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Customs - Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962 - Appellant imported Forcepoint security appliances (servers) and classified them under Customs Tariff Item (CTI) 8471 50 00, claiming the benefit of exemption Notification No. 24/2005-CUS - Department contended that the goods were correctly classifiable under CTI 8517 69 90 and were not eligible for the exemption - Whether the invocation of the extended period of limitation under Section 28(4) of the Customs Act, 1962 is justified - HELD - The extended period of limitation under Section 28(4) can be invoked only if the non-p... [Read more]

Customs - Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962 - Appellant imported Forcepoint security appliances (servers) and classified them under Customs Tariff Item (CTI) 8471 50 00, claiming the benefit of exemption Notification No. 24/2005-CUS - Department contended that the goods were correctly classifiable under CTI 8517 69 90 and were not eligible for the exemption - Whether the invocation of the extended period of limitation under Section 28(4) of the Customs Act, 1962 is justified - HELD - The extended period of limitation under Section 28(4) can be invoked only if the non-payment or short payment of duty is by reason of collusion or any willful mis-statement or suppression of facts by the importer, with an intent to evade payment of duty. In the present case, there was insufficient evidence to establish the intent to evade on the part of the appellant, as the goods were imported on a Delivery Duty Paid (DDP) basis, and the Bills of Entry were filed by the customs broker appointed by the overseas seller, although using the appellant's Import Export Code (IEC). Therefore, the invocation of the extended period of limitation was not justified - The impugned order is modified by upholding the confirmation of demand of duty with interest within the normal period of limitation, while the demand for the extended period of limitation, confiscation of the goods, imposition of redemption fine, and penalty are set aside - The appeal is partly allowed - Confiscation of goods under Section 111(m) of the Customs Act, 1962 - The Principal Commissioner held the imported goods liable to confiscation under Section 111(m) of the Act, on the ground that the goods did not correspond in respect of the CTI under which they were classified - Whether the confiscation of the goods or holding the goods liable to confiscation under Section 111(m) of the Customs Act, 1962 was justified - HELD - The discrepancy in this case was regarding the CTI under which the imported goods should be classified, and not regarding the goods themselves. Even if the self-assessment of the CTI was incorrect, it cannot be a ground for confiscating the imported goods under Section 111(m) of the Act. Decision: The confiscation of the goods or holding the goods liable to confiscation under Section 111(m) of the Customs Act, 1962 cannot be sustained - Imposition of penalty under Section 114A of the Customs Act, 1962 - Whether the imposition of penalty under Section 114A of the Customs Act, 1962 is justified - HELD - The elements required for imposing penalty under Section 114A are the same as for invoking the extended period of limitation under Section 28(4) of the Act. Since the Tribunal had found that the invocation of the extended period of limitation was not justified, the penalty imposed under Section 114A also needs to be set aside. [Read less]

GST – Scope of Section 130(2) of the CGST Act, 2017 - Provisional Release of confiscated goods - The petitioner challenge the show cause notice proposing confiscation of goods and conveyance under Section 130 of the CGST Act - The petitioner sought the provisional release of the goods by paying the proposed fine in lieu of confiscation under Section 130(2) of the CGST Act - Whether the petitioner is entitled to the provisional release of the goods under Section 130(2) of the CGST Act, pending the adjudication of the confiscation proceedings - HELD – In view of the relevant statutory provisions and the amendments introd... [Read more]

GST – Scope of Section 130(2) of the CGST Act, 2017 - Provisional Release of confiscated goods - The petitioner challenge the show cause notice proposing confiscation of goods and conveyance under Section 130 of the CGST Act - The petitioner sought the provisional release of the goods by paying the proposed fine in lieu of confiscation under Section 130(2) of the CGST Act - Whether the petitioner is entitled to the provisional release of the goods under Section 130(2) of the CGST Act, pending the adjudication of the confiscation proceedings - HELD – In view of the relevant statutory provisions and the amendments introduced by the Finance Act, 2021, the provisional release of goods is not contemplated under Section 130(2) of the CGST Act - What is intended under Section 130(2) is not a provisional release, but it is a release of the goods after confiscation and the amounts to be paid, are determined by way of final order of confiscation by the authority concerned. Nowhere in sub-section (2) of Section 130, any reference with regard to the provisional release of the goods is made - The release of goods under Section 130(2) is upon payment of fine in lieu of confiscation after the final order of confiscation, and not as a provisional measure pending the adjudication. The provisions for provisional release are specifically provided under Section 67(6) of the CGST Act, and the same is conspicuously absent in Section 130. Applying the principle of "expressio unius est exclusio alterius", the legislature's conscious omission of the provisional release provision in Section 130 indicates the legislative intent not to permit such provisional release under that provision. The power of provisional release being specifically provided under Section 67(6), cannot be extended to proceedings under Section 130 in the absence of an express statutory mandate. There is no scope for incorporating the concept of provisional release into Section 130(2) as a provisional measure, pending the adjudication proceedings, by accepting the fine in lieu of the confiscation proposed in the notice issued in Form MOV-10 - However, the respondents cannot retain the possession of the goods merely because the confiscation proceedings under Section 130 are initiated, in the absence of a valid detention order under Section 129 of the CGST Act. The respondents to release the goods upon the petitioner furnishing a simple bond, as the continued detention of the goods is found to be not legally sustainable - Whether the Respondents have the power to retain the goods proposed to be confiscated, until an order of confiscation is passed – HELD - In cases where no order or detention as contemplated under section 129(1) is passed, the officer concerned cannot hold the goods and conveyances in their possession, once the procedure for inspection as contemplated under clause 2(d) and (e) of Circular No.41/15/2018-GST dated 13.4.2018 is expired - A mere direction in Form MOV-2 restraining the person from taking the goods until further orders cannot substitute the requirement of passing an order or detention as provided in section 129(10). Since what is required is “order of detention”; necessarily it must be an order, highlighting the reasons for such detention, and it cannot be in the form of a simple direction - Mere initiation of proceedings under section 130 of the Act, by itself is not an authority for the officer concerned, to retain the goods in possession and such retention of possession can be made, only following the procedure for detention contemplated under section 129 of the Act - Any action of the officer concerned to retain the possession without passing an order of detention as contemplated under the Act would be illegal which would enable the party concerned to seek release of the goods and conveyances. [Read less]

Central Excise - Clandestine Removal of Goods - Whether the evidence relied upon by the authorities to establish the charge of clandestine removal was legally valid and sufficient - HELD - The evidence relied upon by the authorities, such as cash deposits in bank accounts of certain brokers/intermediaries with handwritten names, was far from credible and lacked proper investigation and corroboration. The mere mention of names in testimonial evidence or derived records cannot form the basis for alleging clandestine removal, and the authorities failed to establish other critical aspects like receipt of unaccounted raw materi... [Read more]

Central Excise - Clandestine Removal of Goods - Whether the evidence relied upon by the authorities to establish the charge of clandestine removal was legally valid and sufficient - HELD - The evidence relied upon by the authorities, such as cash deposits in bank accounts of certain brokers/intermediaries with handwritten names, was far from credible and lacked proper investigation and corroboration. The mere mention of names in testimonial evidence or derived records cannot form the basis for alleging clandestine removal, and the authorities failed to establish other critical aspects like receipt of unaccounted raw materials, excess consumption of electricity, and lack of transport documents. Relying on the decision in Famous Ceramics Industries & Others v. CCE & ST-Rajkot, it is held that the charge of clandestine removal was not proved by the authorities, and consequently, the demands and penalties imposed on the appellants are not sustainable - The appeals are allowed [Read less]

Central Excise – Interest on refund of Duty Paid under Protest, Applicable rate of interest - Whether the interest is payable from the date of deposit of the duty, or from the date of expiry of three months after the date of filing the refund application – HELD - The provisions of Section 11B and 11BB of the Central Excise Act, which deal with refund of duty and interest on delayed refunds, are not applicable to the present case as the amount paid was not 'duty' but a deposit made under protest, prior to any adjudication. Unless the amount is appropriated against a confirmed demand through a proper adjudication order, ... [Read more]

Central Excise – Interest on refund of Duty Paid under Protest, Applicable rate of interest - Whether the interest is payable from the date of deposit of the duty, or from the date of expiry of three months after the date of filing the refund application – HELD - The provisions of Section 11B and 11BB of the Central Excise Act, which deal with refund of duty and interest on delayed refunds, are not applicable to the present case as the amount paid was not 'duty' but a deposit made under protest, prior to any adjudication. Unless the amount is appropriated against a confirmed demand through a proper adjudication order, it does not acquire the character of 'duty' and remains merely a deposit, retained without the authority of law. Since the department itself acknowledged that the levy was unsustainable and sanctioned the refund, the amount paid under protest cannot be treated as 'duty' attracting the provisions of Sections 11B and 11BB. Accordingly, the interest is payable from the date of deposit till the date of refund - In the absence of any specific statutory provision prescribing the rate of interest for refund of revenue deposits, the rate of 12% per annum is appropriate. The reliance of the Department on the provisions of Section 11BB and the corresponding Notification prescribing 6% interest rate is misplaced, as the same are inapplicable to the refund of deposits. Denying the rightful interest at 12% per annum would unjustly enrich the State at the expense of the citizen, violating the constitutional rights - The Department is directed to sanction and disburse the balance interest to the assessee at the rate of 12% per annum from the date of deposit till the date of actual refund – The appeal is allowed [Read less]

Service Tax - Limitation period for filing refund claim of service tax on export supply - Appellant discharged service tax under the reverse charge mechanism on the commission and filed refund claims for the service tax paid. Rejection of refund on the ground that the claims were filed beyond the six-month time limit prescribed in the relevant notification - Whether the rejection of the appellant's refund claims on the ground of being filed beyond the time limit specified in the notification is tenable, or the one-year time limit under Section 11B of the Central Excise Act, 1944 should prevail – HELD - The time limit pre... [Read more]

Service Tax - Limitation period for filing refund claim of service tax on export supply - Appellant discharged service tax under the reverse charge mechanism on the commission and filed refund claims for the service tax paid. Rejection of refund on the ground that the claims were filed beyond the six-month time limit prescribed in the relevant notification - Whether the rejection of the appellant's refund claims on the ground of being filed beyond the time limit specified in the notification is tenable, or the one-year time limit under Section 11B of the Central Excise Act, 1944 should prevail – HELD - The time limit prescribed under Section 11B of the Central Excise Act, 1944, which is one year from the 'relevant date' (the date of payment of service tax), would prevail over the time limit specified in the Notification No.41/2007-Cus dated 06.10.2007. The time limit prescribed in the parent statute (Section 11B) cannot be overridden by the subordinate legislation (the notification). The appellant had filed the refund claims within the one-year period from the date of payment of service tax, and therefore, the claims were within the limitation period - The authorities are directed to grant the refund to the appellant in accordance with law – The appeal is allowed - Non-declaration of commission amount in shipping bills - The refund claims of the appellant were also rejected on the ground that the appellant had not indicated the commission amount in all the shipping bills - Whether the non-declaration of the commission amount in the shipping bills is a mere procedural requirement or a substantive condition for the grant of refund – HELD - The non-mention of the commission amount in the shipping bills is a mere procedural condition, and the refund claims can be considered if there is documentary evidence regarding the amount of service tax paid on the actual amounts of commission disbursed. A distinction must be made between substantive conditions and mere procedural requirements, and the non-observance of the latter should not lead to the denial of the substantial benefit - The non-declaration of the commission amount in the shipping bills is only a technical breach and is condonable, as the appellant had satisfied the substantial conditions of the notification. [Read less]

Service Tax - Sale of space for advertisement on internet, Invocation of extended period of limitation for demanding service tax – Demand of service tax for the period 2015-16 and 2016-17, alleging suppression of facts and invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. The appellant contended that it was under the bonafide belief that its services were not taxable as they fell under the negative list under Section 66D(g) of the Finance Act, 1994 – HELD - The extended period of limitation could not have been invoked by the department, as the appellant had a bonafide belief that ... [Read more]

Service Tax - Sale of space for advertisement on internet, Invocation of extended period of limitation for demanding service tax – Demand of service tax for the period 2015-16 and 2016-17, alleging suppression of facts and invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. The appellant contended that it was under the bonafide belief that its services were not taxable as they fell under the negative list under Section 66D(g) of the Finance Act, 1994 – HELD - The extended period of limitation could not have been invoked by the department, as the appellant had a bonafide belief that its services were not taxable. The extended period of limitation can be invoked only when there is a positive act of fraud, collusion, wilful misstatement, or suppression of facts with an intent to evade payment of tax. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period - The appellant had disclosed the nature of its activities to the department while seeking registration in 2016-17, and the Department failed to make further enquiries at that time. Therefore, the demand made by invoking the extended period of limitation is not justified – The impugned order is set aside and the appeal is allowed [Read less]

GST – Anti-profiteering - Not passing on the benefit of Input Tax Credit by way of commensurate reduction in the price on sale of flats – HELD - The Respondent unconditionally accepts the findings of the investigation report submitted by the DGAP and confirms its readiness and willingness to pay the entire amount as determined to be payable in the said report, along with applicable interest. In view of the promise of the Respondent to refund the balance profiteered amount along with interest, the Respondent has agreed to comply with the provisions of Section 171 of the CGST Act - The Respondent shall pay the remaining ... [Read more]

GST – Anti-profiteering - Not passing on the benefit of Input Tax Credit by way of commensurate reduction in the price on sale of flats – HELD - The Respondent unconditionally accepts the findings of the investigation report submitted by the DGAP and confirms its readiness and willingness to pay the entire amount as determined to be payable in the said report, along with applicable interest. In view of the promise of the Respondent to refund the balance profiteered amount along with interest, the Respondent has agreed to comply with the provisions of Section 171 of the CGST Act - The Respondent shall pay the remaining profiteered amount to the eligible buyers along with applicable interest within 30 days and submit compliance report to the jurisdictional authorities - The DGAP’s investigation report is accepted and the case is disposed of [Read less]

Customs – Medical Instruments versus General Printing Machinery – Thermal Printers for Diagnostic Imaging – Specific Adaptation for Medical Use – Exclusion of Chapter 90 goods from Section XVI – The appellant imported thermal printers classifying them under Customs Tariff Item (CTI) 9018 90 99 as instruments and appliances used in medical sciences availing concessional duty benefits - Revenue sought to reclassify the goods under CTI 8443 32 90 as "other printers capable of connecting to an automatic data processing machine," contending that the printers did not perform diagnostic functions themselves but merely p... [Read more]

Customs – Medical Instruments versus General Printing Machinery – Thermal Printers for Diagnostic Imaging – Specific Adaptation for Medical Use – Exclusion of Chapter 90 goods from Section XVI – The appellant imported thermal printers classifying them under Customs Tariff Item (CTI) 9018 90 99 as instruments and appliances used in medical sciences availing concessional duty benefits - Revenue sought to reclassify the goods under CTI 8443 32 90 as "other printers capable of connecting to an automatic data processing machine," contending that the printers did not perform diagnostic functions themselves but merely printed images generated by other diagnostic equipment like CT or MRI scanners – Whether thermal printers specifically designed for printing medical diagnostic images are classifiable under CTI 9018 90 99 as medical instruments or under CTI 8443 32 90 as general printing machinery – HELD - While CTH 8443 covers printers using thermal print processes, Section Note (1)(m) to Section XVI of the Customs Tariff Act specifically excludes articles of Chapter 90, meaning if the goods fall under Chapter 90, they cannot be classified under Chapter 84; the decisive criterion for classification under CTH 9018 is the specific adaptation, construction, or design for professional medical use – The technical literature, white papers, and declarations from specialist doctors and a Chartered Engineer established that the imported thermal printers are distinct from ordinary desktop printers as they are capable of printing diagnostic quality images with necessary spatial and contrast resolution on heat-sensitive medical film, which is essential for primary reading by radiologists - The Revenue’s argument that the printers are not diagnostic because they only print images is rejected as the diagnostic process does not end at the monitor and the hard copy is integral to the diagnosis - The burden to prove re-classification lies with the Revenue, which failed to adduce evidence that the printers were not used for medical purposes. The thermal printers imported by the appellant would fall under CTH 9018 since they are instruments used in medical sciences – The impugned order is set aside and the appeal is allowed - Imposition of Penalty – Personal Penalty on Employee –Section 112(a) of the Customs Act, 1962 – The adjudicating authority imposed a personal penalty of Rs. 10 lakhs on the Manager, Customer Operations of the appellant-company under Section 112(a) of the Customs Act, alleging that the employee was involved in the mis-declaration of the classification of imported thermal printers to evade customs duty – Whether the penalty imposed on the employee under Section 112(a) is sustainable when the underlying demand of differential duty and confiscation against the company is set aside – HELD - The imposition of penalty on the employee was directly linked to the confirmation of demand and findings of mis-classification against the main appellant-company; since the classification of the thermal printers under CTI 9018 90 99 by the appellant-company is correct and set aside the order regarding the re-classification, demand of duty, interest, and confiscation, the grounds for imposing a penalty on the employee for alleged abetment or involvement in evasion automatically ceased to exist; consequently, the personal penalty imposed on the employee is unsustainable in law and set aside. [Read less]

Service Tax - Classification of Service, Scope of Cargo Handling Service or not – Contract for design, finance, construct, own, operate and maintain a Lignite Transportation System - The appellant was responsible for end-to-end handling and transport of lignite—from removal at stockpile, loading and road transport to railway sidings, transfer via conveyors and silos into wagons, rail transport to the power plant, and final unloading and conveyance to storage or plant systems, including providing required equipment and railway sidings at both ends - Department formed a view that the activities undertaken by the appellan... [Read more]

Service Tax - Classification of Service, Scope of Cargo Handling Service or not – Contract for design, finance, construct, own, operate and maintain a Lignite Transportation System - The appellant was responsible for end-to-end handling and transport of lignite—from removal at stockpile, loading and road transport to railway sidings, transfer via conveyors and silos into wagons, rail transport to the power plant, and final unloading and conveyance to storage or plant systems, including providing required equipment and railway sidings at both ends - Department formed a view that the activities undertaken by the appellant classifiable under “Cargo Handling Service” - Whether the activities undertaken by the appellant qualify as 'Cargo Handling Service' under Section 65(23)(b) of the Finance Act, 1994 and whether the extended period of limitation was correctly invoked – HELD - For a service to be classified as 'Cargo Handling Service', it is imperative that the service provider should be engaged in the activity of "packing" together with the transportation of cargo or goods -The service of cargo handling would acquire its essential characteristic so long as the principal activity of packing is undertaken together with transportation, irrespective of whether or not the ancillary services of loading, unloading and unpacking are undertaken. If only the mere transportation of goods is undertaken along with one or more activities of loading, unloading and unpacking, then too it would not get covered under clause (b) of Section 65(23), as the main function of packing remains absent - In the absence of any evidence that the appellant undertakes the activity of packing together with the transportation of goods, the service rendered by the appellant would itself not come within the ambit of Section 65(23)(b) as “cargo handling service”. the Adjudicating Authority has erred in finding that the amendment made to Section 65(23) brings the appellant within the ambit of ‘cargo handling service’ - The impugned order is set aside and the appeal is allowed - Extended period of limitation - The extended period of limitation cannot be invoked in the absence of any positive act of the appellant which proves the intention to evade service tax. The relevant facts regarding the activities of the appellant were already within the knowledge of the Department since 2003 and mere non-filing of returns without proving the intent to evade payment of service tax cannot amount to suppression of facts. The Department itself was confused about the classification of the activities undertaken by the appellant, as evidenced by the issuance of two show cause notices proposing different categories, which precluded the invocation of the extended period of limitation. [Read less]

Customs - Classification of Polyvinyl Chloride (PVC) Suspension Resin – Appellant imported 'Polyvinyl Chloride (PVC) Suspension Resin SP 660' from Thailand, which was classified under CTH 39042110/39042190 as 'Other Poly (Vinyl Chloride); Non-Plasticised: Poly (Vinyl Chloride) Resins' and cleared at a concessional rate of Basic Customs Duty (BCD) at 2% under ASEAN-India Free Trade Area Preferential Trade Agreement. The Revenue, relying on a test report issued by Central Institute of Plastics Engineering & Technology (CIPET) in respect of another importer, proposed reclassification of the goods under CTH 39041090 and deni... [Read more]

Customs - Classification of Polyvinyl Chloride (PVC) Suspension Resin – Appellant imported 'Polyvinyl Chloride (PVC) Suspension Resin SP 660' from Thailand, which was classified under CTH 39042110/39042190 as 'Other Poly (Vinyl Chloride); Non-Plasticised: Poly (Vinyl Chloride) Resins' and cleared at a concessional rate of Basic Customs Duty (BCD) at 2% under ASEAN-India Free Trade Area Preferential Trade Agreement. The Revenue, relying on a test report issued by Central Institute of Plastics Engineering & Technology (CIPET) in respect of another importer, proposed reclassification of the goods under CTH 39041090 and denied the benefit of the concessional notification, thereby confirming the demand of duty - Whether the classification adopted by the importer under CTH 39042110/39042190 or the reclassification attempted by the Revenue under CTH 39041090 is correct – HELD - The impugned order violates the principles of natural justice as the CIPET test report was not provided to the importer for effective rebuttal. On merits, in the cases of Arun Industries and Surabhi Enterprises, it was held that the imported goods are correctly classifiable under sub-heading 3904.21 (Tariff Item 3902 21 10) as 'Poly (Vinyl Chloride) Resins', which is a specific entry, and cannot be classified under the general entry of CTH 39041090 covering 'Others'. The period in the present case is prior to the change made in the Finance Act, 2017, whereby 'Poly (Vinyl Chloride) resin' was shifted from the specific heading 3904 21 10 to the general heading 3904 10. Therefore, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Demand on Sale of Goods - Appellant contended that the total turnover was not on account of any service provided, but was on account of supply of materials, as evident from the Profit and Loss account and invoice-wise sales details – HELD - The entire turnover was towards sale of goods and not provision of services. The Profit and Loss account clearly showed the sale of materials and the purchase of materials, indicating that it was a case of sale of goods and not provision of services. The invoice-wise sales details also corroborated the fact that the entire turnover was towards sale of goods. The mentio... [Read more]

Service Tax – Demand on Sale of Goods - Appellant contended that the total turnover was not on account of any service provided, but was on account of supply of materials, as evident from the Profit and Loss account and invoice-wise sales details – HELD - The entire turnover was towards sale of goods and not provision of services. The Profit and Loss account clearly showed the sale of materials and the purchase of materials, indicating that it was a case of sale of goods and not provision of services. The invoice-wise sales details also corroborated the fact that the entire turnover was towards sale of goods. The mentioning of the turnover under the heading 'Sales of Service' in the Income Tax Returns could have been due to a clerical error on the part of the appellant - The turnover was towards sale of goods and not provision of services, and therefore, the Service Tax demand on the same is not sustainable – Further, the demand is also set aside on the ground of limitation, as the extended period of limitation could not be invoked in the absence of any fraud or suppression on the part of the appellant – The appeal is allowed [Read less]

GST - Short payment of tax and excess availed input tax credit – HELD - The adjudicating authority disbelieved the documents submitted by the petitioner, which showed an excess payment of tax in the previous financial year (FY 2017-18). Hence, there was a short payment of tax in the FY 2018-19. The adjudicating authority and the appellate authority failed to properly examine the evidence provided by the petitioner and exercise their jurisdiction – On the issue of excess availed ITC, the appellate authority passed a cryptic order without appreciating the contentions raised by the petitioner regarding the eligibility and... [Read more]

GST - Short payment of tax and excess availed input tax credit – HELD - The adjudicating authority disbelieved the documents submitted by the petitioner, which showed an excess payment of tax in the previous financial year (FY 2017-18). Hence, there was a short payment of tax in the FY 2018-19. The adjudicating authority and the appellate authority failed to properly examine the evidence provided by the petitioner and exercise their jurisdiction – On the issue of excess availed ITC, the appellate authority passed a cryptic order without appreciating the contentions raised by the petitioner regarding the eligibility and conditions for taking ITC. The appellate authority failed to properly examine the evidence provided by the petitioner and exercise its jurisdiction - both Order-in-Original so also the order impugned passed by the appellate authority shall remain stayed until further orders – Ordered accordingly [Read less]

Customs - Duty demand and penalties under Sec 28AAA of Customs Act, 1962 for obtaining Focus Market Scheme (FPS) Scrips by misclassification of goods - DRI issued show-cause notice under Section 28AAA of the Customs Act, 1962 alleging that they had mis-classified the goods under Customs Tariff Heading (CTH) 2501 00 90 meant for 'industrial salt' to avail the benefit of duty credit at 2% under the Focus Market Scheme (FPS), whereas the correct classification should have been CTH 2501 0010 for 'common salt' for which no such benefit was available - Whether the Customs duty demand and penalties imposed by the lower authoritie... [Read more]

Customs - Duty demand and penalties under Sec 28AAA of Customs Act, 1962 for obtaining Focus Market Scheme (FPS) Scrips by misclassification of goods - DRI issued show-cause notice under Section 28AAA of the Customs Act, 1962 alleging that they had mis-classified the goods under Customs Tariff Heading (CTH) 2501 00 90 meant for 'industrial salt' to avail the benefit of duty credit at 2% under the Focus Market Scheme (FPS), whereas the correct classification should have been CTH 2501 0010 for 'common salt' for which no such benefit was available - Whether the Customs duty demand and penalties imposed by the lower authorities under Section 28AAA of the Customs Act, 1962 are valid and sustainable – HELD - The actions taken by the lower authorities in issuing the demand show-cause notice and adjudicating the same are premature and contrary to the Board's Circular No. 334/1/2012-TRU dated 01.06.2012. The Circular clearly states that the recovery of duty can be initiated under Section 28AAA only after the DGFT/concerned regional Authority initiates action for cancellation of the instrument (FPS scrips), and the matter may be decided only after the instrument has been cancelled by DGFT. In the present case, it is a matter of record that the DGFT has not initiated any action for cancellation of the FPS scrips. Hence, the action taken by the lower authorities is not in line with the Board's instructions – Since the DGFT had not cancelled the scrips, the department cannot re-adjudge the classification and sit over the decision of the DGFT authorities - The penalties, redemption fine, and the duty demand imposed by the lower authorities are not sustainable and set aside – The appeals filed by the appellants are allowed [Read less]

GST - Tender condition requiring local office having GST registration - HELD - The eligibility criteria in a tender must have a rational nexus with the object sought to be achieved and should not create artificial barriers that exclude otherwise competent and financially sound bidders - the GST Registration cannot be issued in two separate districts. Once the bidder/OEM is getting the GST registration, it is valid for all over India. There cannot be two registration numbers of one firm. As regard the place of business, the authorities cannot restrict the persons to having the place of business where the tender has been iss... [Read more]

GST - Tender condition requiring local office having GST registration - HELD - The eligibility criteria in a tender must have a rational nexus with the object sought to be achieved and should not create artificial barriers that exclude otherwise competent and financially sound bidders - the GST Registration cannot be issued in two separate districts. Once the bidder/OEM is getting the GST registration, it is valid for all over India. There cannot be two registration numbers of one firm. As regard the place of business, the authorities cannot restrict the persons to having the place of business where the tender has been issued - the impugned tender condition is quashed and the authorities are directed to issue a corrigendum deleting the same – The writ petition is disposed of [Read less]

Central Excise - Classification of "Sikko Fast" product as fertilizer or chemical product – Dept conducted a search and found that the appellant was clearing the "Sikko Fast" product as fertilizer, but it was actually a soil conditioner – Notice proposing classification of the product under CTH 38249090 and demanding Central Excise duty, interest, and penalty - Whether the "Sikko Fast" product manufactured by the appellant should be classified as a fertilizer under Chapter 31 or as a chemical product under Chapter 38 of the Central Excise Tariff Act, 1985 – HELD - The order of Commissioner (Appeals) discusses merit o... [Read more]

Central Excise - Classification of "Sikko Fast" product as fertilizer or chemical product – Dept conducted a search and found that the appellant was clearing the "Sikko Fast" product as fertilizer, but it was actually a soil conditioner – Notice proposing classification of the product under CTH 38249090 and demanding Central Excise duty, interest, and penalty - Whether the "Sikko Fast" product manufactured by the appellant should be classified as a fertilizer under Chapter 31 or as a chemical product under Chapter 38 of the Central Excise Tariff Act, 1985 – HELD - The order of Commissioner (Appeals) discusses merit of the case to justify redetermination of classification of the product under chapter 38 instead of CTH 3105 claimed by the appellant. This order is however silent on invocation of extended period in this case to demand duty - The Department relied on the test report to conclude classification of the product under CTH 38249090 on the ground that Low percentage of Nitrogen, Phosphorus, and Potassium does not make them essential constituent so as to classify as other fertilizers - The test report relied upon by the Department was incomplete as it did not reply to certain queries raised, and the department did not send the sample to any other government laboratory for complete testing - The Tribunal had considered the classification of "soil conditioner" in the case of Narmada Bio-chem Pvt Ltd, and the principles enumerated in that case should be applied in the present case as well. The Adjudicating Authority is directed to examine the essentiality of the unanswered queries in the test report, the minimum percentage of NPK required for classification under Chapter 31, and the availability of any certificate from the Directorate of Agriculture considering the product as a fertilizer - The impugned order is set aside and remanded the matter to the Adjudicating Authority for a fresh decision – The appeal is allowed by remand [Read less]

Central Excise - Generation and sale of electricity, Rule 6(3) of CENVAT Credit Rules 2004 - Department held that since the appellants are engaged in the manufacture of excisable goods as well as generation and sale of electricity (a non-dutiable activity), the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 are applicable, and the appellants are liable to pay 6% of the value of electricity sold to outside parties - Whether the appellants are liable to pay 6% of the value of electricity sold to outside parties under Rule 6(3) of the CENVAT Credit Rules, 2004 – HELD - The electricity produced from bagasse by the ... [Read more]

Central Excise - Generation and sale of electricity, Rule 6(3) of CENVAT Credit Rules 2004 - Department held that since the appellants are engaged in the manufacture of excisable goods as well as generation and sale of electricity (a non-dutiable activity), the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 are applicable, and the appellants are liable to pay 6% of the value of electricity sold to outside parties - Whether the appellants are liable to pay 6% of the value of electricity sold to outside parties under Rule 6(3) of the CENVAT Credit Rules, 2004 – HELD - The electricity produced from bagasse by the assessees and sold to the state electricity board cannot be subjected to the payment of an amount equal to 6% of the value of electricity sold under Rule 6(3) of the CENVAT Credit Rules, 2004 - An identical dispute in the case of M/s Vaidyanath SSK Ltd. and others came up for hearing before the Commissioner of GST, Aurangabad and the matter was adjudicated in favour of the assessees, by dropping the show-case proceedings initiated against them. The period of dispute in the present case is from March 2015 to December 2015, which is similar to the period covered in the order passed by the Commissioner of GST, Aurangabad. The order of the Commissioner of GST, Aurangabad has been accepted by the Committee of Chief Commissioners and has attained finality as no appeal was preferred against it - The electricity generated from bagasse and sold to the state electricity board cannot be subjected to the payment of an amount equal to 6% of the value of electricity sold under Rule 6(3) of the CCR, 2004 – the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Classification of 'Ready Roti/Halka Fulka' - Department conducted a visit and found that the product was partially cooked and ready to eat after heating, and thus, classified it under Central Excise Tariff Heading (CETH) 2106 90 90 which covers instant food mixes and ready-to-eat packaged foods - Whether the 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 (Bread and Bakery items) or CETH 2106 90 90 (Instant Food Mixes and Ready-to-Eat Packaged Foods) - HELD - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CET... [Read more]

Central Excise - Classification of 'Ready Roti/Halka Fulka' - Department conducted a visit and found that the product was partially cooked and ready to eat after heating, and thus, classified it under Central Excise Tariff Heading (CETH) 2106 90 90 which covers instant food mixes and ready-to-eat packaged foods - Whether the 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 (Bread and Bakery items) or CETH 2106 90 90 (Instant Food Mixes and Ready-to-Eat Packaged Foods) - HELD - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 chargeable to nil rate of duty. The General Rules of Interpretation, particularly Rule 2(a), states that an incomplete or unfinished article shall be taken to include a reference to the complete or finished article if it has the essential character of the complete or finished article. The 'Ready Roti/Halka Fulka' has the essential character of Roti, even though it needs further cooking before consumption – Further, Roti is considered a form of unleavened bread, and the judgment of the Kerala High Court in Modern Food Enterprises Pvt. Ltd. vs. UOI, wherein Malabar Parota was held to be classifiable under Heading 1905 as bread, should apply to Roti as well - The 'Ready Roti/Halka Fulka' manufactured by the appellant is correctly classifiable under CETH 1905 90 90 chargeable to nil rate of duty. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Availability of CENVAT credit on C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners - During the relevant period of 2013-2014, the appellant availed CENVAT credit on input services like C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners – Denial of appellant's claim for CENVAT credit - Whether the appellant is entitled to avail CENVAT credit on the impugned services – HELD - The issue involved in the present appeal is no longer res integra as the Tribunal as well as the Departmental Authority, for the earlier and the subsequent p... [Read more]

Central Excise - Availability of CENVAT credit on C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners - During the relevant period of 2013-2014, the appellant availed CENVAT credit on input services like C&F Agents, Rent of Office/Godown after sale, and AMC of computers and air conditioners – Denial of appellant's claim for CENVAT credit - Whether the appellant is entitled to avail CENVAT credit on the impugned services – HELD - The issue involved in the present appeal is no longer res integra as the Tribunal as well as the Departmental Authority, for the earlier and the subsequent periods, have decided the issue in favour of the appellant. The Department has not filed any appeal against the previous orders passed in the appellant's favour, and therefore, the said orders have attained finality. The department cannot take a contrary view on the same issue for the same assessee - The appellant has correctly availed the CENVAT credit on the impugned services as these services are used in relation to the manufacturing of the final products - The appellant is eligible for CENVAT credit on the C&F Agents services, Rent of Office/Godown after sale, and AMC of computers and air conditioners – The appeal is allowed [Read less]

Service Tax - Export of Services, Realisation of export proceeds in Indian Rupees, Refund of Service Tax – Export of services such as quality assurance, book/journal datasets, content engineering, multimedia production, and production quality control - Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 – Rejection of refund claims on the ground that the appellant had not satisfied the condition of receiving the consideration for the exported services in convertible foreign exchange as per Rule 3(2)(b) of the Export of Service Rules, 2005 - HELD - When a person receives payment in Indian rupees from the account... [Read more]

Service Tax - Export of Services, Realisation of export proceeds in Indian Rupees, Refund of Service Tax – Export of services such as quality assurance, book/journal datasets, content engineering, multimedia production, and production quality control - Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 – Rejection of refund claims on the ground that the appellant had not satisfied the condition of receiving the consideration for the exported services in convertible foreign exchange as per Rule 3(2)(b) of the Export of Service Rules, 2005 - HELD - When a person receives payment in Indian rupees from the account of a bank situated in any country outside India maintained with an authorized dealer, such payment in rupees shall be deemed to have repatriated the realized foreign exchange to India - In the present case, the payment in Indian rupees was received from foreign countries through the appellant's bank account, which is equivalent to the receipt of foreign exchange. Therefore, the mere receipt of consideration in Indian currency does not disentitle the appellant from the export benefits when the remittance originates from abroad through authorized banking channels and is evidenced by Foreign Inward Remittance Certificates (FIRCs) - The impugned orders are set aside and the appeals are allowed [Read less]

Central Excise - Section 35G & Section 35L of the Central Excise Act, 1944 - Deemed Manufacture - Activities involving packing or repacking of goods, labelling or re-labelling of containers including the declaration or alteration of retail sale price, and other treatment on the goods to render the product marketable - Department contended that such activities amounted to \"deemed manufacture\" under Section 2(f)(iii) of the Central Excise Act, 1944 – HELD - This appeal should be preferred before the Hon’ble Supreme Court under Section 35L Sub-section (2) of the Act - The appeal preferred by the department is dismissed

Central Excise - Challenge to the validity of Notification No. 02/2010-CEC, dated 22-6-2010 applying Section 11A for recovery of Clean Environmental Cess - The Notification dated 22.06.2010 issued under Section 83(7) of the Finance Act, 2010 made Section 11A of the Central Excise Act, 1944 applicable for the recovery of Clean Environment Cess (CEC) - Petitioner argued that Section 83(7) only empowers the Central Government to notify provisions relating to the "levy" of excise duty, whereas "assessment and collection" are specifically governed by Section 83(6) and Section 84 through the rule-making power - Whether the expre... [Read more]

Central Excise - Challenge to the validity of Notification No. 02/2010-CEC, dated 22-6-2010 applying Section 11A for recovery of Clean Environmental Cess - The Notification dated 22.06.2010 issued under Section 83(7) of the Finance Act, 2010 made Section 11A of the Central Excise Act, 1944 applicable for the recovery of Clean Environment Cess (CEC) - Petitioner argued that Section 83(7) only empowers the Central Government to notify provisions relating to the "levy" of excise duty, whereas "assessment and collection" are specifically governed by Section 83(6) and Section 84 through the rule-making power - Whether the expression “levy” occurring in Section 83(7) of the Finance Act, 2010, is wide enough to encompass the processes of assessment and collection/recovery of Cess - HELD - The expression “levy” has a varying connotation depending upon the context in which it is used. While it may be distinct from "collection" when both terms are used together, when used in isolation, "levy" can encompass the entire taxing process including assessment and realization. The term "levy" includes taking necessary steps to collect and determine liability - The Section 83(7) utilizes the legislative device of "incorporation by reference," which allows the legislature to adopt an existing statutory scheme for convenience rather than reproducing it verbatim. The Central Government had the option to either frame exhaustive Rules for collection under Section 84 or borrow the established procedure of the Central Excise Act by notification under Section 83(7). Once it is established that "levy" includes assessment and collection, the choice of the notification route is a valid exercise of statutory power - The subordinate legislation should be read harmoniously with the parent statute and that the inclusion of recovery provisions under the term "levy" does not violate the statutory scheme of the Finance Act, 2010. By issuing the impugned notification under Section 83(7), the Central Government had validly extended the applicability of Section 11A of the Central Excise Act, 1944 to the assessment and recovery of Clean Environment Cess - The impugned notification is intra vires the powers conferred under the Act – The writ petition is dismissed [Read less]

Service Tax - Appeal challenging the Order-in-Original, which was passed ex parte and had raised a demand of service tax along with penalty. The petitioner claimed that the notices were served upon an outgoing partner who failed to communicate the same to the firm - HELD - Department has afforded number of opportunities to petitioner to do the needful but apparently no amount of pre-deposit, even as per its own calculation was ever made by the petitioner. This clearly reflects adversely on the conduct of petitioner - While there is no limitation for filing a writ petition, it is a settled position that a writ petition shou... [Read more]

Service Tax - Appeal challenging the Order-in-Original, which was passed ex parte and had raised a demand of service tax along with penalty. The petitioner claimed that the notices were served upon an outgoing partner who failed to communicate the same to the firm - HELD - Department has afforded number of opportunities to petitioner to do the needful but apparently no amount of pre-deposit, even as per its own calculation was ever made by the petitioner. This clearly reflects adversely on the conduct of petitioner - While there is no limitation for filing a writ petition, it is a settled position that a writ petition should be filed within a reasonable time. The Supreme Court has held that a right not exercised for a long time is non-existent, and the doctrine of delay and laches as well as acquiescence are applied to non-suit the litigants who approach the court/appellate authorities belatedly without any justifiable explanation for the delay - In the present case, the petitioner had not provided any explanation, let alone a plausible explanation, for the delay of almost two years in filing the writ petition - The writ petition is dismissed for being devoid of any merit [Read less]

GST - Refund of unutilised Input Tax Credit on Cess paid for purchase of coal - The High Court relied on Patson Papers Pvt Ltd v. Union of India to hold that the petitioner is entitled to claim refund of the input tax credit of the GST Compensation Cess paid on the inward supplies of coal used for manufacturing the exported goods – Aggrieved Revenue filed instant appeal – SC HELD – In view of the fact that the special leave petition(s) against High Court’s decision in Union of India & Ors. vs. Patson Papers Pvt Ltd, relied upon in the impugned order, has already been dismissed, this special leave petition is also d... [Read more]

GST - Refund of unutilised Input Tax Credit on Cess paid for purchase of coal - The High Court relied on Patson Papers Pvt Ltd v. Union of India to hold that the petitioner is entitled to claim refund of the input tax credit of the GST Compensation Cess paid on the inward supplies of coal used for manufacturing the exported goods – Aggrieved Revenue filed instant appeal – SC HELD – In view of the fact that the special leave petition(s) against High Court’s decision in Union of India & Ors. vs. Patson Papers Pvt Ltd, relied upon in the impugned order, has already been dismissed, this special leave petition is also dismissed. The assessee is entitled to refund of the unutilised ITC on cess paid on purchase of coal utilized for the purpose of manufacture of goods which are exported as zero-rated supply - The SLP filed by the Revenue is dismissed [Read less]

GST - Anticipatory Bail - Applicant apprehending arrest in connection with alleged offenses under Sections 69 and 132 of the CGST Act, 2017 - Whether the absence of an FIR bars the grant of anticipatory bail – HELD As per the settled position of law laid down by the Supreme Court, the absence of an FIR does not bar the grant of anticipatory bail, Regarding the nature and gravity of the offenses, the allegations primarily pertain to documentary and digital evidence related to the wrongful availment of Input Tax Credit. The maximum punishment prescribed under Section 132 of the CGST Act is only five years, which does not ... [Read more]

GST - Anticipatory Bail - Applicant apprehending arrest in connection with alleged offenses under Sections 69 and 132 of the CGST Act, 2017 - Whether the absence of an FIR bars the grant of anticipatory bail – HELD As per the settled position of law laid down by the Supreme Court, the absence of an FIR does not bar the grant of anticipatory bail, Regarding the nature and gravity of the offenses, the allegations primarily pertain to documentary and digital evidence related to the wrongful availment of Input Tax Credit. The maximum punishment prescribed under Section 132 of the CGST Act is only five years, which does not qualify as a heinous or violent crime warranting pre-trial incarceration. The limited statutory severity of punishment, coupled with the nature of the allegations, militated against the necessity of custodial detention at that stage - The relevant records and data have already been seized, and one co-accused has been granted regular bail, indicating that the applicant's continued liberty, subject to reasonable conditions, does not pose a risk of absconding or tampering with evidence. Considering the totality of the circumstances, including the nature of the accusation, the character of the evidence, the stage of investigation, the maximum punishment prescribed, and the fact that custodial interrogation has not been shown to be indispensable, the Court granted anticipatory bail to the applicant, subject to the imposition of certain conditions - The anticipatory bail application is allowed [Read less]

GST - Classification of Coconut Oil under GST - SCN proposing demands for short payment of GST under various grounds, including the classification of coconut oil under Tariff Heading 3305 instead of Tariff Heading 1513 – HELD - The Supreme Court in the case of Commissioner of Central Excise Salem vs. M/s. Madhan Agro Industries (India) Private Limited has settled the dispute regarding the classification of coconut oil. The Court held that pure coconut oil sold in small quantities as 'edible oil' would be classifiable under Heading 1513 in Section III-Chapter 15 of the Central Excise Tariff Act, 1985, unless the packaging... [Read more]

GST - Classification of Coconut Oil under GST - SCN proposing demands for short payment of GST under various grounds, including the classification of coconut oil under Tariff Heading 3305 instead of Tariff Heading 1513 – HELD - The Supreme Court in the case of Commissioner of Central Excise Salem vs. M/s. Madhan Agro Industries (India) Private Limited has settled the dispute regarding the classification of coconut oil. The Court held that pure coconut oil sold in small quantities as 'edible oil' would be classifiable under Heading 1513 in Section III-Chapter 15 of the Central Excise Tariff Act, 1985, unless the packaging thereof satisfies all the requirements set out in Chapter Note 3 in Section VI-Chapter 33, whereupon it would be classifiable as 'hair oil' under Heading 3305 - The matter back is remitted back to the Respondent to pass a fresh order on merits taking note of the Supreme Court's decision on the classification issue and to also consider the other issues raised in the show cause notice – The writ petition is disposed of [Read less]

Customs - Relevance and admissibility of statements recorded under Section 108 of the Customs Act and Section 14 of the Central Excise Act, 1944 – Appellant-CHA was imposed penalties under Sections 112(a)(i) and 112(a)(ii) of the Customs Act based on his statements and the statements of third party recorded under Section 108 of the Customs Act. The appellant challenged the penalties on the ground that the statements cannot be relied upon as the procedure under Section 138B of the Customs Act was not followed - Whether the penalties imposed on the appellant solely on the basis of the statements recorded under Section 108 ... [Read more]

Customs - Relevance and admissibility of statements recorded under Section 108 of the Customs Act and Section 14 of the Central Excise Act, 1944 – Appellant-CHA was imposed penalties under Sections 112(a)(i) and 112(a)(ii) of the Customs Act based on his statements and the statements of third party recorded under Section 108 of the Customs Act. The appellant challenged the penalties on the ground that the statements cannot be relied upon as the procedure under Section 138B of the Customs Act was not followed - Whether the penalties imposed on the appellant solely on the basis of the statements recorded under Section 108 of the Customs Act can be sustained – HELD - The statements recorded under Section 108 of the Customs Act cannot be considered as relevant evidence unless the procedure prescribed under Section 138B of the Customs Act is followed. Section 138B(1)(b) requires that the person who made the statement must be examined as a witness before the adjudicating authority, and the authority must form an opinion that the statement should be admitted in evidence in the interests of justice. This procedure was not followed in the present case - The provisions of Section 138B(1)(b) of the Customs Act and Section 9D(1)(b) of the Central Excise Act are mandatory provisions. The rationale behind this elaborate procedure is to ensure that statements recorded during investigation are not obtained under coercion or compulsion and to provide the opportunity of cross-examination to the person against whom the statement is used. Since the mandatory procedure was not followed in the present case, the penalties imposed solely on the basis of the statements recorded under Section 108 of the Customs Act cannot be sustained and set aside – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Penalty under Section 112(a)(i) of the Customs Act - The appellant, a customs broker licensed under the Customs House Agents Licensing Regulations, 2004, was alleged to have failed to perform its duty and exercise supervision to ensure proper conduct of its employees, leading to misdeclaration and illegal import of goods. The Commissioner imposed penalty on the appellant under Section 112(a)(i) of the Customs Act - Whether the penalty under Section 112(a)(i) of the Customs Act can be imposed on the appellant solely on the ground of violation of Regulation 19 of the 2004 Regulations, without any specific allegatio... [Read more]

Customs - Penalty under Section 112(a)(i) of the Customs Act - The appellant, a customs broker licensed under the Customs House Agents Licensing Regulations, 2004, was alleged to have failed to perform its duty and exercise supervision to ensure proper conduct of its employees, leading to misdeclaration and illegal import of goods. The Commissioner imposed penalty on the appellant under Section 112(a)(i) of the Customs Act - Whether the penalty under Section 112(a)(i) of the Customs Act can be imposed on the appellant solely on the ground of violation of Regulation 19 of the 2004 Regulations, without any specific allegation and evidence that the appellant was aware of the illegal acts of its employee/agent - HELD - The show cause notice merely alleged violation of Regulation 19 of the 2004 Regulations, and there was no specific allegation or evidence to show that the appellant was aware of the illegal acts of its employee/agent. Mere violation of the 2004 Regulations cannot be a ground to impose penalty under Section 112(a)(i) of the Customs Act, as there must be some tangible material to show that the appellant had knowledge of the illegal acts of its employee/agent - The impugned order imposing penalty under Section 112(a)(i) of the Customs Act on the appellant is set aside and the appeal is allowed [Read less]

GST - Calculation of Statutory Interest on IGST Refund - Section 56 of the CGST Act, 2017 and Section 16 of the IGST Act, 2017 - Petitioner, following a prior High Court order directing the sanction of a refund with statutory interest, received interest payments that were subsequently reduced via a corrigendum or calculated at negligible amounts in separate orders without any clear justification or detailed methodology. The petitioner challenged these orders, contending that the interest calculations were in violation of the rates and mandates prescribed under Section 56 of the CGST Act and contrary to established judicial... [Read more]

GST - Calculation of Statutory Interest on IGST Refund - Section 56 of the CGST Act, 2017 and Section 16 of the IGST Act, 2017 - Petitioner, following a prior High Court order directing the sanction of a refund with statutory interest, received interest payments that were subsequently reduced via a corrigendum or calculated at negligible amounts in separate orders without any clear justification or detailed methodology. The petitioner challenged these orders, contending that the interest calculations were in violation of the rates and mandates prescribed under Section 56 of the CGST Act and contrary to established judicial precedents - Whether the respondents were justified in granting interest at reduced or arbitrary rates without providing a reasoned basis or adhering to the statutory requirements of Section 56 of the CGST Act - HELD - The impugned orders lacked any reasoning or discussion to explain how the interest amounts were determined or why previously sanctioned amounts were reduced. The Revenue is bound by the mandate of law and must calculate interest strictly in accordance with Section 56 as interpreted by the binding decisions of the Court in Altisource Business Solutions India Pvt. Ltd. and Lupin Ltd. - Once the Court has directed that the petitioner would be entitled for ‘statutory interest’, an appropriate exercise in that regard ought to have been undertaken and as acceptable in law and the petitioner was not required to approach this Court on any such issue. The authorities must follow the statutory mandate once the right to statutory interest has been judicially recognized. The petitioner should not have been forced into further litigation for an entitlement already settled by law - The impugned orders and corrigendum concerning interest are set aside and the respondents were directed to pass fresh orders determining the interest amounts strictly as per Section 56 of the CGST Act – The petition is disposed of [Read less]

GST - Violation of Principles of Natural Justice - Reliance on Undisclosed Evidence and Denial of Cross-examination – Demand for reversal of credit on the ground that the petitioner has not been able to demonstrate movement of goods - The Proper Officer, while passing the order, relied heavily on statements and declarations made by vehicle owners, but failed to provide these statements to the petitioner or allow an opportunity for cross-examination - Whether an adjudication order based on adverse third-party statements is sustainable when the taxpayer is denied access to such evidence and the right to cross-examine the w... [Read more]

GST - Violation of Principles of Natural Justice - Reliance on Undisclosed Evidence and Denial of Cross-examination – Demand for reversal of credit on the ground that the petitioner has not been able to demonstrate movement of goods - The Proper Officer, while passing the order, relied heavily on statements and declarations made by vehicle owners, but failed to provide these statements to the petitioner or allow an opportunity for cross-examination - Whether an adjudication order based on adverse third-party statements is sustainable when the taxpayer is denied access to such evidence and the right to cross-examine the witnesses - HELD - It is a settled principle of law that if any material or statement is relied upon by a quasi-judicial authority for drawing an adverse conclusion against a person, that person must be afforded a fair opportunity to rebut the same. By failing to provide the statements of the vehicle owners and denying the petitioner the right to cross-examine them, the Proper Officer committed a patent violation of the principles of natural justice, rendering the order vulnerable and prone to interference - The right to rebut adverse evidence is fundamental to fair adjudication. The impugned adjudication order is set aside, and the matter is remanded for fresh adjudication with specific directions to provide the witness statements and allow cross-examination if such evidence is to be relied upon – The petition is disposed of - Non-consideration of Evidence and Lack of Reasoned Order - Discharge of Burden regarding Movement of Goods - During the adjudication process, the Proper Officer doubted the movement of goods. The officer concluded that the movement was not proven due to the absence of specific documents like weighment slips or transportation payment reflections, without addressing the documents actually submitted - HELD - The petitioner had produced a "tome of documents" to establish the authenticity of the transactions. It was incumbent upon the Proper Officer to bestow reasoning as to why these documents were not reliable, acceptable, or sufficient. The order impugned does not show how the documents that have been furnished by the petitioner have been considered and why the said documents are not sufficient for the petitioner to discharge his burden as regards movement of goods - The failure to spend even a single line of reasoning on why the submitted evidence was rejected, coupled with translating "doubt" into a firm conclusion without analysis, makes the order infirm and perverse. The lack of reasons and non-consideration of relevant evidence necessitates judicial intervention - The order is quashed and the Proper Officer was directed to conduct a fresh hearing considering all documents on record. [Read less]

The legislative intent is to limit the bar on ITC exclusively to "construction" of immovable property. The provision of Sec.17(5)(d) does not even remotely apply to activities of sub-plotting and transfer of leasehold rights absent any construction.

Affiliation Fee falls beyond the scope of service connected with admission of students and conduct of examination. The meaning of expression 'services relating to admission or conduct of examination' cannot be extended to cover the affiliation fees.

Andaman and Nicobar Islands Value Added Tax Regulation, 2017 - Maintainability of Writ Petition – Availability of Alternative Statutory Remedy – Petitioners challenged notices of assessment of tax, interest, and penalties issued under Andaman and Nicobar Islands VAT Regulation, 2017 - Respondents raised a preliminary objection regarding maintainability, citing the availability of an alternative remedy of appeal to the Appellate Tribunal - The petitioners argued that the Tribunal was not functional at the time of filing and that the notices were without jurisdiction due to being time-barred - Whether the High Court shou... [Read more]

Andaman and Nicobar Islands Value Added Tax Regulation, 2017 - Maintainability of Writ Petition – Availability of Alternative Statutory Remedy – Petitioners challenged notices of assessment of tax, interest, and penalties issued under Andaman and Nicobar Islands VAT Regulation, 2017 - Respondents raised a preliminary objection regarding maintainability, citing the availability of an alternative remedy of appeal to the Appellate Tribunal - The petitioners argued that the Tribunal was not functional at the time of filing and that the notices were without jurisdiction due to being time-barred - Whether the High Court should entertain writ petitions under Article 226 when a statutory appellate forum exists and has become functional during the pendency of the proceedings - HELD - The High Court’s jurisdiction under Article 226 is discretionary and governed by rules of self-imposed restraint, particularly in fiscal matters involving the recovery of public dues. While an alternative remedy is not an absolute bar, the Court should be slow to intervene when a specialized Tribunal is available. Although the Appellate Tribunal was not functional when some petitions were initially filed, it was designated and made operational via a notification dated August 19, 2025. Tax disputes, which often involve complex factual inquiries, are more effectively adjudicated by the statutory Tribunal - Furthermore, by filing objections under Section 74 and participating in hearings before the Commissioner, the petitioners elected a statutory path and waived their right to challenge the initial notices through a writ after receiving an unfavorable decision. The records of writ petitions filed before the Tribunal became functional are transferred to the Appellate Tribunal, while petitions filed thereafter are dismissed with liberty to pursue statutory appeals - the writ petitions are disposed of - Limitation as a Jurisdictional Bar – Mixed Question of Fact and Law – Determination of Tax Period – The petitioners contended that the assessment notices for financial years 2017-18, 2018-19, and 2019-20 were issued beyond the four-year limitation period prescribed under Section 34 of the 2017 Regulation, thereby rendering the proceedings void for want of jurisdiction - HELD - Limitation is generally a mixed question of fact and law. In this instance, the parties were in dispute as to whether returns had been duly filed and the exact dates of such filings, with the petitioners failing to provide copies of the returns to the Court. Since the foundational facts for determining the limitation period were not admitted, the issue did not emerge as a pure jurisdictional error. Such disputes requiring factual verification regarding the filing of returns and the applicability of grace periods are best suited for adjudication by the Appellate Tribunal rather than the writ court - The Court declined to decide the limitation issue on merits, relegating it to the Appellate Tribunal - Principles of Natural Justice – Post-Decisional Hearing – Compliance in Fiscal Statutes – The petitioners alleged that the assessment notices were vitiated by a breach of natural justice because they were issued without a prior audit or an opportunity for a pre-decisional hearing - Whether the absence of a pre-decisional hearing before the issuance of a tax demand notice violates the principles of natural justice when a subsequent statutory hearing is provided - HELD - The principles of natural justice are not rigid and do not always require a hearing at the pre-decisional stage, especially in taxing statutes. A post-decisional hearing that allows for a full review of the original order on merits satisfies the requirement of fairness. Section 74 of the 2017 Regulation provides for a personal hearing upon request when an assessee files an objection. As the petitioners had already availed themselves of this opportunity and participated in a reasoned hearing before the Joint Commissioner, no prejudice was demonstrated. The statutory scheme of issuing a notice followed by an objection and hearing process constitutes sufficient compliance with the rule of audi alteram partem - The challenge based on violation of natural justice is rejected, and the parties were relegated to the statutory appellate forum. [Read less]

Customs – Classification of poly vinyl chloride resins – Vide the impugned order the Tribunal held that the Department has re-classified goods imported under CTH 3904 1090 on the basis of inconclusive Test Report; the Tariff Item 3904 21 10 is specific for Poly vinyl chloride resins, whereas Tariff Item 3904 10 90 covers 'Others' which is a residuary entry and hence, same cannot be preferred over a specific entry. The imported goods are appropriately classifiable under CTH 3904 21 10 as claimed by the importer – Aggrieved, Revenue filed instant appeal – SC HELD – There is no grounds to interfere with the impugned... [Read more]

Customs – Classification of poly vinyl chloride resins – Vide the impugned order the Tribunal held that the Department has re-classified goods imported under CTH 3904 1090 on the basis of inconclusive Test Report; the Tariff Item 3904 21 10 is specific for Poly vinyl chloride resins, whereas Tariff Item 3904 10 90 covers 'Others' which is a residuary entry and hence, same cannot be preferred over a specific entry. The imported goods are appropriately classifiable under CTH 3904 21 10 as claimed by the importer – Aggrieved, Revenue filed instant appeal – SC HELD – There is no grounds to interfere with the impugned judgment and order. Hence, the appeal stands dismissed [Read less]

Customs - Reduction of assessable value and imposition of Anti-Dumping Duty (ADD) – Import of melamine were subjected to investigation alleging that the appellants had deliberately declared the value of the melamine to neutralize the ADD - Department reduced the assessable value of the imported melamine from the declared value and imposed ADD on the differential amount as specified in the relevant notification. Penalties and redemption fines were also imposed on the appellants and their Directors - Whether the reduction of the assessable value and the imposition of ADD on the differential amount is justified – HELD - U... [Read more]

Customs - Reduction of assessable value and imposition of Anti-Dumping Duty (ADD) – Import of melamine were subjected to investigation alleging that the appellants had deliberately declared the value of the melamine to neutralize the ADD - Department reduced the assessable value of the imported melamine from the declared value and imposed ADD on the differential amount as specified in the relevant notification. Penalties and redemption fines were also imposed on the appellants and their Directors - Whether the reduction of the assessable value and the imposition of ADD on the differential amount is justified – HELD - Under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the proper officer can raise doubts on the truth or accuracy of the declared value only if there are certain specific reasons, such as the value being significantly higher than the value at which identical or similar goods are imported, or the presence of abnormal discounts or reductions. In the present case, the declared value was higher than the value determined by the Department, and the Department had relied on data published in a periodic journal (ICIS) to determine the value, without establishing the authenticity and reliability of such data – Though certain efforts have been initiated by the Department to establish over-valuation of the goods imported but that can’t itself give rise to a finding that inflating of price was made for the purpose of evading ADD - The imposition of ADD is a remedial and protective measure to counter unfair international trade practices that cause material injury to the domestic industry, and not a measure to generate revenue - When no lower price of dump imports is referred as transaction value in substitution of usual home market price, one price range published by a periodic journal can’t be taken as transaction value only for the purpose of levy of ADD which would be contrary to the procedure referred in Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - The reduction of the assessable value and the imposition of ADD are not justified – The impugned order is set aside and the appeals are allowed [Read less]

Customs - Retrospective withdrawal of Transport and Marketing Assistance (TMA) Scheme for specified agricultural products - The Ministry of Commerce and Industry had introduced the Transport and Marketing Assistance (TMA) Scheme for specified agricultural products in 2019. The Scheme was included in the Foreign Trade Policy 2015-2020 under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 – Vide DGFT Notification dated 25.03.2022, the Scheme was withdrawn retrospectively, preventing the petitioners from filing claims for reimbursement under the Scheme - Whether the TMA Scheme can be withdrawn retrospe... [Read more]

Customs - Retrospective withdrawal of Transport and Marketing Assistance (TMA) Scheme for specified agricultural products - The Ministry of Commerce and Industry had introduced the Transport and Marketing Assistance (TMA) Scheme for specified agricultural products in 2019. The Scheme was included in the Foreign Trade Policy 2015-2020 under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 – Vide DGFT Notification dated 25.03.2022, the Scheme was withdrawn retrospectively, preventing the petitioners from filing claims for reimbursement under the Scheme - Whether the TMA Scheme can be withdrawn retrospectively, thereby taking away the accrued rights of the exporters under the scheme – HELD – In the judgments of Union of India v. Asian Food Industries, Viraj Impex v. Union of India, and DGFT v. Kanak Exports, it has been held that Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 does not empower the Government to make amendments with retrospective effect, thereby taking away the rights which have already accrued in favor of the beneficiaries under the scheme - The TMA Scheme was statutory in nature, having been introduced under Section 5 of the Act. While the Government has the power to withdraw or amend the scheme, it cannot do so retrospectively, as it would take away the vested rights of the exporters who had availed the benefits of the scheme - The impugned notification dated 25.03.2022 which withdrew the TMA Scheme retrospectively is quashed. The respondents are directed to process the applications filed by the petitioners and pay the accrued benefits accordingly – The writ petitions are allowed [Read less]

Central Excise - Availing Cenvat Credit on Input Services by availed by another unit - Appellant's Engineering and Design Centre located at Pune entered into a Development Agreement with Toyota Motor Corporation, Japan (TMC) for delivery of drawings and designs for seating systems - The Pune unit raised invoices on TMC towards provision of design and drawing services and discharged service tax. The appellant (Bangalore unit) availed cenvat credit of the service tax paid by the Pune unit on the ground that the designs and drawings were used as 'input service' towards manufacturing seating systems at its Bangalore unit - Whe... [Read more]

Central Excise - Availing Cenvat Credit on Input Services by availed by another unit - Appellant's Engineering and Design Centre located at Pune entered into a Development Agreement with Toyota Motor Corporation, Japan (TMC) for delivery of drawings and designs for seating systems - The Pune unit raised invoices on TMC towards provision of design and drawing services and discharged service tax. The appellant (Bangalore unit) availed cenvat credit of the service tax paid by the Pune unit on the ground that the designs and drawings were used as 'input service' towards manufacturing seating systems at its Bangalore unit - Whether the appellant was eligible to avail cenvat credit on the service tax paid by the another unit for the design and drawing services provided – HELD - The invoices issued by the Pune unit clearly mentioned that the service tax paid was for services to be used as input service by the Bangalore unit of the appellant. It is not in dispute that the Pune Unit has not availed cenvat credit against the said invoices. The appellant had availed cenvat credit against these two invoices and the value of the drawings and design charges amortized and included in the cost of the component - The appellant had also intimated the Department about availing the cenvat credit through a letter and had also reflected the cenvat credit in their ER-1 returns. The department has not denied receipt of the said letter but only it is contended that it was addressed to service tax authorities and not to the Central Excise authorities - The appellant has not suppressed any fact from the department and hence, the extended period of limitation could not be invoked to confirm the demand - The demand and penalties imposed on the appellant are set aside and the appeal is allowed [Read less]

Service Tax - Collection of toll by private contractor under fixed bid arrangement - Whether the collection of toll under a fixed bid arrangement with South Delhi Municipal Corporation (SDMC) would be subject to service tax – HELD - When a contractor collects toll on a principal-to-principal basis against payment of a fixed bid amount to the Government body, regardless of the ultimate quantum of toll collected, the contractor cannot be considered as an agent acting on behalf of the government body. Rather, the contractor is collecting toll in the course of its own business, and the excess amount retained after paying the... [Read more]

Service Tax - Collection of toll by private contractor under fixed bid arrangement - Whether the collection of toll under a fixed bid arrangement with South Delhi Municipal Corporation (SDMC) would be subject to service tax – HELD - When a contractor collects toll on a principal-to-principal basis against payment of a fixed bid amount to the Government body, regardless of the ultimate quantum of toll collected, the contractor cannot be considered as an agent acting on behalf of the government body. Rather, the contractor is collecting toll in the course of its own business, and the excess amount retained after paying the fixed bid amount cannot be subjected to service tax. In such arrangements, the contractor is not rendering any service to the government body, but is collecting toll in its own right - The collection of toll by the appellant under the fixed bid arrangement with SDMC is not subject to service tax – The impugned order is set aside and the appeal is allowed [Read less]

GST – Rajasthan AAR - Classification and Rate of GST on Biodegradable Bags – HELD – The applicant has submitted a certificate issued by a notified agency indicating that the product is “compostable”. However, the mere submission of such a certificate does not authorize this Authority to make any scientific, technical or environmental determination regarding the actual biodegradability or compostability of the product - The determination of biodegradability or compostability falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST A... [Read more]

GST – Rajasthan AAR - Classification and Rate of GST on Biodegradable Bags – HELD – The applicant has submitted a certificate issued by a notified agency indicating that the product is “compostable”. However, the mere submission of such a certificate does not authorize this Authority to make any scientific, technical or environmental determination regarding the actual biodegradability or compostability of the product - The determination of biodegradability or compostability falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST Act – Without determining whether the applicant’s product is biodegradable or compostable, if the bags supplied by the applicant are biodegradable, then the benefit of Entry No. 319 of Schedule I to Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025, would be available and GST would be payable at the rate of 5%. If the product is not biodegradable, then the concessional rate would not apply, and the applicable rate under the general classification for plastic bags under Chapter 39 would apply – Ordered accordingly [Read less]

GST – Rajasthan AAR - Classification and GST Rate of Paper Bags - Whether the 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975 – HELD - The Entry 319 of Schedule I prescribes a GST rate of 5% for "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48. However, its wording does not extend to ordinary paper bags falling under Heading 4819 unless the goods specifically qualify as biodegradable bags - No material was submitted by the applicant to establish that their product is a biodegradable bag or that it falls within an environmentally... [Read more]

GST – Rajasthan AAR - Classification and GST Rate of Paper Bags - Whether the 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975 – HELD - The Entry 319 of Schedule I prescribes a GST rate of 5% for "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48. However, its wording does not extend to ordinary paper bags falling under Heading 4819 unless the goods specifically qualify as biodegradable bags - No material was submitted by the applicant to establish that their product is a biodegradable bag or that it falls within an environmentally-classified category under the said entry. Further, Entry 322 of Schedule I, which grants 5% rate only to "Cartons, boxes and cases" of corrugated or non-corrugated paper or paperboard, is not applicable as the applicant manufactures "bags" and not cartons or cases - The Entry 185 of Schedule II, covers "All goods" of Heading 4819 except those falling under subheadings 4819 10 and 4819 20. Since the applicant's product is neither a corrugated carton (4819 10) nor a non-corrugated carton (4819 20), the product falls under the residual category of Heading 4819. Entry 185 therefore applies, attracting GST at 18% - The 'Paper Bags' manufactured and supplied by the Applicant, classifiable under Heading 4819 of the Customs Tariff Act, 1975, are covered under Entry No. 185 of Schedule II to Notification No. 09/2025-Central Tax (Rate), attracting 18% GST – Ordered accordingly [Read less]

GST - Liability for GST Registration in Works Contract Services - Section 22(1) and Section 2(71) of the CGST Act, 2017- Applicant, a company registered in Uttar Pradesh, was awarded a turnkey contract for the construction of a power substation for NTPC at Bikaner, Rajasthan - Whether the applicant is legally required to obtain a separate GST registration in the State of Rajasthan solely because the site of the works contract (immovable property) is located there - HELD – In terms of Section 22(1), a supplier is liable to be registered in the State from where they make a taxable supply. The Section 2(71) defines the "loc... [Read more]

GST - Liability for GST Registration in Works Contract Services - Section 22(1) and Section 2(71) of the CGST Act, 2017- Applicant, a company registered in Uttar Pradesh, was awarded a turnkey contract for the construction of a power substation for NTPC at Bikaner, Rajasthan - Whether the applicant is legally required to obtain a separate GST registration in the State of Rajasthan solely because the site of the works contract (immovable property) is located there - HELD – In terms of Section 22(1), a supplier is liable to be registered in the State from where they make a taxable supply. The Section 2(71) defines the "location of the supplier of services" as the place of business for which registration has been obtained - The applicant has neither established any office nor any fixed establishment in the State of Rajasthan. Since the applicant manages the project from its Uttar Pradesh office and has not established a "fixed establishment" in Rajasthan, the location of the supplier remains Uttar Pradesh and the mere location of the "place of supply" at the construction site does not necessitate a local registration - The applicant is not required to obtain a separate GST registration in the State of Rajasthan – Ordered accordingly - Tax Treatment of Inward Supplies and Determination of Nature of Supply - Section 10(1) of the IGST Act, 2017 - During the execution of a substation project in Bikaner, Rajasthan, the applicant procured equipment and materials from various vendors, with some suppliers located in Uttar Pradesh and others within Rajasthan, for delivery directly to the project site on an "FOR site" basis - Appropriate tax treatment (IGST versus CGST/SGST) for these inward supplies based on the geographic origin of the vendors and the delivery destination - HELD - The taxability of inward supplies is determined by the location of the supplier and the place of supply; if the supply involves movement of goods from a vendor in Uttar Pradesh to the site in Rajasthan, it is an interstate supply liable to IGST, but if both the vendor and the delivery site are located within the State of Rajasthan, the transaction constitutes an intrastate supply attracting CGST and SGST. [Read less]

GST – Rajasthan AAR - Maintainability of Advance Ruling Application by Service Recipient - Section 95(a) and Section 97(2) of the CGST Act, 2017 - The applicant, a State Educational Board, sought Advance ruling regarding applicability of GST on various services it received from third-party suppliers - Whether a recipient of services is legally entitled to seek an Advance Ruling – Taxability of services provided to the Board as services relating to the conduct of examination by an educational institution - HELD - The definition of "applicant" under Section 95(a) is intentionally broad, encompassing any person registered... [Read more]

GST – Rajasthan AAR - Maintainability of Advance Ruling Application by Service Recipient - Section 95(a) and Section 97(2) of the CGST Act, 2017 - The applicant, a State Educational Board, sought Advance ruling regarding applicability of GST on various services it received from third-party suppliers - Whether a recipient of services is legally entitled to seek an Advance Ruling – Taxability of services provided to the Board as services relating to the conduct of examination by an educational institution - HELD - The definition of "applicant" under Section 95(a) is intentionally broad, encompassing any person registered or desirous of obtaining registration under the Act. The scope of an applicant is not restricted to suppliers, a person liable to pay tax under reverse charge or any recipient of service may seek an Advance Ruling on matters specified under Section 97(2) of the Act. Accordingly, the application is maintainable - The applicant-Board engaged suppliers for various services including the printing of answer sheets, question papers, and certificates, online examination form filling, annual maintenance of computers used exclusively for exams, result processing through marks allotment, and provision of computer operators. By virtue of Explanation (iv) to paragraph 3 of Notification No. 12/2017-CT(Rate) (as inserted by Notification No. 14/2018), Central and State Educational Boards are treated as "educational institutions" for the limited purpose of providing services by way of conduct of examination to students. Since the services enumerated by the applicant—including printing, IT support for forms and results, and operational assistance—are integral, directly connected, and exclusively utilized for the examination process, they fall squarely within the exemption provided under Entry 66(b)(iv) of the said notification. The exemption is not limited to the Board's output services but extends to specific input services received by the Board that are necessary for conducting examinations - All the services mentioned in the application are found to be in relation to the conduct of examination and hence are covered under the exemption available vide Entry No. 66(b)(iv) of Notification No. 12/2017-CT (Rate) – Ordered accordingly [Read less]