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Customs/Service Tax/GST - Delay in Adjudication, Reasonable Time, Call Book Procedure - Batch of writ petitions challenged Show Cause Notices and pending adjudication proceedings under the Customs Act, Finance Act, and CGST Act, 2017 on the ground of inordinate delay in finalisation of the adjudication proceedings - Whether the delay in finalisation of the adjudication proceedings is sufficient ground to annul the proceedings - HELD - The respondents failed to establish the existence of any insurmountable constraint that impeded their power to conclude the pending adjudications in a reasonable time. The frequent placement ... [Read more]

Customs/Service Tax/GST - Delay in Adjudication, Reasonable Time, Call Book Procedure - Batch of writ petitions challenged Show Cause Notices and pending adjudication proceedings under the Customs Act, Finance Act, and CGST Act, 2017 on the ground of inordinate delay in finalisation of the adjudication proceedings - Whether the delay in finalisation of the adjudication proceedings is sufficient ground to annul the proceedings - HELD - The respondents failed to establish the existence of any insurmountable constraint that impeded their power to conclude the pending adjudications in a reasonable time. The frequent placement of matters in the "call book", retrieval, and re-transfer without any plausible explanation demonstrated lack of application of mind and defiance of the procedure contemplated under Section 28 of the Customs Act - The respondents failed to comply with the directives of the Board itself, which had contemplated affected parties being placed on notice, a periodic review being undertaken, and the proceedings not being lingered unnecessarily without any plausible explanation - The respondents also failed to act in accordance with the legislative interventions, such as the insertion of Section 28(11) and Explanations 2 and 4, which were intended to empower them to pursue further proceedings and take the adjudicatory process to its logical conclusion - Matters which have the potential of casting financial liabilities or penal consequences cannot be kept pending for years and decades together. A statute enabling an authority to conclude proceedings within a stipulated period of time “where it is possible to do so” cannot be countenanced as a license to keep matters unresolved for years. The flexibility which the statute confers is not liable to be construed as sanctioning lethargy or indolence - This principle would apply equally to cases falling either under the Customs Act, the 1994 Act or the CGST Act - the respondents' inaction and state of inertia led to the inevitable conclusion that they failed to discharge their statutory obligation within a reasonable time - the show cause notices as well as any final orders that may have been passed, are quashed – the Writ Petitions are allowed - State of ‘Flux’ - Contention of the respondents that it was the unsettled position in law which led to a delay in adjudication - as per the respondents it was the decisions in Sayed Ali, Mangali Impex and Canon I which had cast a cloud on their right to pursue adjudication proceedings and impeded their right to conclude proceedings with expedition – HELD – Firstly, the record would reflect that not all of the SCN proceedings issued pan-India had come to be penned by officers of the DRI - Even in cases where the proceedings may have been commenced by an officer of the DRI and if we were to assume that the respondents were compelled to stay their hands in light of the judgment in Sayed Ali, nothing prevented or restrained the respondents from initiating proceedings by placing pending matters in the hands of the Customs officers - Regard must also be had to the fundamental basis underlying the passing of the Amendment and Validation Act in 2011 - the intent of Section 28(11) was to save and validate all proceedings initiated prior to 06 July 2011. It was in furtherance of the aforesaid legislative objective that the provision incorporated a legal fiction by deployment of the phrase “shall be deemed to have and always had”. This deeming fiction stood extended not only with respect to the power to assess under Section 17 but also bid us to acknowledge that all persons appointed as officers of customs under Section 4(1) of the Customs Act would be deemed to have been proper officers for the purposes of reassessment and reopening under Section 28. It thus becomes manifest that despite the statute having duly empowered the respondents to continue proceedings and specifically validating all action initiated prior to 06 July 2011, the respondents failed to act in terms of that legislative command. [Read less]

Customs - Valuation, Air freight, Cost of import - Appellant imported cigarettes from Philip Morris Products S.A. Switzerland. The cigarettes were manufactured by Philip Morris Philippines Manufacturing Inc. and shipped directly from Philippines to India. Due to disruption in shipping routes during the COVID-19 pandemic, the appellant had to import the goods by air, incurring higher freight charges. The appellant self-assessed the Bills of Entry including the additional air freight charges - Whether the additional air freight charges can be included in the assessable value up to 20% of the FOB value as per the fifth provis... [Read more]

Customs - Valuation, Air freight, Cost of import - Appellant imported cigarettes from Philip Morris Products S.A. Switzerland. The cigarettes were manufactured by Philip Morris Philippines Manufacturing Inc. and shipped directly from Philippines to India. Due to disruption in shipping routes during the COVID-19 pandemic, the appellant had to import the goods by air, incurring higher freight charges. The appellant self-assessed the Bills of Entry including the additional air freight charges - Whether the additional air freight charges can be included in the assessable value up to 20% of the FOB value as per the fifth proviso to Rule 10(2)(a) of the Customs Valuation Rules, 2007 – HELD - the additional air freight charges paid by the appellant can be included in the assessable value up to 20% of the FOB value - the appellant had produced invoices showing the "Add. Recov. Freight" amount, which represented the additional air freight charges. Since the CPT price paid by the appellant was effectively the FOB price plus the air freight, the original authority is directed to re-determine the duty payable by restricting the addition of the "Add. Recov. Freight" amount to 20% of the CPT value shown in the invoices - matter is remanded to the original authority for re-determination of the duty payable – appeal allowed by remand [Read less]

GST – Classification of Flavored Milk - Department reject petitioner’s classification of flavored milk under Tariff Heading 0402 99 90 and held that same should be classified under Tariff Heading 2202 99 30 as "beverages containing milk" – Revenue of the view that flavoured milk, with the addition of Badam flavour, ceases to be milk and becomes a special drink - Demand of differential tax and imposed a penalty under Sections 122(2)(b) and 74 of the CGST Act, 2017 - Whether Flavored Milk is classifiable under Tariff Heading 0402 99 90 as "milk and cream, concentrated or containing added sugar or other sweetening matte... [Read more]

GST – Classification of Flavored Milk - Department reject petitioner’s classification of flavored milk under Tariff Heading 0402 99 90 and held that same should be classified under Tariff Heading 2202 99 30 as "beverages containing milk" – Revenue of the view that flavoured milk, with the addition of Badam flavour, ceases to be milk and becomes a special drink - Demand of differential tax and imposed a penalty under Sections 122(2)(b) and 74 of the CGST Act, 2017 - Whether Flavored Milk is classifiable under Tariff Heading 0402 99 90 as "milk and cream, concentrated or containing added sugar or other sweetening matter" or under Tariff Heading 2202 99 30 as "beverages containing milk" – HELD – the Tariff Entry 0402 not only covers milk per se but also milk products like cream, skimmed milk powder, milk food for babies, etc. – The entry 0402 incorporates milk and milk products. Though the entry 0402 speaks only of milk containing added sugar or other sweetening matter, flavoured milk cannot be taken out of tariff heading 0402 merely because of addition of 0.5% of Badam flavour – The finding of the Respondent that “flavoured milk” goes out of entry 0402 by addition of Badam flavour cannot be accepted – Further, applying the principle of Nocitur a Sociis, the entry 2202 99 30, would cover beverages which contain milk as well as water. Flavored milk, being predominantly milk with some sweetening matter added, would fall under the more specific Entry of 0402 rather than the general entry of 2202 99 30 - Since the Flavored Milk is classified under tariff heading 0402 99 90, the question of penalty would not arise – the writ petition is allowed [Read less]

GST - Section 67(2) of the CGST Act, 2017 – Interpretation of expression “and seize or may himself search and seize such goods, documents or books or things” i.e. whether the term “things” should be read ejusdem generis with goods, documents or books - Whether the GST Officers are empowered to seize cash at the time of raid of the premises of the assessee in exercise of powers under Section 67(2) of the CGST Act – SC issued Notice to Revenue

Central Excise - Valuation, Cenvat Credit, Shortage of goods- Appellant's sister concern set up its manufacturing facilities adjacent to the appellant's factory and used the liquid resin manufactured by the appellant as input. The appellant also used sister concerns' facilities to manufacture resin powder from the liquid resin manufactured by it - Department alleged that the appellant under-valued the goods cleared to its own unit and to its sister concern, wrongly availed Cenvat credit, and that there were shortages of finished goods found during stock verification - Whether Rule 8 of the Valuation Rules was applicable to... [Read more]

Central Excise - Valuation, Cenvat Credit, Shortage of goods- Appellant's sister concern set up its manufacturing facilities adjacent to the appellant's factory and used the liquid resin manufactured by the appellant as input. The appellant also used sister concerns' facilities to manufacture resin powder from the liquid resin manufactured by it - Department alleged that the appellant under-valued the goods cleared to its own unit and to its sister concern, wrongly availed Cenvat credit, and that there were shortages of finished goods found during stock verification - Whether Rule 8 of the Valuation Rules was applicable to the stock transfer of goods to the appellant's own unit and sale to its sister concern, or whether Rule 11 (Best Judgment Method) was the appropriate valuation method – HELD - Rule 8 of the Valuation Rules would be applicable only when the entire goods are captively consumed, but in the present case, the appellant had partly consumed the goods captively and partly cleared the same to its sister unit. Since none of the Valuation Rules from Rule 4 to 10A covered this situation, the appellant had rightly adopted Rule 11 (Best Judgment Method) for valuation. Further, as the duty paid by the appellant would be available as Cenvat credit to its sister unit, the exercise was revenue-neutral, and the demand relating to stock transfer and relating to sale to sister unit was set aside – appeal is allowed - Whether the appellant had correctly determined the cost of inputs like formaldehyde and melamine, and the conversion cost for Strong Bond M-3 – HELD - the Adjudicating Authority had incorrectly taken the balance sheet figures for determining the cost of inputs, which included miscellaneous overheads and were lesser than the actual prices adopted by the appellant. Further, the decrease in conversion cost for Strong Bond M-3 was due to market forces and BIFR proceedings, and the appellant had acted bonafide. Therefore, the demand is set aside on this ground - Whether the appellant was entitled to Cenvat credit on the basis of endorsed invoices/bills of entry – HELD - the appellant was entitled to Cenvat credit on the basis of endorsed invoices/bills of entry, as the goods had been received and used in the manufacture of final products, and there was no allegation of diversion of the goods. Accordingly, the demands are set aside - Whether the allegation of shortage of finished goods was sustainable – HELD - the method of stock verification adopted by the Department was not proper, as no Panchnama or weighment slips were prepared, and it was not possible to conduct physical verification of such a large quantity in a short span of time. Further, the shortage was partly attributable to non-updation of books of accounts and captive consumption, and the overall shortage was negligible. Therefore, the demand on account of shortage of finished goods is set aside. [Read less]

Central Excise – Import under Advance Authorization - Refund of CVD and SAD under Section 142(3) of the CGST Act, 2017 – Assessee imported duty-free inputs under advance authorization prior to 01.07.2017 for use in manufacture and export. As the assessee could not fulfill certain advance authorizations and the export obligation, it paid CVD and SAD with CESS along with interest during the relevant period - Assessee filed an application under Section 142(3) read with Section 174 of the CGST Act seeking a refund of the CVD and SAD paid - Whether the assessee is entitled to claim a refund of the CVD and SAD paid after the... [Read more]

Central Excise – Import under Advance Authorization - Refund of CVD and SAD under Section 142(3) of the CGST Act, 2017 – Assessee imported duty-free inputs under advance authorization prior to 01.07.2017 for use in manufacture and export. As the assessee could not fulfill certain advance authorizations and the export obligation, it paid CVD and SAD with CESS along with interest during the relevant period - Assessee filed an application under Section 142(3) read with Section 174 of the CGST Act seeking a refund of the CVD and SAD paid - Whether the assessee is entitled to claim a refund of the CVD and SAD paid after the appointed day under Section 142(3) of the CGST Act – HELD - Section 142(3) provides that every claim for refund by any person before, on or after the appointed day for refund of any amount of central value added tax credit/duty/tax/interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law - The Tribunal, relying on Section 142(3) of the CGST Act, rightly held that the assessee is entitled to claim a refund of the CVD and SAD paid after the appointed day - The Tribunal's order holding that the assessee is entitled to a refund of the CVD and SAD paid after the appointed day under Section 142(3) of the CGST Act, is in consonance with the law and cannot be termed as perverse – Revenue appeal is dismissed [Read less]

Central Excise - Valuation, Related Party, Transaction Value - Appellant manufacturer of cement which was sold in bulk and in 50 kg bags. During the disputed period, the appellant had cleared cement in bulk to M/s. Chettinad Builders Private Limited (CBPL), which used the cement in the manufacture of RMC and also sold it to their customers - Revenue alleged that CBPL was a related party of the appellant based on the appellant's own annual report, which had declared CBPL as an "associate" in terms of AS 18 - Appellant contended that CBPL was neither a related person nor an inter-related undertaking nor an associated company... [Read more]

Central Excise - Valuation, Related Party, Transaction Value - Appellant manufacturer of cement which was sold in bulk and in 50 kg bags. During the disputed period, the appellant had cleared cement in bulk to M/s. Chettinad Builders Private Limited (CBPL), which used the cement in the manufacture of RMC and also sold it to their customers - Revenue alleged that CBPL was a related party of the appellant based on the appellant's own annual report, which had declared CBPL as an "associate" in terms of AS 18 - Appellant contended that CBPL was neither a related person nor an inter-related undertaking nor an associated company as defined under Section 4 of the CEA, 1944 - Whether the appellant and CBPL were "related persons" in terms of Section 4 of the Central Excise Act for the purpose of determining the assessable value – HELD - the appellant had itself declared CBPL as an "associate" in its annual reports and financial statements, which was the primary documentary evidence. The onus was on the appellant to explain this disclosure, which it failed to do - Revenue had discharged the initial burden by relying on the appellant's own financial statements, and the appellant failed to discharge the onus of proving that CBPL was not a related party - demand of differential duty is upheld and appeal is dismissed [Read less]

Central Excise - Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - CENVAT credit, Pre-deposit, enquiry/investigation – Petitioner challenge the order passed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 which required it to pay an additional amount - Petitioner claimed that it was entitled to the benefit of the scheme without payment of the additional amount - Whether the amount paid through the CENVAT account was eligible for deduction under Section 124(2) of the Scheme – HELD - the petitioner failed to establish that the CENVAT credit amount was utilized after the initiation of the investigat... [Read more]

Central Excise - Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - CENVAT credit, Pre-deposit, enquiry/investigation – Petitioner challenge the order passed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 which required it to pay an additional amount - Petitioner claimed that it was entitled to the benefit of the scheme without payment of the additional amount - Whether the amount paid through the CENVAT account was eligible for deduction under Section 124(2) of the Scheme – HELD - the petitioner failed to establish that the CENVAT credit amount was utilized after the initiation of the investigation on 11 December 2018. The petitioner's changing stands on the payment date through the CENVAT Credit Ledger and the non-production of the relevant documents despite opportunities were reasons for the Court to not interfere with the impugned determination - the findings in the impugned order regarding the dates of utilization of CENVAT credit were based on verification of the CENVAT credit ledger, which the petitioner failed to disprove - the petitioner's approach is not candid or fair and it shifted stances without regard for the truth - No relief could be granted to the petitioner on the basis of the materials on record – the petition is dismissed [Read less]

Service Tax - Construction of complex or Works contract, Valuation - Appellant is engaged in providing construction of complex services to potential buyers and owns the land being developed for residential purposes - Whether the service tax is liable to be paid by the Appellant under the category of "construction of complex" service or under the taxable category of "works contract" services - HELD - the activity of the Appellant is classifiable under the taxable category of "works contract" services and not "construction of complex" services. Relying on the decision of the Supreme Court in Larsen & Toubro Ltd. Vs. State of... [Read more]

Service Tax - Construction of complex or Works contract, Valuation - Appellant is engaged in providing construction of complex services to potential buyers and owns the land being developed for residential purposes - Whether the service tax is liable to be paid by the Appellant under the category of "construction of complex" service or under the taxable category of "works contract" services - HELD - the activity of the Appellant is classifiable under the taxable category of "works contract" services and not "construction of complex" services. Relying on the decision of the Supreme Court in Larsen & Toubro Ltd. Vs. State of Karnataka and the Tribunal's own precedents, the agreements between the builder and the buyers for construction of residential units against payments in installments during construction would be treated as works contracts - the abatement available for "construction of complex" services itself indicates that the contracts are composite in nature and would be classifiable as "works contract services". Thus, the demand of service tax under the category of "construction of complex" services is not sustainable – appeal is allowed - Whether the value of land can be included in the value of works contract services for levy of service tax – HELD - the value of land cannot be included in the value of works contract services for levy of service tax. Relying on the principles laid down by the Supreme Court in Commissioner, Central Excise & Customs versus M/s Larsen & Toubro Ltd. and Others, the Tribunal observed that the measure of service tax can only be on that portion of works contracts which contain a service element and the value of property in goods transferred in the execution of the works contract has to be excluded - the value of land is identified in the agreement and is clearly discernible, therefore, the measure of levy has to be divisible in nature. [Read less]

Central Excise - Manufacture, Captive Use, Benefit of Notification No. 67/1995-C.E. - Appellant manufactured tools and sold them to customers, paying VAT but not excise duty. The appellant retained the tools in their factory for processing job work goods and claimed exemption under Notification No. 67/1995-C.E., which exempts capital goods manufactured and used within the factory of production - Revenue argued that the sale constituted removal, making the exemption inapplicable - Whether the sale of tools, while retaining them within the factory for captive use, disentitles the appellant from claiming exemption under Notif... [Read more]

Central Excise - Manufacture, Captive Use, Benefit of Notification No. 67/1995-C.E. - Appellant manufactured tools and sold them to customers, paying VAT but not excise duty. The appellant retained the tools in their factory for processing job work goods and claimed exemption under Notification No. 67/1995-C.E., which exempts capital goods manufactured and used within the factory of production - Revenue argued that the sale constituted removal, making the exemption inapplicable - Whether the sale of tools, while retaining them within the factory for captive use, disentitles the appellant from claiming exemption under Notification No. 67/1995-C.E – HELD - Excise duty is levied on manufacture, not sale, as per Section 3 of the Central Excise Act, 1944. While Rule 5 of the Central Excise Rules, 2002, defines the date of removal for goods used within the factory as the date of issue for such use, Notification No. 67/1995-C.E. exempts such goods from duty - the sale of the tools did not amount to removal for excise purposes, as the tools remained within the factory for captive use - the appellant is entitled to the benefit of exemption under Notification No. 67/1995-C.E. on the tools manufactured and used within the factory, even though the tools were sold to the customers – the impugned order is set side and appeal is allowed [Read less]

Central Excise - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Redemption fine, Confiscation of good – Petitioner filed declaration under the SVLDR Scheme to settle a dispute regarding a show cause notice that sought to confiscate the petitioner's goods and impose a penalty. The declaration was rejected on the ground that the redemption fine is not covered by the Scheme - Whether the redemption fine is covered by the SVLDR Scheme and the petitioner is entitled to the benefit of the Scheme – HELD - The redemption fine is akin to a penalty and, once the petitioner pays the amount of excise duty as required und... [Read more]

Central Excise - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Redemption fine, Confiscation of good – Petitioner filed declaration under the SVLDR Scheme to settle a dispute regarding a show cause notice that sought to confiscate the petitioner's goods and impose a penalty. The declaration was rejected on the ground that the redemption fine is not covered by the Scheme - Whether the redemption fine is covered by the SVLDR Scheme and the petitioner is entitled to the benefit of the Scheme – HELD - The redemption fine is akin to a penalty and, once the petitioner pays the amount of excise duty as required under the Scheme, the petitioner is not liable to pay any further duty, interest, or penalty with respect to the matters covered in the declaration - Court relied on the decision in M/s. Esbee Electrotech LLP v. Union of India, which held that the benefit of the SVLDR Scheme extends to the redemption fine - the Respondent is directed to accept the petitioner's declaration under the Scheme and issue the necessary certificates - The writ petition is allowed [Read less]

Customs - Conversion of Shipping Bills, DFIA to Drawback - Appellant exported Indian Raw Cotton claiming Duty Free Import Authorization (DFIA). The appellant later surrendered the DFIA licenses as no imports were made under them and applied for conversion of Shipping Bills from DFIA to Drawback Shipping Bills – Rejection of request on the ground that it was made after the expiry of the three-month time limit prescribed under the CBIC Circular No. 36/2010-Customs dated 23-9-2010 - Whether the rejection of the appellant's request for conversion of Shipping Bills from DFIA to Drawback on the ground that the request was made... [Read more]

Customs - Conversion of Shipping Bills, DFIA to Drawback - Appellant exported Indian Raw Cotton claiming Duty Free Import Authorization (DFIA). The appellant later surrendered the DFIA licenses as no imports were made under them and applied for conversion of Shipping Bills from DFIA to Drawback Shipping Bills – Rejection of request on the ground that it was made after the expiry of the three-month time limit prescribed under the CBIC Circular No. 36/2010-Customs dated 23-9-2010 - Whether the rejection of the appellant's request for conversion of Shipping Bills from DFIA to Drawback on the ground that the request was made after the expiry of the three-month time limit prescribed under the CBIC Circular No. 36/2010-Customs dated 23-9-2010 is sustainable – HELD - the Hon'ble Gujarat High Court, in the case of Mahalaxmi Rubtech Ltd v UOI, had held that the three-month time limit prescribed under Para 3(a) of the CBIC Circular No. 36/2010-Customs dated 23-9-2010 was ultra vires Articles 14 and 19(1)(g) of the Constitution of India and Section 149 of the Customs Act, 1962. Further, in the appellant's own case the Tribunal had held that there was no time limit prescribed under Para 4.28(e) of the Handbook of Procedures for seeking conversion of Shipping Bills to Drawback Shipping Bills - The appellant is entitled to the conversion of the 15 Shipping Bills from DFIA to Drawback - the impugned order is set aside and appeal is allowed [Read less]

Central Excise - Job work, Valuation, Exemption notification – Appellant was engaged in the manufacture of Wire Harness, Automobile and wire Harness Electrical, on job work basis – Excise duty was being paid on the value of the final product by adding/using their own inputs, but the value of inputs supplied free of cost by the manufacturer were not being included for paying central excise duty - Whether the value of free supply material from the prime manufacturer should have been included in the assessable value for payment of central excise duty by the job worker - HELD - as per the decisions of the Supreme Court in ... [Read more]

Central Excise - Job work, Valuation, Exemption notification – Appellant was engaged in the manufacture of Wire Harness, Automobile and wire Harness Electrical, on job work basis – Excise duty was being paid on the value of the final product by adding/using their own inputs, but the value of inputs supplied free of cost by the manufacturer were not being included for paying central excise duty - Whether the value of free supply material from the prime manufacturer should have been included in the assessable value for payment of central excise duty by the job worker - HELD - as per the decisions of the Supreme Court in Ujagar Prints and Pawan Biscuits, the value of raw material supplied for job work should have been added to arrive at the assessable value. The provisions of Section 2(h) of the Central Excise Act, 1944 and Rule 6 & Rule 10A of the Valuation Rules, 2000 require the value of free supply material to be included in the assessable value, irrespective of the admissibility of CENVAT credit to the job worker in respect of such free supply material – Further, the appellant had suppressed the value of the goods cleared by not including the value of the free supply material from the prime manufacturer, with an intent to evade payment of central excise duty. Therefore, the extended period of limitation under Section 11A(4) was rightly invoked - the suppression of material facts with an intent to evade payment of duty justified the imposition of penalty under Section 11AC – the appeal is dismissed [Read less]

Customs - Bonded Warehouse, Revenue Neutrality, Extended Period of Limitation – Appellant obtained a private bonded warehouse license under Section 58 of the Customs Act, 1962 and a license under Section 65 for undertaking manufacturing and other operations in bond - Appellant carried out manufacturing activities outside the bonded warehouse premises within their registered Central Excise factory - appellant's request to include the entire manufacturing premises under the bonded warehouse license was accepted by the Revenue - later Revenue issued SCNs demanding Customs duty, claiming that the appellant had violated the c... [Read more]

Customs - Bonded Warehouse, Revenue Neutrality, Extended Period of Limitation – Appellant obtained a private bonded warehouse license under Section 58 of the Customs Act, 1962 and a license under Section 65 for undertaking manufacturing and other operations in bond - Appellant carried out manufacturing activities outside the bonded warehouse premises within their registered Central Excise factory - appellant's request to include the entire manufacturing premises under the bonded warehouse license was accepted by the Revenue - later Revenue issued SCNs demanding Customs duty, claiming that the appellant had violated the conditions of the exemption notification by not carrying out manufacturing within the bonded warehouse - Whether the amendment to the bonded warehouse license in 2017 should be given retrospective effect from the date of the original license in 2014 – HELD - the amendment to the Bonded warehouse license in 2017 should be treated as a curative amendment and given retrospective effect from the date of the original license in 2014 - various judicial precedents has held that any amendment to a license should be given retrospective effect from the date of the original license, especially when the conditions imposed earlier were impracticable and the Revenue had full knowledge of the appellant's activities. Since the Revenue had not pointed out any misdemeanor or diversion of goods, and the purpose of the exemption notification was achieved, the demands made by the Revenue would not survive – Further, the extended period of limitation under Section 28(4) cannot be invoked in the present case, as the appellant's activities were carried out with the knowledge and approval of the Customs/Excise authorities, and there was no case of any short payment or short levy of duty due to suppression of facts - extended period of limitation cannot be invoked when the activities were carried on with the approval of the Department - the demands made by the Revenue would not survive and set aside – the appeal is allowed [Read less]

Central Excise - CENVAT Credit, Manufacture – Appellants were engaged in the manufacture of flexible laminated film, flexible laminated pouches, printed coated laminated paper foil and printed coated paper in roll - Department denied the CENVAT Credit availed by the appellants on the ground that the process of slitting/cutting of paper rolls does not amount to manufacture and demanded an amount under Section 11D of the Central Excise Act, 1944 on the ground that the appellants had collected the same from the buyers by wrongly representing it as excise duty - Whether the process of slitting/cutting of paper rolls undertak... [Read more]

Central Excise - CENVAT Credit, Manufacture – Appellants were engaged in the manufacture of flexible laminated film, flexible laminated pouches, printed coated laminated paper foil and printed coated paper in roll - Department denied the CENVAT Credit availed by the appellants on the ground that the process of slitting/cutting of paper rolls does not amount to manufacture and demanded an amount under Section 11D of the Central Excise Act, 1944 on the ground that the appellants had collected the same from the buyers by wrongly representing it as excise duty - Whether the process of slitting/cutting of paper rolls undertaken by the appellants amounts to manufacture – HELD - the process of slitting/cutting of paper rolls amounts to manufacture as it transforms the raw paper into a commercially different product with a new identity, use and market value - various judicial precedents have recognized that activities involving significant alteration of a product's characteristics and its end-use can amount to manufacture - once the Department has accepted the duty of the final products, the CENVAT Credit is not deniable even if the activity does not amount to manufacture – Further, the demand under Section 11D is not sustainable as the conditions of the provision are not satisfied - the impugned orders are set aside and appeals are allowed [Read less]

Central Excise - Classification, Fertilizer, Plant Growth Regulator - Classification of the final products "Siapton 10L" and "Isabion" - Appellant classified the products as fertilizers under Central Excise Tariff Item No. 3101 00 99, while the Department claimed that the products are classifiable as Plant Growth Regulators under Central Excise Tariff Item No. 3808 93 40 - Whether the final products "Siapton 10L" and "Isabion" are classifiable as fertilizers under Central Excise Tariff Item No. 3101 00 99 or as Plant Growth Regulators under Central Excise Tariff Item No. 3808 93 40 - HELD - The Larger Bench of the Tribunal... [Read more]

Central Excise - Classification, Fertilizer, Plant Growth Regulator - Classification of the final products "Siapton 10L" and "Isabion" - Appellant classified the products as fertilizers under Central Excise Tariff Item No. 3101 00 99, while the Department claimed that the products are classifiable as Plant Growth Regulators under Central Excise Tariff Item No. 3808 93 40 - Whether the final products "Siapton 10L" and "Isabion" are classifiable as fertilizers under Central Excise Tariff Item No. 3101 00 99 or as Plant Growth Regulators under Central Excise Tariff Item No. 3808 93 40 - HELD - The Larger Bench of the Tribunal has held that a plant growth promoter cannot be equated with a plant growth regulator. A plant growth promoter only promotes the growth of the plant and does not inhibit it. On the other hand, a plant growth regulator inhibits, promotes or otherwise alters the physiological processes in a plant - the products "Siapton 10L" and "Isabion" merit classification as fertilizers under Central Excise Tariff Item No. 3101 00 99 and not as Plant Growth Regulators under Central Excise Tariff Item No. 3808 93 40. This is because the products merely provide nutrients to the plant and do not alter the physiological processes in a desired direction. The amino acids and nitrogen present in the products help in cell building exercise and thereby, help the plant grow using the nutrients. Therefore, the products are in the nature of fertilizers (bio-stimulants) and not plant growth regulators - The impugned orders are set aside, and the appeals are allowed [Read less]

Service Tax - VCES (Voluntary Compliance Encouragement Scheme) - Mining services, Transportation services, Composite services - Appellant declared its service tax liability under the VCES for the period from October 1, 2007, to December 31, 2012 - Department sought to treat the VCES declaration as "substantially false" and demanded additional service tax, contending that the transportation charges should have been included in the value of the mining service - Whether the transportation of limestone from the mines to the factory premises was an integral part of the mining service and should have been included in the value o... [Read more]

Service Tax - VCES (Voluntary Compliance Encouragement Scheme) - Mining services, Transportation services, Composite services - Appellant declared its service tax liability under the VCES for the period from October 1, 2007, to December 31, 2012 - Department sought to treat the VCES declaration as "substantially false" and demanded additional service tax, contending that the transportation charges should have been included in the value of the mining service - Whether the transportation of limestone from the mines to the factory premises was an integral part of the mining service and should have been included in the value of taxable services under the VCES declaration – HELD - the mining and transportation services were separate and distinct services, and they cannot be classified as a "composite service" under Section 65A(2)(b) of the Finance Act, 1994 - the CBEC Circular dated November 12, 2007, clarified that the transportation of minerals from the pithead to a specified location within the mine/factory or for transportation outside the mine was chargeable to service tax under the "Goods Transport by Road" category, and not as part of the mining service. As SCL had already paid the service tax on the transportation charges under the reverse charge mechanism, the appellant's VCES declaration was not "substantially false," and the department's demand was not justified – the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Reverse Charge Mechanism, Foreign Service Provider - Whether the appellant is liable to pay service tax under RCM in respect of services namely consulting engineer services and intellectual property right services received from foreign service provider prior to 18.04.2006, when the levy on such services was introduced by way of Section 66A of the Finance Act, 1994 – HELD - the levy on such services received from abroad was brought into the tax net by the enactment of Section 66A of the Finance Act, 1994, which was effective from 18.04.2006. Prior to 18.04.2006, the receipt of services from a foreign service... [Read more]

Service Tax - Reverse Charge Mechanism, Foreign Service Provider - Whether the appellant is liable to pay service tax under RCM in respect of services namely consulting engineer services and intellectual property right services received from foreign service provider prior to 18.04.2006, when the levy on such services was introduced by way of Section 66A of the Finance Act, 1994 – HELD - the levy on such services received from abroad was brought into the tax net by the enactment of Section 66A of the Finance Act, 1994, which was effective from 18.04.2006. Prior to 18.04.2006, the receipt of services from a foreign service provider was not taxable in the hands of the recipient in India - the imposition of service tax on the recipients of services under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 not valid prior to the enactment of Section 66A. Therefore, the demand of service tax on the appellant for the period prior to 18.04.2006 is set aside - the impugned order confirming the demand of service tax is set aside and appeal is allowed [Read less]

Central Excise - CENVAT credit, Goods destroyed in fire - Whether the appellant is liable to pay interest on the late reversal of CENVAT credit under Rule 14 of the CENVAT Credit Rules, 2004 for the goods destroyed in a fire accident, for which remission of excise duty was granted – HELD - as per the provisions of Rule 14 of CCR, 2004, the interest is payable only when the CENVAT credit has been taken and utilized wrongly or has been erroneously refunded. In the present case, the appellant claimed that they have maintained the accumulated CENVAT credit, which is more than the CENVAT credit required to be reversed. Theref... [Read more]

Central Excise - CENVAT credit, Goods destroyed in fire - Whether the appellant is liable to pay interest on the late reversal of CENVAT credit under Rule 14 of the CENVAT Credit Rules, 2004 for the goods destroyed in a fire accident, for which remission of excise duty was granted – HELD - as per the provisions of Rule 14 of CCR, 2004, the interest is payable only when the CENVAT credit has been taken and utilized wrongly or has been erroneously refunded. In the present case, the appellant claimed that they have maintained the accumulated CENVAT credit, which is more than the CENVAT credit required to be reversed. Therefore, if it is found that the appellant has not utilized the CENVAT credit and maintained a balance equal to or above the CENVAT credit reversed, they are not required to pay the interest - the impugned order is set aside and matter remanded to the adjudicating authority to verify the factual aspect and decide the issue accordingly – Appeal allowed by remand [Read less]

Central Excise – Valuation, Retail Sale Price (RSP) – Appellant engaged in the manufacture and clearance of "Vitrified Polished Tiles" which were notified under Section 4A of the Central Excise Act, 1944 - Appellant discharging Central Excise duty on the RSP declared on the goods less the stipulated abatement – Demand of differential duty and proposing imposition of penalties on the ground that the goods were sold at prices higher than the RSP declared – HELD - the statements of the dealers and builders relied upon by the Department do not establish that the goods were sold at prices higher than the RSP declared on... [Read more]

Central Excise – Valuation, Retail Sale Price (RSP) – Appellant engaged in the manufacture and clearance of "Vitrified Polished Tiles" which were notified under Section 4A of the Central Excise Act, 1944 - Appellant discharging Central Excise duty on the RSP declared on the goods less the stipulated abatement – Demand of differential duty and proposing imposition of penalties on the ground that the goods were sold at prices higher than the RSP declared – HELD - the statements of the dealers and builders relied upon by the Department do not establish that the goods were sold at prices higher than the RSP declared on the goods - Mere allegation that the dealers sold the goods at prices higher than the RSP declared does not render the RSP declared on the goods to be not as per the requirements of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 - the cross-examination of the dealers, whose statements were relied upon, was denied by the Commissioner contrary to the settled legal position, and therefore, no reliance can be placed on their statements - the manner of determination of the RSP adopted in the impugned Order-in-Original is not in conformity with the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008 - the Rules require the RSP to be determined either based on the RSP declared on identical goods removed within one month or by conducting enquiries in the retail market where the goods are actually sold, and not by relying on a price list. Additionally, the for the period prior to 1-3-2008, the demand for differential duty is not tenable as the manner of ascertainment of RSP under Section 4A(4) was not prescribed by any Rules prior to 1-3-2008 - the impugned Order-in-Original is set aside and the appeal is allowed [Read less]

Central Excise - Cenvat Credit, write-off of slow-moving/non-moving inventory, Rule 3(5B) of Cenvat Credit Rules, 2004 - Appellant is engaged in the manufacture of various alloy steel products and had made provisions in the books of account for partially writing down the value in respect of slow moving/non-moving inventory of stores and spares – Demand for reversal of Cenvat credit availed on such inventory under Rule 3(5B) of the Cenvat Credit Rules, 2004 - Whether the provision of Rule 3(5B) of the Cenvat Credit Rules, 2004 is applicable when the appellant has made provisions in the books of accounts for partial writin... [Read more]

Central Excise - Cenvat Credit, write-off of slow-moving/non-moving inventory, Rule 3(5B) of Cenvat Credit Rules, 2004 - Appellant is engaged in the manufacture of various alloy steel products and had made provisions in the books of account for partially writing down the value in respect of slow moving/non-moving inventory of stores and spares – Demand for reversal of Cenvat credit availed on such inventory under Rule 3(5B) of the Cenvat Credit Rules, 2004 - Whether the provision of Rule 3(5B) of the Cenvat Credit Rules, 2004 is applicable when the appellant has made provisions in the books of accounts for partial writing down the value of slow moving/non-moving inventory, but the inventory is still available and being used in the manufacturing process – HELD - the provisions of Rule 3(5B) of the Cenvat Credit Rules, 2004 are applicable only when the value of the input or capital goods is written off fully or partially, or a specific provision to write-off fully or partially has been made in the books of accounts. In the present case, the appellant has made a general provision for slow/non-moving inventory without actually writing off the inventory from the asset account. The goods continued to lie in the appellant's factory and were gradually used in the manufacture of dutiable final products. Therefore, the inventory which had not become obsolete cannot be called as the entry written off, and Rule 3(5B) of the Cenvat Credit Rules, 2004 has been wrongly invoked by the Department - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Reimbursements, Grants-in-aid, Pure Agent service – Appellant received certain amounts as corpus fund grants and reimbursements from the Government of Gujarat for organizing training programs. The revenue authorities demanded service tax on these reimbursements by invoking Rule 5 of the Service Tax (Determination and Valuation) Rules, 2006 - Whether the reimbursements received by AMA are in the nature of pure agent expenses and hence excluded from the assessable value for the purpose of service tax – HELD - the reimbursements received by AMA towards expenses like hotel accommodation, dinner charges, local... [Read more]

Service Tax - Reimbursements, Grants-in-aid, Pure Agent service – Appellant received certain amounts as corpus fund grants and reimbursements from the Government of Gujarat for organizing training programs. The revenue authorities demanded service tax on these reimbursements by invoking Rule 5 of the Service Tax (Determination and Valuation) Rules, 2006 - Whether the reimbursements received by AMA are in the nature of pure agent expenses and hence excluded from the assessable value for the purpose of service tax – HELD - the reimbursements received by AMA towards expenses like hotel accommodation, dinner charges, local transportation, program folders, and stationery charges are in the nature of pure agent expenses and hence cannot be included in the assessable value for the purpose of service tax - Rule 5 of the Service Tax (Determination and Valuation) Rules, 2006, which provides for inclusion of such reimbursements in the assessable value, is ultra vires to the extent of Section 67 of the Finance Act, 1994 - the impugned order is set and appeal is allowed - Whether the grants-in-aid received by AMA from the Government are subject to service tax – HELD - the grants-in-aid received by AMA from the Government are not subject to service tax as there is no link or nexus between the grant-in-aid and any taxable service provided by AMA to the Government. The grants-in-aid are meant for the charitable cause championed by AMA and not for any specific service, and hence, service tax is not leviable on such grants-in-aid. [Read less]

Service Tax - Export of Services, Establishment of Distinct Persons - Appellant provided engineering services to its Group Companies situated outside India and treated the same as Export of Services under Rule 6A of Service Tax Rules, 1994 – SCN alleging that the services provided to the group companies cannot be considered as export of services under Rule 6A as they are the "Establishment of Distinct Persons" under Explanation 3 of Section 65B(44) of the Finance Act, 1994 - Revenue also alleged that the services provided to the group companies are exempted services and the appellant is liable to pay 6%/7% of the value o... [Read more]

Service Tax - Export of Services, Establishment of Distinct Persons - Appellant provided engineering services to its Group Companies situated outside India and treated the same as Export of Services under Rule 6A of Service Tax Rules, 1994 – SCN alleging that the services provided to the group companies cannot be considered as export of services under Rule 6A as they are the "Establishment of Distinct Persons" under Explanation 3 of Section 65B(44) of the Finance Act, 1994 - Revenue also alleged that the services provided to the group companies are exempted services and the appellant is liable to pay 6%/7% of the value of such services under Rule 6(3) of Cenvat Credit Rules, 2004 - Whether the services provided by the appellant to its group companies situated outside India can be considered as export of services under Rule 6A of Service Tax Rules, 1994 - HELD - on identical facts, various judgments have been passed by the Tribunal and the Gujarat High Court holding that the appellant and the service recipient group companies are separate entities and not "Establishment of Distinct Persons" under Explanation 3 of Section 65B(44) - the adjudicating authority has not properly understood this aspect and has not considered the relevant judgments. Therefore, the impugned order is set aside and matter remanded to the adjudicating authority to pass a fresh order in light of the relevant judgments - the issue of liability under Rule 6(3) of Cenvat Credit Rules, 2004 will also be re-examined by the adjudicating authority in light of the findings on the issue of export of services – the appeal is allowed by remand [Read less]

Central Excise - CENVAT Credit, Exempted Service, Extended Period of Limitation – Denial of CENVAT Credit availed by the appellant on inputs and input services used for the trading activity - Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944 can be invoked against the appellant in the absence of any fraud, collusion, or willful misstatement – HELD - the extended period of limitation cannot be invoked against the appellant as there was no element of fraud, collusion, or willful misstatement. The appellant had maintained adequate records and had immediately reversed the CENVAT Cr... [Read more]

Central Excise - CENVAT Credit, Exempted Service, Extended Period of Limitation – Denial of CENVAT Credit availed by the appellant on inputs and input services used for the trading activity - Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944 can be invoked against the appellant in the absence of any fraud, collusion, or willful misstatement – HELD - the extended period of limitation cannot be invoked against the appellant as there was no element of fraud, collusion, or willful misstatement. The appellant had maintained adequate records and had immediately reversed the CENVAT Credit upon the department's objection. In the absence of any fraudulent intent, the Tribunal set aside the demand for the period beyond the normal period of limitation - the demand confirmed for the period beyond the normal period of limitation under Section 11A of the CEA, 1944 is set aside – appeal is partly allowed [Read less]

Central Excise – Non-payment of duty, Invocation of Extended Period – Appellant are engaged in the manufacture and clearance of excisable goods (Cable Trays) without payment of Central Excise Duty - SCN issued proposing demands of Central Excise Duty, recovery of Cenvat Credit, and imposition of penalties. The adjudicating authority confirmed the demands and imposed penalties - Whether the extended period under Section 11A(4) of the Central Excise Act could be invoked against the appellants for non-payment of Central Excise Duty – HELD - the facts on record do not support the case of the Department for invocation of ... [Read more]

Central Excise – Non-payment of duty, Invocation of Extended Period – Appellant are engaged in the manufacture and clearance of excisable goods (Cable Trays) without payment of Central Excise Duty - SCN issued proposing demands of Central Excise Duty, recovery of Cenvat Credit, and imposition of penalties. The adjudicating authority confirmed the demands and imposed penalties - Whether the extended period under Section 11A(4) of the Central Excise Act could be invoked against the appellants for non-payment of Central Excise Duty – HELD - the facts on record do not support the case of the Department for invocation of the extended period. The appellants had recorded all their business transactions, including manufacture, clearances, purchases, and sales in their books of account, which were audited under the Income Tax Act. They had also paid VAT/Sales Tax on the transactions and issued invoices to customers - Merely failing to pay Central Excise Duty due to the advice of a Chartered Accountant does not amount to suppression of facts with the intent to evade duty – Further, the Cenvat Credit was availed and reversed by the appellants in the same month, and therefore, the demand for Cenvat Credit and interest is not sustainable - since there was no intention to evade duty, the imposition of penalties under Section 11AC and Rule 26 of the Central Excise Rules is not justified - the Central Excise Duty demand for the normal period of limitation along with interest is upheld the demand for the extended period, the Cenvat Credit demand, and all the penalties imposed are set aside – the appeal is partly allowed [Read less]

Service Tax - Supply of Tangible goods or Deemed sale – Renting out of 'Gas Engine' under an MOU - Whether the transaction of renting the Gas Engine by the appellant to Gujarat Insecticides Ltd. is a deemed sale and therefore, not liable to service tax – HELD - since the appellant had transferred the effective control and right to possession of the Gas Engine to Gujarat Insecticides Ltd. and had also paid VAT on the rental amount, the transaction is deemed to be a sale under Article 366(29A) of the Constitution of India – as per the definition of 'service' under Section 65B(44) of the Finance Act, 1994, a transaction... [Read more]

Service Tax - Supply of Tangible goods or Deemed sale – Renting out of 'Gas Engine' under an MOU - Whether the transaction of renting the Gas Engine by the appellant to Gujarat Insecticides Ltd. is a deemed sale and therefore, not liable to service tax – HELD - since the appellant had transferred the effective control and right to possession of the Gas Engine to Gujarat Insecticides Ltd. and had also paid VAT on the rental amount, the transaction is deemed to be a sale under Article 366(29A) of the Constitution of India – as per the definition of 'service' under Section 65B(44) of the Finance Act, 1994, a transaction that is deemed to be a sale within the meaning of Article 366(29A) of the Constitution is excluded from the definition of 'service' and therefore, not liable to service tax - the transaction of renting the Gas Engine by the appellant to Gujarat Insecticides Ltd. is a deemed sale and therefore, not liable to service tax - the impugned order is set aside and appeal is allowed [Read less]

Service Tax - Refund Claim, Limitation - Appellant paid service tax towards 'senior living fee' to M/s. Vedanta Brindhavan Senior Citizens Welfare and Service Trust - Appellant claimed refund of the service tax paid, stating that he did not receive any set off nor rendered any service to the Trust, and that the payment was a mistake of law. The original authority rejected the refund claim on the grounds of limitation and unjust enrichment - Whether the appellant, being the person who ultimately paid the service tax, was eligible to file the refund claim or only the Trust was eligible - HELD - The appellant, being the perso... [Read more]

Service Tax - Refund Claim, Limitation - Appellant paid service tax towards 'senior living fee' to M/s. Vedanta Brindhavan Senior Citizens Welfare and Service Trust - Appellant claimed refund of the service tax paid, stating that he did not receive any set off nor rendered any service to the Trust, and that the payment was a mistake of law. The original authority rejected the refund claim on the grounds of limitation and unjust enrichment - Whether the appellant, being the person who ultimately paid the service tax, was eligible to file the refund claim or only the Trust was eligible - HELD - The appellant, being the person who ultimately bore the incidence of the service tax, was eligible to file the refund claim and was not barred by the concept of unjust enrichment. The Supreme Court in Commissioner, Central Excise, Madras Vs M/S. Adison & Co. Ltd, held that a consumer can make an application for refund - the Department had not filed any appeal against the finding in the impugned order that the refund claim was not time-barred under Section 11B of the Central Excise Act, 1944, and hence this finding had become final - the impugned order is set aside and appeal is allowed [Read less]

Service Tax – Classification of Service - OIDAR Services - Appellant entered into an agreement with its foreign holding company to avail various IT services, including remote access to information systems, business support systems, electronic mail systems, etc. – Revenue of the view that the services received by the appellant are classifiable as 'Online Information and Database Access or Retrieval Services' (OIDAR) and the appellant, being the recipient, is liable to pay service tax under the Reverse Charge Mechanism - Whether the services received by the appellant are classifiable as OIDAR services – HELD – the ap... [Read more]

Service Tax – Classification of Service - OIDAR Services - Appellant entered into an agreement with its foreign holding company to avail various IT services, including remote access to information systems, business support systems, electronic mail systems, etc. – Revenue of the view that the services received by the appellant are classifiable as 'Online Information and Database Access or Retrieval Services' (OIDAR) and the appellant, being the recipient, is liable to pay service tax under the Reverse Charge Mechanism - Whether the services received by the appellant are classifiable as OIDAR services – HELD – the appellant is not only using the hardware and software facilities of their holding company but it is allowed to use the applications and databases of the holding company, including supply chain, manufacturing and finance systems, quality and laboratory information systems, fragrance business support systems, data warehouse, etc. - based on the services received by the appellant, it is clear that it is not mere Information Technology Services but the services received include whole lot of access to the data worldwide with regard to technology, production and various other services essential for day-to-day manufacturing activities. Therefore, in agreement with the Commissioner that the services received by the appellant fall under OIDAR services - with effect from 18.04.2006 though the service provider is outside India, recipient of services is liable to pay service tax as per Section 66A and Section 68 of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of the Service Tax Rules 1994 - Since the services were provided by a non-resident entity, the appellant, being the recipient, is liable to pay service tax under the reverse charge mechanism as per Section 66A and Section 68 of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 - the demand of service tax with interest is confirmed but the penalties imposed on the appellant under Sections 76 and 77 of the Finance Act, 1994 are set aside as the there was no suppression of facts and the demand arose due to the interpretation of legal provisions - Appeals are partially allowed only to the extent of setting aside the penalty [Read less]

Service Tax - Work Contract Service, Exemption under Notification No. 25/2012-ST, Composition Scheme - Based on information received from the Income Tax Department, a show cause notice was issued to the appellant alleging short payment of service tax, non-payment of service tax on freight and audit fees, and imposition of penalties under Sections 77 and 78 of the Finance Act, 1994 - Whether the services provided by the appellant to Pakshimanchal Vidyut Vitran Nigam Ltd (PVVNL) should be classified as Work Contract Service eligible for exemption under Notification No. 25/2012-ST - HELD - as per the work order provided by th... [Read more]

Service Tax - Work Contract Service, Exemption under Notification No. 25/2012-ST, Composition Scheme - Based on information received from the Income Tax Department, a show cause notice was issued to the appellant alleging short payment of service tax, non-payment of service tax on freight and audit fees, and imposition of penalties under Sections 77 and 78 of the Finance Act, 1994 - Whether the services provided by the appellant to Pakshimanchal Vidyut Vitran Nigam Ltd (PVVNL) should be classified as Work Contract Service eligible for exemption under Notification No. 25/2012-ST - HELD - as per the work order provided by the appellant, there was a specific clause for payment of service tax on the labor charges only. The repair and maintenance of damaged transformers do not fall under the exemption provided under Notification No. 25/2012-ST for "construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works". Therefore, the appellant is not eligible for the exemption claimed under the said notification - the demand needs to be recomputed by treating the services provided to PVVNL as Work Contract Service - Matter remanded back to the original authority to recompute the demand by either determining the labor charges as per the work order or by allowing the benefit of composition scheme and partial recharge as per Notification No. 30/2012-ST – The appeal is partially allowed [Read less]

Central Excise - Cenvat Credit, SEZ Supply, Rebate – Denial of benefit of Cenvat credit refund for supplies to Special Economic Zone (SEZ) units - Whether supplies to Special Economic Zone (SEZ) (to developer or the unit) constitute "export" for the purpose of Rule 5 of the Cenvat Credit Rules, 2004 – HELD - after the filing of the matters, the Central Board of Excise and Customs had issued a Circular No.1001/8/2015-CX.8 dated 28 April 2015 clarifying that for the purposes of Rule 18 of the Central Excise Rules, 2002 and for refund of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules 2004, the supply tr... [Read more]

Central Excise - Cenvat Credit, SEZ Supply, Rebate – Denial of benefit of Cenvat credit refund for supplies to Special Economic Zone (SEZ) units - Whether supplies to Special Economic Zone (SEZ) (to developer or the unit) constitute "export" for the purpose of Rule 5 of the Cenvat Credit Rules, 2004 – HELD - after the filing of the matters, the Central Board of Excise and Customs had issued a Circular No.1001/8/2015-CX.8 dated 28 April 2015 clarifying that for the purposes of Rule 18 of the Central Excise Rules, 2002 and for refund of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules 2004, the supply treated as "export" under the SEZ Act would be treated as "export" for the purposes of the said Rules - the original adjudicating and the appellate authorities did not have the benefit of this circular, and therefore, in the interest of justice, matter remanded back to the Appellate Authority to decide the issue afresh after considering the Circular dated 28 April 2015 and all the relevant decisions – the petitions are allowed by remand [Read less]

GST - Rule 96 of the CGST Rules, 2017 - Territorial Jurisdiction, IGST Refund on export of goods which are exported from Mundra Sez Port, Tuticorin Port, Kattupalli, Nhava Sheva Port – Rejection of refund on the ground that the petitioner had claimed a higher rate of duty drawback due to a human error - The petitioner, registered with the Rajasthan GST Authorities, filed writ petition before the High Court of Judicature for Rajasthan seeking directions to the respondents to issue the refund of IGST along with interest - Whether the High Court of Judicature for Rajasthan has territorial jurisdiction to entertain the writ ... [Read more]

GST - Rule 96 of the CGST Rules, 2017 - Territorial Jurisdiction, IGST Refund on export of goods which are exported from Mundra Sez Port, Tuticorin Port, Kattupalli, Nhava Sheva Port – Rejection of refund on the ground that the petitioner had claimed a higher rate of duty drawback due to a human error - The petitioner, registered with the Rajasthan GST Authorities, filed writ petition before the High Court of Judicature for Rajasthan seeking directions to the respondents to issue the refund of IGST along with interest - Whether the High Court of Judicature for Rajasthan has territorial jurisdiction to entertain the writ petition – HELD - the High Court of Judicature for Rajasthan, Bench at Jaipur, does not have territorial jurisdiction to entertain the writ petition - the goods were exported from ports located outside the State of Rajasthan and the application for refund is to be dealt with by the Customs Authorities at the relevant port of export - The Court relies on the Supreme Court's decisions in Union of India & Ors. v. Adani Exports Limited & Anr. and State of Goa v. Summit Online Trade Solutions Private Ltd. & Ors., which held that the cause of action for a writ petition must have a nexus or relevance with the dispute involved and the facts pleaded must have a connection with the relief sought - the petitioner's registration with the Rajasthan GST Authorities and having a permanent establishment in Rajasthan do not give rise to a cause of action in Rajasthan for the non-grant of refund by the Customs Authorities at the ports from where the goods were exported - In absence of any pleadings for cause of action or part of cause of action accruing in State of Rajasthan for non grant of refund and in view of the fact that the application for refund was made at the ports for exports and the claim is to be dealt by the Customs Authorities of the Port, the writ petition is dismissed for want of territorial jurisdiction [Read less]

Central Excise - CENVAT Credit, Place of Removal - Denial of CENVAT credit on the input services for the period April 2010 to March 2015, on the ground that the direct sale points cannot be considered as the place of removal for the goods manufactured in the factory premises - Whether the direct shop can be considered as the 'place of removal' for the purpose of allowing CENVAT credit on input services - HELD - The Tribunal in the decision of the Allahabad Bench in the appellant’s own case held that the direct shop, from where the bikes were finally sold by the appellant, is the 'place of removal' as per Rule 2(qa) of th... [Read more]

Central Excise - CENVAT Credit, Place of Removal - Denial of CENVAT credit on the input services for the period April 2010 to March 2015, on the ground that the direct sale points cannot be considered as the place of removal for the goods manufactured in the factory premises - Whether the direct shop can be considered as the 'place of removal' for the purpose of allowing CENVAT credit on input services - HELD - The Tribunal in the decision of the Allahabad Bench in the appellant’s own case held that the direct shop, from where the bikes were finally sold by the appellant, is the 'place of removal' as per Rule 2(qa) of the CENVAT Credit Rules, 2004 – There is no good reason to take a different view from the Allahabad Bench and, accordingly, it is held that the place of removal would be the direct shop and not the factory premises - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of Polyester Knitted Fabric - Valuation, NIDB data - Customs authorities had enhanced the declared values of the imported goods solely based on the data available in the National Import Database (NIDB), without providing detailed reasons for the same - Whether the customs authorities can enhance the declared value of imported goods solely based on the NIDB data without providing detailed reasons - HELD - The Customs authorities cannot enhance the declared value of imported goods solely based on the NIDB data without providing detailed reasons - Court relied on various precedents which have consistently h... [Read more]

Customs – Import of Polyester Knitted Fabric - Valuation, NIDB data - Customs authorities had enhanced the declared values of the imported goods solely based on the data available in the National Import Database (NIDB), without providing detailed reasons for the same - Whether the customs authorities can enhance the declared value of imported goods solely based on the NIDB data without providing detailed reasons - HELD - The Customs authorities cannot enhance the declared value of imported goods solely based on the NIDB data without providing detailed reasons - Court relied on various precedents which have consistently held that NIDB data alone cannot be the basis for enhancement of the declared value, and the authorities need to provide cogent reasons based on contemporaneous import data, quality, quantity and other relevant factors to justify the rejection of the declared value - The Customs authorities have a statutory obligation under Section 17(5) of the Customs Act and Rule 12 of the Customs Valuation Rules to pass a speaking order recording the reasons for rejecting the declared value. Mere reliance on NIDB data without establishing the reasons for doubting the accuracy or truthfulness of the declared value would not meet the requirements of the law - The CESTAT appears to have proceeded on the premise that the importer had all along agreed to the enhancement of the declared value and raised no protest. The CESTAT incorrectly proceeded on the basis that the communications addressed itself implied that the importers had willingly accepted the value as suggested by the customs authorities and consequently, the respondents being relieved of undertaking any adjudication as contemplated under Section 17 of the Customs Act in light of the abandonment and waiver of the appellant‘s right to challenge the reassessment - the orders of the CESTAT are set aside and matter is remanded to the customs authorities to re-examine the valuation of the imported goods in accordance with the principles laid down in the judgment - The appeals filed by the importers are allowed [Read less]

Customs AAR - Classification, Motor vehicle parts, Aluminum guide rails – Applicant seeking Advance Ruling on the classification of "Assy Guide Rails" under the Customs Tariff Act, 1975 - Applicant contended that the Assy Guide Rails, which are long, narrow tracks used in the sunroof assembly of motor vehicles to provide support and guidance for the sunroof panel, should be classified under Heading 8708 (Parts and accessories of motor vehicles) or alternatively under Heading 7610 (Aluminum structures and parts thereof) – HELD - the Assy Guide Rails are not classifiable under Heading 7610, as they are not a frame or str... [Read more]

Customs AAR - Classification, Motor vehicle parts, Aluminum guide rails – Applicant seeking Advance Ruling on the classification of "Assy Guide Rails" under the Customs Tariff Act, 1975 - Applicant contended that the Assy Guide Rails, which are long, narrow tracks used in the sunroof assembly of motor vehicles to provide support and guidance for the sunroof panel, should be classified under Heading 8708 (Parts and accessories of motor vehicles) or alternatively under Heading 7610 (Aluminum structures and parts thereof) – HELD - the Assy Guide Rails are not classifiable under Heading 7610, as they are not a frame or structure used to enclose or support a window or door in the traditional sense - the Assy Guide Rails are an essential component of the vehicle's body structure, specifically related to the sunroof system, and contribute to the integrity and functionality of the bodywork - the Assy Guide Rails are a mechanical or functional part of the sunroof assembly, rather than a structural frame, and are specifically designed for use in motor vehicles, which are excluded from Section XV (Base Metals and articles of base metal) under Note 1(g) - The Assy Guide Rails satisfy all the three conditions prescribed in the Explanatory Notes to Section XVII for classification as parts and accessories of motor vehicles under Heading 8708 - the Assy Guide Rails are classifiable under Heading 8708, more specifically under CTI 87082900 (Other parts and accessories of bodies) of the Customs Tariff Act, 1975 – Ordered accordingly [Read less]

GST – Rectification of GSTR-3B Return – Refund of excess tax paid on account of non-availability of functionality to rectify any error or omission in the Returns – Petitioner filed GSTR-3B Returns for January and March 2023. Due to an error by the consultant, the reverse charge liability on purchases from farmers was not reflected in the January 2023 return. To rectify this, the petitioner paid the entire reverse charge liability in the March 2023 return, resulting in an excess payment of tax. The petitioner applied for a refund of this excess amount, but the respondent rejected the refund claim on the ground that th... [Read more]

GST – Rectification of GSTR-3B Return – Refund of excess tax paid on account of non-availability of functionality to rectify any error or omission in the Returns – Petitioner filed GSTR-3B Returns for January and March 2023. Due to an error by the consultant, the reverse charge liability on purchases from farmers was not reflected in the January 2023 return. To rectify this, the petitioner paid the entire reverse charge liability in the March 2023 return, resulting in an excess payment of tax. The petitioner applied for a refund of this excess amount, but the respondent rejected the refund claim on the ground that there is no excess payment of tax - Whether the petitioner is entitled to rectify the error in the January 2023 return and claim a refund of the excess payment made in the March 2023 return – HELD - petitioner has, in order to rectify the error committed while filing the return in Form GSTR-3B for the month of January 2023 by not reflecting the reverse charge liability and clubbing the same in the output tax liability, rectified in the return filed for the month of March 2023 by payment of excess amount through electronic cash ledger – The petitioner has already paid the tax on outward supplies for month of January 2023 which included the inward supply liable to reverse charge - the petitioner is entitled to refund of amount which was paid in excess along with return in Form GSTR-3B for the month of March,2023 – Further, in Circular No. 26/2017-GST dated 29.12.2017, it is clarified that where the adjustment is not feasible in Form GSTR-3B, the refund may be claimed by the assessee - Respondent is directed to process the refund claimed by the petitioner – the Petition is allowed [Read less]

GST - Input Tax Credit on Sales Promotion, Stock Difference - Denial of Input Tax Credit on goods purchased for sales promotion (gold coins and t-shirts) and the confirmation of stock difference - Whether the petitioner was entitled to ITC on the goods purchased for sales promotion activities – HELD – The sub-clause (h) to Section 17(5) of the CGST Act, 2017 specifically prohibits the availment of input tax credit in respect of the goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples - The expression ‘goods disposed by way of gift or free samples’ will specifically apply to the g... [Read more]

GST - Input Tax Credit on Sales Promotion, Stock Difference - Denial of Input Tax Credit on goods purchased for sales promotion (gold coins and t-shirts) and the confirmation of stock difference - Whether the petitioner was entitled to ITC on the goods purchased for sales promotion activities – HELD – The sub-clause (h) to Section 17(5) of the CGST Act, 2017 specifically prohibits the availment of input tax credit in respect of the goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples - The expression ‘goods disposed by way of gift or free samples’ will specifically apply to the goods whether manufactured or traded by an assessee under the provisions of the GST enactments - The restrictions in Section 17(5)(h) of the CGST Act will apply to goods disposed of by way of gift or free samples. The law settled under Central Excise Act, 1944 or other Central Tax enactments are not applicable to the context of the respective GST enactments - the petitioner is not entitled to ITC on items meant for sales promotional activities – Further, the petitioner had not made out any case for interference with the order confirming the stock difference for the assessment year 2019-20 - The writ petitions are dismissed [Read less]

Tamil Nadu General Sales Tax Act, 1959 - Agricultural produce – Petitioner grows cardamom in Kerala and sells it in the State of Tamil Nadu - STAT had earlier held that the phrase 'within the State' in Section 2(r) of the TNGST Act, 1959 was unconstitutional as it discriminated against agricultural produce grown outside Tamil Nadu – in the instant case, the STAT allowed the State's appeal and held that the cardamom sold by the petitioner was not agricultural produce as it had been 'cured' prior to sale, thereby bringing it outside the exemption - Whether the cardamom sold by the petitioner was 'cured' and therefore not... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Agricultural produce – Petitioner grows cardamom in Kerala and sells it in the State of Tamil Nadu - STAT had earlier held that the phrase 'within the State' in Section 2(r) of the TNGST Act, 1959 was unconstitutional as it discriminated against agricultural produce grown outside Tamil Nadu – in the instant case, the STAT allowed the State's appeal and held that the cardamom sold by the petitioner was not agricultural produce as it had been 'cured' prior to sale, thereby bringing it outside the exemption - Whether the cardamom sold by the petitioner was 'cured' and therefore not eligible for the agricultural produce exemption under the Act – HELD - the phrase 'within the State' in Section 2(r) is unconstitutional as it violates Articles 301 and 304 of the Constitution by discriminating against agricultural produce grown outside Tamil Nadu. This view was based on the earlier decision of the Tamil Nadu Taxation Special Tribunal which had attained finality - the State's contention that the cardamom was 'cured' and therefore not eligible for the agricultural produce exemption, is rejected - there was no material on record to indicate that the cardamom had undergone any such process, and the State had not examined this issue at any of the earlier stages. In the absence of any factual evidence, the Court refused to direct any further verification on this aspect and held that the cardamom sold by the petitioner was eligible for the agricultural produce exemption - the turnover from the sale of cardamom grown in Kerala and sold in Coimbatore was not liable to sales tax in Tamil Nadu – The impugned orders of the STAT is set aside and the petitions are allowed [Read less]

GST – Andhra Pradesh AAR - Rectification of Advance Ruling Order, IGST rate on approved equipment, Classification of life boats as additional equipment – Rectification application seeking rectification of the Advance Ruling order AAR to specific mention of IGST rate on the approved list of equipment and exclusion of life boats from being classified as additional equipment - Whether the IGST rate on the approved list of equipment needs to be specifically mentioned in the order – HELD - There is no requirement to specifically mention the IGST rate, as the IGST rate is the sum of CGST and SGST/UGST rates. The applicable... [Read more]

GST – Andhra Pradesh AAR - Rectification of Advance Ruling Order, IGST rate on approved equipment, Classification of life boats as additional equipment – Rectification application seeking rectification of the Advance Ruling order AAR to specific mention of IGST rate on the approved list of equipment and exclusion of life boats from being classified as additional equipment - Whether the IGST rate on the approved list of equipment needs to be specifically mentioned in the order – HELD - There is no requirement to specifically mention the IGST rate, as the IGST rate is the sum of CGST and SGST/UGST rates. The applicable CGST and SGST/UGST rates would determine the IGST rate, and hence the applicant's request to rectify the order in this regard was not considered - Whether life boats should be excluded from being classified as additional equipment – HELD - Life boats, though required to be compulsorily available on a ship as additional safety measures, cannot be considered as essential parts of the ship - the original order is amended to the extent to include life boats as additional equipment, and not as essential parts of the warship/submarine. Accordingly, the application was disposed of. [Read less]