refund of IGST on zero-rated supply, limitation for appeal, condonation of delay - Refund application for IGST paid on zero-rated supplies to a SEZ unit. The refund application was rejected without issuing a deficiency memo or providing a hearing, as required under Rule 92 of the CGST Rules, 2017. The petitioner later filed an appeal against the rejection order, but it was dismissed as time-barred - Whether the original order rejecting the refund application is valid and the delay in filing the appeal be condoned – HELD - The original order rejecting the refund application is void ab initio and non-est... [Read more]

GST - Rejection of refund of IGST on zero-rated supply, limitation for appeal, condonation of delay - Refund application for IGST paid on zero-rated supplies to a SEZ unit. The refund application was rejected without issuing a deficiency memo or providing a hearing, as required under Rule 92 of the CGST Rules, 2017. The petitioner later filed an appeal against the rejection order, but it was dismissed as time-barred - Whether the original order rejecting the refund application is valid and the delay in filing the appeal be condoned – HELD - The original order rejecting the refund application is void ab initio and non-est in law, as it was passed without complying with the mandatory requirements of Rule 92 of the CGST Rules, which requires the issuance of a deficiency memo and an opportunity of hearing before rejecting the refund application. The Department had subsequently entertained the petitioner's fresh refund application and issued a deficiency memo, which was not taken to its logical conclusion - In the peculiar facts of the case, where the initial rejection order was void and the petitioner was actively pursuing its rights, the delay in filing the appeal should be condoned, especially considering the impact of the COVID-19 pandemic during the relevant period. The designated officer is directed to decide the petitioner's refund application in accordance with the law, without being influenced by the earlier rejection order or the order dismissing the appeal - The petitions are disposed of [Read less]

Customs - Foreign origin of seized gold – The gold bars and piece of gold was seized under Section 110 of the Customs Act on reasonable belief that the same are smuggled into India and therefore liable to confiscation - Whether gold seized from the appellant was of foreign origin and smuggled into India – HELD - In the absence of any foreign markings on the gold and the statement of the appellant being hearsay evidence without any corroborative evidence, the revenue has failed to establish that the gold was of foreign origin and smuggled into India. Apart from the statement of the appellant, there is no corroborative e... [Read more]

Customs - Foreign origin of seized gold – The gold bars and piece of gold was seized under Section 110 of the Customs Act on reasonable belief that the same are smuggled into India and therefore liable to confiscation - Whether gold seized from the appellant was of foreign origin and smuggled into India – HELD - In the absence of any foreign markings on the gold and the statement of the appellant being hearsay evidence without any corroborative evidence, the revenue has failed to establish that the gold was of foreign origin and smuggled into India. Apart from the statement of the appellant, there is no corroborative evidence on record to suggest that the subject gold was of foreign origin and was smuggled into India - The mere fact that the appellant was found carrying the gold at a public place does not constitute reasonable belief to seize the goods under Section 123 of the Customs Act. The benefit of doubt has to be extended to the appellant as there is no conclusive proof of the gold being of foreign origin and smuggled. Therefore, the confiscation of the gold and imposition of penalty on the appellant cannot be sustained - Since the seizure and confiscation of the gold has been found to be bad in law, the principle of restitution applies, and the appellant is required to be placed in the same position as he was prior to the seizure. Accordingly, the appellant is entitled to the release of the seized gold from whose possession it was seized, as the owner of the gold has not come forward to claim ownership. The Customs Act also does not prohibit release of goods to the person from whose possession the same were seized where the owner is not known or does not come forward - The appellant is entitled to release of subject gold. Accordingly, the appeal is allowed [Read less]

Customs - Reasonable Belief for Confiscation of Smuggled Goods - Department seized gold and silver from appellant no.1 while he was transporting it in a car. The Department alleged that the goods were smuggled and therefore liable for confiscation. The appellants claimed that the goods were legally purchased - Whether the Department had reasonable belief to confiscate the seized gold and silver as smuggled goods - HELD - The Department could not establish any valid reasons to believe that the impugned goods were smuggled and liable for confiscation. The seizure was made in a town and not at the international border or a Cu... [Read more]

Customs - Reasonable Belief for Confiscation of Smuggled Goods - Department seized gold and silver from appellant no.1 while he was transporting it in a car. The Department alleged that the goods were smuggled and therefore liable for confiscation. The appellants claimed that the goods were legally purchased - Whether the Department had reasonable belief to confiscate the seized gold and silver as smuggled goods - HELD - The Department could not establish any valid reasons to believe that the impugned goods were smuggled and liable for confiscation. The seizure was made in a town and not at the international border or a Customs notified area, which is a strong ground to entertain a reasonable belief that the goods are smuggled. The follow-up searches at the premises of the respondents did not yield any incriminating evidence to corroborate the initial statement of the seized person, which was later retracted - The reasonable belief must exist at the time of seizure and not at a subsequent stage. The Department did not make any efforts to verify the claims of the respondents regarding the licit purchase of the goods, despite the production of invoices. The Department failed to discharge its responsibility of forming a reasonable belief under Section 123 of the Customs Act, without which the burden of proof cannot shift to the person from whom the goods were seized - The order of the Commissioner (Appeals) setting aside the confiscation of the seized gold and silver is upheld and the Revenue appeals are dismissed [Read less]

Customs - Import of Technical Grade Urea through State Trading Enterprises (STE) on High Sea Sale basis without DGFT license - Whether goods are liable for confiscation and penalty can be imposed – HELD - As per the ITC (HS) Policy, import of Urea was allowed "through" STE, which means the purchase of Urea from the foreign supplier should be effected by STE, even if the sale to the domestic buyer is made on High Sea basis. When the import is made through STE, as permitted under the policy, there is no violation of legal provisions, and hence, the goods cannot be held liable for confiscation under Section 111(d) of the Cu... [Read more]

Customs - Import of Technical Grade Urea through State Trading Enterprises (STE) on High Sea Sale basis without DGFT license - Whether goods are liable for confiscation and penalty can be imposed – HELD - As per the ITC (HS) Policy, import of Urea was allowed "through" STE, which means the purchase of Urea from the foreign supplier should be effected by STE, even if the sale to the domestic buyer is made on High Sea basis. When the import is made through STE, as permitted under the policy, there is no violation of legal provisions, and hence, the goods cannot be held liable for confiscation under Section 111(d) of the Customs Act. Consequently, no penalty is imposable on the appellant under Section 112 of the Act - The judgment relied upon by the Revenue in the case of Marico Industries Ltd. is distinguishable on facts, as in that case, the importer had directly established the letter of credit on the foreign supplier and the import was against Advance Release Order, which did not provide for import through STE - The impugned order is set aside and the appeal is allowed [Read less]

GST - Refund claim for goods supplied to SEZ – Rejection of refund on the ground that the petitioner had failed to submit endorsed copies of invoices by the specified officer of the SEZ as required under Rule 89(1) of the CGST Rules, 2017 - Whether the appellate authority was right in rejecting the petitioner's refund claim on the ground that the petitioner had failed to submit endorsed copies of invoices by the specified officer of the SEZ – HELD – The appellate authority had erred in its interpretation of Rule 112 of the CGST Rules, 2017, which provides for four exceptions under which the petitioner could have prod... [Read more]

GST - Refund claim for goods supplied to SEZ – Rejection of refund on the ground that the petitioner had failed to submit endorsed copies of invoices by the specified officer of the SEZ as required under Rule 89(1) of the CGST Rules, 2017 - Whether the appellate authority was right in rejecting the petitioner's refund claim on the ground that the petitioner had failed to submit endorsed copies of invoices by the specified officer of the SEZ – HELD – The appellate authority had erred in its interpretation of Rule 112 of the CGST Rules, 2017, which provides for four exceptions under which the petitioner could have produced additional evidence, including the endorsed copies of invoices, before the appellate authority - The petitioner's case falls within the exceptions provided under Rule 112(1)(a) to (d), and therefore, the appellate authority should have considered the additional evidence submitted by the petitioner. In any event, it could have been also appropriate for the appellate authority to remand the proceedings to the original authority, if any additional material produced by the petitioner requires examination by the original authority. The substantive contentions urged on behalf of the petitioner are required to be taken into consideration by the appellate authority before passing any order - The impugned order is set aside and matter is remanded back to the appellate authority to consider the petitioner's additional evidence and pass an appropriate order. The petitioner should be allowed to urge any additional contentions before the appellate authority, and the appellate authority should record appropriate evidence on all such contentions - The writ petitions are disposed of [Read less]

GST - Classification of Glucose Monitoring Instruments, Luxury litigation – Petitioner classified "Blood Glucose Monitoring System" under HSN 90278990 and paid GST at 12% rate - Authorities issued a show cause notice classifying the goods under HSN 90278990 instead of HSN 90278090, which attracts 18% GST - HELD - The issue of classification of glucose monitoring instruments has already been decided by the CESTAT in the case of Bayer Pharmaceuticals Pvt. Ltd. v. Commissioner of Customs, Mumbai - Although it may be true that insofar as the classification of Gluco meters are concerned, the same will be required to be classi... [Read more]

GST - Classification of Glucose Monitoring Instruments, Luxury litigation – Petitioner classified "Blood Glucose Monitoring System" under HSN 90278990 and paid GST at 12% rate - Authorities issued a show cause notice classifying the goods under HSN 90278990 instead of HSN 90278090, which attracts 18% GST - HELD - The issue of classification of glucose monitoring instruments has already been decided by the CESTAT in the case of Bayer Pharmaceuticals Pvt. Ltd. v. Commissioner of Customs, Mumbai - Although it may be true that insofar as the classification of Gluco meters are concerned, the same will be required to be classified under chapter heading/sub-heading/Tariff item 9027, however, the subject matter of the present SCN cannot be equated and would not stand concluded based on earlier decision in the petitioner’s own case on classification, as the impugned show cause notice issued on a different foundation - Petitioner’s assertion that it would not reply to the show cause notice on any count and it is only the High Court which would adjudicate the petitioner’s contentions on the SCN, is not the correct approach – There is an increase in the tendency in the litigants to by-pass the statutory procedure and approach the High Court in challenging the SCNs, sometimes even before reply to the SCNs are filed and obviously before a view is taken by the proper officer - Such litigation needs to be deprecated as this would amount to complete discarding of the statutory procedure mandated under the provisions of the concerned laws. However, very frequently such statutory mechanism is being circumvented with impunity knowing well that there are disputed questions of fact or issues which can be gone into, in reply to the show cause notice. The Writ Petitions are nonetheless filed, and on such petitions a vehement assertion is put up before the Court, as if, the Court does not have any other pressing proceedings, except to entertain such Writ Petitions. This amounts to a litigant taking selective chances, as such litigants has means to resort to such luxury litigation. Such litigation would be nothing short of an abuse of the process of law in a given situation, deserving it to be dismissed with costs for waste of valuable judicial time - The present case is one of such cases, where contentions appropriately gone into by the proper officer are sought to be urged before the Court in the present proceedings. If such contentions as urged on behalf of the petitioner are to be entertained by the High Court in the proceedings under Article 226 of the Constitution, not a single show cause notice can proceed and every show cause notice would be assailed before this Court. This is certainly not the law - The writ petition is dismissed with liberty to the petitioner to file a reply to the show cause notice – Ordered accordingly [Read less]

GST – Gujarat AAAR - Eligibility of Input Tax Credit on Lease Rental paid for land – Appellant sought an advance ruling on the eligibility of ITC on the GST paid on the lease rental - The Advance Ruling Authority vide the impugned order ruled that the ITC of GST charged on the lease rental by the Government of Gujarat is not admissible – HELD – The Section 17(5)(d) explicitly prohibits the availment of Input Tax Credit on goods and services utilized for the construction of immovable property. This restriction applies regardless of whether the construction is undertaken in the course or furtherance of business - The... [Read more]

GST – Gujarat AAAR - Eligibility of Input Tax Credit on Lease Rental paid for land – Appellant sought an advance ruling on the eligibility of ITC on the GST paid on the lease rental - The Advance Ruling Authority vide the impugned order ruled that the ITC of GST charged on the lease rental by the Government of Gujarat is not admissible – HELD – The Section 17(5)(d) explicitly prohibits the availment of Input Tax Credit on goods and services utilized for the construction of immovable property. This restriction applies regardless of whether the construction is undertaken in the course or furtherance of business - The land has been leased for the construction of the factory and the vacant land is a part of the statutory requirement of the factory. The vacant land does not constitute a separate entity; rather, it is integral to the factory premises - The ITC on services related to land used for construction of immovable property is restricted under Section 17(5)(d) of the CGST Act, regardless of whether the construction is carried out directly or through a works contractor. The restriction under Section 17(5)(d) applies irrespective of the payment schedule or the manner of payment (upfront or periodic), and extends to services related to the land used for construction, including repairs and renovation of the immovable property - The appellant is not eligible for ITC on the GST paid on the lease rental - The appeal is rejected [Read less]

GST - Statutory requirement for pre-deposit under GST Act - Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) of the CGST Act, 2017 – Vide the impugned order the High Court held that the appellate authority had dismissed the appeal on two grounds, for non-compliance with Section 107(6) and also on merits. Even if one of the grounds is found to be perverse, illegal and not in consonance with the law, the other the ground(s) justifying the ultimate decisions to be taken, it does not invite quashing and setting aside of the order in its entirety. The findings of t... [Read more]

GST - Statutory requirement for pre-deposit under GST Act - Validity of dismissal of appeal by the appellate authority on the ground of non-compliance with Section 107(6) of the CGST Act, 2017 – Vide the impugned order the High Court held that the appellate authority had dismissed the appeal on two grounds, for non-compliance with Section 107(6) and also on merits. Even if one of the grounds is found to be perverse, illegal and not in consonance with the law, the other the ground(s) justifying the ultimate decisions to be taken, it does not invite quashing and setting aside of the order in its entirety. The findings of the appellate authority on merits were sustained and the petition was dismissed – Assessee in appeal – SC HELD - Not inclined to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is dismissed [Read less]

GST – Discrimination in not extending GST rate revision benefit to the petitioner – Challenge to rejection of petitioner’s representation for refund of differential GST amount by the respondent Rajasthan State Road Development and Construction Corporation Ltd. (RSRDCC) - The government had extended the benefit of refund of differential GST amount to contractors working under other government agencies like the Public Works Department and Rajasthan Housing Board, but the RSRDCC denied the same benefit to the petitioner - Whether the denial of the GST rate revision benefit to the petitioner by the RSRDCC, while extendin... [Read more]

GST – Discrimination in not extending GST rate revision benefit to the petitioner – Challenge to rejection of petitioner’s representation for refund of differential GST amount by the respondent Rajasthan State Road Development and Construction Corporation Ltd. (RSRDCC) - The government had extended the benefit of refund of differential GST amount to contractors working under other government agencies like the Public Works Department and Rajasthan Housing Board, but the RSRDCC denied the same benefit to the petitioner - Whether the denial of the GST rate revision benefit to the petitioner by the RSRDCC, while extending it to other similarly situated contractors, is discriminatory and violative of Article 14 of the Constitution – HELD - The denial of the GST rate revision benefit to the petitioner by the RSRDCC, when the same benefit is being extended to other contractors working under government agencies, is discriminatory and violative of Article 14. The RSRDCC, being a government undertaking, is bound by the orders and rules issued by the Governor of Rajasthan, including the order dated 07.01.2021 which provides for an equitable adjustment of the contract price due to change in GST rates - The order dated 07.01.2021 clearly says that if any rates of Tax are increased or decreased in case of performance of a contract, an equitable adjustment of the Contract price shall be made to fully take into account any such change by addition to the Contract Price or deduction there from, as the case may be. The variation in the GST rates came in existence during the course of performance of the contract by the petitioner which was assigned by the respondent-Company. The language of the order dated 07.01.2021 clearly speaks that if there is any variation in the GST rates, the effect arising from the variation would be applicable to the contractors whose work at the relevant time was in progress and not completed - The differential treatment meted out to the petitioner, without any reasonable basis, is arbitrary and cannot be sustained. The respondents are directed to make refund of the differential amount of the GST i.e. 6% to the petitioner, which shall be effective from the revision of the GST Rate - the writ petition is allowed - Maintainability of writ petition against State instrumentality Fact - Petition challenging the rejection of representation for refund of differential GST amount by the respondent Rajasthan State Road Development and Construction Corporation Ltd. (RSRDCC), which is a government undertaking - Whether the writ petition is maintainable against the RSRDCC, which is a contractual dispute, or the petitioner should have approached the dispute redressal mechanism provided under the contract – HELD - Even in contractual matters, when the State or its instrumentality fails to exercise fairness or indulges in arbitrary or discriminatory actions, the aggrieved party can invoke the writ jurisdiction under Article 226 of the Constitution. The RSRDCC being a government undertaking, its actions are subject to the constitutional guarantee of non-arbitrariness under Article 14. The mere availability of an alternative remedy does not oust the jurisdiction of the High Court, as the rule regarding alternative remedy is one of policy, convenience and discretion rather than a rule of law - Applicability of PWF&AR and order on GST rate revision to RSRDCC - The contract agreement between the petitioner and RSRDCC contained clauses referring to PWF&AR and circulars issued by the Government of Rajasthan. The government had also issued an order dated 07.01.2021 amending the PWF&AR to insert a new clause 36E dealing with the impact of change in GST rate - Whether the order dated 07.01.2021 and the PWF&AR are applicable to the RSRDCC, which is a government undertaking - HELD - The RSRDCC being a government undertaking, the orders and rules framed by the Governor of Rajasthan, including the PWF&AR, are binding on it. The contract agreement itself referred to the applicability of PWF&AR and government circulars. Further, the RSRDCC does not have any separate rules or regulations for its contracts, and it follows the same framework as applicable to other government contracts. Therefore, the order dated 07.01.2021 amending the PWF&AR to insert clause 36E dealing with change in GST rates is also applicable to the RSRDCC. [Read less]

GST - Issuance of C-Form from 01.07.2017 onwards for purchase of Extra Neutral Alcohol (ENA) as input for manufacture of Alcoholic Liquor – Denial from issuance of C-Forms for the purchase of ENA from other States on the ground that the GST regime does not enable issuance of C-Forms - The Ld. Single Judge directed the State to issue C-Forms to the respondent-assesseee until necessary amendment is brought to the statute to exclude ENA from the ambit of GST - State appeal against the Ld. Single Judge order, contending that for the period from 01.07.2017 till 12.11.2024, the respondents are liable to be taxed in terms of GS... [Read more]

GST - Issuance of C-Form from 01.07.2017 onwards for purchase of Extra Neutral Alcohol (ENA) as input for manufacture of Alcoholic Liquor – Denial from issuance of C-Forms for the purchase of ENA from other States on the ground that the GST regime does not enable issuance of C-Forms - The Ld. Single Judge directed the State to issue C-Forms to the respondent-assesseee until necessary amendment is brought to the statute to exclude ENA from the ambit of GST - State appeal against the Ld. Single Judge order, contending that for the period from 01.07.2017 till 12.11.2024, the respondents are liable to be taxed in terms of GST Act and they are not entitled for any C-Forms - HELD – The GST Council was not in a position to take a decision on goods known as ENA and they have consciously decided to maintain status quo, which naturally should be construed as the situation which was prevailing prior to 01.07.2017. Therefore, the manufacturers of Alcoholic liquor for human consumption, who are dependents on supply of ENA from other States has to be provided with C-Forms, if they are entitled. They cannot be denied their right of trade, which is a fundamental right - The indecision of the Council of GST cannot create impediments to the right of trade of the respondent. The respondent is entitled to be issued C-Forms for the purchase of ENA from other States for the period prior to the amendment excluding ENA from GST - The State is directed to issue C-Forms to the respondent, subject to compliance of other statutory requirements – The writ appeal is dismissed [Read less]