More Judgements

High Court Judgement  | High Court SGST

The mere fact that the supplier has remitted tax would not by that alone create a credit in the Electronic Credit Ledger. Whether it be the Electronic Credit Ledger or Electronic Cash Ledger, interest is payable on delay in payment of tax.

2024-VIL-390-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax - Short payment of service tax - Payment of tax prior to the issue of show cause notice – Appellant case since the was paid by it prior to the issue of show cause notice, as per section 73 (3) of Finance Act, 1994 the department should not have served any notice for the said amount – HELD - it is the job of the assessee to self-assess tax and file returns as required. It is the job of the officer to scrutinize them to ensure that the service tax has been correctly assessed and paid - since the returns are filed online, it is not possible for the assessee to provide any details other than what is required in... [Read more]

Service Tax - Short payment of service tax - Payment of tax prior to the issue of show cause notice – Appellant case since the was paid by it prior to the issue of show cause notice, as per section 73 (3) of Finance Act, 1994 the department should not have served any notice for the said amount – HELD - it is the job of the assessee to self-assess tax and file returns as required. It is the job of the officer to scrutinize them to ensure that the service tax has been correctly assessed and paid - since the returns are filed online, it is not possible for the assessee to provide any details other than what is required in the ST-3 returns. The central excise officer may seek any details, which he feels necessary to scrutinize them. The appellant cannot be faulted for not providing any information which it was not required to provide in the ST-3 returns - The central excise officer is given sufficient time to scrutinize the returns and issue a demand under section 73 within the normal period of limitation. If he fails to do so, and if some short payment is not detected and the demand gets time barred, the responsibility for that rests squarely on the officer who is mandated to scrutinize the returns and not on the assessee – the ingredients for invoking extended period of limitation need to be established and they cannot be presumed - the Commissioner has erred in issuing a show cause notice covering the amount which was already paid with interest prior to the issue of SCN. This payment is squarely covered by section 73(3) of the Finance Act and it is not excluded by virtue of section 73(4). The demand to this extent is set aside - For the same reason the imposition of penalty under section 78 on the assessee is also set aside - assessee’s appeal is allowed and the Revenue’s appeal is dismissed - Revenue appeal against dropping of demand under rule 6(3) of CCR, 2004 on the ground that the amount of CENVAT credit in terms of rule 6(3) of the Rules was already reversed but due to appellant mistake it was not shown properly in the corresponding ST-3 returns – HELD - the Commissioner examined the returns and the CA certificates and came to the conclusion that the amount under rule 6(3) was correctly reversed - If the Revenue feels that the Commissioner committed an error, it should point out as to where the error lies. It cannot be based on mere conjectures - the Revenue’s appeal is without any merit and it deserves to be dismissed [Read less]

2024-VIL-382-CESTAT-KOL-ST  | CESTAT SERVICE TAX

Service Tax – Payment towards Technology Transfer Agreement - Demand under Reverse Charge Mechanism towards expenses incurred in foreign currency on account of Licence Fee, Documentation charges and Foreign Technician Fees - Whether the Appellant is liable to pay service tax on the license fees and other incidental expenses paid to overseas company towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines under the category of Intellectual Property Services – HELD – the Ld. Commissioner has relied upon the stay order to confirm the demand. However, it would be inappropriate ... [Read more]

Service Tax – Payment towards Technology Transfer Agreement - Demand under Reverse Charge Mechanism towards expenses incurred in foreign currency on account of Licence Fee, Documentation charges and Foreign Technician Fees - Whether the Appellant is liable to pay service tax on the license fees and other incidental expenses paid to overseas company towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines under the category of Intellectual Property Services – HELD – the Ld. Commissioner has relied upon the stay order to confirm the demand. However, it would be inappropriate to rely on a stay order as it is merely an interim order and cannot be taken as laying down any enunciation in law and is bereft of any precedent value - technical knowhow provided by a foreign company to an Indian company under a licence for consideration of Royalty equal to a percentage of net sale price of the goods, was nowhere registered or patented in India as an IPR service and therefore, the recipient of such service was not liable to pay Service Tax under RCM as IPR service - the transfer of technology by foreign company to the appellant would not qualify as “intellectual property right” within the meaning of Section 65(55a) of the Finance Act, 1994 and therefore, would not be covered under the definition of “intellectual property service” within the scope of Section 65(55b) of the Act - the impugned order is set and the appeal is allowed - Repair of MIG Engines - Service tax demand on amount received from the Malaysian company against repair of MIG Engines – HELD – appellant has characterized this service of repairs / rectifications provided by them as Export of Service not liable to tax - It is undisputed that the activity of repairs and maintenance was carried out within the jurisdiction of India and therefore was liable for tax under Section 65(105)(zzg) as “management, maintenance or repair” service and was liable for payment of duty in terms of Rule 3(1)(ii) of the Export of Services Rules, 2005 - The Ld. Commissioner vide the impugned order has categorically held that the provision of service having took place in India, there is a breach of Rule 6A of the Service Tax Rules, 1994 and Rule 3(1)(ii) of the Export of Services Rules, 2005. To this extent, agree with the findings of the Ld. Commissioner on the aspect. However, demand for the extended period cannot be sustained as there is nothing on record to establish mala-fides on the part of the appellant - Extended period of limitation – HELD - In view of the fact that the appellant is a public sector company completely under the control of the Ministry of Defence and owned by the Government of India, it is rather unacceptable and quite improper to assume intent to evade payment of duty on the part of the organization – Not in agreement with the findings of the Ld. Commissioner that the appellant had deliberately suppressed material information, wrongly classifying as ‘Export of Service’ with intent to evade duty – No merit to impute the charge of suppression to a government organization owned by the Ministry of Defence, for the non-payment of duty / tax with intent to evade the same by suppressing the material information, more so when it is depicted inappropriately and construed accordingly - the demand for the extended period cannot be sustained [Read less]

2024-VIL-358-BOM  | High Court SGST

GST - Section 89 – Liability of Directors of Private Company - Resignation as Director of the Company – Recovery proceedings against former Director of the Company – Validity of attachment of immovable property and current account of former Director for recovery of due of Company – HELD – Recovery sought to be made under the impugned order dated 27th November 2020 is for the period 1st April 2018 to 31st March 2019. However, from March 2018, the petitioner had not taken any active part in the day-to-day affairs of the company. Thus, for the period in question, the petitioner never acted as a director of the compa... [Read more]

GST - Section 89 – Liability of Directors of Private Company - Resignation as Director of the Company – Recovery proceedings against former Director of the Company – Validity of attachment of immovable property and current account of former Director for recovery of due of Company – HELD – Recovery sought to be made under the impugned order dated 27th November 2020 is for the period 1st April 2018 to 31st March 2019. However, from March 2018, the petitioner had not taken any active part in the day-to-day affairs of the company. Thus, for the period in question, the petitioner never acted as a director of the company - All such factual issues were required to be verified before the impugned attachment orders were passed by the designated officer, by issuing a show cause notice to the petitioner but such exercise was undertaken. Petitioner was neither issued a show cause notice nor was he heard, before such orders were passed – Further, the principal liability is not on the “petitioner” who is not a registered person within the meaning of Section 79(1) of the MGST Act, 2017. Further Section 89 of the Act clearly provides that before taking any action of recovery against the directors of the company, a subjective satisfaction is required to be achieved by the concerned officer in regard to whether a person concerned against whom recovery is sought to be made was a director of a Private Limited Company for the concerned period. It is only after such satisfaction to the effect that such person was the director of the company, the liability could be fastened against such director - as to on what basis the respondents have proceeded to make the attachment of the petitioner’s property, is not known. No reasons are attributed whatsoever except for the impugned order - the impugned order is in breach of the rights guaranteed to the petitioner under Art. 14, read with Art. 300A, of the Constitution - the impugned order is set aside and the writ petition is allowed [Read less]

2024-VIL-389-CESTAT-KOL-CE  | CESTAT CENTRAL EXCISE

Central Excise - Refund of pre-deposit - Abatement of proceedings - Rule 22 of the CESTAT (Procedure) Rules, 1982 - Initiation of insolvency proceedings under the provisions of the Insolvency and Bankruptcy Code, 2016 during pendency of appeal – approval of Resolution Plan by NCLT – Whether the present appeals abate and the Tribunal, having become functus officio, would thus not be in a position to give any directions in the matter or any further direction to be issued with regard to deposits made by the erstwhile appellants under Section 35F of the Central Excise Act, 1944 – Appellant of the view that in the present... [Read more]

Central Excise - Refund of pre-deposit - Abatement of proceedings - Rule 22 of the CESTAT (Procedure) Rules, 1982 - Initiation of insolvency proceedings under the provisions of the Insolvency and Bankruptcy Code, 2016 during pendency of appeal – approval of Resolution Plan by NCLT – Whether the present appeals abate and the Tribunal, having become functus officio, would thus not be in a position to give any directions in the matter or any further direction to be issued with regard to deposits made by the erstwhile appellants under Section 35F of the Central Excise Act, 1944 – Appellant of the view that in the present case, liquidation process had not been resorted to and it is not a case of winding up of the existing company and therefore, Rule 22 of the CESTAT (Procedure) Rules, 1982 has no application - Difference between ‘liquidation’ and ‘winding up’ - HELD - once the CIRP process is set out, all pending disputes are given a go-by and what occupies the centre stage is the moratorium declaration and its public announcement. Further, the moment the Resolution Plan is approved in terms of Section 31 of the Code or a moratorium is issued in terms of Section 14 of the Code, the said provisions of the code become applicable statutorily - in the context of Rule 22, the terms ‘liquidation’ and ‘winding up’ have been used rather loosely, though resulting in the same implied consequence - to hair-split the argument that Rule 22 cannot be applied to the fact of the case as it deals with winding up of the company, is not made out - ‘winding up’ is the process of settling of accounts and liquidating assets in anticipation of the dissolution of a corporation whereas ‘liquidation’ can be construed as the process of ascertaining the liabilities and distribution of the assets particularly in bankruptcy or dissolution. In other words, liquidation is largely a process of winding up - whether pre-deposit is in the nature of a security deposit or otherwise, does not arise for consideration in the present matter in view of the fact that the Tribunal being a creature of the statute, is bound by the provisions of the statute and the appeals abating under the given circumstances renders the Tribunal as functus officio - The order of abatement cannot be construed to mean that the issue involved has been decided in favour of the appellant. The question of refund of pre-deposit is a natural corollary to the successful outcome of the appeal, to situations concerning insolvency proceedings, no such order can be passed by the Tribunal in view of the existing provisions in law - Having in depth analysed the legal position and case-laws in extenso, with reference to Rule 22 and Rule 41 of the CESTAT (Procedure) Rules, 1982, the observations of the Hon’ble Apex Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., the SOP prescribed by the CBIC dated 23.05.2022 and the Resolution Plan as approved by the NCLT, the present appeals abate. With the abatement of the appeals, the Tribunal is rendered functus officio in matters relating to these appeals - Moreover, the impugned Orders-in-Original get merged with the order of the NCLT, approving the Resolution Plan - the present appeals abate with effect from the date of approval of the Resolution Plan by the NCLT – Ordered accordingly [Read less]

2024-VIL-62-AAR  | Advance Ruling Authority SGST

GST – Gujarat AAR - Liability of SEZ unit to discharge GST under RCM on specified services availed from DTA – applicant availed GTA, legal services from advocate, security services, bus hire services from DTA - Whether the applicant being an SEZ unit is required to pay tax under reverse charge mechanism on specified services in accordance with Notification No. 10/2017-IT(Rate) dated 28.6.2017, as amended – HELD - the intention of the Legislature is not to tax supplies to a unit in SEZ or a SEZ Developer - The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notific... [Read more]

GST – Gujarat AAR - Liability of SEZ unit to discharge GST under RCM on specified services availed from DTA – applicant availed GTA, legal services from advocate, security services, bus hire services from DTA - Whether the applicant being an SEZ unit is required to pay tax under reverse charge mechanism on specified services in accordance with Notification No. 10/2017-IT(Rate) dated 28.6.2017, as amended – HELD - the intention of the Legislature is not to tax supplies to a unit in SEZ or a SEZ Developer - The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notification No. 10/2017-IT(Rate) dated 28.6.2017 as amended, subject to furnishing a LUT or bond as specified in condition (i) of para 1 of notification No. 37/2017-CT – Ordered accordingly [Read less]

2024-VIL-60-AAR  | Advance Ruling Authority SGST

GST – Gujarat AAR - Liability of SEZ unit to discharge GST under RCM on specified services availed from DTA – applicant availed GTA, legal services from advocate, security services, bus hire services from DTA - Whether the applicant being an SEZ unit is required to pay tax under reverse charge mechanism on specified services in accordance with Notification No. 10/2017-IT(Rate) dated 28.6.2017, as amended – HELD - the intention of the Legislature is not to tax supplies to a unit in SEZ or a SEZ Developer - The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notific... [Read more]

GST – Gujarat AAR - Liability of SEZ unit to discharge GST under RCM on specified services availed from DTA – applicant availed GTA, legal services from advocate, security services, bus hire services from DTA - Whether the applicant being an SEZ unit is required to pay tax under reverse charge mechanism on specified services in accordance with Notification No. 10/2017-IT(Rate) dated 28.6.2017, as amended – HELD - the intention of the Legislature is not to tax supplies to a unit in SEZ or a SEZ Developer - The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notification No. 10/2017-IT(Rate) dated 28.6.2017 as amended, subject to furnishing a LUT or bond as specified in condition (i) of para 1 of notification No. 37/2017-CT – Ordered accordingly [Read less]

2024-VIL-63-AAR  | Advance Ruling Authority SGST

GST – Gujarat AAR – Manufacture of not - Classification of activity of insulating of bare M.S. Pipes provided by the customers on job work basis – Whether the activity of insulating of bare M.S. Pipes provided by the customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant would be classifiable under clause (iv) of Sr. No. 26 or under Sr. No. 27 of notification No. 11/2017-CT (Rate) dated 28.6.2017 - applicant case that the services provided by them are amounting to manufacture but not covered by Sr. No. 26 [heading 9988] of the Notification No. 11/2017-CT (Rate) dated 28.6.2017 bu... [Read more]

GST – Gujarat AAR – Manufacture of not - Classification of activity of insulating of bare M.S. Pipes provided by the customers on job work basis – Whether the activity of insulating of bare M.S. Pipes provided by the customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant would be classifiable under clause (iv) of Sr. No. 26 or under Sr. No. 27 of notification No. 11/2017-CT (Rate) dated 28.6.2017 - applicant case that the services provided by them are amounting to manufacture but not covered by Sr. No. 26 [heading 9988] of the Notification No. 11/2017-CT (Rate) dated 28.6.2017 but same is covered under Sr. No. 27 [heading 9989] and is chargeable to 18% GST – HELD – The chapter note 5 was added to chapter 73 [Articles of Iron or Steel], of the Central Excise Tariff Act, 1985, w.e.f. 14.5.2023 to read “5. In relation to the pipes & tubes of headings 7304, 7305 and 7306, the process of coating with cement or polyethylene or other plastic materials shall amount to ‘manufacture’” - However, this chapter note does not find a mention in the Customs Tariff Act, 1975, which is adopted for classification under GST, in terms of explanation (iii) of notification No. 1/2017-CT (Rate) dated 28.6.2017. Hence, the claim of the applicant that the activity performed, amounts to manufacture, is not tenable and therefore, rejected - The activity of insulating of bare M.S. Pipes provided by the registered customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant would be classifiable under clause (id) of Sr. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.6.2017 under the heading 9988. Further, it would be classifiable under clause (iv) of Sr. No. 26 of notification No. 11/2017-CT (Rate) dated 28.6.2017 in respect of similar service provided on goods belonging to unregistered persons – Ordered accordingly [Read less]

2024-VIL-355-MAD  | High Court SGST

GST - Levy of GST on total trade receivable by treating total trade receivables on pan-India basis as the taxable turnover – Levy of 36% tax on total turnover in the financial statement – HELD - In the impugned orders, the fourth issue dealt with the total trade receivables of the corporate entity was drawn from the financial statement of such corporate entity. Upon consideration of the reply on this issue, further proceedings were dropped. However, the same sum was treated as a taxable turnover under the fifth issue pertaining to sundry creditors and tax liability was imposed on such amount - Given that the issue rela... [Read more]

GST - Levy of GST on total trade receivable by treating total trade receivables on pan-India basis as the taxable turnover – Levy of 36% tax on total turnover in the financial statement – HELD - In the impugned orders, the fourth issue dealt with the total trade receivables of the corporate entity was drawn from the financial statement of such corporate entity. Upon consideration of the reply on this issue, further proceedings were dropped. However, the same sum was treated as a taxable turnover under the fifth issue pertaining to sundry creditors and tax liability was imposed on such amount - Given that the issue relating to sundry creditors pertains to alleged non-payment by the petitioner for supplies received, the imposition of tax liability on the total value of trade receivables flies in the face of reason. Even assuming that dues to sundry creditors were not discharged, only the trade payables and not receivables should have been taken into account - On the issue of 'Income received', the total income was taken from the financial statement and tax appears to have been imposed on such turnover at 36%. The petitioner has placed on record the reconciliation statement in GSTR-9C to contend that the annual turnover under the relevant registration was much less - the impugned order confirms the tax demand solely on the ground that the trial balance for Tamil Nadu was not provided - the impugned order is set aside insofar as it pertains to the issues relating to sundry creditors and income received and matter remanded for reconsideration by the respondent – writ petition is disposed of [Read less]

2024-VIL-61-AAR  | Advance Ruling Authority SGST

GST – Karnataka AAR - Section 2(17) of the IGST Act 2017 - Online information and database access or retrieval (OIDAR) services – Scope of phrase “supply of online educational journals or periodicals” - Supply of subscription of online subscription based clinical database services (Clinical Key services) to M/s All India Institute of Medical Sciences (AIIMS) - Whether the supply of services of subscription of Clinical Key to AIIMS is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 – HELD – the supply of subscription-based services via ‘Clinical Key’ is co... [Read more]

GST – Karnataka AAR - Section 2(17) of the IGST Act 2017 - Online information and database access or retrieval (OIDAR) services – Scope of phrase “supply of online educational journals or periodicals” - Supply of subscription of online subscription based clinical database services (Clinical Key services) to M/s All India Institute of Medical Sciences (AIIMS) - Whether the supply of services of subscription of Clinical Key to AIIMS is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 – HELD – the supply of subscription-based services via ‘Clinical Key’ is covered under OIDAR services - applicant provides online access and retrieval services to a systematically organized clinical / medical database with one of the constituents of database being journals or periodicals. One constituent part of database alone cannot define the whole. Given the composite nature of contract and supply involving several constituents, the supply by the applicant does not qualify as ‘supply of online educational journals or periodicals’ - Exemption under Entry No. 69(b)(v) of the Notification No. 9/2017-IT(Rate) dtd 28.6.2017 is very specific to ‘supply of online educational journals or periodicals’ and not to entire gamut of OIDAR services, which is a composite supply of service, provided to educational institutions - supply of services by the applicant to AIIMS is not covered under exemption in terms of Entry No. 69(b)(v) of the Notification No. 9/2017-IT(Rate) dtd 28.6.2017 as amended – Ordered accordingly - Section 2(11) & 2(16) of IGST Act, 2017 - Whether it is the Applicant or the AIIMS needs to discharge the GST liability (i) for the period up to 30 September 2023 and (ii) for the period after 01 October 2023 – HELD - AIIMS, being a person located in the taxable territory other than non-taxable online recipient, is liable to discharge GST on OIDAR services for the period upto 30.09.2023, in terms of Sl.No.1 of Notification 10/2017-Integrated Tax (Rate) dated 28.06.2017 - For the period w.e.f 1.10.2023, any unregistered person receiving OIDAR services, located in taxable territory is considered as ‘Non-taxable Online Recipient’ (NTOR). It is an admitted fact in that AIIMS has obtained GST Registration, hence AIIMS being a GST registered recipient of OIDAR services, is liable to discharge GST liability from 1.10.2023 - Applicant is not liable to discharge the GST liability in respect of supply of services by the applicant to AIIMS through subscription of Clinical Key for both the periods i.e, for the period upto 30th September 2023 and for the period after 01 October 2023. The recipient of service, being the importer of service, is liable to discharge GST liability for both the periods - Whether the supply of services of subscription of Clinical Key to other educational institutions is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 – HELD - the exemption under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 is applicable only on ‘supply of online educational journals or periodicals’, whereas the applicant providing services of subscription of Clinical key are providing services by way of online access and retrieval services to a systematically organized clinical / medical database - The supply of services (subscription of Clinical Key) to other educational institutions is not exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017 [Read less]

2024-VIL-59-AAR  | Advance Ruling Authority SGST

GST – Karnataka AAR – Pure Service - Taxability of supply of Teachers and Lecturers to Municipal schools on outsourcing basis – Eligibility to exemption under entry no.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - the impugned services of supply of teachers/lecturers is provided by way of an activity in relation to the function of promotion of educational aspects entrusted to the Municipality (BBMP) under Article 243W of the Constitution - The service of supply of teachers/ lecturers to schools/ colleges run by BBMP, on outsource basis is covered under pure services being provided to a... [Read more]

GST – Karnataka AAR – Pure Service - Taxability of supply of Teachers and Lecturers to Municipal schools on outsourcing basis – Eligibility to exemption under entry no.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - the impugned services of supply of teachers/lecturers is provided by way of an activity in relation to the function of promotion of educational aspects entrusted to the Municipality (BBMP) under Article 243W of the Constitution - The service of supply of teachers/ lecturers to schools/ colleges run by BBMP, on outsource basis is covered under pure services being provided to a local authority by way of an activity in relation to a function “Promoting educational aspects” entrusted to a Municipality under Article 243W of the Constitution of India and hence, exempt in terms of entry number 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly [Read less]

2024-VIL-351-ALH  | High Court SGST

GST - Stock Transfer of goods - Wrong vehicle number in e-way bill – Levy of penalty under Section 129 of the CGST Act, 2017 - whether the wrong mention of vehicle no. would be considered as a human error and will be covered under the circular No.41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018 – HELD – since it is a case of stock transfer there is no intention on the part of dealer to evade any tax - the minor discrepancy as to the registration of vehicle in the e-way bill would not attract proceedings for penalty under Section 129 of the CGST Act - Moreover, the Department has not placed any othe... [Read more]

GST - Stock Transfer of goods - Wrong vehicle number in e-way bill – Levy of penalty under Section 129 of the CGST Act, 2017 - whether the wrong mention of vehicle no. would be considered as a human error and will be covered under the circular No.41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018 – HELD – since it is a case of stock transfer there is no intention on the part of dealer to evade any tax - the minor discrepancy as to the registration of vehicle in the e-way bill would not attract proceedings for penalty under Section 129 of the CGST Act - Moreover, the Department has not placed any other material so as to bring on record that there was any intention on the part of the dealer to evade tax except the wrong mention of part of registration number of the vehicle in the e-way bill. The number of vehicle through which the goods were transported was manually corrected by the transporter while only there is a minor discrepancy in Part-B of the e-way bill where the description of the vehicle is entered by the dealer - the order passed by the detaining authority as well as first appellate authority cannot be sustained and set aside – the Writ petition is allowed [Read less]

2024-VIL-360-MAD  | High Court SGST

GST - Issuance of credit notes by supplier - Disallowance of ITC with regard to certain inputs by non-speaking order – Levy of tax under reverse charge mechanism on professional and consultant charges - HELD - With regard to the issue relating to the issuance of credit notes, matter remanded for re-consideration upon considering the submissions of the petitioner that lower ITC was availed of in the subsequent months and that no revenue loss was occasioned as a result – With regards legal and professional charges, the petitioner stated that GST is payable on forward charge basis for professional and consultant charges a... [Read more]

GST - Issuance of credit notes by supplier - Disallowance of ITC with regard to certain inputs by non-speaking order – Levy of tax under reverse charge mechanism on professional and consultant charges - HELD - With regard to the issue relating to the issuance of credit notes, matter remanded for re-consideration upon considering the submissions of the petitioner that lower ITC was availed of in the subsequent months and that no revenue loss was occasioned as a result – With regards legal and professional charges, the petitioner stated that GST is payable on forward charge basis for professional and consultant charges and tax liability was duly discharged by the supplier. With regard to legal services, tax was paid on reverse charge basis and the petitioner has enclosed both a Chartered Accountant's certificate and sample invoices. In those circumstances, matter required to be reconsidered by the respondent - With regard to issue relating to denial of ITC, except for holding that the tax payer had availed ITC which is blocked credit under Section 17(5) of the CGST Act, 2017, no reasons are specified as to why such ITC was denied – the impugned order calls for interference with regard to the three issues discussed above. Consequently, the impugned order is set aside and matter is remanded for re-consideration – writ petition is disposed of [Read less]

2024-VIL-365-ALH-ST  | High Court SERVICE TAX

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Admittance of amount payable by the petitioner before the audit party – Rejection of declaration on the ground no written communication issued to the petitioner with respect to quantification of disputed amount on or before the cut-off date 30.06.2019 – HELD – The CBIC, the highest administrative authority under the Scheme, chose to clarify the statutory scheme and included within the scope of "quantified" amount as mentioned under Section 125 (1) read with Section 121(r) of Finance Act, 2019, any amount that may have been admitted by the declarant before the... [Read more]

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Admittance of amount payable by the petitioner before the audit party – Rejection of declaration on the ground no written communication issued to the petitioner with respect to quantification of disputed amount on or before the cut-off date 30.06.2019 – HELD – The CBIC, the highest administrative authority under the Scheme, chose to clarify the statutory scheme and included within the scope of "quantified" amount as mentioned under Section 125 (1) read with Section 121(r) of Finance Act, 2019, any amount that may have been admitted by the declarant before the audit party before the cut-off date 30.06.2019 - Once that clarification was issued by the CBIC, the interpretation sought to be made by the revenue runs contrary to the same - It is no longer res integra that a Circular issued by CBIC would bind the Revenue Authorities insofar as it is beneficial to the assessee/declarant - the declaration made by the petitioner was with respect to amount quantified prior to 30.06.2019. Therefore, the petitioner's declaration was maintainable. It ought to have been dealt with on its own merits. It may not have been rejected for reason of show cause notice issued after the cut-off date - The order passed by the Designated Committee is set aside – the writ petition is allowed [Read less]

2024-VIL-357-MAD  | High Court SGST

GST - Mismatch of GSTIN in invoices – Claim of input tax credit based on wrong GSTIN - Denial if ITC - Belated filing of Return – Levy of interest – HELD - As far as the denial of input tax credit is concerned, there appears to be discrepancy in the GSTIN given by the supplier in the invoice raised on the petitioner and correct GSTIN of the petitioner. The petitioner can get suitable certificate from the supplier that the sale was indeed made to the petitioner - The petitioner can give proper explanation for the discrepancy in the GST number and in the invoices raised by the supplier and furnish it before the appella... [Read more]

GST - Mismatch of GSTIN in invoices – Claim of input tax credit based on wrong GSTIN - Denial if ITC - Belated filing of Return – Levy of interest – HELD - As far as the denial of input tax credit is concerned, there appears to be discrepancy in the GSTIN given by the supplier in the invoice raised on the petitioner and correct GSTIN of the petitioner. The petitioner can get suitable certificate from the supplier that the sale was indeed made to the petitioner - The petitioner can give proper explanation for the discrepancy in the GST number and in the invoices raised by the supplier and furnish it before the appellate Commissioner in remand proceedings - In the return that was filed belatedly by the petitioner, the petitioner has accepted the short payment declared as the taxable turnover and yet had failed to pay the tax in time - There is an inordinate delay in payment admitted tax liability in the return for the assessment year 2017-2018. The petitioner cannot take advantage of its own mistake and state that the petitioner is not liable to pay penalty on account of belated filing of returns in GSTR 9 - Writ Petition stands dismissed [Read less]

2024-VIL-363-GUJ  | High Court VAT

Gujarat Value Added Tax Act, 2003 - SEZ Unit – Reversal of transitioned credit in the electronic ledger - Refund on excess input tax credit transitioned under Section 140 of the GST Act but voluntarily reversed – issue of refund order along with interest – short payment of interest - petitioner aggrieved by suo motu revision of refund payment order by reducing the amount of interest from the date of reversal of the credit – HELD - Merely because the petitioner has transferred the amount to the electronic credit ledger coupled with the fact that such amount remained unutilized till it was reversed by the petitioner ... [Read more]

Gujarat Value Added Tax Act, 2003 - SEZ Unit – Reversal of transitioned credit in the electronic ledger - Refund on excess input tax credit transitioned under Section 140 of the GST Act but voluntarily reversed – issue of refund order along with interest – short payment of interest - petitioner aggrieved by suo motu revision of refund payment order by reducing the amount of interest from the date of reversal of the credit – HELD - Merely because the petitioner has transferred the amount to the electronic credit ledger coupled with the fact that such amount remained unutilized till it was reversed by the petitioner by filling Form DRC-03, the transfer of amount to the electronic credit ledger was only a memorandum entry made on 01.07.2017 and reversed on 18.12.2020. For all effect and purpose, the amount was never utilized by the petitioner and the Commissioner has also rightly not granted refund of the amount input tax credit which is utilized by the petitioner - respondent could not have suo motu revised the refund order without reference to the revisional proceedings under section 75 of the GVAT Act, 2003 - the self revision made by the respondent of the refund payment order is also not in accordance with the provisions of VAT Act - respondent authorities are directed to refund balance amount within a period of four weeks – the petition is allowed [Read less]

2024-VIL-362-GUJ  | High Court SGST

GST - Change in constitution of firm – Activation of GSTIN with retrospective date - Non-completion of migration to GST regime due to mismatch of PAN and the provisional GSTIN – Petitioner seeking activation of its GSTIN, obtained on 05th April, 2018, to be made effective from 01.07.2017 and granting final certificate of registration to the from 01.07.2017 and allow petitioner to file returns for the period from July 2017 to March 2018, avail and utilize input tax credit – HELD - there is no fault on part of the petitioner for not being able to utilise the provisional GST number which was given to the petitioner on t... [Read more]

GST - Change in constitution of firm – Activation of GSTIN with retrospective date - Non-completion of migration to GST regime due to mismatch of PAN and the provisional GSTIN – Petitioner seeking activation of its GSTIN, obtained on 05th April, 2018, to be made effective from 01.07.2017 and granting final certificate of registration to the from 01.07.2017 and allow petitioner to file returns for the period from July 2017 to March 2018, avail and utilize input tax credit – HELD - there is no fault on part of the petitioner for not being able to utilise the provisional GST number which was given to the petitioner on transition after the petitioner has taken over the business of the proprietorship concern. The GSTN Portal is required to map the PAN number of the petitioner with the GST number instead of PAN number of the partnership firm, which was not done and therefore, the petitioner was unable to utilise the ITC during the interregnum period for the goods purchased from 01st July, 2017 till March, 2018 - there was no option for the petitioner but to obtain new PAN number for the proprietorship which was inactive and there was no question of filing GST Returns with regard to the GSTN which was allotted to the petitioner after mapping of PAN number as the petitioner had already obtained fresh GSTN number. Therefore, the only remedy which would be available to the Department was to get the GST number which was obtained by the petitioner in the year 2018 to make it effective from 01st July, 2017 so as to enable the petitioner to get the input tax credit for the goods purchased during the interregnum period from 01st July, 2017 to March, 2018 - respondent authorities are directed to activate the petitioner’s currently active GSTIN with effect from 01st July, 2017 – the petition is allowed [Read less]

2024-VIL-353-MAD  | High Court SGST

GST – Carry forward of excess tax paid as per self-assessment – Appellant-case that excess amount has to be returned back and it can be adjusted by way of carry forward the same into ITC for the next year – Demand of amount carried forward as input tax credit – HELD - the net tax payable on the previous year has been shown both for the State GST as well as Central GST in minus, that means, if it is zero balance nothing to be returned, if it is in minus, the tax excessively paid previously has to be returned back, therefore, the said excess payment of more than net tax payable have been made as a carry forward by wa... [Read more]

GST – Carry forward of excess tax paid as per self-assessment – Appellant-case that excess amount has to be returned back and it can be adjusted by way of carry forward the same into ITC for the next year – Demand of amount carried forward as input tax credit – HELD - the net tax payable on the previous year has been shown both for the State GST as well as Central GST in minus, that means, if it is zero balance nothing to be returned, if it is in minus, the tax excessively paid previously has to be returned back, therefore, the said excess payment of more than net tax payable have been made as a carry forward by way of ITC in the next year starting from 1st July, 2017 - such a claim made by the dealer has to be considered as to whether the previous year excess tax had been by assessee, for which, assessee is entitled to get for such a credit, without going into that aspect, since the revenue has passed a cryptic order making such a demand from the dealer when it was challenged before this Court, the learned Judge also has accepted the said version of the revenue side, which may be erroneous - the order impugned passed by the learned Judge is set aside - the matter is remitted back to the respondent revenue for reconsideration - Writ Appeal is allowed [Read less]

2024-VIL-354-MAD  | High Court SGST

GST - Section 140 of the TNGST Act, 2017 - Transitional credit of advance tax paid under TNVAT Act, 2006 - admissibility of transitional credit of advance tax paid that remained unutilized in the Return filed by the petitioner for the month of June, 2017 – HELD - If the amount of advance tax had remained un-utilised under the VAT or under the TNVAT Act, 2006, it has to be allowed to be transitioned under Section 140 of the TNGST Act 2017. The language of Section 140(1) of the TNGST Act, 2017 makes it clear that any amount of Value Added Tax and Entry Tax remaining un-utilized in the return shall be allowed to be transiti... [Read more]

GST - Section 140 of the TNGST Act, 2017 - Transitional credit of advance tax paid under TNVAT Act, 2006 - admissibility of transitional credit of advance tax paid that remained unutilized in the Return filed by the petitioner for the month of June, 2017 – HELD - If the amount of advance tax had remained un-utilised under the VAT or under the TNVAT Act, 2006, it has to be allowed to be transitioned under Section 140 of the TNGST Act 2017. The language of Section 140(1) of the TNGST Act, 2017 makes it clear that any amount of Value Added Tax and Entry Tax remaining un-utilized in the return shall be allowed to be transitioned and such a registered person is entitled to take credit of such amount in his electronic credit ledger - the impugned order is set aside and writ petition is allowed [Read less]

2024-VIL-15-AAR-CU  | Advance Ruling Authority CUSTOMS

Customs AAR - Classification of Airsoft gun – Electronic toys - Toy Gun – HELD - Airsoft Toy Guns of models AK Series CYMA, Double Bell, Classic Army, SRC; M4 Series CYMA, Double Bell, Classic Army, SRC; - P90 Series CYMA, Double Bell, Classic Army, SRC: - M15 and M16 Series CYMA, Double Bell, Classic Army, SRC; MP5 Series CYMA, Double Bell, Classic Army, SRC; G36 Series CYMA, Double Bell, Classic Army, SRC; Shotgun toy blaster CYMA, Double Bell, Classic Army, SRC; LMGs CYMA, Double Bell, Classic Army, SRC; Electric Pistols CYMA, Double Bell, Classic Army, SRC, as claimed by the applicant as Toys merit classification u... [Read more]

Customs AAR - Classification of Airsoft gun – Electronic toys - Toy Gun – HELD - Airsoft Toy Guns of models AK Series CYMA, Double Bell, Classic Army, SRC; M4 Series CYMA, Double Bell, Classic Army, SRC; - P90 Series CYMA, Double Bell, Classic Army, SRC: - M15 and M16 Series CYMA, Double Bell, Classic Army, SRC; MP5 Series CYMA, Double Bell, Classic Army, SRC; G36 Series CYMA, Double Bell, Classic Army, SRC; Shotgun toy blaster CYMA, Double Bell, Classic Army, SRC; LMGs CYMA, Double Bell, Classic Army, SRC; Electric Pistols CYMA, Double Bell, Classic Army, SRC, as claimed by the applicant as Toys merit classification under CTH 9503, more specifically under CTH 9503 0010 - Airsoft Toy Guns of Model-Sniper Blasters CYMA, Double Bell, Classic Army, SRC as claimed by the applicant as Toys merit classification under CTH 9503 0020 and Gels and Plastic Pellets used in these claimed toy guns merit classification under CTH 9503, more specifically under CTH 9503 0099 of the First Schedule of the Customs Tariff Act, 1975 - imports of subject goods and the projectiles are subject to the fulfilment of conditions under the BIS and IS norms for safety and Arms Rules, 2016, as amended – Ordered accordingly [Read less]

High Court Judgement  | High Court SGST

Biomass/Agro Fired (Steam) Boilers and Agro Waste Thermic Heaters are neither Waste to Energy Plant nor Renewable Energy devices to be eligible for benefit of lower rate of 5% GST under Entry 201A/234 of N/No.01/2017-CT(R); Ruling by AAAR is upheld.

2024-VIL-364-GUJ-CE  | High Court CENTRAL EXCISE

Central Excise - Eligibility to Cenvat credit on welding electrodes, wire FLR, filler Wires, Welding wires, Wire rope, material used for railway line and capital goods i.e. M.S. Gratings/ G.I. Coated Gratings - Revenue case that use of subject goods for repair and maintenance of plant and machinery cannot be considered to have been used “in or in relation to the manufacture of final products” and, as such, goods are not integrally connected with the manufacture of the petroleum products – HELD – the issue is no more res-integra in view of the decision of the Hon’ble Apex Court in Kisan Co-operative Sugar Factory ... [Read more]

Central Excise - Eligibility to Cenvat credit on welding electrodes, wire FLR, filler Wires, Welding wires, Wire rope, material used for railway line and capital goods i.e. M.S. Gratings/ G.I. Coated Gratings - Revenue case that use of subject goods for repair and maintenance of plant and machinery cannot be considered to have been used “in or in relation to the manufacture of final products” and, as such, goods are not integrally connected with the manufacture of the petroleum products – HELD – the issue is no more res-integra in view of the decision of the Hon’ble Apex Court in Kisan Co-operative Sugar Factory Ltd. case, wherein the Hon’ble Supreme Court has held that the interpretation of the expression “used in or in relation to manufacture” was interpreted as to the item used for maintenance of the Plant and Machinery were also held to be the item used in the manufacture of the finished goods - the respondent is entitled to the Cenvat credit on the items like Welding Electrodes, Welding filler Wires as capital goods as per Rule 2(k) of the CENVAT Credit Rules, 2004 - With regard to the issue of entitlement on the Cenvat credit on the M.S. Gratings/G.I. Coated Gratings are concerned, the M.S. Gratings used as accessory for supporting and holding such structure used in relation to the manufacture of final product - Tribunal has not committed any error in arriving at the findings that the respondent is entitled to the Cenvat credit on the subject items – Revenue appeal is dismissed [Read less]

2024-VIL-359-KER  | High Court VAT

Kerala General Sales Tax Act, 1963 – Section 44 - Eligibility to interest on amount of tax refunded pursuant to favourable Court order - HELD - It is true that the earlier orders of assessment were set aside and this Court specifically directed the authorities to extend the benefit of the G.O. dated 07-07-2008 and the circular dated 24-07-2008, in respect of inter-state transactions to the petitioner. However, the Court while disposing of the writ petition specifically directed the passing of fresh orders of assessment – Section 44 of the KGST Act, 1963 and in particular sub-section (4) clearly indicates that it is onl... [Read more]

Kerala General Sales Tax Act, 1963 – Section 44 - Eligibility to interest on amount of tax refunded pursuant to favourable Court order - HELD - It is true that the earlier orders of assessment were set aside and this Court specifically directed the authorities to extend the benefit of the G.O. dated 07-07-2008 and the circular dated 24-07-2008, in respect of inter-state transactions to the petitioner. However, the Court while disposing of the writ petition specifically directed the passing of fresh orders of assessment – Section 44 of the KGST Act, 1963 and in particular sub-section (4) clearly indicates that it is only when the refund is not made within 90 days of a final order of assessment that the assessee is entitled to claim interest - In the light of the specific provisions in sub-section (4) of Section 44 of the KGST Act, 1963 it is difficult to accept the contention of the petitioner that, dehors the provisions of Section 44 of the KGST Act, the petitioner is entitled to payment of interest – Further, in the earlier writ petition the petitioner did not choose to claim any interest, this constitutes an omission to sue on principles emanating from the provisions contained in Order II Rule 2 of the Code of Civil Procedure - for more than one reason, the petitioner has not made out a case for a direction that it is entitled to interest on the refunds made to it – the writ petition is dismissed [Read less]

2024-VIL-384-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise – Manufacture of medicaments – Determination of assessable value – Demand of duty – Appellant is engaged in manufacture of Medicaments, which were marketed through distributors – Revenue issued show cause notice to Appellant questioning non-inclusion of certain expenditures borne by distributors in assessable value – Adjudicating authority confirmed demand of differential duty – Appellate authority set aside demand and remanded matter to adjudicating authority – Adjudicating authority once again confirmed demand proposed in show cause notice – Commissioner (Appeals) affirmed order passed by... [Read more]

Central Excise – Manufacture of medicaments – Determination of assessable value – Demand of duty – Appellant is engaged in manufacture of Medicaments, which were marketed through distributors – Revenue issued show cause notice to Appellant questioning non-inclusion of certain expenditures borne by distributors in assessable value – Adjudicating authority confirmed demand of differential duty – Appellate authority set aside demand and remanded matter to adjudicating authority – Adjudicating authority once again confirmed demand proposed in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Adjudicating authority is justified in holding that expenditures incurred by distributors are includible in assessable value – HELD – Issue of relationship of Appellant with distributors having influenced price to warrant adoption of alternative valuation stood settled in favour of Appellant as far as back in year 1992 upon finding of first appellate authority disclaiming relationship with sole distributor and failure of Revenue to file appeal thereto – Once decision is rendered inter parties and attains finality, a different view cannot be taken – First appellate authority had traversed propriety in not enforcing its own earlier decision – Order passed in de novo proceedings by original authority was not correct in law and which was upheld in impugned order was also incorrect in law – impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

2024-VIL-391-CESTAT-ALH-ST  | CESTAT SERVICE TAX

Service Tax – Section 102 of Finance Act, 1994 – Providing of construction services – Payment of tax – Entitlement of refund – Appellant had rendered services as a sub-contractor of National Buildings Construction Corporation (NBCC) to University of Lucknow for construction of ONGC Centre of Advance Studies and paid service tax to department for providing said services – Appellant filed refund application claiming refund of tax under provisions of Section 102 of the Act – Adjudicating Authority rejected claim of Appellant – Commissioner (Appeals) rejected appeal filed by Appellant – Whether Appellant is e... [Read more]

Service Tax – Section 102 of Finance Act, 1994 – Providing of construction services – Payment of tax – Entitlement of refund – Appellant had rendered services as a sub-contractor of National Buildings Construction Corporation (NBCC) to University of Lucknow for construction of ONGC Centre of Advance Studies and paid service tax to department for providing said services – Appellant filed refund application claiming refund of tax under provisions of Section 102 of the Act – Adjudicating Authority rejected claim of Appellant – Commissioner (Appeals) rejected appeal filed by Appellant – Whether Appellant is entitled to refund under Section 102 of the Act – HELD – Section 102 of the Act exempts taxable services provided to Government, a local Authority or a Governmental Authority by way of construction, erection, commissioning, installation, completion, renovation or alteration of a structure meant for use as educational establishment – Ultimate client in this case is University of Lucknow which is an educational establishment – ONGC Centre of Advanced Studies of this educational establishment was constructed by Appellant as a sub-contractor of NBCC – Exemption available to services provided to University of Lucknow does not depend on either such services are provided directly by main contractor or by main contractor using services of a sub-contractor – Services rendered by Appellant through main contractor to University of Lucknow are exempted under Section 102 of the Act – Appellant is not liable to pay service tax and as he has already paid same, he is entitled to refund under Section 102 of the Act – Impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

2024-VIL-388-CESTAT-CHE-CU  | CESTAT CUSTOMS

Customs – Section 111(m) of Customs Act, 1962 – Customs Tariff Act, 1975 – Import of nickel hydroxide compound – Classification – Appellant imported Compound of Nickel Hydroxide by classified it under CTH 28254000 – Department viewed that Appellant had mis-classified goods claiming undue benefit of Nil rate of Basic Customs Duty (BCD) under Notification No.50/2017 – Department issued show cause notice proposing to reclassify goods under CTH 38259900 @7.5% BCD and to demand differential duty – Adjudicating Authority confirmed classification of imported goods under CTH 38249000 and demand of differential duty... [Read more]

Customs – Section 111(m) of Customs Act, 1962 – Customs Tariff Act, 1975 – Import of nickel hydroxide compound – Classification – Appellant imported Compound of Nickel Hydroxide by classified it under CTH 28254000 – Department viewed that Appellant had mis-classified goods claiming undue benefit of Nil rate of Basic Customs Duty (BCD) under Notification No.50/2017 – Department issued show cause notice proposing to reclassify goods under CTH 38259900 @7.5% BCD and to demand differential duty – Adjudicating Authority confirmed classification of imported goods under CTH 38249000 and demand of differential duty and ordered for confiscation of goods – Whether goods imported by Appellant is classifiable under CTH 28254000 as declared by Appellant or under CTH 38249900 as classified by Revenue – HELD – Appellant has adopted classification under CTH 28254000 and claimed Nil rate of Customs duty under Notification No.50/2017 – Chapter Note 28 excludes any mixture of separate chemical elements or separate chemically defined compounds – It is an admitted fact that imported product is primarily containing Nickel Hydroxide with minor proportions of Cobalt Hydroxide and Graphite – Nickel Hydroxide is a compound, Cobalt Hydroxide is also a separate compound and Graphite is an element/metal – Imported product being a mixture of compounds goes out of Chapter 28 of 1975 Act – Chapter 38 deals with Miscellaneous Chemical Products – As imported product consists of mixture of Nickel Hydroxide, Cobalt Hydroxide and Graphite, it is more appropriately classifiable under CTH 38249900 as a chemical product – Imported product is classifiable under CTH 38249900 and not under CTH 28254000 as adopted by Appellant – Consequently, Appellant is not eligible for benefit of Notification No.50/2017 – Demand of duty along with interest is confirmed – Appeal partly allowed - Confiscation of goods – Imposition of penalty – Whether order of confiscation and imposition of redemption fine and penalty is justified or not in facts and circumstances of this case – HELD – Main contention of Appellant is that there is no wilful mis-declaration rendering imported goods liable for confiscation under Section 111(m) of the Act – Merely claiming benefit of exemption in Bills of Entry does not amount to suppression/mis-declaration on part of Appellant – Penalty cannot be imposed, as there was no intention to evade payment of duty – Order of confiscation and imposition of fine and penalty is not justified and ordered to be set aside. [Read less]

2024-VIL-386-CESTAT-ALH-ST  | CESTAT SERVICE TAX

Service Tax – Section 66D of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is registered with Service Tax Department for providing service under category of Advertising Agency Services – On-going through the nature of services undertaken by Appellant, revenue viewed that services provided by Appellant were appropriately covered under category of Business Auxiliary Service – Department issued show cause notice to Appellant, proposing demand of service tax under category of Business Auxiliary Service – Commissioner confirmed demand proposed in show cause notice – Whether Appellant ... [Read more]

Service Tax – Section 66D of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is registered with Service Tax Department for providing service under category of Advertising Agency Services – On-going through the nature of services undertaken by Appellant, revenue viewed that services provided by Appellant were appropriately covered under category of Business Auxiliary Service – Department issued show cause notice to Appellant, proposing demand of service tax under category of Business Auxiliary Service – Commissioner confirmed demand proposed in show cause notice – Whether Appellant is indulged in providing Business Auxiliary Service or Advertising Agency Service – HELD – Appellant claimed that services provided by them are sale of space for advertisement in print media, whereas revenue seeks to classify same under Business Auxiliary Service – Newspaper agencies sold their space for advertisement in their print media at a discount to Appellant – Appellant in turn sold that space to various advertisers at tariff notified by newspaper agencies – Undisputedly, Appellant has provided service of sale of space in print media – Service of sale of space for advertisement in print media would be covered under Negative List specified by Section 66D of the Act – Services provided by Appellant would have merited classification under category of Advertising Agency Services – Demand made by classifying services provided under category of Business Auxiliary Services on a notional value of commission received cannot be sustained – Demand confirmed in impugned order is set aside – Appeal allowed [Read less]

2024-VIL-385-CESTAT-HYD-CE  | CESTAT CENTRAL EXCISE

Central Excise – Manufacture of fruit pulps – Allegation of clandestine removal – Demand of duty – Appellants are engaged in manufacture of various types of fruit pulps – Anti-Evasion Officers visited unit of Appellants and found excess physical stock of finished goods in comparison with stock accounted in manual RG1 Register – Commissioner confiscated excess stock of fruit pulp and imposed redemption fine – Officers again visited the factory and verified stock of finished goods and compared same with stock reflected in SAP account and found certain shortage – Department issued show cause notices proposing ... [Read more]

Central Excise – Manufacture of fruit pulps – Allegation of clandestine removal – Demand of duty – Appellants are engaged in manufacture of various types of fruit pulps – Anti-Evasion Officers visited unit of Appellants and found excess physical stock of finished goods in comparison with stock accounted in manual RG1 Register – Commissioner confiscated excess stock of fruit pulp and imposed redemption fine – Officers again visited the factory and verified stock of finished goods and compared same with stock reflected in SAP account and found certain shortage – Department issued show cause notices proposing to recover specified amounts of duty on fruit pulp allegedly cleared clandestinely – Commissioner confirmed demand of specified duty – Whether demand of duty confirmed on alleged shortage of goods said to be found on basis of comparison of quantity accounted in SAP system and quantity accounted in manual RG1 Register is correct or not – HELD – Sole ground based on which demand has been confirmed by Commissioner is that there was certain difference in quantity of fruit pulp accounted for in RG1 Register and those physically available in factory premises, when compared with stock accounted for in SAP system – Differential quantity has been considered as clandestinely removed by Appellants and demand has been confirmed accordingly – It is an admitted fact that Appellants were maintaining all their records including statutory records relating to production and clearance of final products in SAP system – Department preferred to compare physical stock with defunct RG-1 stock, even though correct stock on day-to-day basis was maintained by Appellants in their SAP system – When Department compared physical stock with defunct RG1 Register for purpose of arriving at excess stock to confiscate same, Department cannot take a different stand and compare quantity accounted in SAP system with quantity accounted in defunct RG1 Register to arrive at alleged shortage and demand duty thereon – SAP alone was the proper account being maintained and there cannot be any comparison with so called RG1 register either for excess or for shortage – There was no excess or shortage of fruit pulp when physical stock is compared with stock accounted for in SAP system – Department’s reliance on manual RG1 Register, when accounts are maintained in SAP system, is misconceived and cannot be accepted – Stock verification was not done by officers in proper and justifiable manner – Department has not brought any independent evidence to prove its claim of clandestine removal – Impugned order passed by Commissioner set aside – Appeals allowed [Read less]

2024-VIL-393-CESTAT-BLR-CU  | CESTAT CUSTOMS

Customs – Import of goods – Classification – Appellant imported goods declared as ‘fish protein’ and classified same under Customs Tariff Heading 3504 0099 – Revenue after testing the goods found that declaration of goods as ‘fish protein’ was incorrect, as impugned goods were found to be processed/de-mineralized fish scale classifiable under CTH 0511 9190 – Commissioner classified imported goods under CTH 0511 9190 and demanded differential duty and denied benefit of Notification No.96/2009 – Whether goods imported by Appellant are classifiable as demineralised fish scale under chapter heading 0511 or ... [Read more]

Customs – Import of goods – Classification – Appellant imported goods declared as ‘fish protein’ and classified same under Customs Tariff Heading 3504 0099 – Revenue after testing the goods found that declaration of goods as ‘fish protein’ was incorrect, as impugned goods were found to be processed/de-mineralized fish scale classifiable under CTH 0511 9190 – Commissioner classified imported goods under CTH 0511 9190 and demanded differential duty and denied benefit of Notification No.96/2009 – Whether goods imported by Appellant are classifiable as demineralised fish scale under chapter heading 0511 or as fish protein under CTH 3504 of the Act – HELD – It is an admitted fact that Appellant manufactured peptide by using collagen protein contained in demineralized fish scale imported by Appellant – Just because imported item contains protein which has been extracted through various processes to manufacture peptide, it does not make imported product a ‘fish protein’ – Content of protein cannot establish product as a protein, instead it is only a source of protein – Classification is based on description at time of import and not on basis of its content as claimed by Appellant – Test reports and technical literature clearly established that product imported is demineralised fish scale – Goods imported by Appellant are appropriately classifiable under Chapter Heading 0511 9090 – Appeal partly allowed - Advance authorisation scheme – Denial of benefit – Whether Appellant has mis-declared description of product in order to claim benefit of advance authorization – HELD – Notification No.96/2009-Cus grants exemption to materials imported into India against Advance Authorization in terms of Para 4.1.3 of Foreign Trade Policy – There is no dispute that goods were initially tested and test report declared goods as fish protein – Based on this test report, goods were cleared under chapter heading 3504 as claimed by Appellant – At a later date, after physically examining the goods imported, samples were drawn and test reports with regard to samples clearly stated that they were nothing but fish scales with a high content of fish protein and therefore, goods are classifiable under chapter heading 0511 and not under 3504 as claimed by Appellant – Denial of benefit of advance authorisation scheme to earlier consignments based on current test reports is not sustainable – Benefit of advance authorisation is to be denied only prospectively for consignments where samples were drawn and thereafter – Demand is upheld for 6 bills of entry – Other 9 bills of entry which are provisionally assessed are to be reassessed by reclassifying same under Chapter Heading 0511. [Read less]

2024-VIL-392-CESTAT-ALH-CE  | CESTAT CENTRAL EXCISE

Central Excise – Section 11A(1) of Central Excise Act, 1944 – Rule 14 of CENVAT Credit Rules, 2004 – Disallowance of Cenvat Credit – Sustainability – Appeal is directed against order in appeal of Commissioner (Appeals) upholding Order-in-Original passed by Adjudicating Authority disallowing Cenvat Credit availed by Appellant and order for recovery of same under provisions of Rule 14 of the Rules read with Section 11A(1) of the Act – Whether lower authorities are justified in disallowing Cenvat Credit taken on items such as Channels, Plates, HR Coils etc. of iron and steel used in repair and maintenance of capit... [Read more]

Central Excise – Section 11A(1) of Central Excise Act, 1944 – Rule 14 of CENVAT Credit Rules, 2004 – Disallowance of Cenvat Credit – Sustainability – Appeal is directed against order in appeal of Commissioner (Appeals) upholding Order-in-Original passed by Adjudicating Authority disallowing Cenvat Credit availed by Appellant and order for recovery of same under provisions of Rule 14 of the Rules read with Section 11A(1) of the Act – Whether lower authorities are justified in disallowing Cenvat Credit taken on items such as Channels, Plates, HR Coils etc. of iron and steel used in repair and maintenance of capital goods within factory – HELD – Cenvat credit is available only on items, which are excisable goods covered under definition of capital goods under the Rules and used in factory of manufacturer – If product is not integrally connected with process of manufacture and which does not result in utilization of such product directly or indirectly in to manufacture of finished product, then such a product cannot be said to be input utilized for or in relation to manufacture of final product – Issue involved in matter is in respect of admissibility of CENVAT Credit in respect of Channels, Plates, HR Coils etc. of iron and steel used in repair and maintenance of capital goods within factory – Activity of repair and maintenance of plant and machinery is an activity which has direct nexus with manufacture of final products and goods used in this activity would be eligible for Cenvat credit – Impugned order passed by Commissioner (Appeals) set aside – Appeal allowed [Read less]

2024-VIL-387-CESTAT-BLR-ST  | CESTAT SERVICE TAX

Service Tax – Section 65(zzzze) of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is engaged in manufacture of Thin Client, which is a computer with nominal storage capacity – Appellant had entered into Customer License Agreement for embedded systems with Microsoft Corporation (MS), which grants them limited world-wide license – In pursuance to license granted by MS, Appellant builds MS images using software tools from toolkit purchased locally from dealer of MS – In terms of agreement with MS, Appellant had to procure Certificate of Authenticity (COA) and affix same on Thin Client ... [Read more]

Service Tax – Section 65(zzzze) of Finance Act, 1994 – Classification of service – Demand of tax – Appellant is engaged in manufacture of Thin Client, which is a computer with nominal storage capacity – Appellant had entered into Customer License Agreement for embedded systems with Microsoft Corporation (MS), which grants them limited world-wide license – In pursuance to license granted by MS, Appellant builds MS images using software tools from toolkit purchased locally from dealer of MS – In terms of agreement with MS, Appellant had to procure Certificate of Authenticity (COA) and affix same on Thin Client manufactured by them – Appellant purchased COAs on High Sea Sale (HSS) basis and affixed same to manufactured Thin Clients – Commissioner confirmed demand of service tax under category of Information Technology Software Service as defined under Section 65(zzzze) of the Act – Whether purchase of COA on high sea sale basis and later affixed on Thin Clients already installed with MS software embedded system procured from local Microsoft authorized distributors, is a ‘sale’ or ‘service’ classifiable under taxable category of Information Technology Software Service – HELD – Crux of dispute in present case centers around fact either purchase/import of COAs/stickers/labels will result in sale or service – Appellant are engaged in manufacture of Thin Clients, which required a software to make it functional/operational – To acquire necessary software to be embedded with system, Appellant entered into an agreement with MS, whereby they were authorized to procure off-shelf MS OS software, which also provided them the right to replicate into individual hard discs installed later into Thin Clients – Software would be operational or functional only with affixation of COAs – Appellant procured/purchased COAs/stickers/labels on HSS basis from Priya Limited – Imported stickers/labels are considered as ‘goods’ more or less in line with Circular No.15/2011 issued by Board – Merely by affixing stickers/labels providing authenticity to software loaded to each of Thin Clients cannot be construed as a ‘service’ received by Appellant under category of ITSS – Whole transaction/activity including installation of software and later affixing stickers/labels to Thin Clients procured/purchased on HSS basis are in nature of ‘sale’ and not ‘service’ – Consequently, demand of service tax cannot be sustained – Appeal allowed [Read less]

2024-VIL-356-BOM  | High Court SGST

GST on Ocean Freight – Application of Mohit Minerals case to FOB contracts - Revenue contention that Mohit Minerals case needs to be applied only in respect of the cases which involve the contracts on CIF basis and not FOB contracts – HELD - issue has been decided in petitioner’s favour by the Supreme Court in Union of India vs. Mohit Minerals case - The submission of the Revenue that decision in Mohit Minerals is applicable only to cases which involve the contracts on CIF basis and not FOB contracts, is totally untenable inasmuch as the case in Mohit Minerals before the High Court of Gujarat involved both categories... [Read more]

GST on Ocean Freight – Application of Mohit Minerals case to FOB contracts - Revenue contention that Mohit Minerals case needs to be applied only in respect of the cases which involve the contracts on CIF basis and not FOB contracts – HELD - issue has been decided in petitioner’s favour by the Supreme Court in Union of India vs. Mohit Minerals case - The submission of the Revenue that decision in Mohit Minerals is applicable only to cases which involve the contracts on CIF basis and not FOB contracts, is totally untenable inasmuch as the case in Mohit Minerals before the High Court of Gujarat involved both categories of contract namely CIF and FOB. The Court on such facts, declared the impugned Notification ultra vires of the IGST Act. Once the notification itself has been declared as ultra vires and the same has been upheld by the Supreme Court, the notification is no manner was available to the GST Authorities to be applied - the show cause notice is rendered without jurisdiction and the same is set aside - As the show cause notice itself has been set aside, the petitioner is permitted to seek refund of tax paid under protest, and if such an application is made, the petitioner would be entitled to the refund of the same with interest at 7% per annum – the writ petition is allowed [Read less]

2024-VIL-383-CESTAT-HYD-CU  | CESTAT CUSTOMS

Customs – Denial of refund of CVD + SAD claimed under the provision of Section 142(3) of the CGST Act, 2017 - Refund of CVD + SAD paid for regularisation of Advance License (Import License) deposited after 01.07.2017 in relation to imports prior to 01.07.2017 – HELD - Section 142(3) read with 142(5) of the CGST Act, 2017 provides that every claim for refund by any person before, on or after the appointed day, for refund of any amount of Cenvat credit/duty/tax/interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law and any amount eventually acc... [Read more]

Customs – Denial of refund of CVD + SAD claimed under the provision of Section 142(3) of the CGST Act, 2017 - Refund of CVD + SAD paid for regularisation of Advance License (Import License) deposited after 01.07.2017 in relation to imports prior to 01.07.2017 – HELD - Section 142(3) read with 142(5) of the CGST Act, 2017 provides that every claim for refund by any person before, on or after the appointed day, for refund of any amount of Cenvat credit/duty/tax/interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law and any amount eventually accruing to him, shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provision of unjust enrichment - from a conjoint reading of sub-section (3) (5) and (8A) of Section 142 of the CGST Act it is evident than that an assessee is entitled to claim refund of CVD and SAD paid after appointed day, under the existing law, and such claim has to be disposed of according to the provisions of the existing law. As the Appellant was admittedly entitled to Cenvat credit of the said amount of, which is now no longer available due to implementation of GST regime, it is held that they are entitled to refund of the said amount - the Adjudicating Authority is directed to grant refund of the CVD and SAD to the Appellant along with interest as specified under Section 11BB of the Central Excise Act – appeal is allowed [Read less]

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