More Judgements

Home

More Judgements

2026-VIL-851-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs – Classification of relays, feeder management intelligent electronic devices (FMIEDs), Principal function test - Appellant imported four types of electrical relays namely Midos relays, relays for tap changer control and transformer monitoring, K-range relays, and MICOM claiming classification under Customs Tariff Item 8536 49 00 and exemption under Serial Number 376 of Notification No. 12/2012 - Dept issued a show cause notice disputing the classification and claiming the goods were feeder management intelligent electronic devices classifiable under tariff item 8536 90 90 with contact ratings exceeding 7 amperes - Whether the imported goods are relays classifiable under CTI 8536 49 00 or feeder management intelligent electronic devices classifiable under CTI 8536 90 90, and whether they are eligible for exemption under the notification for relays with contact rating up to 7 amperes – HELD - The primary function test enunciated in Section Note 3 to Section XVI of the tariff schedule and affirmed in the Circular dated 19.04.2007 regarding classification of multi-functional products requires that when a composite machine performs multiple complementary functions, classification shall be determined by the machine or component which performs the principal function - The relays are devices used for control, protection and supervision of electrical systems from overcurrent and voltage, and that additional features resulting from technological advancements such as digital displays, data recording and alarm functions are merely ancillary to the primary protective function and cannot alter the core function for which the goods are purchased - The technical brochures identify the goods as relays and that in trade parlance customers specifically placed orders for relays by mentioning specifications and standards - Three of the four products namely Midos relays, relays for tap changer control and transformer monitoring, and K-range relays all had contact ratings of 5 amperes, whereas the Commissioner had erroneously assumed all four products had contact ratings above 7 amperes solely based on the specification of MICOM relays - The appellant had voluntarily paid the differential duty amount for MICOM relays prior to issuance of the SCN - The confirmation of differential duty for the three products other than MICOM along with interest and penalties are set aside. All four products are held to be classifiable under CTI 8536 49 00 as relays. The products except MICOM were declared entitled to exemption under the notification. The imposition of penalties under sections 112 and 114AA of the Customs Act is set aside - The appeals are partly allowed [Read less]

2026-VIL-856-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Classification - Rule 2(a) of General Rules for Interpretation - Appellant, engaged in manufacturing and assembling mobile phones, imported certain goods declaring them as 'parts of mobile phones' – Dept reclassified the imported goods as complete mobile phones in CKD/SKD condition under the tariff item applicable to mobile phones attracting a higher rate of basic customs duty, by invoking rule 2(a) of the General Rules for Interpretation of the Customs Tariff Act, 1975, confirmed differential duty with interest, confiscated the goods with an option to redeem on payment of redemption fine, and imposed penalty for improper importation - Whether the imported goods, being parts of mobile phones accompanied by locally procured components, could be treated as complete or finished mobile phones by invoking rule 2(a) of the General Rules for Interpretation so as to attract reclassification and consequent differential duty liability – HELD – The Rule 2(a) of the General Rules for Interpretation stipulates that incomplete or unfinished goods must possess the essential character of the complete or finished goods for them to be classified as such. The burden to establish reclassification lies squarely upon the department and not upon the assessee - Further, the Chartered Engineer engaged by the Department himself categorically opined that the unassembled parts imported by the appellant form an incomplete mobile phone and the goods were without battery essential for power backup and without camera, they required fitment of additional parts along with some basic manufacturing process - Since the expert report of the Chartered Engineer did not conclusively establish that the imported parts possessed the essential character of a complete or finished mobile phone, it is the department that bears the burden of proving reclassification by adducing proper evidence - The impugned order erred in placing the burden upon the appellant to demonstrate that the goods were not complete mobile phones. The view taken by the Principal Commissioner that the goods were complete mobile sets by virtue of rule 2(a) of the General Rules for Interpretation cannot be sustained – The impugned order is set aside and the appeal is allowed [Read less]

2026-VIL-855-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax - Rebate on Export of Services - Eligibility of credit availed prior to service tax registration - Whether Cenvat Credit availed prior to obtaining service tax registration is admissible for the purpose of claiming rebate on export of services – HELD - A plain reading of the relevant provisions of the Finance Act and the Cenvat Credit Rules does not reveal any statutory condition making service tax registration a pre-condition for availment of Cenvat Credit. The obligation to register under the Finance Act is applicable only to persons liable to pay service tax, whereas the appellant, being exclusively engaged in export of services during the disputed period, was not liable to pay any service tax, and therefore was not required to obtain registration during that period. The credit availed on input services, though accumulated prior to registration, could lawfully be taken upon obtaining registration, subject to compliance with other applicable provisions of the Cenvat Credit Rules including nexus with output services and availability of proper documents - Multiple High Courts and co-ordinate benches have consistently held that there is no statutory provision disentitling a person from taking credit merely on account of non-registration during a period when registration itself was not required – The denial of credit solely on the ground of non-registration is not legally sustainable and set aside - The matter requires re-examination of the factual matrix including supporting documents by the original authority to verify eligibility of the credit under the provisions prevailing during the relevant period - Appeal allowed by way of remand - Cenvat Credit - Nexus between input services and output services - Eligibility of credit on certain input services such as life insurance for employees, rent-a-cab, hotel bills, air travel, medical check-up, annual maintenance contracts and vehicle maintenance - Whether credit on such input services can be denied on the ground that they lack a direct nexus with the provision of output services exported – HELD - The period in question falls prior to the amendment effected by the Finance Act of a later year, and that under the unamended definition of input service in the Cenvat Credit Rules, any service used in relation to business activities was eligible for credit, which carried a wider scope than what was introduced by the subsequent amendment. The Tribunal has consistently held that various categories of input services including those pertaining to management, maintenance or repair, air travel, outdoor catering, insurance for employees and entertainment expenses are eligible as input services in the context of provision of output services during this period, and that the original adjudicating authority failed to consider these binding decisions while denying credit on account of absence of nexus - Each denied input service requires fresh examination in the factual context of the appellant by applying the ratios laid down by the co-ordinate benches on the eligibility of such input services - Appeal allowed by way of remand [Read less]

2026-VIL-849-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax - Refund – Time Limit for Filing Claim – One Year Period Computation - Appellant filed a refund claim for a quarterly period (July to September 2016) on 27.07.2017 for services exported in convertible foreign exchange – Rejection of refund claim on the ground that remittances were received beyond one year from the date of receipt and therefore time-barred under Notification No. 27/2012 read with Rule 5 of Cenvat Credit Rules, 2004 - Appellant contended that the one year period should be computed from the last date of the quarter for which refund was filed and not from the actual date of receipt of each remittance – HELD - The Notification No. 14/2016 dated 01.03.2016 amended the earlier Notification No. 27/2012 and provided a specific time limit for service providers, requiring refund claims to be filed before expiry of one year from the date of receipt of payment in convertible foreign exchange - A plain reading of the notification clearly requires filing of refund claim within one year from the date of receipt of convertible foreign exchange. The case laws relied upon the appellant are distinguished on the ground that they dealt with provisions under Notification No. 27/2012 and not the amended provisions applicable post 01.03.2016. Accordingly, the limitation has to be counted from the date of receipt of remittances and not from the last date of the quarter - The matter is remanded back to the original Refund Sanctioning Authority to decide the refund claim – The appeal is allowed by way of remand - Refund – Evidence of Receipt of Foreign Exchange – Acceptance of FIRC and BRC - The appellant submitted Form FIRC as evidence of receipt of foreign exchange instead of Bank Realisation Certificate, contending that Circular dated 12.03.2009 permits acceptance of FIRC in lieu of BRC. Department rejected the refund claim on the ground that strict compliance with Notification No. 27/2012 required production of BRC and not FIRC for the relevant period 2016-17 – HELD - What is crucial is that the document should categorically indicate that foreign exchange has been received in respect of the invoices under the cover of which export of service has taken place. The evidence of receipt of foreign exchange can be in the form of FIRC or BRC or both, provided there is corroboration with invoices in respect of which refund has been claimed. Accordingly, the matter is remanded to the original Refund Sanctioning Authority with direction to examine whether remittances have been received in respect of the invoices under the cover of which export of service has taken place, based on documents to be submitted by the appellant. [Read less]

2026-VIL-853-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax – Payments towards for technology transfer, technical assistance under Inter-Governmental Agreement – Demand under Scientific and Technical Consultancy Service - Appellant, an aircraft manufacturer, entered into an agreement with a foreign state-owned entity for transfer of licence and technological documentation for production of aircraft in India under an Inter-Governmental Agreement - The appellant made payments for technology transfer, technical assistance, supply of parts, training and related services - Whether payments made by the appellant for services rendered by a foreign government organization in connection with technology transfer and technical assistance constitute "Scientific or Technical Consultancy Service" liable to service tax under RCM – HELD - The definition of Scientific or Technical Consultancy Service under Section 65 of the Finance Act, 1994 requires that the service must be rendered by a scientist, a technocrat, or a science or technology institution or organization. The foreign state entity in question is a governmental organization responsible for export of defence and dual use technology, acting as an exclusive state intermediary agency, and therefore cannot be classified as a science or technology institution or organization - The Tribunal relied on its earlier coordinate bench decisions involving the same appellant and the same foreign entity under identical factual matrices where it was conclusively established that the entity is a government organization and not a scientific or technical institution. Even the Department did not press this aspect when it filed an appeal before the Supreme Court against the coordinate bench's earlier order, thereby accepting the position. No evidence was placed on record to establish that the appellant received services from any individual scientist or technocrat in their individual capacity - The demand of Service Tax under Scientific or Technical Consultancy Service is set aside. However, confirmation of demand of Service Tax on MMR and penalty thereon is sustained - The appeals filed by assessee are allowed partly and the appeal filed by the Department is dismissed [Read less]

2026-VIL-44-SC | Supreme Court VAT

Central Sales Tax Act, 1956 - Inter-State Sale of Natural Gas - Jurisdiction of State to Levy VAT - Constitutional Competence – Delivery Point and Transfer of Title – Respondents operating under a Production Sharing Contract with the Government of India for an offshore deep-water block, entered into Gas Sales and Purchase Agreements with buyers in various States – The natural gas extracted from the offshore basin was delivered at a designated onshore processing terminal in one State ("delivery point"), with title, risk, and possession passing to the buyers at that point, following which the buyers independently arranged transportation of the gas through common carrier pipelines across multiple States to their facilities in another State - Assessing authority of the destination State levied VAT on the transaction, treating the same as an intra-State sale on the ground that the gas, being fungible and co-mingled in the common carrier pipeline, constituted unascertained goods that were appropriated only upon receipt at the buyers' factories within that State, and that the sale was therefore completed within its territory — HELD – The Section 3 of the CST Act, enacted pursuant to Article 269(3) to formulate principles for determining when a sale takes place in the course of inter-State trade or commerce, operates as the primary and overriding provision, and Section 4 of the CST Act, which fixes the territorial situs of a sale for the purpose of identifying the appropriate State, is expressly made subject to Section 3 and cannot be invoked to override an established inter-State character of a transaction – In the present case, the delivery point was unambiguously fixed at the onshore processing terminal in the originating State and the transportation thereafter was effected solely under separate carriage agreements between the buyers and the pipeline operators, who acquired no title to the gas and acted merely as carriers – The co-mingling and fungibility of gas in the common carrier pipeline was a statutory compulsion arising from the open access common carrier regime mandated by the applicable Regulations. The physical intermixing of gas in the pipeline after the sale was concluded at the delivery point was a mere incident of transportation that could neither alter nor relocate the character of an already completed inter-State sale; the subsequent re-metering at the destination point is held to be legally irrelevant to the determination of the taxable event - The nature of goods, whether ascertained or unascertained, is irrelevant for the purposes of Section 3(a) of the CST Act, once it is established that a contract of sale occasions the movement of goods from one State to another - The Explanation 3 inserted into Section 3 of the CST Act by the Finance Act, 2016, was clarificatory and not substantive in nature and did not alter the pre-existing legal position but merely gave explicit statutory expression to what was already implicit in Section 3; accordingly, the argument that the Explanation was applicable only prospectively is rejected - The destination State had itself recognised the inter-State character of the transaction by issuing statutory declaration forms to the buyers under the CST Rules. Having approbated the inter-State nature of the transaction in that manner, it was not open to the State to reprobate by simultaneously asserting jurisdiction to levy VAT on the same transaction - The judgment of the High Court quashing the assessment order and directing refund of the tax realised, is confirmed – The Revenue appeals are dismissed [Read less]

2026-VIL-852-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Transfer/Sale of manufacturing unit – Backward integration between sister concerns – Demand of duty on goods manufactured and captively consumed at the acquired unit during the interregnum between the date of acquisition and the date of grant of amended registration, when the final products manufactured therefrom have already suffered duty on clearance - Whether the transfer of the unit could be disregarded merely because the amendment of registration was granted at a later date – HELD – The documentary evidence on record, including the Deed of Sale and the Central Excise Registration Certificate subsequently obtained, conclusively establishes that there was a genuine sale of the manufacturing unit by Respondent No.1 to Respondent No.2 - The substantive right of possession arising from the sale agreement cannot be defeated by the procedural delay in filing the surrender/amendment application, since such filing necessarily depends on prior compliances such as cancellation/amendment of factory licence, ground plan certification, and clearance of dues, which are beyond the immediate control of the parties. The ingots manufactured at the acquired unit were captively consumed by the purchaser for manufacture of TMT Bars and Miss Roll, which were cleared on payment of appropriate duty, and therefore demanding duty again on the intermediate ingots would amount to double taxation on the same goods in a wholly revenue-neutral situation - While the purchaser ought to have awaited grant of amended registration before commencing production, for such procedural lapse, imposition of penalty under Rule 25 of the Central Excise Rules, 2002 for violation of Rule 9(1) read with Notification No.35/2001 (N.T.) is upheld - The penalties imposed by the Commissioner (Appeals), not being contested and already paid to give a quietus to litigation – The order of the Commissioner (Appeals) setting aside the duty demand is upheld and the appeal filed by the Revenue is dismissed [Read less]

2026-VIL-854-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs - Extra Duty Deposit - Refund and Interest on Delayed Refund – Respondents-assessee imported coal in bulk from a related party supplier and the B/E were provisionally assessed pending Special Valuation Branch investigation – Respondent deposited Extra Duty Deposit at one percent of the declared assessable value as per Board Circular - Upon completion of SVB investigation, the proper officer accepted the declared transaction value and directed finalization of all pending provisionally assessed bills of entry - Whether Extra Duty Deposit collected under Board circular in SVB cases constitutes duty within the meaning of the Customs Act or is merely a deposit, and whether the importer is entitled to interest on delayed refund of such deposit and if so, from what date – HELD – The Extra Duty Deposit is not a duty of customs as defined under the Customs Act but is in the nature of a deposit collected for the specific purpose of ensuring timely submission of information by the importer during SVB investigation so as to enable expeditious finalization of provisional assessment. Though its quantum is measured on the basis of declared assessable value, that measure does not convert its character into duty, since the obligation to pay it arises not from a charge under the taxing statute but from a Board Circular prescribing a security mechanism - Further, since Extra Duty Deposit is collected in the context of provisional assessment proceedings under Section 18 of the Customs Act, the mechanism for its refund and for payment of interest on delayed refund is governed by the provisions of Section 18 read mutatis mutandis with Section 27A. The self-contained machinery of Section 18 providing for adjustment and refund of excess amounts paid at the provisional assessment stage, along with interest for delay beyond three months from the date of final assessment, overrides the general refund provisions of Section 27 by virtue of the non obstante clause in Section 18 - The proper officer was not justified in treating the refund application as disposed of merely on account of non-finalization of provisional assessments. The delay in finalization of provisional assessments is entirely attributable to the Department and not to the importer, who had furnished all requisite documents and information. Since the SVB order accepting the declared transaction value had attained finality without being challenged by either side, there was no outstanding purpose for which the EDD could have been retained by the department, as it was not required to cover any deficiency in finally assessed duty - Interest is payable on the Extra Duty Deposit refund amount from the date of expiry of three months from the date of receipt of the refund application as originally submitted and acknowledged by the custom house, until the date of actual payment of the refund - The impugned order of the Commissioners (Appeals) granting such interest is upheld – The appeal filed by Revenue is dismissed [Read less]

2026-VIL-850-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Valuation of imported plant and machinery with bundled technical services - The importer imported key components of lime kiln machinery valued at a separate consideration under a contract that also included engineering package, license fee and technical assistance valued at a separate consideration - Department sought to include the value of technical services, license fees and engineering charges in the assessable value of imported goods, contending that the supply of such services was a condition of sale of the plant and machinery and that the importer had split a single invoice into two invoices merely to evade customs duty - Whether the separately contracted and invoiced technical services, engineering package and license fees could be included in the assessable value of imported plant and machinery under section 14 of the Customs Act, 1962 read with rule 10(1)(c) of the Customs Valuation Rules, 2007 – HELD - Where a single contract involves importation of dutiable equipment and services for post-importation activities, and these two sets of items are segregable with separate invoices and separate contractual obligations, the consideration for services cannot be added to the assessable value of imported goods. The contract clearly bifurcated the obligations into two parts: technical assistance and licensing for one part, and supply of key components for the other part. The buyer was separately responsible for procuring additional machinery and undertaking local construction. There was no binding obligation in the contract to purchase services as a prerequisite for purchasing equipment - Royalties and license fees are includible in transaction value only when they are required to be paid as a condition of sale of the imported goods itself, which was not the case here as the services were relatable to post-importation activities of setting up and operating the plant. The intention to split invoices could not be inferred from the contract terms, which expressly provided for separate considerations - payment under the technical services agreement is not a payment as a condition of sale of the imported plant and therefore, is not includible in the transaction value under Rule 10 (1)(e) of CVR - The decision of the authorities below requiring inclusion of technical services charges in the assessable value is set aside and the appeal is allowed [Read less]

2026-VIL-504-CAL | High Court SGST

GST - Detention and Release of goods in transit - Demand under Section 129 of the CGST Act, 2017, disputing the ownership, quality, quantity, and authenticity of the accompanying tax invoices and e-way bills - Petitioner sought release of the perishable consignment under Section 129(1)(a) by paying the lesser penalty applicable where the owner comes forward - Revenue contended that since ownership was disputed, the higher penalty under Section 129(1)(b) applicable where the owner does not come forward ought to apply - Whether, when the revenue merely raises a dispute as to ownership in the SCN without producing any concrete contrary material to disprove the petitioner's claim of ownership, the consignment ought to be released under Section 129(1)(a) upon payment of penalty equal to two hundred percent of the tax payable, or whether the higher liability under Section 129(1)(b) is attracted – HELD - The provisions of Section 129 of the 2017 Act must be interpreted strictly. On a meaningful and harmonious reading thereof, the legislative intent is to release detained goods subject to fulfillment of conditions, without creating any charge or lien over the goods, since recovery of any crystallized demand is separately provided for under the statute - Where the petitioner is named as consignor and the consignee is named in the very show-cause notice and the revenue has not produced, identified, or discussed any concrete or unimpeachable material in its order raising demand to suggest that the petitioner is not the owner of the consignment, a mere assertion of dispute as to ownership in the SCN is insufficient to deny the petitioner the benefit of Section 129(1)(a) – The adjudication on ownership at this stage is of no relevance since the matter will be examined in a statutory appeal and if the demand is ultimately crystallized, the petitioner will be liable to pay regardless of ownership - The goods being perishable in nature, the consignment deserves to be released expeditiously. The petitioner is entitled to release of the consignment under Section 129(1)(a) upon payment of the applicable penalty. Subject to compliance of the provisions laid down under Section 129(1)(a) of the CGST Act, the consignment shall be released in favour of the petitioner in accordance with law. The writ petition is disposed of [Read less]

2026-VIL-831-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise - Excise duty on Ready Mix Concrete (RMC) manufactured at construction site - Whether RMC manufactured at construction site is dutiable under Central Excise Act – HELD - The manufacturing process and composition of RMC is different from the conventional concrete mix. RMC is an excisable product classifiable under CTH 38245010 under Miscellaneous Chemical Products under the Central Excise Tariff Act, 1985 and attracts duty at the applicable rate. However, as per the rulings of the Supreme Court and the Board Circular, the exemption from levy of Central Excise duty is available only to 'concrete mix' and not... [Read more]

2026-VIL-830-CESTAT-HYD-CE | CESTAT CENTRAL EXCISE

Central Excise - Penalty under Rule 26 of Central Excise Rules, 2002 on a body corporate - Appellant, a body corporate, was imposed penalty under Rule 26 of the Central Excise Rules, 2002 for goods cleared by a related party which were found to be undervalued, resulting in short payment of excise duty - Whether penalty under Rule 26 can be imposed on a body corporate – HELD – The expression "person" used in Rule 26 includes body corporates and not just natural persons. The definition of "person" under the General Clauses Act, 1897 which includes body corporates, would apply to the provisions of the Central Excise Act a... [Read more]

2026-VIL-832-CESTAT-CHD-ST | CESTAT SERVICE TAX

Service Tax - Taxability of cash incentives provided by banks to credit card users - Department sought to levy service tax on the cash incentives accruing to the Respondent-Assessee on usage of the commercial credit card provided by the banks, contending that the activity undertaken by the respondent assessee amounts to a taxable service in terms of Section 65(E)(e) of the Finance Act, 1994 - The respondent assessee submitted that there is no service involved and they are merely a recipient of the credit card service from the bank, using the card for their business transactions, and the cash back incentives are not a consi... [Read more]

2026-VIL-498-PAT-ST | High Court SERVICE TAX

Service Tax – Supply of crude oil from Refinery through pipeline - Crude oil transportation chain involving pipeline, storage, and further transportation - Taxability of Terminal Facilities/Warehousing - Whether terminal facilities / warehousing services are incidental to pipeline service or independent service liable to service tax – HELD - The terminal facilities/warehousing services provided by the respondent-refinery are not incidental or integral to the pipeline service, but constitute an independent service liable to service tax - Without having any storage or warehousing facilities, crude oil not be transhipped from pipeline to other mode of transport. Therefore, the terminal facilities or discharge facilities is nothing but store and warehousing of the crude oil before entering into third step of transportation for final destination of supply of crude oil - As per the MoU, the respondent charged separately for the "discharge facility" or "terminal facilities" or "storing of crude oil" before the next phase of transportation, which cannot be considered as an integral part of the pipeline transportation. The definition of "storage and warehousing" under the Finance Act, 1994 and the legal precedents establish that the storage of crude oil at refinery before further transportation to the final destination is a distinct service and not merely incidental to the pipeline service. The respondent is liable to pay service tax on the terminal facilities/warehousing services provided to the recipient - The appeal filed by the Department is allowed, and the order of the CESTAT is set aside, restoring the order of the Commissioner - Maintainability of Department’s appeal - Pecuniary jurisdiction – HELD – The present appeal has been filed for total tax evasion of less than 1 Crore, which is not a permissible limit for adjudication in terms of Notifications dated 22.08.2019 and 06.08.2024 before this Court – However, on the certain material factual aspects, appellate Tribunal failed to touch core issue and, thus, the Court is convinced enough that the substantial questions of law is involved in the matter, as the finding of the Tribunal is directly and substantially affecting the right of the appellant/department - The present appeal is maintainable before this Court, as the substantial questions of law appears involved irrespective of the financial limitations. [Read less]

2026-VIL-502-ALH | High Court SGST

GST - Arrest - Petitioner was arrested under CGST Act but grounds of arrest not annexed to arrest memo, neither furnished to petitioner nor his nominated person - Violation of Supreme Court rulings on mandatory requirement of furnishing grounds of arrest - Remand order passed mechanically without examining legality of arrest – HELD – The arrest and remand order is illegal and unconstitutional. Apex Court rulings in Radhika Agarwal, Vihaan Kumar, and Gautam Navlakha mandate strict compliance with procedural safeguards for arrest, including furnishing grounds of arrest to the arrested person and their nominated represent... [Read more]

2026-VIL-835-CESTAT-MUM-CU | CESTAT CUSTOMS

Customs - Payment of Education Cess, Secondary & Higher Education Cess through MEIS scrips - whether payments of Education Cess and Secondary & Higher Education Cess made by importers through debit in Merchandise Exports from India Scheme (MEIS) duty credit scrips constituted valid discharge of duty liability – HELD - In light of CBIC Circular No. 02/2020-Customs dated 10.01.2020 and binding judicial precedents, payments made by importers through MEIS scrips towards EC and SHEC for past periods constitute valid discharge of duty liability. It is not in dispute that the imports in question pertain to a period prior to iss... [Read more]

2026-VIL-834-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Mis-declaration resulting in suppression of value of goods at the time of import with a view to evade payment of customs duty - Penalty under Section 112(a) of Customs Act - Appellant implicated as co-noticee along with importer, allegations of under-valuation – HELD - The penalty imposed on the appellant is liable to be set aside as the Tribunal has already set aside the penalties imposed on the importer and another co-noticee on the same set of facts. Further, the appellant's role was limited to sale of goods after clearance for home consumption and there is no evidence to show his involvement in under-valuat... [Read more]

2026-VIL-822-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax - Defective Show Cause Notice – Show Cause Notice for non-payment of service tax on "Data Processing Fees" without specify the particular sub-clause of Section 65(19) of the Finance Act, 1994 under which the appellant's activities were proposed to be classified - Whether the non-specification of the sub-clause in the Show Cause Notice renders it defective and violates the principles of natural justice - HELD - The Show Cause Notice is fundamentally defective as it failed to specify the particular sub-clause of Section 65(19) under which the appellant's activities were proposed to be classified. Where a statut... [Read more]

2026-VIL-18-GSTAT-DEL-NAPA | Tribunal SGST

GST – Anti-profiteering - Profiteering allegation against real estate developer - DGAP investigated a complaint against Respondent-real estate developer alleging profiteering by not passing on the benefit of Input Tax Credit to the home buyers – It is the complainant’s case that the Respondent retained his money for a longer period of more than 10 years. Therefore, entitled to Interest on his deposited money from the Respondent - HELD - The developer had voluntarily accepted the DGAP's report and its conclusions. The developer had contravened the provisions of Section 171 of the CGST Act, 2017 and had indulged in pro... [Read more]

2026-VIL-833-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Rejection of transaction value - The Customs authorities sought to reject the declared transaction value and re-determine the value under Customs Valuation Rules based on statements recorded under Section 108 of the Customs Act and documents retrieved from the laptop of the importer – HELD - The statements recorded under section 108 of the Customs Act cannot be relied upon to reject the declared transaction value under rule 10 of the Customs Valuation Rules as the mandatory procedure under section 138B of the Customs Act was not followed. Section 138B requires that the person who made the statement must be examined as a witness before the adjudicating authority and the authority must form an opinion that the statement should be admitted in evidence. This procedure was not followed in the present case, hence the statements cannot be used as evidence to reject the transaction value. The Commissioner's reliance on the statements to support the plea of under-valuation is not justified - The print-outs retrieved from the laptop cannot be relied upon as the retrieval was not done in his presence. Further, the procedure under section 138C of the Customs Act, which requires a certificate, was also not followed. Hence, the documents retrieved from the laptop cannot be used as evidence against the appellants - The impugned order is set aside and the appeals are allowed - Rejection of transaction value and re-determination - No evidence of mis-declaration of thickness - Contemporaneous import data rejected incorrectly – HELD - The charge of mis-declaration of thickness of the goods is not established as there is no physical examination or laboratory report to support it. The Commissioner rejected the contemporaneous import data obtained by the appellants under RTI incorrectly, merely on the ground that the appellants may have selectively asked for information. This data should have been considered, especially when even one import of identical/similar goods with value similar to the declared value was available. In the absence of any evidence of over-invoicing or mis-declaration, the rejection of the transaction value under rule 10 and re-determination under rules 5/6 is not justified. [Read less]

2026-VIL-499-MP-CE | High Court CENTRAL EXCISE

Central Excise - Bail application in criminal case related to evasion of central excise duty and cess - The applicant was arrested in connection with a case registered under Sections 9(1)(B) of the Central Excise Act, 1944 and Rule 22 of the Chewing Tobacco Zarda, Sentenced Tobacco and Gutkha Packing Machines (Determination and Collection of Duty) Rules, 2006 - The applicant was alleged to have been engaged in illegal manufacture and packing of chewing tobacco, zarda and scented tobacco pouches through packing machines installed in his premises, without payment of the requisite central excise duty - Whether the applicant should be granted bail in the present case – HELD - The offences alleged are economic offences involving substantial evasion of Government revenue, and such offences constitute a class apart and need to be visited with a different approach in the matter of bail. The prosecution has made out a prima facie case against the applicant, with material including statements, seizure of machines, raw materials and finished products, supporting the prosecution allegations. There is substance in the prosecution's argument that under the amended statutory regime and newly introduced Chewing Tobacco, Zarda, Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026, the liability extends to notified stock and installed packing machinery, and the material collected during the investigation indicates deliberate non-disclosure of packing machines and evasion of statutory obligations – There is possibility of the applicant tampering with evidence and influencing witnesses, as the investigation is still in progress regarding procurement of machinery, supply chain, purchasers, suppliers and involvement of other persons. Given the gravity and nature of the allegations, the huge alleged tax evasion, the statutory scheme under the Rules of 2026 and Notification dated 31.12.2025, and the non-bailable nature of the offence under Section 9A(1A) of the Central Excise Act, the Court is not inclined to extend the benefit of bail to the applicant at this stage - The bail application filed by the applicant stands dismissed [Read less]

2026-VIL-500-DEL | High Court SGST

GST - Show Cause Notice - Omission of Proposed Interest and Penalty Amounts - Whether the show cause notice issued under the CGST Act, 2017 is valid and legally tenable despite the omission of the proposed amounts of interest and penalty – HELD - While the show cause notice must mention the proposed interest and penalty amounts as per the statutory mandate under Sections 75(6) and 75(7) of the CGST Act, 2017, the mere omission of these specific amounts does not render the show cause notice illegal - The remedy available to the petitioner is to prefer a statutory appeal, which cannot be dismissed on the ground of limitati... [Read more]

2026-VIL-105-AAR | Advance Ruling Authority SGST

GST – Gujarat AAR - Eligibility of Input Tax Credit on inputs and input services used for construction of concrete tower to support and erect the Vertical Continuous Vulcanization (VCV) lines for manufacture of Extra High Voltage (EHV) cables - The applicant is setting up a new manufacturing plant for making EHV cables using the Vertical Continuous Vulcanization (VCV) process. The VCV manufacturing line is required to be supported by a concrete structure in the form of a multi-storied VCV tower. The applicant has procured inputs and input services for the construction of this concrete tower and is seeking eligibility of input tax credit on the same - Whether the applicant is eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017 – HELD - The concrete structure in the form of VCV tower serves as a critical and essential structural support system to the entire VCV machine line for manufacture of EHV cables while maintaining the structural integrity, stability, precision and overall efficiency. The plant and machinery in terms of the explanation to Section 17 specifically includes foundation and structural support, and the exclusions from plant and machinery are land, building or any other civil structures, telecommunication towers, and pipelines laid outside the factory premises - The CBIC Circular No. 219/13/2024-GST clarified that input tax credit is not restricted in respect of ducts and manholes used in network of optical fiber cables as they are considered as plant and machinery. Similarly, the ITC on inputs and input services used for construction of concrete VCV tower to support and erect the VCV lines cannot be restricted - The applicant is eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017 – Ordered accordingly [Read less]

2026-VIL-836-CESTAT-AHM-CU | CESTAT CUSTOMS

Customs - Imposition of penalty on partner and firm – Appellant-partner of the firm was imposed penalties under Sections 112(a) and 114AA of the Customs Act, 1962 in relation to the import of goods containing concealed SD memory cards - Whether the imposition of penalties on both the firm and the partner is legally valid – HELD - Once a penalty is levied on the firm, no separate penalty can be imposed on the partners, as the firm and the partners are not separate legal entities. The firm had already been penalized, and hence, imposing a separate penalty on the Appellant, as a partner, was not permissible in law - Howev... [Read more]

2026-VIL-821-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Demand based on the figures in Form 26AS – Dept considered entire turnover received by the appellant, as per the Form 26AS, chargeable to Service Tax - Whether the Department was correct in treating the entire amount reflected in the ITR/Form 26AS as being chargeable to Service Tax – HELD - The entire case of demand was built solely on the basis of the figures shown in the ITR and Form 26AS statement, which may not be accurate and conclusive evidence to levy Service Tax. It is further seen that the figures shown in Form-26AS statement differs with turnover declared in the Profit & Loss Account. The Depart... [Read more]

2026-VIL-501-P&H | High Court SGST

GST - Demand Order and Recovery - Petitioner challenge the demand order raised under Section 74-A(1) read with Section 74-A(5)(ii) of the CGST Act, 2017 and the recovery proceedings initiated pursuant to the said demand order – HELD - The demand order is found to be illegal as no valid show cause notice was issued to the petitioner prior to raising the demand, as required under Section 74A of the GST Act. Additionally, the recovery made by debiting the input tax credit lying in the petitioner's Electronic Cash Ledger, is illegal as it was made on the same day as the passing of the demand order, in violation of Section 78... [Read more]

2026-VIL-107-AAR | Advance Ruling Authority SGST

GST – Kerala AAR - Classification od used Gunny Bags - Whether used gunny bags without plastic coating, arising after use in packing of raw materials are classifiable as reusable packing bags under Heading 6305 of the Customs Tariff Act, 1975 attracting GST at 5%, or as waste or scrap under other headings attracting GST at 18% - HELD – The classification must be determined based on the common parlance, commercial identity, essential character, condition at the time of supply, and intended use of the goods. The goods do not become waste or scrap merely on account of prior use so long as they retain their identity and functional utility, since waste and scrap arise only when goods lose their original utility and are fit solely for recovery of constituent material - The impugned goods were intact, bundled and capable of reuse without further processing as evidenced by photographic material and sale invoices describing them as old gunny bags supplied as identifiable packing material, such goods clearly retained their form, structure and commercial identity as packing sacks - The Heading 6309 expressly excludes sacks and bags showing signs of wear from its ambit and directs their classification under their respective headings, while Heading 6310 applies only to worn-out textile materials reduced to cuttings or fragments fit solely for recovery, conditions which the impugned goods did not satisfy - Applying the GST rate notification, it is held that goods falling under Heading 6305 attract GST at 5% where the sale value does not exceed rupees two thousand five hundred per piece, and 18% where the sale value exceeds rupees two thousand five hundred per piece, with the clarification that where such bags are worn out, torn or reduced to waste rendering them unfit for reuse, the classification may differ and would require independent examination - The used gunny bags without plastic coating are classifiable under Heading 6305 as reusable packing bags and attract GST at 5% where sale value does not exceed rupees two thousand five hundred per piece and 18% where it exceeds that threshold – Ordered accordingly [Read less]

2026-VIL-503-KAR | High Court VAT

Karnataka Sales Tax Act, 1957 - Rectification of assessment order and entitlement to interest on delayed refund in view of deemed rectification – Levy of tax at the rate of 20% on the sale of coconut oil under a brand name. The petitioner had challenged the amendment imposing the higher tax rate, which was initially struck down by the High Court but later upheld by the Division Bench - The petitioner filed a rectification application seeking modification of the assessment orders, which was not rejected within 60 days and hence deemed to have been allowed - Whether the petitioner is entitled to interest on the delayed ref... [Read more]

2026-VIL-505-CAL | High Court SGST

GST – Expiry of E-way Bill, Imposition of Penalty - During transportation the vehicle was intercepted at the location approximately ten kilometres away from the destination, at which point the e-way bill had expired – Levy of penalty equivalent to two hundred percent of the tax payable on the goods - Whether imposition of a penalty at the rate of two hundred percent of the tax payable was justified in the absence of any intention to evade payment of tax, where the only irregularity was the expiry of the e-way bill and the delay in seeking extension was approximately fifty minutes beyond the eight-hour grace period permitted under the rules – HELD – The sub-rule 10 of Rule 138 of the CGST Rules, 2017 provides a validity period for e-way bills and its proviso permits extension of the validity period within eight hours from the time of its expiry in circumstances of exceptional nature, thereby granting latitude to the transporter - The vehicle was intercepted approximately fifty minutes after the expiry of the permissible eight-hour window for seeking extension and no allegation of an intention to evade payment of tax was made by the department - The imposition of two hundred percent penalty is not warranted in cases involving failure to renew the e-way bill within the stipulated time. Though the statute empowers imposition of a rigid and high penalty of two hundred percent, whether or not such penalty is justified depends upon whether there existed any intention to evade payment of tax. Finding no such allegation in the present case and considering that the delay was merely fifty minutes beyond the permissible extension window, the imposition of the maximum penalty is harsh and would cause grave prejudice to the petitioners - The impugned order is set aside and the petitioner is directed to pay a nominal token fine of Rs. 10,000/-, the respondents are directed to refund the balance amount after adjusting the token fine from the amount already deposited – The petition stands disposed of [Read less]

2026-VIL-106-AAR | Advance Ruling Authority SGST

GST – Kerala AAR - Grant of Rights through Auction - Taxability of consideration received by a statutory religious board for auctioning the right to collect remnant rice offerings at a temple – HELD - The transaction does not involve the supply of pre-ascertained or identified quantities of rice as goods at the time of contract, but rather the conferment of an exclusive commercial licence or right upon the successful bidder to collect and appropriate offering remnants arising during temple operations for a specified period, the quantity and nature of which are uncertain at the time of contracting. The use of a competitive auction mechanism evidences that the activity is undertaken in the course or furtherance of business with the objective of maximising consideration. The religious origin of the offerings does not alter the essential legal character of the contractual arrangement, which is the grant of a right for consideration. Once an article is offered by a devotee, it ceases to retain the character of agricultural produce and becomes an asset of the temple - Although the Applicant is a statutory religious board, it is a body corporate engaged in “business” within the meaning of Section 2(17) of the CGST Act, 2017. Accordingly, the assignment of rights and licences for consideration constitutes “supply” under Section 7(1) of the CGST Act, 2017. The transaction therefore falls squarely within the ambit of a licence or grant of rights constituting a supply of services, and is accordingly taxable under the relevant provision of the Act – Ordered accordingly - Taxability of consideration received by a statutory religious board for auctioning the right to collect coconuts and broken coconuts offered by devotees at temples under its administration - Whether the assignment of collection rights for coconuts constitutes a sale of nil-rated goods or a taxable supply of services – HELD - The subject matter of the auction is not the coconuts as goods but the exclusive commercial right or licence granted to the successful bidder to collect and appropriate such offerings during a specified period. The adoption of a competitive tendering mechanism indicates that the activity is undertaken in the course or furtherance of business. The exemption or nil-rating applicable to coconuts as goods is not attracted since the applicant does not supply the coconuts as commodities but confers a right to collect them. The consideration flows from the contractor to the applicant in exchange for the conferment of this exclusive right, and the underlying nature of the transaction is therefore a supply of services and not a sale of goods - Taxability of consideration received for auctioning the right to collect clothing abandoned by pilgrims in a river - Whether such transaction constitutes a supply of goods or a taxable supply of services – HELD - There is no transfer of identified or ascertained goods at the time of the contract, and the quantity and nature of the clothing to be collected remains uncertain and dependent on future events, with the successful bidder bearing the associated commercial risk. The grant of an exclusive commercial privilege to collect and deal with such materials for a lump-sum auction amount constitutes the conferment of a right or licence, which is a supply of services. The hygienic and religious objective underlying the arrangement does not alter the contractual and commercial character of the transaction. The exemption applicable to sanitation services supplied to Governmental authorities is not attracted since the supply made by the applicant is not the sanitation activity itself but the grant of a right to the contractor to carry out such activity. The activity falls within the scope of business and constitutes a taxable supply of services - Taxability of consideration received for auctioning the right to harvest coconuts from coconut palms situated on temple lands - Whether the assignment of such agricultural rights constitutes a taxable supply or is exempt under the relevant notification – HELD – Coconuts on the tree constitute agricultural produce in their primary form. The assignment of the right to collect and manage such standing crops through auction is intrinsically linked to the activity of harvesting and cannot be viewed in isolation from agricultural operations. The relevant exemption notification exempts services relating to agricultural operations directly related to production of agricultural produce, including harvesting. The grant of the right to collect and manage such produce falls squarely within the scope of this exemption as it is directly related to harvesting operations. The applicant does not derive revenue from a commercial licence unconnected to agricultural activity but assigns the right to carry out harvesting of crops attached to temple lands, which is a service directly related to agricultural operations - Taxability of honorarium and sitting fees paid by a statutory religious board to its president and members - Whether such payments attract reverse charge liability as services supplied by a director to a body corporate – HELD - The Notification No. 13/2017-Central Tax (Rate) prescribing reverse charge liability is restricted to services supplied by a director of a company or a body corporate, and does not extend to services rendered by members of a statutory board or governing body, unless such persons hold the legal status of directors in law. The president and members of the board are statutory functionaries appointed under the governing legislation and do not constitute a board of directors, nor are they appointed as directors under any corporate law. Merely being members of the board of a body corporate does not render them directors for the purposes of the said notification. The services rendered by such persons therefore do not fall within the prescribed category, and the reverse charge provisions are accordingly not attracted - Tax is not payable under reverse charge - Taxability of advocate fees and legal expenses paid by a statutory religious board to unregistered advocates - Whether reverse charge is attracted on legal services received by the applicant – HELD - The Notification No. 13/2017-Central Tax (Rate) mandates reverse charge on legal services provided by an individual advocate or firm of advocates to a business entity located in the taxable territory. The definition of business under the relevant provision is wide and inclusive, covering all activities undertaken for consideration, including activities incidental or ancillary thereto, irrespective of profit motive. The applicant, being engaged in revenue-generating activities such as auctioning of rights and generating consideration from temple assets, qualifies as a business entity. Legal services provided by advocates to the applicant therefore attract reverse charge, and the applicant, as recipient of such services, is liable to discharge the tax - Tax is payable under reverse charge - Taxability of consideration received for auctioning the right to perform religious rituals such as specific ceremonies within temple premises - Whether such transaction is exempt as the conduct of a religious ceremony or constitutes a taxable supply of services – HELD - The exemption for conduct of religious ceremonies is applicable to the person who actually performs the ceremony and not to a transaction by which the right to perform such ceremonies is granted to a third party for consideration. The applicant does not itself conduct the religious ceremony but grants an exclusive licence or right to a qualified priest or acharyan through a competitive auction process. Such a transaction is a commercial supply undertaken in the course or furtherance of business and is distinct from the actual conduct of a religious ceremony. The religious nature of the underlying ritual does not alter the contractual character of the arrangement between the applicant and the suc [Read less]

More Judgements Home More Judgements