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2026-VIL-1548-CESTAT-MUM-CE | CESTAT CENTRAL EXCISE

Central Excise – Liability to pay differential Central Excise duty on intermingled Superior Kerosene Oil (SKO) with High-Speed Diesel (HSD) or Motor Sprit (MS) – Appellant manufactures petroleum products by refining crude petroleum and transporting excisable goods via pipelines to distribution depots through sequential product-to-product pumping method. During pipeline transfers, when shifting from one product to another, an interface or transmix occurs at the inter-junction of each batch of product comprising a mixture of two products. The Appellant used SKO as an interface between MS and HSD to prevent contamination. The Department demanded differential Central Excise duty on the intermingled SKO-MS/HSD mixture quantified at higher values on the ground that the duty payable on gain/surge shall be the duty payable on MS/HSD rather than on SKO - Whether the differential Central Excise duty demand on interface quantity of SKO is legally sustainable – HELD – The differential duty demand on interface quantity of SKO is clearly not sustainable. The issue arising out of the present dispute for earlier periods has already been decided favourably in the case of the Appellant vide multiple Final Orders of the Tribunal. The Co-ordinate Bench of the Tribunal in the case of Indian Oil Corporation has examined similar issue and concluded that central excise duty demand on intermix products of SKO is not sustainable. The Hon'ble Supreme Court has upheld this position in Civil Appeal dated 14.09.2023 holding that the Board can only clarify existing law but cannot create law by itself and therefore the Board Circular having without support of any Act or Rule is not binding on the assessee. The activity of intermixing of SKO with MS/HSD does not amount to manufacture under Section 2(f) of the Central Excise Act, 1944 as the products are not specified under the Third Schedule and the adjudication order travelled beyond the scope of the Show Cause Notice which is not permissible in law. The issue arising out of the present dispute is no more res integra – The impugned order passed by the Commissioner of Central Excise (Appeals) is set aside and the appeal filed by the Appellant is allowed in their favour with consequential benefits, if any [Read less]

2026-VIL-1539-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise – Assessment under Section 4 of Central Excise Act, 1944 - Clearances to related parties at price below cost of manufacture – Appellant cleared identical batteries to two vendors at Rs 2.13 and Rs 2.20 per piece while clearing same batteries to its own Lucknow unit at Rs 2.90 and Rs 2.81 per piece under CAS-4 costing – MoU showed buyback arrangement where vendors manufactured torches as per appellant's design and specification and sold them back to appellant – Department invoked extended period alleging relationship and mutuality of interest – Appellant contended that prices were charged on transaction value under Section 4 of Central Excise Act and buyers were independent entities not related parties - Whether identical batteries cleared to different buyers at significantly different prices where buyback arrangement exists is assessable on contractual price or whether cost-of-manufacture method applies - HELD – Where price at which goods are sold is exceptional and substantially below cost of manufacture, such price cannot be accepted as normal price for purposes of Section 4(1)(a) of CEA. The expression ‘ordinarily sold’ excludes extraordinary or unusual transactions. Where there is clear indication that extra-commercial consideration has entered into sale transaction, such as perpetual loss-making transactions, the price cannot be sole consideration contemplated under Section 4(1)(a) - In present case, battery prices were significantly lower than cost of manufacture and sales were made continuously, indicating extra-commercial consideration. The buyback agreement and nature of transaction indicate price not at arm's length - Where all three conditions of Section 4(1)(a) namely normal price, ordinarily sold and sole consideration are not satisfied, valuation must be done under Section 4(1)(b) read with Central Excise Valuation Rules - On extended period, where agreements and documents regarding related transactions are available on record and already known to Department through its own investigation, the conditions for invoking extended period are not satisfied as there is no wilful suppression. However, normal period of limitation being barred by date of SCN, demands within normal period are upheld along with interest. Penalties imposed under Section 11AC were set aside as they were wrongly imposed under Rule 15 of CENVAT Credit Rules which is inapplicable to undervaluation cases - The appeals are partly allowed [Read less]

GSTAT Order | Tribunal SGST

GST - Applicability of Section 74 of CGST Act to ITC availed based on invoices from Non-Existent Suppliers, Discharge of burden under Section 155 of CGST Act – Respondent-assessee availed and utilized ineligible input tax credit on the basis of invoices issued by non-existent suppliers during the relevant period of supply claiming that during the transactions the registration status of all suppliers was active on the GST portal. However, scrutiny by the Revenue disclosed that each of the suppliers was a non-existent entity and none of them had ever conducted any business at all - Whether the Section 74 of the CGST Act is applicable when taxpayer who availed ITC on invoices issued by non-existent suppliers without proof of actual physical movement of goods - HELD - The burden of proving the rightful claim of input tax credit lies on the person claiming the credit as per Section 155 of the CGST Act. Mere production of tax invoices and banking details showing payment is not sufficient to discharge this burden. The purchasing taxpayer has to prove and establish the actual physical movement of goods and the genuineness of transactions by furnishing details of the vehicle which delivered goods, payment of freight charges, acknowledgement of taking delivery of goods and other corroborating evidence - In the present case there is no proof of actual physical movements of goods from the alleged suppliers to the Respondent who admittedly availed and utilised input tax credit based on invoices issued by these suppliers - The Respondent was fully aware that the suppliers on whose invoices the ITC was availed and utilised were non-existent. The Respondent was also completely aware that the goods for the supply on which the ITC was claimed were not actually delivered - There was a wilful misstatement in self assessment made by the Respondent in the monthly return. Such conduct clearly demonstrates that the Respondent deliberately defrauded the Revenue for taking ineligible input tax credit - The demand of input tax credit availed on the basis of invoices from non-existent suppliers is payable under Section 74 of the CGST Act along with applicable interest and penalty. The findings of the appellate authority in exonerating the Respondent from the liabilities under Section 74 are set aside and the demand confirmed by the adjudicating authority is restored – The Revenue appeal is allowed - Validity of Consolidated Show Cause Notice Covering Multiple Financial Years under Section 74, Meaning of period as against financial year - The Respondent contended that a single consolidated show cause notice could not have been issued covering multiple financial years from 2017-18 to 2023-24 - Whether the statutory scheme under the CGST Act permits issuance of a consolidated SCN under Section 74 covering multiple financial years - HELD - The statutory scheme does not prohibit issuance of a consolidated notice for multiple financial years. Sections 74(3) and 74(4) of the CGST Act employ the expressions for any period and for such periods, whereas Section 74(10) uses the term financial year for the purpose of prescribing limitation for passing the order. The Legislature is conscious that insofar as wrongfully availed ITC is concerned, the notice can relate to a period and need not be for a specific financial year. The nature of ITC fraudulent utilization and availment cannot be established on most occasions without connecting transactions over different financial years. The purchase could be shown in one financial year and the supply may be shown in the next financial year. It is only when either are found to be fabricated or the firms are found to be fake that the maze of transactions can be analysed and established as being fraudulent or bogus. A solitary availment or utilization of input tax credit in one financial year may actually not be capable by itself of establishing the pattern of fraudulent availment or utilization - The issuance of a consolidated show cause notice for multiple financial years under Section 74 of the CGST Act is valid and does not constitute a jurisdictional defect - Applicability of Section 74 of CGST Act to Demands under Reverse Charge Mechanism - Distinction between inadvertence and wilful misstatement – Respondent claimed that expenses incurred towards conveyance charges, hiring of labourers, freight and travelling expenses and legal charges were not taxable under the RCM - The First Appellate Authority concluded that there was no deliberate action to suppress material information with a view to evade tax and that the expenses were properly reflected in the annual financial statements of the Petitioner - Whether Section 74 of the CGST Act can be invoked for demands relating to RCM when there is no proof of deliberate suppression of facts with intent to evade tax - HELD - The term suppression of facts as contemplated under Section 74 of CGST Act must be construed strictly. Suppression of facts in taxation means that the correct information was not disclosed deliberately to escape payment of tax. Where facts are known to both the parties, the omission by one to do what one might have done and not that one must have done does not render it suppression - In the present case in so far as the demand under Reverse Charge Mechanism is concerned, no deliberate action to suppress material information with a view to evade tax has been proved against the Respondent. The expenses incurred were properly reflected in the annual financial statements of the Respondent indicating there was no attempt to evade tax liabilities. Therefore Section 74 of the CGST Act cannot be invoked for enforcement of demands under RCM - The demand under RCM is payable under Section 73 of the CGST Act along with applicable interest and penalty and not under Section 74 of the CGST Act - Power of First Appellate Authority to modify the demand determined by the Proper Officer - The Revenue contended that the First Appellate Authority exceeded its jurisdiction by modifying the amount of tax and confirming the liability itself instead of issuing directions to the proper officer for fresh computation as required under Section 75(2) and (3) of the CGST Act - Whether the First Appellate Authority has the power to modify the amount of tax determined by the proper officer without referring the matter back to the proper officer for fresh computation - HELD - Section 75 of the CGST Act which provides for general provisions relating to determination of tax empowers the Appellate Authority under sub-section (8) to modify the amount of tax determined by the proper officer - The First Appellate Authority has the inherent power to modify the amount of tax determined by the proper officer after meticulous examination and comparison of records and does not need to refer the matter back to the proper officer for fresh computation when the computation by the proper officer itself is found to be incorrect and the appellate authority has already re-examined and verified the records and computed the correct liability - The First Appellate Authority does not exceed its jurisdiction by modifying the tax amount itself. The challenge by the Revenue to the jurisdiction of the First Appellate Authority in respect of modification of tax amount by itself is devoid of merit - The appeal filed by the Revenue is partly allowed. [Read less]

2026-VIL-95-SC-CU | Supreme Court CUSTOMS

Customs – Delay in payment of Foreign Travel Tax – Penalty for Delayed Payment – Distinction between Failure to Pay and Delay in Payment – Appellant airline company was charged with penalty under Section 38(3) of Finance Act 1979 for delayed deposit of Foreign Travel Tax collected from passengers. Delay in payment ranged from 1 day to 63 days in six instances. Appellant had prepared demand drafts before due dates but there were delays in depositing same into Government treasury. Appellant contended that delay should not attract penalty as distinct from non-payment and that provisions of Section 38(4) read with Rule 4 and 9 would apply instead of Section 38(3) – Whether delayed payment of Foreign Travel Tax can be equated with non-payment and whether penalty under Section 38(3) is automatic once timeline is breached – HELD – Expression ‘fails to pay’ occurring in Section 38(3) means non-payment not delay in payment. Legislature has carefully used phrase fails to pay implying non-payment. If legislative intent was to cover delayed payment different expression would have been used. Failure to pay cannot be equated with delay in making payment. Delayed payment of Foreign Travel Tax into Government treasury cannot be equated with non-payment. Section 38(4) read with Rules 4 and 9 deals with delayed payment situation - Timeline for deposit of Foreign Travel Tax and filing of returns is not inflexible. Discretion is vested on Collector of Customs to condon delay on sufficient cause shown. Imposition of penalty is not automatic moment timeline is breached. Officer of customs may exercise discretion to decide whether penalty is imposable - Mere delay in depositing tax or filing returns cannot trigger mandatory penalty. Penalty is not imposable insofar Appellant concerned – The penalty imposed on appellant for late deposit of Foreign Travel Tax is set aside and quashed. Any amount paid as penalty shall be refunded with interest at nine percent per annum. Bank guarantee furnished by Appellant stands discharged – The appeal is allowed [Read less]

2026-VIL-1540-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax – Taxability of services received from outside India through permanent establishment in foreign country – Applicability of Section 66A of Finance Act, 1994 – Treatment of foreign permanent establishment as separate person – Whether services received by Appellant through its permanent establishment in foreign country are taxable under Section 66A of Finance Act, 1994 and whether demand for period prior to 01.07.2012 is barred by period of limitation - HELD – Where a person carries on business through a permanent establishment in India and through another permanent establishment in a country outside India, such permanent establishments are treated as separate persons for purposes of Section 66A. The R&D facility established in the foreign country to undertake research and development activities is liable to be treated as fixed establishment. Expenses incurred by the Indian establishment in relation to services provided by the foreign establishment constitute consideration for services received from outside India. Such services are taxable under Section 66A read with provisions relating to reverse charge mechanism. However, in the absence of allegation of mala fide intention in the show cause notice, demand for period prior to 01.07.2012 is barred by period of limitation as the extended period of limitation cannot be invoked – The appeal is partly allowed to the extent that demand for period prior to 01.07.2012 is set aside and only the amount already deposited being confirmed along with interest due thereon - Service Tax – Show Cause Notice vagueness – Specificity of demand for services received from outside India – Applicability of principle that SCN must specify nature of taxable service and statutory category – Whether plea of vagueness can be entertained when assessee has provided detailed reply to show cause notice with invoice-wise and year-wise details and supporting documents – HELD – Though show cause notice lacked specific classification for other heads of expenditure, in respect of Annexure C the demand was clearly indicating the nature of service received and expenditure incurred for which money was transferred to branch office in foreign country. The plea of vagueness cannot be entertained when the assessee has itself made detailed submissions to SCN providing invoice-wise and year-wise details of transactions, supporting documents and relevant contractual agreements. Having fully understood the SCN and provided comprehensive reply thereto admitting to the payments and furnishing documentary evidence, the assessee cannot thereafter take the plea of vagueness. The principle that adjudicating authority should not traverse beyond SCN and that SCN should not be generic but must contain specific clarification is settled law – Appeal rejected on this ground - Service Tax – Reimbursable expenses – Distinction between reimbursement and consideration for services – Applicability of benefit of exemption for reimbursements – Whether amounts paid to foreign service providers represent reimbursable expenses or consideration for services rendered – HELD – Expenditures incurred represent consideration for services provided by foreign service provider and not reimbursable expenses. Reimbursable expenses are those which are incurred by service provider over and above the value of service provided as per transaction agreement. In present case, amounts paid to foreign service provider either directly or through branch office were consideration for services actually rendered. Such charges do not fall under category of reimbursable expenses and are not eligible for exemption granted in respect of reimbursements. The principle laid in Intercontinental Consultants case regarding exclusion of reimbursable expenses applies only to true reimbursements and not to consideration for services received – Appeal rejected on this ground - Service Tax – Valuation of taxable services on reverse charge basis – Applicability of Section 67(2) of Finance Act, 1994 – Whether service tax value to be determined on cum tax basis - Whether Section 67(2) providing for cum tax valuation is applicable to reverse charge mechanism of service tax – HELD – Section 67(2) which provides for determination of value of taxable service as cum tax amount applies only to cases where service tax is demanded from service provider on forward charge basis. In reverse charge mechanism, service tax is demanded from service recipient who is the person receiving services from outside India. Section 67(2) is not applicable to reverse charge cases. The demand of service tax worked out by treating entire amount paid to foreign service provider as consideration for services is correct and sustainable. The reliance placed on decisions regarding forward charge basis are not applicable to reverse charge mechanism – Appeal rejected on this ground - Service Tax – Period of limitation – Extended period under proviso to Section 73 – Invocation of extended period in absence of mala fide intention – Whether extended period of limitation under proviso to Section 73 can be invoked in absence of allegation or finding of mala fide intention – HELD – In the absence of any allegation of mala fide intention or conscious and deliberate wrongdoing in show cause notice, the demand for period prior to 01.07.2012 is barred by the normal period of limitation. Extended period of limitation can be invoked only where there is evidence of fraud, collusion, wilful misstatement or suppression of facts or contravention of provisions with intent to evade payment of tax. Mere non-payment or non-disclosure of transactions when no mala fide intention is attributed does not justify invocation of extended period. Further, for period prior to 01.07.2012 when positive list regime was in operation, show cause notice must establish specific taxable service and statutory category thereunder which was not done – Demand for this period is set aside - Service Tax – Penalty under Section 78 of Finance Act, 1994 – Imposition of penalty for non-payment – Condition of wilful non-disclosure for invocation of penalty – – Whether penalty under Section 78 can be imposed without allegation or finding of wilful non-disclosure with intent to evade payment of tax – HELD – Penalty under Section 78 cannot be imposed where the notice does not allege or the order does not record a finding that the assessee wilfully suppressed facts or committed non-disclosure with intent to evade payment of tax. The fact that service tax was not paid does not by itself attract penalty. In the present case since the demand pertains to services for which credit would have been available as input service credit and the entire demand is revenue neutral, there is no mala fide intention attributable to assessee. In absence of wilful and deliberate wrongdoing, penalty under Section 78 cannot be sustained – Penalty set aside - Service Tax – Penalty under Section 77 of Finance Act, 1994 – Contravention of provisions of Section 70 – Non-filing of true and correct returns – Whether penalty under Section 77 can be imposed where assessee has regularly filed service tax returns throughout the period – HELD – Penalty under Section 77 for alleged contravention of Section 70 pertaining to non-filing of true and correct ST-3 returns cannot be imposed where the assessee has filed returns regularly throughout the entire period under consideration. Penalty provision applies only where there is evidence of deliberate failure to file prescribed returns. Regular filing of returns by assessee demonstrates compliance with procedural requirements – Penalty set aside. [Read less]

2026-VIL-988-MEG-ST | High Court SERVICE TAX

Service Tax - Delay in Assessment Proceedings – Violation of Statutory Timelines – Arbitrary Order – Petitioner filed writ petition challenging Order-in-Original dated 12.03.2025 confirming demand for Service Tax and imposing penalties under Finance Act 1994. Show cause notice was issued on 05.10.2016. First personal hearing was granted only on 05.04.2024 after nearly 2704 days. Order was passed on 12.03.2025 after approximately 8.5 years from issuance of show cause notice – Whether impugned order was manifestly arbitrary and time-barred for violation of timelines prescribed under Section 73(4B) of Finance Act 1994... [Read more]

2026-VIL-985-BOM | High Court SGST

GST - Audit under Section 65 - Communication of audit findings under Rule 101(5) CGST Rules, 2017 in Form GST ADT-02 - Apprehension of recovery without adjudication - Distinction between audit report and adjudication order - Petitioner apprehended that recovery would be effected on basis of audit findings without there being any adjudication proceeding - HELD - The communication of audit findings is administrative action in nature only and does not constitute adjudication. Rule 101(5) provides that on conclusion of audit, proper officer shall inform findings of audit to registered person in accordance with provisions of su... [Read more]

2026-VIL-983-CAL | High Court SGST

GST - Violation of principles of natural justice - Denial of opportunity to submit supporting documents before passing adverse order - Authority held that appellant could not submit purchase and sales ledger, purchase and sales register and taxable and exempted sales bills and invoices till date and that submitted documents were not sufficient to refute allegations levelled in SCN. Accordingly, appeal was decided against petitioner without allowing submission of all documents - Whether denial of opportunity to produce documents in support of claim before passing adverse order amounts to violation of natural justice - HELD ... [Read more]

2026-VIL-993-DEL | High Court SGST

GST - Scope of High Court interference under Article 226 when statutory remedy is available, Distinction between denial of hearing and challenge to merits of adjudication - Show Cause Notice was issued under Section 74 of the CGST Act alleging fraud, wilful misstatement and suppression of facts - Whether, notwithstanding the availability of an efficacious statutory remedy of appeal under Section 107 of the CGST Act, the High Court should entertain a writ petition under Article 226 when the challenge essentially relates to the correctness of factual findings and appreciation of material placed on record - HELD - Although an alternative statutory remedy does not operate as an absolute bar to the exercise of writ jurisdiction, the High Court may entertain a petition under Article 226 only in exceptional circumstances - A distinction must be maintained between a case where a party is denied an opportunity of hearing and one where, despite having been heard, the party disputes the manner in which its defence or documents have been considered. The latter constitutes a challenge to the merits of the adjudication and is ordinarily amenable to the statutory appellate remedy - In the present case, the Petitioner participated in the adjudication proceedings, filed a detailed reply to the SCN and placed documents in support of its defence. The Petitioner did not demonstrate any patent denial of an opportunity to present its case. Accordingly, the grounds urged did not disclose any manifest violation of the principles of natural justice or exceptional circumstance warranting exercise of the extraordinary jurisdiction under Article 226 - The writ petition is dismissed - Validity of Consolidated Show Cause Notice Covering Multiple Financial Years - The Petitioner contended that a single Show Cause Notice could not have been issued covering the financial years 2017-18 to 2021-22 - Whether the statutory scheme under the CGST Act permits issuance of a consolidated Show Cause Notice covering multiple financial years - HELD - The statutory scheme does not prohibit issuance of a consolidated notice covering multiple financial years. Sections 73(3) and 74(3) of the CGST Act employ the expressions for any period and for such periods, whereas Sections 73(10) and 74(10) refer to the financial year for the purpose of prescribing the limitation for passing the order. The distinction is material and the fact that the limitation prescribed is computed with reference to the financial year does not impose a requirement that a separate Show Cause Notice must necessarily be issued for each financial year - The statutory language contemplates a notice relating to a period which may extend beyond one financial year. Particularly in cases involving alleged fraudulent availment or utilisation of input tax credit, transactions spread across different financial years may be required to be examined together to ascertain the alleged pattern of fraud or suppression. The mere issuance of a consolidated Show Cause Notice covering multiple financial years does not constitute a patent lack of jurisdiction warranting interference under Article 226 of the Constitution - The consolidated Show Cause Notice covering multiple financial years is valid and does not constitute a jurisdictional defect. The question of limitation with respect to individual demands shall be examined by the appellate authority in accordance with law. [Read less]

2026-VIL-1535-CESTAT-AHM-CU | CESTAT CUSTOMS

Customs - Invocation of Extended Period of Limitation under Section 28(4) of Customs Act in cases of alleged mis-declaration of Country of Origin - Mis-declaration of Country of Origin of imported polyester knitted fabrics – Appellant imported polyester knitted fabrics and submitted certificates of origin issued by Malaysian authorities. Departmental authorities alleged that the goods were actually of Chinese origin and the certificates of origin were fabricated. Show cause notice invoking extended period of limitation was issued alleging evasion of customs duty through mis-declaration of country of origin - Whether extended period of limitation under Section 28(4) can be invoked for alleged mis-declaration of country of origin when the appellant had no conscious knowledge of the infirmity in the certificates and was not instrumental in obtaining fabricated certificates – HELD – Extended period of limitation under Section 28(4) can be invoked only when there is specific and explicit averment in the show cause notice and credible evidence establishing that the appellant was involved in collusion, wilful misstatement or suppression of facts. The burden to prove mala fide conduct lies on the department - In the present case, the appellant consistently maintained throughout the proceedings that he had received the certificates of origin from the foreign supplier and had no reason to believe they were not genuine. Department failed to establish any positive act by the appellant to obtain fabricated certificates or that he had conscious knowledge of the inaccuracies in the certificates - Merely because goods were imported with certificates of origin later found to be fabricated does not render the importer liable to extended period unless it is established that the importer stepped into the shoes of the supplier and was instrumental in obtaining the fabricated certificate. The absence of any culpatory statement and the consistent non-committal stance of the appellant throughout multiple recorded statements cannot be interpreted as admission of involvement in fraud. Extended period cannot be invoked on the basis of bare assertions or suspicions arising from delayed overseas verification reports - The delay in conducting verification beyond the stipulated time period of two months and even thereafter obtaining verification response only after considerable inordinate delay further militates against invocation of extended period. The SCN having not specifically alleged the ingredients of Section 28(4) against the appellant, the invocation of extended period is not legally sustainable – The extended period of limitation is not invokable. The demand for differential duty on the basis of alleged mis-declaration cannot be sustained and set aside – The appeals are allowed - Country of Origin Certificates – Verification procedure under Rule 7(c) and Rule 7(d) of Customs Tariff Determination of Origin of Goods under Preferential Trade Agreement Rules 2009 – Appellant submitted country of origin certificates purportedly issued by Malaysian authorities - Department sought verification of certificates from Malaysian authorities but only 15 certificates out of 29 were verified - Whether the mandatory procedural requirements of Rule 7(c) and Rule 7(d) can be dispensed with on the ground that fraud is alleged and Rule 23 relating to fraudulent acts applies – HELD – Rule 23 merely provides for cooperation between member countries in taking action against persons involved in fraudulent acts and does not dispense with the procedural requirements of Rule 7(c) and Rule 7(d). These are duly incorporated domestic provisions forming part of the binding statutory framework and cannot be ignored. When a treaty provision has not been incorporated into domestic law, it cannot be enforced in derogation of municipal law. However, when Rules have been incorporated into domestic law and given statutory recognition, they must be followed by the customs authorities - Rule 23 may justify deeper investigation but cannot be read to dispense with requirements of Rule 7(c) and Rule 7(d). In the present case, only 15 certificates were verified and the verification report merely stated that certificates were not authentic and belonged to other company without providing detailed exhaustive clarification addressing the grounds raised by the importing authority or specifying to whom the actual certificates were issued. The procedure contemplated under Rule 7(c) and Rule 7(d) had not been properly followed - The verification process having not been followed in totality, the allegation of fraud cannot be held to be established - Confiscation of Imported Goods on Ground of alleged Mis-declaration of Country of Origin - Goods imported and cleared by Customs authorities as well as goods seized were proposed to be confiscated on ground of misdeclaration of country of origin. The department alleged that goods were of Chinese origin but declared to be of Malaysian origin - Whether goods already cleared by customs authorities can be confiscated on ground of subsequent allegation of mis-declaration of country of origin when the allegation of mis-declaration is not established through credible and authenticated evidence – HELD – Goods when already cleared by Customs after due examination and satisfying themselves as to the conditions for clearance cease to be imported goods as per Section 2(f) of Customs Act. Once goods have been imported and cleared for home consumption by the proper officer, it is not open for the revenue to subsequently propose confiscation on allegations not supported by credible authenticated evidence. Unauthenticated photocopies and bare unverified reports from overseas authorities are not sufficient to reject declared transaction value or country of origin. The evidence produced in the case consisting of printouts from overseas authority websites, unsigned documents and letters not bearing official stamps and seals do not possess evidentiary value - The goods were exported and imported on the basis of country of origin certificates purportedly issued by competent Malaysian authorities and samples drawn were not subjected to test analysis that was shared with appellant. The mere suspicion arising from delayed and incomplete overseas verification report is not sufficient to confiscate goods already cleared. The country of origin of goods cannot be held to be established as Chinese when proper verification procedure had not been followed – Confiscation of goods already cleared for home consumption cannot be upheld. The allegation of mis-declaration of country of origin not having been established through credible and authenticated evidence, the goods stand to be of Malaysian origin as declared. [Read less]

2026-VIL-1534-CESTAT-AHM-CU | CESTAT CUSTOMS

Customs - Interest on voluntary deposit during investigation – Rejection of interest claim on ground that refund had been sanctioned within 03 months from date of filing refund application - Whether Appellant was entitled to interest on amounts voluntarily deposited during investigation when refund has been allowed within 03 months – HELD - The issue regarding payment of interest on amounts voluntarily deposited during investigation is no more res intergra and has been decided by various case law. The consistent legal approach of High Courts and Supreme Court allowing interest even in absence of statutory provisions is... [Read more]

2026-VIL-1538-CESTAT-CHE-CE | CESTAT CENTRAL EXCISE

Central Excise - Valuation of excisable goods - Tooling advances received from buyer - Inclusion in assessable value - Application of Rule 6 of Central Excise Valuation Rules, 2000 - Appellant contended that tooling cost required to be amortised over finished goods manufactured with tools and that proportionate cost had already been included in assessable value through supplementary invoices - Adjudicating Authority accepted amortisation method and dropped proceedings. Commissioner (Appeals) relayed on Circular No.170/4/96-CX to mandate Cost Accountant certificate and remanded for fresh determination - Whether entire tooling advance is includible in assessable value or only proportionate amortised tooling cost attributable to finished goods - HELD - Section 4 of Central Excise Act and specifically Rule 6 of Central Excise Valuation Rules, 2000, with its Explanation 1, contemplate that value of tools, dies, moulds used in production must be apportioned as appropriate and not automatically loaded on single clearance. What is required is determination of portion attributable to goods being valued - Circular No.170/4/96-CX proceeds on principle of proportionate valuation and does not mandate Cost Accountant as inflexible requirement. Evidence on record including tooling records with tool descriptions and values, production records, supplementary invoice referring to tool amortisation cost with corresponding assessable value and duty, and Chartered Accountant certificate establishes actual tooling activity and inclusion of amortised cost in assessable value. Department has not identified any specific deficiency in amortisation – Further, extended period invocation cannot be sustained as tooling advances and proposed method of amortisation were specifically brought to Department's notice during audit. Mere failure or negligence in adopting correct valuation does not establish suppression with intent to evade where dispute concerns valuation methodology and facts disclosed to Department. No material establishing deliberate suppression or intent to evade duty warranting penalty under Section 11AC. The Order-in-Original dropping proceedings is restored and the appeal is allowed [Read less]

2026-VIL-1537-CESTAT-AHM-CE | CESTAT CENTRAL EXCISE

Central Excise - Sugar syrup as intermediate product manufactured for captive consumption - Marketability test - Applicability of Section 2(d) of Central Excise Act, 1944 - Appellant manufactured biscuits exempt from excise duty under Notification No.03/2006-CE and also manufactured sugar syrup captively for use in biscuit production without paying excise duty during September 2009 to September 2011, claiming that sugar syrup being non-marketable intermediate product was not excisable goods. Revenue issued show cause notice proposing recovery of central excise duty under Section 11A(4) along with interest and penalty - Whether sugar syrup containing 80 percent sugar content manufactured by appellant and captively consumed in manufacture of exempt biscuits is an excisable good - HELD - The test of marketability under Section 2(d) of CEA, 1944, as explained in the explanation inserted by Finance Act, 2008, requires that goods must be capable of being bought and sold for a consideration and are deemed to be marketable. So long as product is capable of being bought and sold, it is excisable - Marketability is a decisive test of dutiability and not actual marketing. The sugar syrup in the present case contains sugar content of 80 percent by weight and would have shelf life without addition of any preservative. The sugar syrup satisfies the requirement of marketability and is therefore both marketable and excisable goods - The sugar syrup manufactured as per own specifications with sugar content of 80 percent by weight and intended for their principal comes into existence as result of process of manufacture and is distinct product capable of being bought and sold - Regarding invocation of extended period, the appellant had sent letter indicating various ingredients used in biscuit manufacture, which was generic in nature and not an intimation regarding non-payment of excise duty on sugar syrup as same was manufactured captively and not shown in ER-1 returns filed with department. Accordingly, defence taken by appellant for non-invocation of extended period is not correct and extended period is justified - In case duty liability on sugar syrup is held, appellant should be allowed the Cenvat credit on the quantity of sugar so consumed to manufacture sugar syrup - The demand of central excise duty, recovery of interest and imposition of penalty under Section 11AC are upheld - The appeal is partially allowed [Read less]

GSTAT Order | Tribunal SGST

GST - Denial of Input Tax Credit on account of GSTR-3B and GSTR-2A Mismatch - Reliance on mismatch without Invoice-Wise Verification - Appellant claimed Input Tax Credit pertaining to prior financial year invoices in the subsequent financial year. Revenue alleged excess Input Tax Credit based on mismatch between FORM GSTR-3B and FORM GSTR-2A without examining the Appellant's contention that the difference arose because credit pertaining to prior financial year was availed within the time permitted under Section 16(4) of the CGST Act, 2017 - Whether the difference between credit claimed in FORM GSTR-3B and credit reflected in FORM GSTR-2A can be treated as inadmissible excess without invoice-wise verification – HELD - The statutory provision Section 16(4) as it stood for the transition period permitted a taxpayer to claim credit on prior year invoices up to the due date of the subsequent year return. FORM GSTR-2A was at the relevant time a facilitation tool and not a statutory bar to credit. The Circular No. 183/15/2022-GST specifically directs the Proper Officer to verify, not summarily disallow, cases where prior year credit has been claimed in subsequent year returns - The finding that non-appearance of an invoice in FORM GSTR-2A shows that the supplier did not pay tax is an assumption, not a finding reached after verification. The three precedents relied upon by the First Appellate Authority namely Mahalakshmi Cotton Ginning Processing and Oil Industries v. State of Maharashtra, ALD Automotive Private Limited v. CTO, and Microqual Techno Ltd. v. State of Karnataka rest on facts and statutory provisions materially different from the present case and could not have been relied upon to disallow the credit - The demand cannot be sustained as it stands without invoice-wise verification of the prior year credit - The demand for excess credit raised is not sustainable without proper invoice-wise verification and reconciliation. The matter is remanded to the Proper Officer for de novo adjudication with directions to carry out invoice-wise verification with reference to prior year records - The appeal is allowed by way of remand - Violation of Natural Justice - Mandatory personal hearing - Section 75(4) - Absence of personal hearing before confirmation of demand - The Show Cause Notice issued under Section 73 recorded the date, time and venue of personal hearing as NA and no personal hearing was granted to the Appellant before the Order-in-Original was passed confirming the entire demand - Whether the absence of a personal hearing before confirmation of demand under Section 73(9) vitiates the Order-in-Original – HELD - The Section 75(4) makes a hearing mandatory once an adverse decision is contemplated against the person, irrespective of whether a specific request for hearing was made. The absence of any such hearing before the Order-in-Original was passed is a clear infirmity - The Show Cause Notice itself records the date, time and venue of personal hearing as NA and nothing on the record shows that any hearing was in fact granted before the demand was confirmed. The absence of a personal hearing, by itself, justifies setting aside the Order-in-Original – The Appellant shall be granted a proper opportunity of personal hearing, with the date, time and venue duly communicated, and shall be permitted to produce its books of account, invoices and any further reconciliation statements, before any fresh order is passed. The issue is answered in favour of assessee - Notice under Section 61 / Form GST ASMT-10 - Scrutiny of returns - Independent provisions Section 61 and Section 73 - Absence of notice in FORM GST ASMT-10 - The Proper Officer initiated proceedings under Section 73 read with Rule 142 following an audit assignment, not pursuant to scrutiny under Section 61 - Whether the absence of a notice in FORM GST ASMT-10 under Section 61 renders proceedings initiated directly under Section 73 invalid – HELD - Section 61 and Section 73 are independent provisions. Section 61 provides one particular route for scrutiny of returns which requires a notice in FORM GST ASMT-10. Where the Proper Officer proceeds directly under Section 73 read with Rule 142 without first invoking Section 61, the absence of a FORM GST ASMT-10 notice does not, by itself, invalidate the proceedings. The present proceedings were initiated pursuant to a specific assignment under Section 73 read with Rule 142 following an audit reference, and not pursuant to scrutiny under Section 61. The decisions relied upon by the Appellant on this point are distinguishable on facts and do not invalidate the proceedings under Section 73. However, this ground does not cure the infirmities found on the prior issues which go to the root of the impugned orders. [Read less]

2026-VIL-1536-CESTAT-HYD-ST | CESTAT SERVICE TAX

Service Tax - Classification of mining activities as cargo handling service - Appellant engaged in activities of excavation, loading, transportation and unloading of limestone from mine face to crusher situated within mining lease area - On introduction of taxable service of Mining of Mineral, Oil or Gas with effect from 01.06.2007, Appellant obtained service tax registration and discharged service tax under that category - Show cause notice for earlier period from February 2005 to December 2009 proposed to classify activities as Cargo Handling Service and invoking extended period of limitation. Commissioner confirmed demand under Cargo Handling Service - Whether activities of excavation, loading, transportation and unloading of limestone carried out within mining area are liable to service tax under Cargo Handling Service particularly for period prior to introduction of Mining of Mineral, Oil or Gas service with effect from 01.06.2007 – HELD - The activities constitute an integrated set of operations within mining area. Cargo handling service contemplates handling of cargo as cargo. Mere loading, unloading or movement of goods when performed in course of execution of another principal service does not ipso facto bring entire composite activity within taxable category of Cargo Handling Services. The real nature and dominant character of the contract are required to be examined - Appellant was not independently engaged for handling limestone as cargo but handling and movement took place within mining area as necessary part of mining operation. Revenue itself accepted these very same activities as mining service after 01.06.2007. No material change in nature of activity before and after 01.06.2007 has been demonstrated - Once essential character is found to be mining mere fact that excavation involves loading and movement cannot convert it into Cargo Handling Service for earlier period. Classification of composite activity cannot be determined by isolating one or two incidental elements - Introduction of specific taxable entry from particular date is relevant circumstance while examining legislative scheme. Extended period cannot be invoked as there was no deliberate suppression with intent to evade payment of service tax - Demand of service tax, interest and penalties is not sustainable and set aside - The appeal is allowed [Read less]

2026-VIL-1533-CESTAT-DEL-CE | CESTAT CENTRAL EXCISE

Central Excise - Fraudulent availment of CENVAT Credit - Documentary Evidence - The Appellant manufacturer was alleged to have fraudulently availed CENVAT credit amounting on invoices for raw materials supplied by M/s Bhiwadi Cylinders without actual receipt of goods - Department initiated proceedings based on investigations revealing that the ultimate vendor M/s MAI had not maintained manufacturing facility and had issued invoices without receiving raw materials. Appellant furnished Goods Receipts from the transporter showing delivery to its factory and entries in RG 23A Part-II register showing receipt and usage of the r... [Read more]

2026-VIL-1532-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Adjustment of excess Service Tax Paid - Succeeding Month or Quarter - Rule 6(4A) of Service Tax Rules - Appellant availed CENVAT credit on service tax paid under Reverse Charge Mechanism on services received from foreign service providers and had made advance tax payments which were utilized against its liability in succeeding years - Department disallowed the adjustment contending that under Rule 6(4A) of the Service Tax Rules such adjustments of excess payment could be made only during the immediate succeeding month or quarter - Whether the adjustment of excess advance service tax paid could be made to a su... [Read more]

GSTAT Order | Tribunal SGST

GST - Applicability of GST on Affiliation Services, Exemption under Entry 66 of Exemption Notification, Issuance of consolidated SCN for multiple tax period - Appellant engaged in field of education undertaking activities such as granting affiliation to schools, conducting public examinations and registering students - Show Cause Notice was issued proposing demand of tax alleging that affiliation services rendered by appellant do not fall within exemption entries 66(a), 66(aa), or 66(b)(iv) of the Exemption Notification No.12/2017-CT(Rate) dated 28.06.2017 - Whether affiliation services provided by appellant to schools constitute supply within the meaning of Section 7(1)(a) read with Section 2(17) of the CGST Act, 2017 and whether affiliation is an independent taxable supply falling outside the exemption under Entry 66(b)(iv) of the Exemption Notification - HELD - The affiliation services provided by appellant to schools constitute independent taxable supply not forming integral part of services relating to admission to or conduct of examination. Entry 66(b)(iv) of the Exemption Notification dated 28.06.2017 is confined to services relating to admission to or conduct of examination by an educational institution. The affiliation provided by appellant relates to defining and accrediting the functionality of the school which is much broader in scope compared to conduct of an entrance examination. Affiliation to the colleges by university is prerequisite for any college to admit students for the course offered. Only after affiliation is granted the interface with the university and the admission of students in the affiliated college will commence - The service of granting affiliation is not part of admission of students or conduct of examination for them. Appellant being a registered society under Societies Registration Act 1860 and not a statutory university constituted under any Parliamentary or State legislative enactment discharging compulsory statutory functions cannot avail benefit of decisions rendered exclusively in context of statutory bodies – The activities of appellant constitute supply under Section 7 read with Section 9 of the CGST Act and are chargeable to GST - The affiliation services provided by appellant including affiliation processing or form charges constitute independent taxable supply not falling within exemption and accordingly demand for affiliation fees for the period 18.06.2021 to November 2023 is upheld - Issuance of SCN for a consolidated period, covering various limitations and the order passed in furtherance thereto for a consolidated period is in accordance with the law or not – HELD – The CGST Act nowhere prohibits issuance of a common Show Cause Notice covering multiple tax periods where the issues arise from the same investigation or audit - The validity of the notice has to be examined with reference to compliance with limitation for each tax period individually, and not merely on the ground that several years have been clubbed together in a single notice - The statutory language of Sections 73(3), 73(4), 74(3) and 74(4) of the Act 2017, employs the expressions “for any period” and “for such periods”, in contradistinction to the expression “financial year” used in Sections 73(10) and 74(10) of the CGST Act, thereby expressly contemplating a notice covering a period spanning more than one financial year - Where a consolidated notice under Section 73 or Section 74 of the Act has been issued and the appellant has been afforded a full and fair opportunity to respond to the allegations therein, the mere fact of consolidation, in the absence of demonstrable prejudice, cannot vitiate or invalidate the proceedings under the GST regime. The appellant has not demonstrated any prejudice flowing from the consolidated format - The proceedings in this particular matter are not vitiated solely on the ground of the issuance of a consolidated SCN and order passed for a consolidated period covering July 2017 to November 2023 - Taxability Of Annual Registration and Late Registration Charges - Appellant contended that annual registration charges as well as late annual registration charges are in nature of affiliation fee for continuance of affiliation of schools being charged annually for continuance of affiliation in default whereof school would stand de-affiliated. Appellant contended that these charges should be exempted not only for period July 2017 to 17th June 2021 but also for subsequent period 18th June 2021 to November 2023 under the Exemption Notification - Whether annual registration charges and late charges qualify for exemption under Entry 66(b)(iv) of the Exemption Notification or receive benefit of regularization granted for affiliation charges - HELD - The annual registration charges as credited in books of account under head annual charges and collected from affiliated schools annually and failure to pay may result in de-affiliation are administrative and preparatory in nature. Exemption entry applies only to services expressly covered therein and exemption cannot be extended to administrative or preparatory charges – The strict construction rule mandated by Constitution Bench does not permit extension of exemption to activities that are preparatory to and not constitutive of conduct of examination. The fact that non-payment may lead to de-affiliation is commercial consequence of contractual obligation and does not transform administrative charge into examination related service - The Circular No. 234/28/2024 dated 11.10.2024 subject matter is confined to affiliation services simpliciter and there is no reference express or implied to annual registration charges renewal charges or late fees for registration as falling within ambit of regularization. Being clarificatory instrument issued in specific context of affiliation services its benefit cannot be extended by inference to distinct category of receipt merely because both arise from same underlying regulatory relationship - Exemption or regularization dispensation being in nature of fiscal concession must be strictly construed and scope cannot be enlarged by implication to categories of supply not expressly covered therein - The annual registration charges and late charges are independent supply distinct from services relating to admission of students or conduct of examinations and do not qualify for exemption - Finding of appellate authority upholding levy of GST on annual registration and late charges is affirmed - Cum-Tax Valuation Under Rule 35 of CGST Rules 2017 - Appellant contended that amounts collected by appellant if taxable at all should be treated as inclusive of GST under Rule 35 of the Rules 2017 - Whether amounts collected by appellant are to be treated as inclusive of GST under Rule 35 of the CGST Rules, 2017 – HELD - Where tax has not been collected separately, gross amount received must be treated as value of taxable service inclusive of tax for purpose of quantifying tax liability. Settled cum-duty or cum-tax jurisprudence developed under erstwhile Central Excise and Service Tax regime applies with equal force to valuation under the CGST Act. Burden placed upon appellant to independently establish GST inclusiveness stands discharged in law once it is demonstrated that no tax was separately collected from recipients - Where gross amount charged does not separately disclose tax component amount charged is to be regarded as inclusive of such tax - In present case first appellate authority has observed that no documentary evidence has been furnished by appellant to substantiate its version that fees collected were inclusive of GST. The burden of proof placed upon appellant is discharged – The appellant is entitled to benefit of cum-tax valuation under Rule 35 of the Rules 2017 and amounts collected by appellant are to be treated as inclusive of GST. This issue is decided in favour of appellant - Invocation of Section 74 of CGST Act 2017 - Fraud Wilful [Read less]

2026-VIL-984-KAR | High Court SGST

GST - Denial of appellate remedy - Non-communication of adjudication order to updated address - Recovery notice issued without furnishing copy of adjudication order - Petitioner had updated change in registered address in year 2023 but adjudication order dated 27.03.2024 was sent to old address. Accordingly, petitioner did not receive adjudication order and recovery notice in Form DRC-13 was subsequently - Whether recovery notice can be issued when adjudication order has not been communicated to petitioner due to outdated address and whether limitation for appeal starts from date of recovery notice or from date of communic... [Read more]

2026-VIL-979-PAT | High Court SGST

GST - Cancellation of GST Registration - Opportunity of Hearing and Procedural Defect - Fixing date of hearing before show cause period expires - The date for personal hearing was fixed on 05.03.2024 while the date for filing show cause was 07.03.2024, meaning the hearing was fixed prior to show cause period expiring. Appellant did not submit show cause response and registration was cancelled ex-parte by order dated 22.04.2024 - Whether proper opportunity of hearing was granted as required under Section 75(4) of CGST Act, 2017 which provides that opportunity of hearing shall be granted where adverse decision is contemplate... [Read more]

2026-VIL-1530-CESTAT-CHE-ST | CESTAT SERVICE TAX

Service Tax - Classification of services rendered by shipping agents and freight forwarders - Distinction between taxable support services and non-taxable transportation - Appellant raises invoices on customers including freight component with mark-up along with ancillary charges such as LCL charges, documentation charges, terminal handling charges and delivery order charges - Appellant discharges service tax on ancillary charges but not on ocean/air freight in the belief that the same was not taxable/exempt during the relevant period - Respondent alleges that mark-up charged by appellant on freight charged by shipping companies constitutes consideration for taxable service classified - Whether freight component recovered by appellant on principal-to-principal basis with a commercial mark-up constitutes taxable consideration for Business Support Service - HELD - Prior to 01.07.2012 transportation of goods by vessel or aircraft from place outside India to customs station in India did not fall within definition of taxable service - With effect from 01.07.2012 the activity stood expressly excluded by Section 66D(p)(ii) of negative list and continued till its omission with effect from 01.06.2016 - Freight component paid by appellant to shipping lines and airlines recovered from its customers therefore represents consideration for an activity which statute itself has by deliberate design kept outside tax net throughout the period in question. Where principal activity is non-taxable by legislative design the profit or margin earned in course of that very activity cannot be severed and taxed as if it were consideration for distinct service - Rule 5 of Valuation Rules cannot itself be source of taxability nor can it convert non-taxable transaction into taxable one merely because person recovering amount fails to qualify as pure agent - Classification and taxability of activity must be determined with reference to its substance and charging provisions applicable to it not with reference to manner of billing or presence of margin - The mark-up earned by Custom House agent or freight forwarder on ocean or air freight recovered on principal-to-principal basis does not constitute consideration for business support service – The invocation of extended period of limitation is not justified as issue involved is interpretational dispute and ingredients of fraud collusion wilful misstatement or suppression with intent to evade tax are not established - Demand of service tax on freight/mark-up amount for entire period is set aside - Impugned order is set aside and appeal is allowed [Read less]

2026-VIL-974-CAL | High Court SGST

GST - Denial of Input Tax Credit to bona fide purchaser for default of supplier - Appellant was denied Input Tax Credit on the ground that suppliers had not deposited tax and had not filed GSTR-3B and invoices were not reflected in GSTR-2A of recipients - Whether Input Tax Credit can be denied to bonafide purchaser for default of supplier in depositing tax / non-filing of GSTR-3B / non-reflection of invoice in GSTR-2A - HELD - A bona fide purchaser who has received tax invoices from registered suppliers cannot be denied ITC merely because the supplier has defaulted in depositing tax or filing GSTR-3B - The conditions under Section 16(2)(a) and 16(2)(b) of CGST Act, 2017 are satisfied when purchaser is in possession of tax invoice issued by supplier registered under Act and has received goods or services - The only dispute under Section 16(2)(c) is whether tax charged has actually been paid to Government. The Department itself admits that proceedings have been initiated against defaulting supplier for non-filing of GSTR-3B. Having done so Department cannot doubly recover once from supplier and again from recipients - Department must first proceed for recovery against defaulting supplier under Section 79 of CGST Act. Mere non-reflection of invoices in GSTR-2A cannot by itself lead to automatic denial of Input Tax Credit to bona fide purchaser - The principle laid down in Suncraft Energy Private Limited which has been affirmed by Supreme Court squarely applies to facts of present case – Further, the Section 74 cannot be invoked mechanically merely to cover up the limitation under Section 73(10). The SCN must specifically allege how fraud was inferred or how concealment was detected - Bare invocation of words fraud willful misstatement and suppression of facts without listing out reasons is not sufficient to invoke extended limitation – The impugned is quashed and set aside and Respondents are directed to revisit issue by reconsidering reply with all documents in light of judgments in Suncraft Energy case - Respondent shall pass a reasoned and speaking order in accordance with law after affording opportunity of personal hearing to petitioners – The writ petition is allowed [Read less]

2026-VIL-973-CAL | High Court SGST

GST - Issuance of Show Cause Notice in the name of a deceased person - Assessment of tax liability of a deceased person - Appellant issued Show Cause Notice and Order in Original against a deceased proprietor instead of his legal heirs determining tax demand - Whether a Show Cause Notice can be issued in the name of a deceased person for determination of tax liability - HELD - It is a well settled proposition of law that issuance of a notice in the name of a dead person is a nullity non est and void ab initio in the eye of law - A SCN cannot be issued in the name of a dead person for determination of the liability of the d... [Read more]

2026-VIL-972-GAU-CE | High Court CENTRAL EXCISE

Central Excise - Refund of Education Cess and Secondary and Higher Education Cess - Scope of Section 11B of the Central Excise Act, 1944 - Applicability to amounts paid without authority of law - Appellant rejected refund claims for EC and SHEC that respondents had mistakenly paid for the period October 2013 to June 2017 on crude oil produced under NELP blocks arguing that the refund claims were barred by the limitation period prescribed in Section 11B of the Act, which prescribes a one year period for claiming refund from the relevant date - Whether the time limit prescribed in Section 11B of the Central Excise Act, 1944 applies to refund claims for EC and SHEC when the same were paid by mistake and do not constitute duties of excise - HELD - Section 11B of the Act prescribes limitation for refund of duty of excise and interest and does not refer to other amounts collected without authority of law - EC and SHEC are not duties of excise as they are levied on the aggregate of excise duties and are not calculated as excise duty proper - The amount paid as EC and SHEC on Oil Industry Development Cess does not take the character of duty of excise but is simply an amount paid under a mistake of law - The provisions of Section 11B of the Act would therefore not be applicable to an application seeking refund of EC and SHEC paid under mistake - Since EC and SHEC are not duties of excise, the limitation prescribed under Section 11B of the Act would not apply and the general provisions under the Limitation Act, 1963 would be applicable - Section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake or could with reasonable diligence have discovered it - The retention of EC and SHEC which have been paid on a mistaken notion by the respondents without any authority of law is not permitted under Article 265 of the Constitution which provides that no tax shall be levied or collected except by authority of law - A mistake does not confer any right on any party and can be corrected - Section 11B of the CEA, 1944 cannot be a bar to refund the EC and SHEC that has been paid mistakenly by the respondents to the appellant - The Revenue appeals are dismissed [Read less]

2026-VIL-1547-CESTAT-HYD-CU | CESTAT CUSTOMS

Customs – Amendment of shipping bills under Section 149 of Customs Act, 1962 – Maintainability of departmental appeal in view of monetary limit prescribed under Section 131BA – Respondent manufacturer and exporter of Barium Carbonate exported goods during F.Y. 2017-18 to 2019-20 under 59 shipping bills with MEIS reward column marked as "NO" and subsequently sought amendment by changing declaration to "YES" to pursue Merchandise Export from India Scheme benefit. Request was initially rejected. Matter went to High Court which remanded for reconsideration. Deputy Commissioner again rejected request. Commissioner (Appeals) allowed appeal on ground that Section 149 as applicable during relevant period prescribed no limitation for seeking amendment and omission appeared inadvertent. Revenue appealed before CESTAT. Preliminary objection raised regarding maintainability citing Board instruction dated 02.11.2023 prescribing monetary limit of Rs. 50,00,000/- for filing departmental appeals under Section 131BA of Customs Act - Whether the appeal is maintainable and whether respondent could seek post-export amendment of shipping bills under Section 149 for enabling claim of MEIS benefit – HELD – On preliminary issue of maintainability, no Customs duty, interest, fine or penalty is involved in dispute. If Customs duty is taken as basis for amount in dispute, it is Nil. If monetary value of MEIS benefit is taken as basis, it is only Rs. 47,19,103/- which falls below prescribed threshold of Rs. 50,00,000/-. Board under Section 131BA can prescribe monetary limits for departmental appeals and statutory scheme requires tribunal to have regard to circumstances whether appeal should be filed. Present appeal falls below threshold from both angles and Revenue has not demonstrated that case falls within specified exceptional categories warranting appeal irrespective of monetary limit. Object of monetary limits is to reduce Government litigation and concentrate Departmental resources on disputes involving prescribed Revenue effect. Section 131BA cannot be rendered otiose by continuing appeal below threshold without exceptional circumstances. Respondent's contention on maintainability deserves acceptance. On merits, Section 149 empowers proper officer to authorize amendment of documents even after export where supported by contemporaneous documentary evidence. When Section 149 was applicable during relevant period, it prescribed no limitation period for amendment. Subsequently introduced time limitation cannot be retrospectively applied to exports completed before such introduction. What matters is existence of documentary evidence supporting amendment and whether proposed amendment can be verified from documents existing at time of export. Repeated "NO" declarations in 59 bills over 3 years is relevant but cannot alone conclude issue - proper inquiry must examine whether amendment is supported by documentary material existing contemporaneously. Amendment of shipping bills merely enables respondent to place corrected bills before competent authority administering scheme - whether respondent ultimately satisfies all requirements and is entitled to benefit is separate matter for competent authority free to examine admissibility under Foreign Trade Policy and scheme conditions uninfluenced by mere fact that amendment was permitted. Permitting amendment does not automatically result in loss of Revenue. Fact that request made after considerable delay is relevant while exercising discretion but delay by itself cannot operate as absolute jurisdiction bar where statute as applicable fixed no outer limitation – Respondent is entitled to seek amendment of 59 shipping bills under Section 149 by changing MEIS declaration - Commissioner (Appeals) order is sustainable - Appeal filed by Revenue is dismissed both on ground of applicable monetary limit and even otherwise on merits [Read less]

2026-VIL-1546-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – Tariff classification of mixed lot polyester warp knitted fabrics – Appellant imported mixed lot polyester warp knitted fabrics from foreign suppliers under five Bills of Entry and classified the goods under Tariff Item 6005 9000 claiming concessional Basic Customs Duty at 10 per cent under Notification No. 82/2017-Customs. The Revenue rejected the classification and proposed reclassification under Tariff Items 6005 3500 to 6006 3900 as warp knitted fabrics of synthetic fibres, demanding differential duty with penalties under Sections 114A and 114AA of Customs Act, 1962 - Whether the Revenue established that the appellant's classification is incorrect by adducing requisite technical and scientific evidence before reclassifying the goods – HELD – It is a settled position that the burden to prove that classification adopted by importer is incorrect lies upon Revenue and mere suspicion is insufficient. Classification under Chapter 60 depends upon fibre composition, weight, predominance, textile construction etc. which cannot be determined from invoice, packing list or visual examination alone. The term polyester warp knitted fabrics does not prove that the fabric is made up of 100 per cent polyester as the weft can be made up of any other material, thus mixed lot of fibres cannot automatically be treated as 100 per cent synthetic unless fibre composition is scientifically determined. The Revenue failed to produce Test reports, Technical literature, Textile Committee opinion, Expert witness, Chemical Examiner's report, Market enquiry, Manufacturer's specification, Fibre composition, Yarn composition, GSM analysis or any other laboratory report in support of allegation of mis-classification. No samples were drawn to ascertain constituent material or fibre content. The Proper Officer examined goods and accepted the classification without raising any objection and the assessment attained finality as it was not challenged. The Revenue failed to bring fresh evidence to allege mis-declaration. Reclassification without fresh evidence is legally not sustainable. In absence of any cogent or corroborative evidence available on record to dispute the classification claimed by Appellant under Tariff Item 6005 9000, the classification is upheld and the appellant is eligible for benefit of concessional rate of Basic Customs Duty under Serial No. 166 of Notification No. 82/2017-Customs - The differential duty demand of Rs.39,12,198/- together with applicable interest is set aside - The penalties imposed under Sections 114A and 114AA are set aside – The appeal is allowed with consequential relief [Read less]

2026-VIL-990-P&H | High Court SGST

GST - Bail Application – Fraudulent Availment of Input Tax Credit – Petitioner arrested on allegation of claiming input tax credit in illegal manner without actual transaction of goods, causing huge loss to the State Exchequer on basis of fake invoices. Petitioner in custody for approximately four months. Petitioner contended that all purchases and supplies were supported by valid tax invoices and delivery challans with payments through banking channels. Petitioner also alleged that grounds of arrest and order under Section 69 of CGST Act were not communicated to him – Whether Petitioner is entitled to bail in case involving alleged fraudulent availment of input tax credit considering principles governing bail in economic offences, violation of fundamental rights, and right to speedy trial – HELD – Arrest must proceed on belief supported by reasons relying on material and not on suspicion alone. Once a Court finds that fundamental rights under Articles 21 and 22 of Constitution have been violated while arresting the accused, it is the duty of the Court to release the accused on bail as the arrest stands vitiated. The benefit of bail cannot be denied merely on severity of offence. The primary purposes of bail are to release the accused of imprisonment, to release the State of burden of keeping him pending trial, and to keep the accused constructively in custody to ensure submission to jurisdiction of the Court - Petitioner has already undergone custody for approximately four months, has clean antecedents, maximum punishment is five years, entire evidence is documentary in nature and detention in judicial custody is not likely to serve any purpose. There is nothing on record to show that while on bail Petitioner will tamper with evidence or influence witnesses or will not cooperate in trial – Petitioner is entitled to benefit of bail. The petitioner is ordered to be released on bail on furnishing personal bond and surety bond subject to conditions including not making inducement or threat to any person, notifying change of address to trial Court, and not leaving India without prior permission of trial Court – The petition is allowed [Read less]

2026-VIL-1541-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax – Taxability of construction services provided to land owners/existing tenants under redevelopment scheme where service tax already discharged on gross consideration received from independent buyers – Appellant is a builder engaged in construction of residential and commercial complex services undertaken a redevelopment project of air building property constructing 44 flats and 2 shops of which 41 flats and 1 shop were handed back to existing tenants without any consideration under redevelopment scheme and 3 flats and 1 shop were retained for independent sale. Department demanded service tax on construction services provided to existing tenants/land owners based on value of similar flats sold to independent buyers on per square feet basis citing extended period under Section 73(1) and imposed penalty and interest. Appellant contended that service tax is not levable on flats handed free of cost when service tax already discharged on consideration received from independent buyers and that no statutory mechanism exists for determining value of taxable service involving land element - Whether appellant is liable to pay service tax on construction services provided to existing tenants when it has already discharged complete service tax liability on gross consideration received from independent buyers under redevelopment scheme – HELD – Once service tax liability has been discharged on the gross amount of construction service received by the builder from both categories of service recipients i.e. land owner in the form of land or development rights and from independent buyers in the form of cash, the demand of service tax on the same construction service again based on presumed consideration to land owners cannot be sustained as it would amount to double taxation. The taxable value of services provided to land owners cannot be determined on basis of sale value of flats to independent buyers as the comparison must be made between service recipients standing on same footing and not between recipients with different economic interest. The principle established in law is that price of oranges is determined by comparing with price of oranges and not apples. Once appellant has complied with the service tax liability on the gross amount covering land owner consideration in kind and buyer consideration in cash as per CBEC instruction dated 16-2-2006 and CBEC Circular dated 10.2.2012 which are in accordance with Section 67 of Finance Act, 1994 and Rule 3 of Service Tax (Determination of Value) Rules, 2006, further demand for service tax on consideration received from land owners would constitute double taxation. As settled law that for application of any provisions of this type the comparison should be made between service recipients on same footing and as appellant has already discharged the complete service tax liability on gross consideration received, the presumed consideration to land owners cannot be separately taxed - The reliance placed on cases like Etics Infra Development Pvt Ltd., Vasantha Green Projects and LCS City Makers Pvt Ltd. supports the contention that facts and circumstances in this case do not warrant assessment of service tax on different value - Service tax demand on 41 flats and 1 shop handed to existing tenants is not sustainable - Consequently demands of interest under Section 75 and penalty under Section 78 are also set aside - Service tax amount paid by appellant during investigation shall be appropriated against any other tax liability or refunded – The impugned order is set aside and appeal is allowed [Read less]

2026-VIL-1531-CESTAT-MUM-ST | CESTAT SERVICE TAX

Service Tax - Export of services, Services provided by e-commerce marketplace operator to foreign affiliate - Determination of location of service use - Appellant provides services to affiliate eBay International AG such as promotion coordination with vendors marketing market data collection remittance of revenue operation of helpdesk and other administrative services for eBay India website - Appellant contends that services qualify as export since they are provided to recipient located outside India and payment received in foreign exchange and benefit of services accrue to foreign affiliate - Whether services provided in relation to business activities in India for foreign affiliate constitute export of services - HELD - Export of Services Rules 2005 provides three categories of services - Category I applies to services with nexus to immovable property - Category II applies to services where place of performance can be established - Category III applies to remaining services generally including knowledge or technique based services not linked to identifiable immovable property or whose location of performance cannot be readily identified - For Category III services which include BAS the relevant factor is location of service receiver and not place of performance. For Category III services export of service may take place even when all relevant activities take place in India so long as benefits of these services accrue outside India - Board's circular dated 24.02.2009 clarifies that for Category III services the phrase used outside India is to be interpreted to mean that benefit of service should accrue outside India - Board's circular dated 13.05.2011 further clarified that words accrual of benefit are not restricted to mere impact on bottom-line of person who pays for service. All activities extended by appellant to foreign subsidiary including marketing research consultancy promotion of sales through advertisement take place in India. Appellant did not conduct any market research or activity outside India while providing BAS – The services failed to satisfy essential qualification of service being delivered and used outside India. However Revenue concluded that services provided were not export of services they were provided within taxable territory in India. In absence of any notice for recovery of service tax due from appellant in respect of services not considered to be export of services in appropriate proceedings the refund claims filed in terms of Rule 5 of CCR, 2004 cannot be rejected. Revenue cannot have two stands in respect of same services - If Revenue's case is that activities undertaken do not amount to export of service then proceedings need to be initiated for demanding service tax in respect of taxable services provided. By not initiating any such proceedings, Revenue itself has allowed these taxable services as export of services. Having done so Revenue cannot in proceeding under Rule 5 for refund take contrary stand and deny refund treating services not to be export of services - Impugned order is set aside and appeals are allowed [Read less]

2026-VIL-991-DEL | High Court SGST

GST - Consideration of Replies to Show Cause Notice – Petitioners filed writ petitions seeking quashing of a consolidated Order-in-Original passed against 629 firms and individuals. The Department had found large-scale availment of ineligible input tax credit on basis of fake invoices. Petitioners submitted detailed replies to Show Cause Notice which were not considered by the Adjudicating Authority – Whether the Adjudicating Authority was required to consider replies submitted by Petitioners and render a reasoned order, and whether failure to do so renders the statutory right of appeal nugatory – HELD – The judgme... [Read more]

2026-VIL-989-PAT | High Court VAT

Bihar VAT Act, 2005 – Refund of penalty under Section 68 of BVAT Act, 2005 – Prescribed authority for processing refund – Authority competent to grant refund and payment of interest – Whether Joint Commissioner of State Tax is competent prescribed authority for refund when amount exceeds Rs. 50,000/- and whether petitioner entitled to interest from date of communication of Tribunal order or from date of filing refund application – HELD – As per Rule 43(1) prescribed authority for refund shall be Joint Commissioner when amount to be refunded exceeds Rs. 50,000/-. After re-designation of officers under BGST Act, 2017, Joint Commissioner of Commercial Taxes was re-designated as Additional Commissioner of State Tax. However, when petitioner filed application before Joint Commissioner of State Tax such application could have been forwarded by Joint Commissioner to Additional Commissioner - Technical objection taken by respondent refusing refund on ground of non-filing before Additional Commissioner after re-designation cannot be accepted as it would defeat purpose of procedural provisions. Upon harmonious reading of Section 68, Section 70 and Rule 43 of VAT Rules, payment of interest is not automatic after expiry of sixty days from date of communication of Tribunal order but petitioner must file application for refund. Since petitioner filed defective Form A-VIII on 21.05.2024 and despite direction by authority on 18.06.2025 failed to remove defects for one year before approaching Court, delay in processing refund is attributable to petitioner - Under Section 70(2) delay attributable to dealer is excluded from period for which interest is payable. Petitioner is directed to file fresh application in Form A-VIII before Additional Commissioner of State Tax within ten days and authority directed to grant refund within ten days from receipt of application with interest @ 6% per annum payable from authority's personal pocket if refund not made within specified period – The petition is disposed of [Read less]

2026-VIL-1545-CESTAT-CHE-CU | CESTAT CUSTOMS

Customs – Fraudulent export allegations under DEEC scheme and clandestine removal of duty-free imported scrap – Appellant was issued a DEEC Licence permitting duty-free import of non-alloy re-rollable scrap cuttings against export obligation of non-alloy steel bars and rods. Material was imported under three Bills of Entry and a portion was manufactured into CTD bars by the manufacturing unit and exported to Bangladesh while the remaining unmanufactured material was exported with special permission. DRI initiated investigation alleging fraudulent export of maize instead of specified goods and clandestine removal of duty-free material. CBI investigation concluded that actual exports to Bangladesh had taken place. The Adjudicating Authority confirmed demand of customs duty forgone with interest and penalties under Sections 112(a) and 114(i) of the Customs Act, 1962 - Whether the Revenue established through reliable and corroborative evidence that duty-free imported material was diverted to the domestic market or that fraudulent exports occurred and whether departmental proceedings based on identical set of facts and evidence can be sustained when criminal proceedings have resulted in acquittal – HELD – The burden of proof lies on the Revenue to establish allegations through cogent and reliable evidence. The CBI as the premier investigating agency examined the material facts including vehicle movement through Immigration Check Posts, DEEC records and realization of export proceeds and found that actual exports of non-alloy steel bars and rods to Bangladesh had taken place. The statements of Surendra Kumar Gangwal, Vikas Kumar Jain and Samir Saha which formed the basis of allegations were subsequently retracted and cannot constitute the substantive basis of allegations in the absence of independent corroboration as laid down by the Supreme Court. No independent evidence was produced establishing diversion of duty-free material including absence of evidence of buyers of alleged diverted goods, cash trail or seizure of offending goods. For allegations of clandestine removal, positive evidence is required such as purchase of excess raw materials, shortage or excess of raw materials or finished goods found in stock or factory premises, excess consumption of electricity or seizure of cash or clandestinely removed goods made during investigation. Despite cash transactions to the extent of Rs.11.23 Crores involved in the transactions, no seizure of cash was made and no clandestinely removed goods were seized or any shortage or excess of materials was found in the factory premises. The Supreme Court in Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. held that when criminal case and departmental proceedings are based on identical set of facts and evidence and the criminal court has acquitted the appellant, there is no basis to sustain punishment in the departmental proceedings as this would amount to double jeopardy. Section 135 of the Customs Act provides for without prejudice clause for both penalty provision and prosecution but there is no provision permitting the imposition of penalty under Section 112 notwithstanding acquittal in prosecution proceedings. The Show Cause Notice was materially defective as the supporting manufacturer was not made a noticee. The Adjudicating Authority traveled beyond the allegations in the Show Cause Notice in arriving at findings. The Export Obligation Discharge Certificate issued by the competent authority was neither shown to have been cancelled nor subjected to any adverse proceedings and cannot be brushed aside without credible evidence to the contrary. The extended definition of manufacture under the EXIM Policy, 1997-2002 then applicable supported the appellant's position. All the allegations against the principal noticee fail for want of reliable and corroborative evidence and the allegations of connivance or abetment against co-appellants cannot independently survive. The principle that fraud vitiates everything cannot be invoked without reliable and corroborative evidence. The entire case of the Revenue is based upon surmises and conjectures while the evidences brought into record are incomplete, inconsistent and not reliable pieces of evidence – Demand of customs duty forgone together with consequential interest and penalties imposed is not sustainable - The impugned order is set aside and the appeals are allowed [Read less]

2026-VIL-1544-CESTAT-DEL-CU | CESTAT CUSTOMS

Customs - Misclassification and undervaluation of imported kitchen-wares - Appellant imported goods declared as Urea Houseware Trays and Bowls classified under CTH 68159990 but investigation revealed goods were made of Urea Formaldehyde Resin kitchenwares. Show Cause Notice proposed recovery of differential customs duty based on mis-declaration of description and undervaluation of goods. Respondent's statement acknowledged the goods were Urea Formaldehyde kitchenwares and deposited Rs. 3 lakhs without protest. Chemical composition test by CRCL confirmed goods were polymeric material composed of Urea Formaldehyde Resin with inorganic filler. Documents obtained from Chinese Customs through proper overseas enquiry showed exporter declared value approximately 65% higher than value declared by importer before Indian Customs despite suitable adjustments for freight and insurance - Whether goods were correctly classified and whether transaction value was rightly rejected - HELD - Goods were correctly identified as Urea Formaldehyde Resin based kitchenwares classifiable under CTH 39091010 and not under CTH 68159990 as declared. Transaction value was rightly rejected under Rule 12 of Customs Valuation Rules. Sequential rules for valuation have been followed while re-determining the value based on identical goods received from same exporter in previous consignments. Mandatory penalty under Section 114A was rightly imposed as the importer had clearly admitted the undervaluation and undervalue declaration - The demand of differential customs duty and penalty under Section 114A are upheld and appeals are allowed - Admissibility of documents obtained from foreign customs authorities under Section 139 of the Customs Act - In investigation, department obtained documents from Consulate of Hong Kong Customs with respect to four consignments through proper overseas enquiry channel and comparative chart prepared by Indian Customs in English translation. Respondent importer objected to these documents on ground that they were in alien language, did not bear seal or signature of Hong Kong customs officials and were not obtained through proper channel - Whether documents obtained from foreign customs authorities are admissible under Section 139 of the Customs Act - HELD - Documents obtained from Chinese Customs are covered under sub-clause (ii) of Section 139 as they were received from any place outside India in course of investigation through proper channel from competent authorities. The presumption of correctness is attached to documents under Section 139(ii) except when contrary is proved. Nothing on record proves the contrary except oral claim of importer. The said documents have been duly stamped by Indian Customs and chart prepared in English translation. The section nowhere mandates that document under that section shall only be in original. Department has sufficiently proved that documents were obtained through proper channel from competent authorities. Irrespective that documents are photo copies of declaration made before Chinese customs, Section 139 of the Customs Act has rightly been invoked by original adjudicating authority - Presumption of correctness attached to documents is upheld and appeals are allowed. [Read less]

2026-VIL-980-DEL-CU | High Court CUSTOMS

Customs - Judicial Review of Settlement Commission Order - Challenge to Show Cause Notice on Ground of Limitation after Settlement - Petitioner filed application before Settlement Commission for settlement of proceedings arising from Show Cause Notice demanding duty along with interest. Instead of pursuing statutory appellate remedy against adjudication order petitioner consciously elected to invoke jurisdiction of Settlement Commission. Settlement Commission passed order determining duty liability at reduced amount - Settlement Commission directed jurisdictional Commissioner to verify and quantify interest liability and intimate Petitioner if further amount was payable. Subsequently, interest was quantified at higher amount. Petitioner challenged order of Settlement Commission seeking to set aside interest direction from remaining part of order and challenged validity of Show Cause Notice on ground of limitation – HELD - The scope of judicial review over orders of Settlement Commission is narrow and restricted to grounds such as contravention of statutory provisions, prejudice, fraud, bias or malice. Sufficiency of material placed before Settlement Commission and conclusions drawn therefrom ordinarily fall outside scope of judicial review - Once Petitioner consciously invoked jurisdiction of Settlement Commission and had settlement order passed, they cannot thereafter reopen validity of underlying Show Cause Notice by challenging it on ground of limitation. Petitioner cannot isolate direction regarding interest computation and under guise of challenging interest determination reopen validity of Show Cause Notice. Liability to pay interest is statutory consequence of liability to pay duty and does not stand extinguished merely because quantum of duty is settled – The mere fact that interest ultimately quantified is higher than amount initially computed by Petitioner cannot constitute ground for interference with Settlement Commission's order. Petitioner's challenge to Show Cause Notice on ground of limitation cannot be permitted to be indirectly raised by isolating direction relating to interest from settlement order as whole. Writ petition was dismissed as no ground existed to interfere with the order passed by the Settlement Commission [Read less]

2026-VIL-1542-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Exemption for renting of immovable property to educational institution under clause 9(b) of Mega Exemption Notification No. 25/2012-ST - Appellant let out immovable property under lease deed dated 01.05.2004 to Ritnand Balved Education Foundation, a registered society engaged in providing educational services. Department issued Show Cause Notice for recovery of service tax amounting to Rs. 2,15,769/- along with interest and penalties under Sections 70 and 78 of Finance Act for the period 2012-13 on the ground that appellant did not file service tax returns and was liable to pay service tax for rendering service of renting immovable property. Appellant claimed exemption under clause 9(b) of the notification which provides exemption for services provided to or by an educational institution in the form of renting of immovable property - Whether the service of renting immovable property to Ritnand Balved Education Foundation qualifies for exemption under clause 9(b) - HELD - The bare perusal of the lease deed reveals that education is not the only purpose for the leased premises. The premises were taken on rent for various other purposes including commercial use as well as hostel for the students. The lease deed nowhere defines the lessee/tenant to be an educational institute. The document is silent about the nature of activities being carried out. Ritnand Balved Education Foundation is not proven to be an educational institute. The certificate issued by Amity University is dated 27.07.2020 whereas the impugned order is dated 16.06.2020 hence the document cannot be relied upon at this stage. The anus of claiming eligibility under exemption notification rests upon the assessee. Exemption notifications are required to be interpreted strictly. Since the lessee/tenant is not proven to be an educational institute the exemption does not apply. The benefit has to be given strictly when the rented premises are used by the educational institute. Appellant has failed to discharge the said burden. Hence the denial of exemption is justified and demand for service tax is confirmed - The appeal is partly allowed - Applicability of extended period of limitation under Section 73 read with Section 75 of Finance Act - Appellant claimed that extended period of limitation is not invoable as the appellant was under bona fide belief of applicability of exemption under the Mega Exemption Notification and interpretational reason for non-payment of tax should not attract extended period of limitation - Whether extended period of limitation is rightly invoked when appellant did not file service tax returns despite liability - HELD - It is a settled law that it is not merely the non-payment of service tax but a positive act on part of the assessee as may prove the intention or mens ria of the assessee to evade the payment of tax which is relevant for invoking the extended period of limitation. The appellant was not filing service tax returns despite having liability to pay service tax. This amounts to suppression of facts to evade the payment of tax. The plea that the society was under bona fide belief of eligibility of exemption under Mega Exemption Notification and due to interpretational reason the tax was not paid is not acceptable as the appellant has already failed to prove itself to be an educational institute and the premises did not remain used for education purposes only. The extended period of limitation has rightly been invoked while issuing the Show Cause Notice. However the normal period has to reckon from the last date of filing of service tax return and partial demand in the question beyond five years hence is hereby set aside. Demand for the remaining period including normal period is hereby confirmed. The penalty also is proportionately reduced. [Read less]

2026-VIL-977-DEL-CE | High Court CENTRAL EXCISE

Central Excise - Scope of Judicial Review of Settlement Commission Orders - Sufficiency of Evidence - The Petitioner approached the Settlement Commission for adjustment of CENVAT credit reversal in respect of its manufacturing activities during 2005. The Settlement Commission rejected the claim for adjustment on the ground that the documentary evidence furnished by the petitioner was insufficient to establish the reversal - Whether the High Court could interfere with the Settlement Commission's order on grounds of sufficiency and adequacy of evidence placed before it – HELD - The jurisdiction of the High Court under Arti... [Read more]

2026-VIL-1529-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Joint Venture operations – Demand under Manpower supply and Business Support Services - Scope of taxable service - Appellant as designated Operator for three petroleum exploration blocks allotted under NELP entered into Joint Operating Agreements with co-venturers and raised cash calls upon JV partners towards manpower and BSS rendered by appellant as Operator – Respondent-Dept alleged that gross amounts recovered by appellant from respective JVs towards manpower and business support services constitute consideration for taxable services rendered by appellant and are exigible to Service Tax - Whether cash calls raised by operator of joint venture on its co-venturers for allocation of manpower costs and office expenses constitute consideration for taxable services - HELD - Contributions made by co-venturers towards execution of common venture do not constitute taxable consideration for services rendered inter se between Joint Venture and its constituents - In a joint venture the arrangement amongst parties is contractual for undertaking common enterprise for profit with joint control over strategic financial and operative decisions. Whatever a partner does for furtherance of business of partnership he does so only for advancing his own interest as he has a stake in success of venture. There is neither intention to render a service to other partners nor is there any consideration fixed as quid pro quo for any particular service - A contractor-contractee or principal-agent relationship which is an essential element of any taxable service is absent in relationship amongst co-venturers or between co-venturers and joint venture. The element of consideration which is necessary ingredient of any taxable service is absent in such arrangement - The activities undertaken by appellant as designated Operator do not constitute taxable service within meaning of Finance Act 1994. They merely represent discharge of contractual obligations undertaken by co-venturer in furtherance of common enterprise and allocation of resultant expenditure amongst participating members in accordance with their agreed participating interests – Further, extended period of limitation under proviso to Section 73(1) of Finance Act 1994 was invoked in purely mechanical manner without establishing indispensable statutory ingredients of fraud collusion willful misstatement or suppression of facts with intent to evade payment of Service Tax – The impugned demand of service tax together with interest thereon are set aside – The appeal is allowed [Read less]

2026-VIL-975-CAL | High Court SGST

GST - Interest and penalty on returns filed after due date, Maintainability of writ petition - Claim for refund of over-deposited taxes - Petitioner filed returns for financial year 2017-18 at the rate of 18 per cent instead of statutory rate of 12 per cent and subsequently issued credit notes to correct the inadvertent error in March 2018 - Despite the full discharge of tax liability by the petitioner and correction through credit notes, respondent authorities issued Show Cause Notice for alleged delayed filing of returns and imposed interest under Section 50 of CGST Act - Whether interest is sustainable when there is no ... [Read more]

2026-VIL-1543-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Taxability of services as Goods Transport Agency Services - Whether services are classifiable as GTA Services where service provider issued bills instead of consignment notes - Appellant provided clearing and forwarding agent services and GTA services and charged Service Tax from service receivers for clearing and forwarding agent services and deposited to revenue. For GTA services, appellant was under bona fide belief that services come under reverse charge and therefore neither charged Service Tax nor deposited to revenue. On basis of third-party data from Income Tax Department showing difference between receipts and ST-3 values, department issued Show Cause Notices proposing demand of Service Tax. Department denied classification as GTA services on ground that appellant had issued bills instead of consignment notes. Appellant contended that bills issued contained essential particulars of consignment note and acknowledged transportation of goods. Service recipients issued certificates categorically certifying they received GTA services from appellant and discharged applicable Service Tax under Reverse Charge Mechanism - HELD - Section 65(50b) of Finance Act 1994 defines Goods Transport Agency as any person who provides service in relation to transport of goods by road and issues a consignment note by whatever name called. The statute does not prescribe any particular format or nomenclature for a consignment note. The expression by whatever name called makes it abundantly clear that the document issued by service provider need not necessarily be titled as consignment note. What is material is the substance and contents of the document evidencing the transportation of goods. Bills issued by appellant contain essential particulars of consignment note and acknowledge transportation of goods. Service recipients issued certificates categorically certifying they received GTA services from appellant and discharged applicable Service Tax under Reverse Charge Mechanism. These certificates constitute cogent and reliable evidence establishing that appellant provided GTA services during relevant period. Certificate given for GTA on letterhead is sufficient and certificate on each consignment note is not required. The denial of benefit merely on ground that appellant issued bills instead of documents titled as consignment notes is unsustainable - Appeals are allowed and demands are set aside - Limitation for demand - Applicability of extended period of limitation based on Form-26AS data from Income Tax Department - Appellant regularly filed ST-3 returns on time and was under bona fide belief that GTA services come under reverse charge. Department issued first Show Cause Notice dated 24.10.2019 for period April 2014 to March 2015 based on third-party data received from Income Tax Department through data sharing protocol showing difference between receipts as per Form-26AS and values shown in ST-3 returns. Subsequently department issued another Show Cause Notice dated 06.07.2021 for period April 2015 to June 2017 invoking extended period of limitation alleging suppression of facts. Appellant contended that Form-26AS is not a statutory document for determining taxable turnover for service tax and that subsequent SCN invoking extended period is not sustainable as all facts were already in knowledge of department when first SCN was issued - HELD - Form-26AS maintained by Income Tax Department is not a statutory document for determining taxable turnover for service tax purposes. The entire basis of Form-26AS and service tax payment are different. The impugned order confirming service tax demand on basis of payment released by service recipients is bad in law and not sustainable. Appellant was regularly filing ST-3 returns and SCNs were issued consecutively for years 2015-16, 2016-17 and 2017-18. All necessary information was available to department based on which first SCN was issued. Subsequent SCN invoking extended period of limitation alleging suppression of facts is not sustainable. Supreme Court, High Courts and Tribunal have held that allegation of suppression of facts cannot be sustained if all relevant facts were in knowledge of department. Appellant was regularly filing ST-3 returns and therefore while issuing second SCN, same/similar facts could not be taken as suppression of facts as these facts were already in knowledge of authority. The impugned orders are set aside and appeals are allowed with consequential relief. [Read less]

2026-VIL-986-TEL-CU | High Court CUSTOMS

Customs – Target Plus Scheme – Requirement of nexus between goods imported and goods exported – Appellant exported iron ore fines and other minerals and obtained duty credit certificates for import of continuous cast copper rods – Department contended that copper rods had no nexus with minerals exported and benefit of Notification No. 32/2005-Cus could not be claimed – Appellant contended that broad nexus as contemplated in paragraph 3.2.5 of Handbook of Procedures was sufficient and that ambiguity in policy provisions had been interpreted in favour of exporters – Whether strict one-to-one nexus between importe... [Read more]

2026-VIL-982-TEL | High Court VAT

Central Sales Tax Act, 1956 - Classification of Stock Transfers as Inter-State Sales - Vehicles manufactured at factory in Andhra Pradesh were transferred to regional sales offices in other States. Appellant claimed exemption under Section 6A of CST Act, 1956 on ground that these were branch stock transfers. Tax authority disallowed exemption and treated them as inter-state sales under Section 3(a) of CST Act, 1956 - Whether stock transfers of vehicles from manufacturing unit to regional sales offices qualify for exemption under Section 6A of CST Act or constitute inter-state sales under Section 3(a) of CST Act, 1956 – HELD - The appellant's characterization of impugned transactions as branch stock transfers simpliciter is not acceptable. The function and effect of the APO document which originates in dealer-level demand is aggregated at central planning stage and directly triggers manufacture and despatch of vehicles to branch from which demand emanated is indistinguishable from an indent or purchase order. Data gathered at audit establishes concrete material that dealers placed firm orders on branches accompanied by advance payments before vehicles were despatched. The transactions bear all essential incidents of a pre-existing contract of sale occasioning inter-state movement of goods – The Form F declarations do not immunize transactions where material establishes that movement was occasioned by pre-existing contract of sale. The presumption raised by Form F is rebuttable and stands rebutted here by appellant's own admitted business practice read together with evidence gathered at stage of audit regarding advance orders and payments at branch level - The denial of exemption is sustainable both for non-compliance with statutory requirements and on independent ground that transactions satisfy ingredients of Section 3(a) CST Act - The impugned order is upheld. Transactions constitute inter-state sales and are exigible to tax – The writ petition is dismissed [Read less]

2026-VIL-992-TEL | High Court SGST

GST – Appeal period under Section 107(1) and (4) of CGST Act, 2017 – Computation of period of limitation from date of order-in-original – Delay in uploading Form GST DRC-07 – Appellant preferred appeal on 30.03.2024 against order-in-original dated 30.10.2023 relating to tax period 2018-19. Form GST DRC-07 was uploaded on 11.03.2024 - Appellate authority rejected appeal as time barred reckoning period from date of order-in-original, treating appeal as being beyond condonable period of one month over three months period prescribed under Section 107(1) and (4) – Whether appeal period is computed from date of order-i... [Read more]

2026-VIL-981-TEL-ST | High Court SERVICE TAX

Service Tax – Authority of the Tribunal to constitute Larger Bench on conflicting High Court judgments - CESTAT observed conflicting views rendered by two different High Courts on interpretation of Section 142(3) of CGST Act, 2017. One judgment from jurisdictional High Court and another from another High Court on same issue. CESTAT directed constitution of Larger Bench to decide questions regarding refund of CENVAT credit in cash and doctrine of vested rights - Whether Tribunal can constitute a Larger Bench to examine conflicting High Court judgments and determine which judgment should be followed – HELD - Tribunal was... [Read more]

2026-VIL-976-TEL-ST | High Court SERVICE TAX

Service Tax - Maintainability of Appeal under Section 35G of Central Excise Act - Classification of Taxable Services - Revenue preferred an appeal under Section 35G of the Central Excise Act against the CESTAT's order which had allowed the Respondent's appeal and set aside the demand on the ground that the services rendered were not taxable under Section 65(105) of the Finance Act - Whether an appeal involving determination of classification of services falls within the prohibition against appeals on grounds of rate of duty or value of goods under Section 35G(1) of the Central Excise Act – HELD - The questions relating t... [Read more]

2026-VIL-978-TEL | High Court VAT

Andhra Pradesh General Sales Tax Rules, 1957 - Applicability of Rule 6(3)(i) to Works Contracts spread beyond One Year - Petitioner executed three different works contracts, two of which extended beyond one year. Department assessed the value of goods purchased considering Rule 6(3)(ii) instead of Rule 6(3)(i) applicable for works spread beyond one year - Whether in respect of contracts spread over a period of more than one year, the provision of Rule 6(3)(i) of the APGST Rules, 1957 would be applicable – HELD - The Rule 6(3)(i) merely provides another method of determining the turnover liable to tax for works spread beyond one year, based on the value of goods purchased and supplied or used in the execution of the works contract in that year, instead of the method prescribed in Rule 6(2) of arriving at turnover by deducting certain items of expenditure from gross receipts - The value of goods under Rule 6(3)(i) includes not only the cost of acquisition of goods but also transportation charges to deliver the goods to the situs of the works, cost of establishment relatable to supply of material, other charges incurred till incorporation in the works and profits relatable to the value of goods. The profit element may be estimated considering factors like profits ordinarily made by other contractors in similar works, profits earned by the contractor in previous years and profit percentage norms accepted in the industry - The deemed turnover under Rule 6(3)(i) would exclude profits on labour component and actual cost of incorporation in the works - The issue involved in the present writ petitions is covered by Full Bench decision of High Court of Andhra Pradesh in the case of State of Andhra Pradesh v. Seven Hills Constructions - The impugned order is set aside and the matter is remanded for fresh computation taking into consideration the provision of Rule 6(3)(i) after verifying whether the works executed by the petitioner actually spread over beyond one year – The writ petition is allowed [Read less]

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2026-VIL-1543-CESTAT-ALH-ST | CESTAT SERVICE TAX

2026-VIL-986-TEL-CU | High Court CUSTOMS

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