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GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, whi... [Read more]

GST - Delay in filing appeal and condonation of delay under Section 107(4) of the CGST Act, 2017 – Exclusion of time spent in pursuing writ petition before the High Court - Whether the Appellate authority was correct in dismissing the petitioner's appeal on the ground of delay of 15 days in filing the appeal – HELD - The limitation period for filing the appeal against the order dated 17.01.2025 was extended by 26 days, as the petitioner had spent this time in pursuing the writ petition before the High Court. Thus, the last date for filing the appeal was 12.05.2025. The Petitioner had filed the appeal on 28.05.2025, which was only a delay of 15 days - As per Section 107(4) of the Act, the Appellate Authority can condone the delay in filing the appeal if the appellant was prevented from presenting the appeal within the prescribed period. The grounds cited by the petitioner for the delay were neither imaginary nor fanciful, and the delay was only 15 days, which could have been condoned by the Appellate authority - The Appellate authority adopted a hyper-technical approach in dismissing the appeal on the ground that it should have been filed by 07.05.2025, which was contrary to the spirit of Section 107(4) of the Act, which allows condonation of delay within an extended one-month window - The delay in filing the appeal is condoned and the matter is remitted to Appellate authority for adjudication of the appeal on merits – The petition is disposed of [Read less]

Service Tax - Liability of service tax on payments made by an Indian company to its overseas Joint Venture for IT services – Dept appeal against the order of the Commissioner dropping the demand of service tax on payments made by the respondent-assessee to its joint venture company - The assessee had set up the JV to provide IT services to clients in the Middle East. The JV would raise debit notes on the assessee as "Consultant pay rolls" which were recorded in the assessee's books as "Consultant Charges" and "Purchase of Service". The revenue alleged that the assessee had not paid service tax on these payments under the... [Read more]

Service Tax - Liability of service tax on payments made by an Indian company to its overseas Joint Venture for IT services – Dept appeal against the order of the Commissioner dropping the demand of service tax on payments made by the respondent-assessee to its joint venture company - The assessee had set up the JV to provide IT services to clients in the Middle East. The JV would raise debit notes on the assessee as "Consultant pay rolls" which were recorded in the assessee's books as "Consultant Charges" and "Purchase of Service". The revenue alleged that the assessee had not paid service tax on these payments under the categories of "Business Support Service" (BSS) and "Information Technology Software Service" (ITSS) - Whether the payments made by the assessee to the JV located outside India is liable to service tax under the category of "Business Support Service" (BSS) for the period prior to 01.07.2012 – HELD – The words "operational and administrative assistance" have wide connotation and can include certain services already taxed under any other head of more specific description. The scope of BSS under Section 65(105)(zzzq) was expanded to include "operational or administrative assistance" only with effect from 01.05.2011 and not earlier. Therefore, the demand of service tax on the payments made by the assessee to the JV prior to 01.05.2011 is not sustainable. The appeal filed by Revenue for charge of service tax on the disputed activity, prior to 01.05.2011 does not have the support of law - For the period post-01.07.2012, when any service is provided outside the taxable territory between two persons who are not connected to the branch office in India and the services not being provided to the Assessee situated in India, such services cannot be brought under the tax net for payment of service tax – Further, as per the Place of Provision of Service Rules, 2012, the location of the service recipient determines the taxability of the service. In the present case, since both the service provider (JV) and the service recipient (assessee) are located outside India, and the services were rendered and consumed outside India, the same cannot be brought under the service tax net in India – The payment of consultancy charges paid by the Respondent-Assessee to JV situated abroad, in the present set of facts cannot be subjected to levy of Service Tax under the Finance Act, 1994 - The order of the Commissioner dropping the demand of service tax on the payments made by the assessee to the JV located abroad is upheld and the Revenue appeal is dismissed [Read less]

GST - Condonation of delay in filing appeal - Whether the delay of 48 days in filing the appeal against the assessment order is condonable – HELD - The delay was not due to any negligence or inaction on the part of the petitioner, but was caused by unavoidable and exceptional operational circumstances beyond its control. The petitioner had undergone a major organizational restructuring and transition, including the migration of its accounts, bill processing, GST compliances, and allied financial functions to a new centralized system. This resulted in delayed access to critical records and an inadvertent oversight of the ... [Read more]

GST - Condonation of delay in filing appeal - Whether the delay of 48 days in filing the appeal against the assessment order is condonable – HELD - The delay was not due to any negligence or inaction on the part of the petitioner, but was caused by unavoidable and exceptional operational circumstances beyond its control. The petitioner had undergone a major organizational restructuring and transition, including the migration of its accounts, bill processing, GST compliances, and allied financial functions to a new centralized system. This resulted in delayed access to critical records and an inadvertent oversight of the statutory appeal timeline. The non-adjudication of the appeal on merits would cause grave injury and prejudice to the petitioner, and thus, the delay should be condoned in the interest of justice. Accordingly, the Appellate Authority is directed to entertain the petitioner's appeal and adjudicate it on merits – The writ petition is allowed [Read less]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is canc... [Read more]

GST - Cancellation of GST registration, Payment of GST liabilities in installments – Cancellation of registration due to non-filing of monthly returns and non-payment of GST liabilities. Subsequently, show-cause notices were issued, and the bank accounts were attached. The petitioners argued that they were willing to file the pending returns and pay the outstanding GST liabilities, but they were unable to do so due to the cancellation of the GST registration and the attachment of the bank accounts - The petitioners sought to set aside the cancellation of their GST registration – HELD - Once the GST registration is cancelled, the GST portal disables the filing of regular returns (GSTR-1 and GSTR-3B), making it impossible for the petitioners to file the pending returns. The petitioners should be given an opportunity to file an application for revocation of the GSTIN cancellation order – The petition is disposed of granting liberty to the petitioners to file an application for revocation of the GSTIN cancellation and thereafter, to file an application for allowing them to file return and also to file an application under Section 80 of the CGST Act, 2017, allowing them to clear the liability in installments and on such application being filed, the bank accounts of the petitioners shall be defreezed - The writ petition is disposed of [Read less]

Customs - Rejection of declared value, re-determination of value, demand of differential duty, confiscation of goods and imposition of penalties – Appellant imported "Recycled LDPE Granules" availing benefit under Sl.No.477 of the Customs Notification No.21/2002 - Adjudicating Authority rejected the declared value, re-determined the value, demanded differential duty, confiscated the goods and imposed penalties on the appellants - Whether the Adjudicating Authority was justified in rejecting the declared value and re-determining the value of the imported goods – HELD - The Adjudicating Authority had wrongly held that th... [Read more]

Customs - Rejection of declared value, re-determination of value, demand of differential duty, confiscation of goods and imposition of penalties – Appellant imported "Recycled LDPE Granules" availing benefit under Sl.No.477 of the Customs Notification No.21/2002 - Adjudicating Authority rejected the declared value, re-determined the value, demanded differential duty, confiscated the goods and imposed penalties on the appellants - Whether the Adjudicating Authority was justified in rejecting the declared value and re-determining the value of the imported goods – HELD - The Adjudicating Authority had wrongly held that the relied upon documents were provided to the appellants along with the Show Cause Notice, when in fact the Adjudicating Authority's own letter had indicated that these documents were not available with them and a request was made to the DRI to provide the same. The denial of opportunity to the appellants to submit their response based on the relied upon documents was a violation of the principles of natural justice. Hence, the rejection of the declared value and re-determination of the value is set aside - The demands, the appropriation of deposits towards duty, the penalties imposed on the appellants and the confiscation of the goods are set aside - The appeals are disposed of - Whether the demand of differential duty under Section 28 of the Customs Act, 1962 was valid when the assessment was provisional – HELD - The judgments of the Supreme Court and High Courts have held that the demand under Section 28 can be raised only after the final assessment of the goods. In the present case, since the assessment was provisional, the demand of differential duty under Section 28 was not valid and set it aside. [Read less]

Customs - Imposition of minimum import price (MIP) by DGFT, Enhancement in declared value based on DGFT Notification - Appellant filed Bills of Entry for clearance of goods declared as Engineered Marble imported from China, with the declared unit prices being below the prescribed MIP of USD 60 per square meter as per DGFT Notification No. 18 (RE-2008) dated 04.08.2011. The Adjudicating Authority enhanced the value of the goods to USD 60 and ordered confiscation, permitting redemption on payment of a fine - Whether the Adjudicating Authority was justified in enhancing the declared transaction value of the goods and imposing... [Read more]

Customs - Imposition of minimum import price (MIP) by DGFT, Enhancement in declared value based on DGFT Notification - Appellant filed Bills of Entry for clearance of goods declared as Engineered Marble imported from China, with the declared unit prices being below the prescribed MIP of USD 60 per square meter as per DGFT Notification No. 18 (RE-2008) dated 04.08.2011. The Adjudicating Authority enhanced the value of the goods to USD 60 and ordered confiscation, permitting redemption on payment of a fine - Whether the Adjudicating Authority was justified in enhancing the declared transaction value of the goods and imposing confiscation, fine and penalty for the appellant's failure to comply with the DGFT's MIP notification – HELD - The valuation rules under the Customs Act and the value-based restrictions prescribed in the DGFT notification operate in distinct domains. Under the Customs Act, the assessable value is determined on the basis of the declared transaction value for the purpose of applying the ad valorem duty. In contrast, the value mentioned in the DGFT notification is meant to regulate the permissibility of importing the goods - The Adjudicating Authority had enhanced the declared value not on the basis of any findings on any misdeclaration of value or irregularity under the Customs Act, but solely to align the goods with the "policy conditions". Once the value is enhanced and aligned to USD 60 for import purposes, the goods become purged of the taint and are to be treated as compliant with the DGFT notification, irrespective of the fact that such enhancement of value stems from departmental action. Hence if the importer does not contest the enhanced value, as in this case, the goods become freely importable and are no longer liable to penal consequences - The confiscation, fine and penalty are set aside and that the goods are directed to be released after payment of duty as per the enhanced value - The appeal was disposed of accordingly - The Bench expresses considerable surprise that the Ld. Counsel for appellant was unaware of the decision of the Hon’ble High Court in their own case even after a decade of its passing, to the extent of requesting this Bench to have the hearing postponed pending outcome of the matter before the Hon’ble High Court. An appellant seeking relief before the Tribunal is obligated to make a full, fair, and true disclosure of all material facts pertinent to the relief claimed, and stating the applicable law. While the Tribunal is presumed to know the law, it is not presumed to know the facts. Complete disclosure is therefore indispensable, especially since the Tribunal ordinarily accepts the submissions and averments of parties at face value, assuming they are made candidly, in good faith and with clean hands. [Read less]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be ... [Read more]

Central Excise - Limitation period for show cause notice under Central Excise Act, Valid service of notice - Department had issued a show cause notice dated 11.4.2011 alleging clandestine removal of goods by the assessee during the period 1.4.2007 to 30.6.2007. The SCN was sent to the appellant's old address and when it was returned by the postal department, it was affixed on the notice board of the respondent - Whether the SCN issued by the department was time-barred – HELD - The demand of duty can be made by serving an SCN under Section 11A of the Central Excise Act, 1944 within the normal time of two years and can be made within the extended period of limitation of five years if the non-payment or short payment of duty is due to fraud or collusion or wilful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty - The appellant had changed its address and intimated the change to the department, but the SCN was sent to the old address and when it was returned by the postal department, it was pasted on the notice board of the office of the department. This cannot be termed as proper service of notice. After the order was passed, the appellant sought the SCN and it was served on 24.7.2012 beyond the period of five years from the relevant period. The Annexures to the SCN and the relied upon documents were served even later - The SCN must be served before issuing the order and not after the order has been issued, as the very purpose of issuing an SCN is to give the noticees an opportunity to show cause, which cannot be served if the order is passed without serving the SCN - The impugned order cannot be sustained because the SCN was served beyond the extended period of limitation of five years. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only e... [Read more]

Central Excise - Clandestine removal of goods and demand of duty, interest and penalty based on electricity consumption - DGGI conducted searches at the factory, residence of the director, and premises of the clearing and forwarding agent and supplier, and found excess (unaccounted) stocks of raw material, finished goods, and other materials. The Department alleged clandestine removal of goods by the appellant and issued show cause notices demanding duty, interest and penalties - Whether the demand of duty, interest and penalties on the appellant based on the calculation of alleged clandestine removal of goods using only electricity consumption can be sustained – HELD – The preliminary submission of the appellant is that since the investigation was conducted after the introduction of CGST Act in November 2017, the investigation lacks credibility. However, the savings clause in section 174(2) of the CGST Act, 2017 allows institution of any proceedings under the repealed Act (Central Excise Act, 1944) even after the appointed day of CGST Act. Therefore, on this issue, the submission of the learned counsel is rejected - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained based solely on the calculation using electricity consumption. The calculations in the SCN only considered electricity consumption and did not take into account any other parameters to determine the actual production - all that the figures and calculations show is that if the production of goods in terms of electricity consumption has been as efficient. However, the calculation does not establish that the production has, indeed, been so efficient throughout the period of dispute and part of the goods so produced was clandestinely removed without paying duty - The allegation of excess production and clandestine removal and consequent demand of duty, interest and penalties cannot be sustained and set aside – The impugned order is set aside and the appeals are allowed [Read less]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication with... [Read more]

Customs – Import of ‘Cold Rolled Stainless Steel Coils’, Limitation under Section 110(2) of Customs Act - Goods seized under Section 110(1) of Customs Act with the allegation that they were imported in violation of the Ministry of Steel's circular requiring NOC for steel imports without BIS certification - Importer requested waiver of show cause notice to expedite adjudication - Department failed to pass order within 6 months from seizure as mandated under Section 110(2) - Commissioner (Appeals) vacated the seizure and ordered release of the goods on the basis of non-issuance of show cause notice or adjudication within six months from the seizure date – Dept in appeal against the impugned order – HELD - The statutory 6-month period under Section 110(2) is mandatory and not directory - The waiver of show cause notice does not override the statutory time limit and the importer cannot be held bound by such waiver after the expiry of 6 months - Failure to pass order within 6 months from seizure results in the seizure becoming illegal and the goods are liable to be released unconditionally. There is no infirmity in the order of the Commissioner (Appeals) in giving relief to the importer. The impugned order passed after the expiry of 6-month period is without jurisdiction and set aside and goods are ordered to be released - Whether the release of goods is correctly ordered - The goods imported were 'Cold Rolled Stainless Steel Coils Grade J2' which were found to be in conformity with the description and specifications based on testing - Ministry of Steel had issued NOC for similar goods imported by other parties – HELD - The circular of Ministry of Steel requiring NOC for import of goods not covered under the Steel and Steel Products (Quality Control) Order cannot be the basis for treating the imported goods as prohibited/restricted, as the circular cannot override the substantive law - For Grade J2, department has not been able to show that under which Control Order of the Ministry of Steel i.e. the Steel and Steel products (Quality Control Order) any restriction was applied on the ‘Cold Rolled Stainless Steel Coils Grade J2’ - The department failed to demonstrate that the imported goods were covered under the Quality Control Order or any BIS standards - In absence of any statutory restriction, the goods cannot be treated as prohibited and are liable to be released. [Read less]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the road... [Read more]

Service Tax - Exemption from Service Tax for Construction of Roads – Denial of exemption on the ground that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests - Whether the construction of internal roads by the appellant is eligible for exemption from service tax under Notification No.25/2012-ST dated June 20, 2012 – HELD - The exemption under the notification is available for construction of a road, bridge, tunnel, or terminal for road transportation for use by general public. However, the Appellate Authority had found that the roads in question constructed by the appellant were internal roads which were meant for the residents of the complex and their guests, and not for use by the general public. The appellant had not produced any document or evidence to show that these internal roads were for general public use, which is the basic requirement for availing the exemption notification - In the case of Warsi Buildcon, it was held that the exemption on payment of service tax in respect of services relating to the construction of roads was limited only to those roads which were meant to be used by the general public, and not for private use by the buyers of the builders or residents of the township. However, the present case is distinguishable from the Warsi Buildcon case, as the Work Order in the present case has been issued by the Jaipur Development Authority, which is a Government Authority. Since the exemption has been sought under Entry No.13(a) and 29(h), the relevant issue to be decided is whether the construction of road is for use by general public - The impugned order is set aside and the matter is remanded to the Original Authority to decide the issue of eligibility for exemption from service tax afresh, considering the nature of the Work Order and the evidence provided by the appellant to establish that the construction of roads was for use by the general public - The appeal is allowed by way of remand [Read less]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - Th... [Read more]

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - The Designated Authority had the inherent power to reject the declaration for non-compliance with the mandatory requirement of Section 107(3) to pay 50% of the declared tax dues by 31.12.2013. Where a power is conferred by a statute, it carries with it the power to do all such acts as are reasonably necessary for its execution – Further, the Scheme does not provide either the Revenue or the Declarant to amend or alter the time lines specified therein or the respective quantum of payment to be made, at their discretion. Therefore, these provisions have to be strictly interpreted, and the time limit specified in the Scheme have to be strictly adhered to by the declarant - The non-payment of fifty percent of the declared tax dues by the specified date of 31.12.2013 would in itself disentitle the appellant from availing the benefit of the VCES Scheme. The rejection of VCES declarations for non-payment of the 50% dues by the due date is upheld – The impugned order does not warrant any interference. The appeal is dismissed - Whether the declaration was barred under the second proviso to Section 106(1) of the Finance Act, 2013 – HELD - The appellant had been issued a show cause notice and order for non-payment of service tax on service charges for the period from January 2009 to June 2009. The declaration filed by the appellant under VCES was for the period from April 2010 to December 2012, which was a subsequent period to the one for which the earlier order was issued. Therefore, the declaration was rightly rejected by the Designated Authority under the second proviso to Section 106(1), which prohibits a declaration for a subsequent period on the same issue for which a notice or order has been issued. [Read less]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to cont... [Read more]

GST - Seizure of documents, books of accounts and the CPU, Non-supply of seized documents and records - The petitioner alleged that during a search and seizure operation, certain documents, books of accounts, and the CPU were seized. Despite repeated requests, the respondent did not provide the petitioner with copies of the seized documents or return the seized CPU, depriving the petitioner of a fair opportunity to contest the adjudication proceedings - Whether the denial of access to the seized documents and CPU violated the principles of natural justice – HELD - The petitioner was deprived of a fair opportunity to contest the adjudication proceedings as the documents and records based on which the petitioner could have prepared its defense were not available to it. Without the documents and records, the petitioner would also not be in a position to prefer a proper appeal before the appellate authority - The impugned order should not be given effect to and the matter is remanded to the proper officer for fresh consideration after providing the petitioner with the seized documents or copies thereof, and the seized CPU, and affording the petitioner an opportunity of hearing in accordance with the principles of natural justice - the impugned order was treated as an additional show-cause notice, allowing the petitioner to file a composite reply within two weeks from the date of receiving the seized documents or copies thereof and the seized CPU - The writ petition is disposed of [Read less]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether... [Read more]

GST – Proceedings for excess availment of Input Tax Credit, Non-filing of GSTR-3B return by the Supplier, grounds not raised in SCN – Issue of notice alleging excess availment of ITC on the ground that the petitioner's supplier had not filed Form GSTR-3B for the period August 2019 to October 2019 - The adjudicating authority gave credit to the petitioner for August and September 2019 but confirmed the demand for October 2019. The appellate authority rejected the appeal questioning the genuineness of the petitioner's transactions and holding that the petitioner failed to produce evidence of receiving the goods - Whether the appellate authority was justified in rejecting the appeal on grounds not mentioned in the show cause notice – HELD - The only issue raised in the SCN was the non-filing of the supplier's return in Form GSTR-3B. Once the supplier filed the return for October 2019 during the pendency of the appeal, the appellate authority should have adopted the same standard as the adjudicating authority and dropped the demand for that month. The appellate authority, however, tried to upset the petitioner's case on grounds not mentioned in the notice to show cause, which was not permissible under the law. The appellate authority should have afforded the petitioner an opportunity to rebut any new grounds it intended to rely upon. By not doing so, the appellate authority acted arbitrarily - The appellate order is set aside and the matter is remanded to the appellate authority for a fresh decision after affording the petitioner an opportunity of hearing on all points the appellate authority may have contemplated against the petitioner in accordance with law – The petition is disposed of [Read less]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the inp... [Read more]

Service Tax - Admissibility of CENVAT credit on input services used for construction of immovable property for providing renting service - Whether the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property which was subsequently let out under the "Renting of Immovable Property Service" – HELD - The definition of "input service" under the CENVAT Credit Rules, 2004 covers services used directly or indirectly in relation to the provision of output service. The renting service cannot be provided without constructing and maintaining the building, and therefore the input services used for construction of the building have a direct nexus with the output service of renting. The 'includes' clause of the definition of 'input service' expressly covers services used in relation to setting up of the premises of an output service provider, which would include the construction services utilized by the appellant – Further, various judicial precedents, including the judgment of the Hon'ble Punjab & Haryana High Court in the case of the appellant's sister concern, have allowed the CENVAT credit on input services used for construction of immovable property which is subsequently let out. Accordingly. the appellant is eligible to take CENVAT credit on the input services used for construction of the immovable property – The impugned order is set aside and the appeal is allowed [Read less]

Andhra Pradesh VAT Act, 2005 - Input Tax Credit on goods sold in the same form at subsidized rates - Petitioner, a State Government undertaking, procures and supplies essential commodities at subsidized rates fixed by the Government. It claims Input Tax Credit on the purchase of these goods which it then sells in the same form through the public distribution system - Whether the petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities when the goods are sold in the same form at subsidized rates fixed by the Government – HELD - The petitioner is entitled to claim full Input Tax Credit on th... [Read more]

Andhra Pradesh VAT Act, 2005 - Input Tax Credit on goods sold in the same form at subsidized rates - Petitioner, a State Government undertaking, procures and supplies essential commodities at subsidized rates fixed by the Government. It claims Input Tax Credit on the purchase of these goods which it then sells in the same form through the public distribution system - Whether the petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities when the goods are sold in the same form at subsidized rates fixed by the Government – HELD - The petitioner is entitled to claim full Input Tax Credit on the purchase of the commodities as per Rule 20(4)(a) of the AP VAT Rules, 2005, which allows a dealer who buys and sells goods in the same form to claim full Input Tax Credit. The fact that the goods are sold at subsidized rates fixed by the government does not disentitle the petitioner from claiming the full Input Tax Credit. The respondents' disallowance of the Input Tax Credit claimed by the petitioner on the ground that the sale price was less than the purchase price is not sustainable - the order under challenge is set aside and the writ petition is allowed - Purchase Tax on By-Products - The respondents levied purchase tax under Section 4(4) of the AP VAT Act on the by-products (broken rice, bran, and husk) which are left with the millers as per the terms of the agreement between the petitioner and the millers, on the ground that these by-products are consideration for the conversion of paddy into rice - Whether the by-products left with the millers can be treated as "disposed of" by the petitioner and therefore subject to purchase tax under Section 4(4) of the APVAT Act – HELD - The by-products like broken rice, bran, and husk are left with the millers as per the terms of the agreement and there is no transfer of title or "disposal" of these goods by the petitioner. Therefore, the levy of purchase tax under Section 4(4) on these by-products is not sustainable. The responsibility to pay tax on these by-products lies with the millers as per the agreement. This issue is no longer res integra, as the High Court has previously held in a similar case that the value of by-products left with the millers cannot be added to the turnover of the petitioner for the purpose of tax computation. [Read less]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modi... [Read more]

Kerala VAT Act, 2003 – Jurisdiction of assessing authority, Implementation of Appellate Order - Assessment for Unaccounted Sales - The assessing authority passed an assessment order holding the petitioner liable for an unaccounted sales turnover and demanding the output tax along with interest. The petitioner appealed against this order, contending that the transactions were actually carried out by her son, who had obtained a fresh registration after the deceased's death. The appellate authority allowed the appeal, finding that the sales turnover belonged to the son's new firm and directed the assessing authority to modify the assessment by deleting the said sales turnover - Whether the assessing authority was justified in issuing a fresh assessment order restoring the original assessment, despite the appellate authority's clear directions – HELD - The appellate authority had allowed the appeal filed by the petitioner directing the assessing authority to modify the assessment by “deleting the sales turnover” from the assessment. The appellate authority also found that such an order is required since turnover actually belongs to another dealer - The assessing authority could not have issued notices to the petitioner demanding further documents, as the appellate order had already made a positive finding that the sales turnover in question belonged to the son's new firm. The assessing authority should have simply implemented the appellate order by issuing a fresh assessment order accepting the directions. The assessing authority's action in restoring the original assessment order is not justified - The assessment order passed by the assessing authority is set aside and the writ petition is allowed [Read less]

Central Excise - Valuation of excisable goods cleared to an inter-connected undertaking, Supply of tailor-made goods - Appellant supplied certain material to an inter-connected undertaking. Department contended that the valuation should be done under section 4(1)(b) of the Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, as the goods were being cleared to a related party, which in turn were being sold in retail – Appellant case that Rule 9 and 10 cannot be applied as the entire excisable goods are not sold only to or through related person –... [Read more]

Central Excise - Valuation of excisable goods cleared to an inter-connected undertaking, Supply of tailor-made goods - Appellant supplied certain material to an inter-connected undertaking. Department contended that the valuation should be done under section 4(1)(b) of the Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, as the goods were being cleared to a related party, which in turn were being sold in retail – Appellant case that Rule 9 and 10 cannot be applied as the entire excisable goods are not sold only to or through related person – Demand invoking extended period – HELD - For invoking Rule 9 of the Central Excise Valuation Rules, it is necessary that the inter-connected undertaking is also related in the manner specified in sub-clauses (ii), (iii) or (iv) of section 4(3)(b). In the present case, the Department did not allege or establish that the inter-connected undertakings were related in the said manner. For the related person definition under section 4(3)(b)(iv), there must be a mutual interest between the parties, which was not proved in the present case. Mere inter-connectedness of the undertakings does not lead to the conclusion of mutuality of interest. There being merely an inter-connected undertaking cannot lead to valuation in accordance with Rule 9 or 10(a), both prior to and post amendment to 01.12.2013. Incidentally, only Rule 9 has been invoked in the SCN for valuation. Therefore, the transaction value has to be accepted for the purposes of discharging Central Excise duty – an attempt has been made by the adjudicating authority to hold that even if Rule 9 and 10 of Central Excise Valuation Rules were not applicable, the valuation in the case should be under clause (b) of sub-section (1) of section 4. It is a case where the demand was proposed based on valuation under Rule 9, where the goods were required to be sold only through the related person prior to 01.12.2013, which is not the case in the present appeal and post amendment, while it is covered as part sale is also included under Rule 9, but the same interconnected undertaking is also required to be related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of section 4(3)(b). The department has not been able to establish that they were otherwise also related in terms of said sub-clauses - The transaction value of the goods cleared to the inter-connected undertaking should be accepted for the purpose of discharging the Central Excise duty. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Availment of CENVAT credit on input services and common inputs used for manufacture of dutiable and exempted goods – Demand for reversal of credit - Appellant had not maintained separate records for the utilization of inputs in the manufacture of dutiable and exempted goods as required under Rule 6(2) of the CCR 2004 - Whether the appellant had availed CENVAT credit on input services and common inputs used for the manufacture of both dutiable and exempted goods during the disputed period – HELD - The appellant had not availed CENVAT credit on common input services prior to the audit objection. After th... [Read more]

Central Excise - Availment of CENVAT credit on input services and common inputs used for manufacture of dutiable and exempted goods – Demand for reversal of credit - Appellant had not maintained separate records for the utilization of inputs in the manufacture of dutiable and exempted goods as required under Rule 6(2) of the CCR 2004 - Whether the appellant had availed CENVAT credit on input services and common inputs used for the manufacture of both dutiable and exempted goods during the disputed period – HELD - The appellant had not availed CENVAT credit on common input services prior to the audit objection. After the audit objection was raised, the appellant availed the credit on common input services and simultaneously reversed 5% of the amount representing the value of the exempted goods in terms of Rule 6(3)(i) of the CCR 2004. The appellant had categorically submitted that they had not availed CENVAT credit on common input services during the disputed period of August 2009 to March 2011 and had only availed the credit after the audit note was issued on 27.11.2011, which was immediately reversed on 06.02.2012. No contrary evidence was brought on record by the Revenue to indicate that the amount of 5% on the value of exempted goods was not reversed by the appellant. Consequently, the confirmation of demand of interest and imposition of penalty are not justified as the appellant had immediately reversed the 5% of the value of the exempted goods after availing the CENVAT credit on common input services – The appeal is allowed [Read less]

Customs - Entitlement to duty drawback on Mobile Phone - Whether unlocking of mobile phones would result in withdrawal of duty drawback benefits – Vide the impugned order the High Court held that the mere act of unlocking does not constitute the phones being \"taken into use\" within the meaning of the applicable provisions – Revenue in appeal - SC HELD – There is no good ground to interfere with the impugned order passed by the High Court. The Special Leave Petition is dismissed

Service Tax – Taxability of horticulture services, processing of fly ash bricks, and other management, maintenance and repair services - Appellant provided various taxable, non-taxable/exempt services to NTPC, including horticulture services, processing of fly ash bricks, and management, maintenance and repair services - Whether the horticulture services provided by the appellant are exempt from service tax – HELD – The horticulture activities undertaken by appellant are specifically excluded from the scope of 'cleaning activity' under the Finance Act. Therefore, the horticulture services provided by the appellant ar... [Read more]

Service Tax – Taxability of horticulture services, processing of fly ash bricks, and other management, maintenance and repair services - Appellant provided various taxable, non-taxable/exempt services to NTPC, including horticulture services, processing of fly ash bricks, and management, maintenance and repair services - Whether the horticulture services provided by the appellant are exempt from service tax – HELD – The horticulture activities undertaken by appellant are specifically excluded from the scope of 'cleaning activity' under the Finance Act. Therefore, the horticulture services provided by the appellant are not liable to service tax - The appellant have provided the services of maintenance of lawns and gardens comprised of growing of grass, plants, trees, regular mowing of lawns, pruning and trimming of shrubs and cleaning of garden, such activities would fall within the ambit of ‘Management, Maintenance or Repair service’ - The appellant has been paying Service Tax for the said service for the period after 01.07.2012, during the Negative List regime. Thus, no merit in the claim of the appellant that the said services are exempted from payment of Service Tax - The matter is remanded to the adjudicating authority to verify the correctness of the appellant's claim and quantify the service tax payable, if any – The appeal is disposed of by way of remand - Processing of Fly Ash Bricks - Appellant contended that the services of processing of fly ash bricks were exempt as per the relevant notifications – HELD - Any service provided in relation to production or processing amounting to manufacture of excisable goods is excluded from the definition of 'Business Auxiliary Service' and thus the benefit of exemption notification is available to the appellant up to 30.06.2012. For the period after 01.07.2012, such activities are covered under the Negative List and Mega Exemption Notification – The matter is remanded back to the adjudicating authority to verify the correctness of the appellant's claim and eligibility for exemption upon production of relevant documentary evidence - Other Services - Regarding the remaining demand pertaining to other services, the Tribunal held that the appellant's reconciliation between the value of services as per audited Trial Balances and the value of services declared in ST-3 Returns indicates that the value of taxable services had been correctly declared. However, the Tribunal remanded this issue back to the adjudicating authority for verification of the correctness of the appellant's claims based on the documents to be furnished - Differential Tax on Change in Rate - The Tribunal held that the demand of differential tax of 2.06% on the value of services received during 2012-13 in respect of past periods needs to be verified, as the appellant's claim in this regard appears to be in line with the judicial precedents - Opening Balance in NTPC Ledger – The appellant was following the mercantile system of accounting and was required to maintain books on accrual basis, while service tax was payable on the payment receipt basis prior to 01.04.2011. Therefore, the Tribunal remanded this issue for verification of the appellant's claim regarding the evidence of invoices issued prior to 01.04.2011 and receipt of payment thereafter - Unpaid Service Tax & Short Payment - The Tribunal remanded these issues for verification of the appellant's claims that the demand pertains to double counting and clerical error, respectively. [Read less]

Central Excise - Eligibility for SSI exemption due to use of brand name and location of manufacturing unit in rural area - Appellant had cleared pharmaceutical products to various customers on payment of duty and had cleared medicines to Ozonic Health Care and Sri Aksaya Agencies without payment of duty, using their brand names - Whether the appellant is eligible for SSI exemption despite using the brand names of another person – HELD - If the brand name belongs to a person who is a Director or proprietor of the appellant's firm, it cannot be considered as the brand name of another person, and the appellant would be elig... [Read more]

Central Excise - Eligibility for SSI exemption due to use of brand name and location of manufacturing unit in rural area - Appellant had cleared pharmaceutical products to various customers on payment of duty and had cleared medicines to Ozonic Health Care and Sri Aksaya Agencies without payment of duty, using their brand names - Whether the appellant is eligible for SSI exemption despite using the brand names of another person – HELD - If the brand name belongs to a person who is a Director or proprietor of the appellant's firm, it cannot be considered as the brand name of another person, and the appellant would be eligible for SSI exemption. In the present case, the proprietor of Ozonic Health Care and the proprietrix of Sri Aksaya Agencies were the Managing Director and a Director of the appellant firm, respectively. Therefore, the use of their brand names by the appellant cannot be considered as the use of brand names of another person, and the appellant is eligible for SSI exemption - The appellant's manufacturing unit is located in a rural area and, consequently, the appellant is eligible for SSI exemption. The certificate issued by the jurisdictional Tahsildar is a valid document to substantiate the claim of the manufacturing unit being located in a rural area for the purpose of availing SSI exemption. In the present case, the appellant had submitted a certificate issued by the jurisdictional Tahsildar, which was found to be a valid document – The demand of central excise duty along with interest and penalties imposed on the appellant and its Managing Director are set aside and the appeals are allowed [Read less]

Customs - Utilization of Served From India Scheme (SFIS) Scrips – Petitioner received Duty Credit Scrips under the Served From India Scheme (SFIS). However, the petitioner faced challenges in utilizing these scrips, as they were deemed non-transferable and could only be predominantly used for import of vehicles for commercial tourism operations, thereby limiting their applicability and usability - Whether the petitioner should be allowed to transfer or utilize the SFIS scrips in a manner different from the restrictions imposed under the original Foreign Trade Policy - HELD - The petitioner had made genuine efforts to uti... [Read more]

Customs - Utilization of Served From India Scheme (SFIS) Scrips – Petitioner received Duty Credit Scrips under the Served From India Scheme (SFIS). However, the petitioner faced challenges in utilizing these scrips, as they were deemed non-transferable and could only be predominantly used for import of vehicles for commercial tourism operations, thereby limiting their applicability and usability - Whether the petitioner should be allowed to transfer or utilize the SFIS scrips in a manner different from the restrictions imposed under the original Foreign Trade Policy - HELD - The petitioner had made genuine efforts to utilize the SFIS scrips, but was unable to do so due to various administrative and policy constraints. It could never have been the intention of the Government or the Policy to let such genuinely availed and entitled scrips lapse – The respondents to consider the petitioner's representations seeking relaxation regarding the utilization of the SFIS scrips, including extension, monetization, or permission to utilize the scrips for payment of IGST/BSD, or in the alternative, to permit transferring the scrips to other eligible persons - Additionally, the status quo be maintained with regard to the validity of the SFIS scrips issued to the petitioner for a period of three months, to allow the respondents to consider the petitioner's requests - The writ petition is disposed of [Read less]

Service Tax - Leviability of Service Tax on excess income earned by freight forwarder - Appellant was promoting and marketing the services of freight forwarders by offering such services to importers and exporters, and had received brokerage/discounts, resulting in income over and above the air cargo and sea cargo freight charge - Department contended that this excess income represented commission or brokerage received towards the promotion or marketing of services provided by overseas freight forwarders, and therefore constituted Business Auxiliary Service - Whether service tax is leviable on the excess income earned by t... [Read more]

Service Tax - Leviability of Service Tax on excess income earned by freight forwarder - Appellant was promoting and marketing the services of freight forwarders by offering such services to importers and exporters, and had received brokerage/discounts, resulting in income over and above the air cargo and sea cargo freight charge - Department contended that this excess income represented commission or brokerage received towards the promotion or marketing of services provided by overseas freight forwarders, and therefore constituted Business Auxiliary Service - Whether service tax is leviable on the excess income earned by the appellant out of the ocean freight amount under the category of BAS – HELD - as a freight forwarder the appellant has undertaken transport of cargo from one country to another through multimodal transportation and for this purpose they jointly work with their counterparts in other countries and based on agreements with them the profit earned or the loss incurred in each transaction is shared with them - the common thread running in various Tribunal decisions relating to "Profit Share" on Freight Forwarding Services is that the "Business Profits" cannot be taxed to Service Tax, and also that when the two partners are jointly delivering the service in multi-modal transport, operating in different geographical locations, such sharing of profit cannot be taxed to Service Tax - The appellant is not liable to pay service tax on the excess income earned under the category of BAS – The impugned order is set aside and the appeal is allowed [Read less]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to inter... [Read more]

Central Sales Tax Act, 1956 – Eligibility to exemption under Section 6(2) of the CST Act, 1956 on second-sale where the first sale is exempt – Vide the impugned order the High Court held that when the conditions specified in Section 6(2), whether in the main provision or in the provisos, are satisfied, the dealer would be entitled to exemption. There is provision which indicates that the exemption under Section 6(2) in respect of a subsequent sale cannot be granted where the first sale has had the benefit of an exemption – Revenue in appeal against the High Court Order – SC HELD – There is no good reason to interfere in the impugned judgment and order passed by the High Court. Accordingly, the Revenue appeal is disposed of [Read less]

GST - Export of services or Intermediary services, Providing educational consultation to Indian students intending to pursue education in foreign universities – Vide the impugned order the High Court held that the respondent\'s (assessee) services qualify as export of services under Section 2(6) of the IGST Act, 2017 instead of \'intermediary\' under the Section 2(13) of the Act – Revenue in appeal against the High Court Order – SC HELD - Not inclined to interfere with the impugned judgment and order of the High Court, hence, the special leave petition is dismissed

Central Excise - Classification of single/double roasted Rava/Sooji - Based on intelligence, it was found that the appellants were manufacturing single/double roasted Sooji/Rava packed under the brand name 'Pillsbury' but had not discharged duty on the same - Department alleged that the process of drying and roasting of Sooji/Rava results into 'manufacture' and that the process of single/double roast of Sooji/Rava and marketing it in unit containers falls under Chapter Sub-heading 19019090 of the CETA, 1985, attracting duty and also Maximum Retail Price (MRP) based assessment - Whether Rava/Suji on roasting at an appropria... [Read more]

Central Excise - Classification of single/double roasted Rava/Sooji - Based on intelligence, it was found that the appellants were manufacturing single/double roasted Sooji/Rava packed under the brand name 'Pillsbury' but had not discharged duty on the same - Department alleged that the process of drying and roasting of Sooji/Rava results into 'manufacture' and that the process of single/double roast of Sooji/Rava and marketing it in unit containers falls under Chapter Sub-heading 19019090 of the CETA, 1985, attracting duty and also Maximum Retail Price (MRP) based assessment - Whether Rava/Suji on roasting at an appropriate temperature resulting into reduction in the moisture content be treated as ‘manufacture’ within the definition of Section 2(f) of Central Excise Act, 1944 – HELD - The process of roasting undertaken by the appellants does not result into 'manufacture' within the definition of Section 2(f) of the CEA, 1944. The Rava/Suji itself is a finished product falling under Chapter 1103 ready to be used and sold in the market. The process of 'single roasting' or 'double roasting' of Rava does not bring any change in the item itself nor any change in its physical properties/characteristics, only the process of roasting reduces the moisture content of Rava/Suji. The plain Rava/Suji when subjected to first roasting and/or second roasting, no transformation takes place nor the resultant roasted product has an altogether distinct character and use. Therefore, the process of roasting i.e. 'single roasting' and/or 'double roasting' of the plain Rava/Suji does not result into 'manufacture' within the definition of Section 2(f) of CEA, 1944, hence, not leviable to excise duty - Since the process of roasting undertaken by the appellant does not result into manufacture, further discussion about change in its classification becomes academic, hence, not dealt into – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand of service tax under Commercial Training or Coaching Centre services on providing of long-term management programmes – Vide the impugned order the Tribunal modified the Order-in-Original by setting aside penalty and upholding the confirmation of demands with interest for the normal period of limitation – Revenue in appeal against the Tribunal Order – SC HELD – There is no sufficient cause to condone the delay in filing the present appeal against the impugned order of the CESTAT. The appeal filed by Revenue is dismissed on the ground of delay – Ordered accordingly

GST - Audit Order – Petitioner was subjected to a GST audit for the period 2020-21 to 2022-23 by the respondent authorities. The audit resulted in the issuance of a final audit report, a show cause-cum-demand notice, and a final demand order, all of which were challenged by the petitioner in a writ petition – HELD - The petitioner cannot challenge the validity of the show cause notice and the audit report, as it had effectively participated in the proceedings before the competent authority and the final order was passed under Section 74 of the CGST Act, 2017. When there is an alternate statutory remedy available, the p... [Read more]

GST - Audit Order – Petitioner was subjected to a GST audit for the period 2020-21 to 2022-23 by the respondent authorities. The audit resulted in the issuance of a final audit report, a show cause-cum-demand notice, and a final demand order, all of which were challenged by the petitioner in a writ petition – HELD - The petitioner cannot challenge the validity of the show cause notice and the audit report, as it had effectively participated in the proceedings before the competent authority and the final order was passed under Section 74 of the CGST Act, 2017. When there is an alternate statutory remedy available, the petitioner should be relegated to avail the statutory remedy of appeal - The petitioner is at liberty to raise all the grounds before the appellate authority and thereafter approach the GST Tribunal, if required – The petition is dismissed [Read less]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable t... [Read more]

Service Tax - Copyright Assignment as Goods vs. Service Tax – Receipt of payments from broadcasters for recorded commercial productions of which the appellant is the copyright owner - Department alleged that this activity of production on behalf of others and assigning of copyright of programmes produced by the appellant to the broadcasters amounted to 'Sale of Programmes' which is a taxable service covered under 'TV or Radio Programme Producer Service' - Whether the assignment of copyright of television programs produced by the appellant to broadcasters amounted to a 'sale of goods' liable to VAT or a 'service' liable to Service Tax – HELD - The appellant produced the television programs on its own, without any involvement of the broadcasters. In such a situation, the activity would not attract Service Tax as the very concept of rendering of "service" implies two entities, one who renders the "service", and the other, who is the recipient thereof - Copyrights are intangible property without a physical existence, and an intangible activity need not necessarily mean it is a service. The assignment of copyright in the television programs by the appellant to the broadcasters was in the nature of a 'sale of goods' liable to VAT, and not a 'service' liable to Service Tax. The payment of service tax and VAT are mutually exclusive, and if sale of goods is involved and VAT has been paid correctly, the activity would be outside the preview of Service Tax - The transfer of copyright in these programs to the broadcasters do not constitute a 'service' under the definition of 'TV or Radio Programme Production Service' in the Finance Act, 1994 - The demand for Service Tax, interest, and penalty are set aside and the appeal is allowed [Read less]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining ... [Read more]

Customs - Admissibility of Statements Recorded Under Section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, Retraction of Statements – Levy of penalties for alleged undervaluation and mis-declaration of imported goods - Whether the statements recorded under Section 108 of the Customs Act could be relied upon without following the procedure under Section 138B, and whether the printouts of emails were admissible without complying with the requirements of Section 138C – HELD - The statements recorded under Section 108 could not be relied upon without first examining the persons who made the statements as witnesses before the adjudicating authority and obtaining the authority's opinion that the statements should be admitted in the interests of justice, as required under Section 138B – In the instant case, the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same – Further, the printouts of emails could not be relied upon without the certificate required under Section 138C - The elaborate procedures in these sections are meant to safeguard against the possibility of statements being recorded under coercion or compulsion during the investigation stage. Since the mandatory procedures under these provisions were not followed, the impugned orders are set aside and the appeals are allowed [Read less]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are i... [Read more]

GST – Odisha AAAR - Admissibility of input tax credit on procurement of goods (pipes) and services (works contract) for construction/laying of underground cross-country pipeline used for transportation of natural gas - Appellant procured pipes and availed works contract services for construction/laying of underground cross-country pipeline as per authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) – Vide the impugned ruling the AAR held that laying of cross-country pipelines meant for supply of natural gas does not fall under the definition of plant and machinery and hence ITC on such pipe lines are in-admissible - Whether ITC is admissible under Section 16 of the CGST Act, 2017 on procurement of pipes and works contract service for construction/laying of underground cross-country pipeline – HELD - The pipelines laid by the appellant are considered as immovable property and not 'plant and machinery' as per the explanation to Section 17(5) of the CGST Act. The Section 17(5)(c) and 17(5)(d) restrict the availment of ITC on goods and services used for construction of immovable property, other than plant and machinery – Since the statute specifically bars availment of ITC on works contract services when supplied for construction of immovable property and the cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on works contract services provided for construction of such pipeline for transportation of natural gas - Further, clause (d) of Section 17(5) bars entitlement to ITC in respect of goods or services used for construction of immovable property on own account - The cross-country pipeline being an immovable property, the appellant is not entitled to avail ITC on goods or services received for construction and laying of such pipeline for transportation of natural gas – The appeal is rejected - Whether cross-country pipeline is “Plant & Machinery” – HELD - The pipelines laid cross-country by the Appellant on the direction of PNGRB do not form part of “plant and machinery” as these are laid outside the factory premises meant for processing the LNG, RLNG or CNG and therefore fall under the restriction clause as prescribed under Section 17(5) (c) and (d) of CGST Act – The underground pipelines laid by the Appellant as per the requirement of the PNGRB, do not form part of plant and machinery as such pipelines laid outside factory premises are excluded from the definition of plant and machinery. The expression “pipelines outside the factory” signifies that the pipeline is to transport some product from the factory to the end user. In the instant case, the gasified natural gas is transported through the pipeline which is outside the factory. Hence, the said pipeline is a “pipeline outside the factory” for which the appellant cannot avail ITC by treating pipelines as “plant & machinery” - Whether cross-country pipeline is covered under “apparatus, equipment, machinery” – HELD - To call ‘pipeline’ an “apparatus, equipment or machinery” would be a distortion of the meaning when the appellant himself described it as a pipeline. While construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document, it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with subject matter understand it. Thus, in common parlance, a pipeline cannot be treated as an apparatus, equipment or machinery. When a specific description is available, it is not justified to bring a pipeline within a meaning of “apparatus, equipment or machinery” by quoting convenient meanings just in order to avail ITC. [Read less]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - ... [Read more]

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - For invoking the extended period of limitation under Section 73(1), the authorities must arrive at a specific conclusion that the case falls under any of the conditions specified in the proviso to Section 73(1), i.e. fraud, collusion, willful misstatement, suppression of facts or contravention of any provisions of the Act with the intent to evade payment of tax. However, in the present case, the impugned order-in-original did not contain any such finding by the authorities - Mere non-furnishing of documents or information cannot be construed to have given rise to a situation under any or all of these five conditions under the proviso to Section 73(1) to levy service tax by extending the limitation. The authorities had proceeded on the basis of the information available in Form 26AS obtained from the Income Tax Department, without examining whether the services rendered by the petitioner were liable to service tax under the Finance Act, 1994. The tax cannot be imposed on the basis of inferences and analogy, and there must be a declaration of liability under the statute - The invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 by the respondent authorities is not justified - The impugned order-in-original is quashed and the writ petition is allowed [Read less]

Service Tax - Taxability of Fees Received by Hospitals from Visiting Doctors - Department alleged that the appellant was providing "Business Support Services" to visiting doctors in the form of infrastructural and administrative support, and thus was liable to pay service tax on the fees received from the visiting doctors - Whether the services provided by the appellant to the visiting doctors falls under "Business Support Services" - HELD - The services provided by hospitals to visiting doctors are in the nature of Healthcare services and not Business Support Services. The visiting doctors are engaged by the appellant hos... [Read more]

Service Tax - Taxability of Fees Received by Hospitals from Visiting Doctors - Department alleged that the appellant was providing "Business Support Services" to visiting doctors in the form of infrastructural and administrative support, and thus was liable to pay service tax on the fees received from the visiting doctors - Whether the services provided by the appellant to the visiting doctors falls under "Business Support Services" - HELD - The services provided by hospitals to visiting doctors are in the nature of Healthcare services and not Business Support Services. The visiting doctors are engaged by the appellant hospital to provide healthcare services to patients, and the appellant hospital is availing the professional services of the visiting doctors, for which it pays them as per the agreement - The visiting doctors are working with the appellant’s hospital and it is the visiting doctors who, in fact, are service providers to the appellant’s hospital as the appellant’s hospital is availing the services of such visiting doctors, for which they are paid by the said hospital as per the agreement and not the vice versa – Further, the extended period of limitation could not be invoked in the present case as the issue involved was a matter of interpretation of statutory provisions, which was decided in favor of the assessee in various decisions. The impugned order is set aside and the appeal is allowed [Read less]

For computation of refund under Rule 89(4) of the CGST Rules, the expression “relevant period” has to be understood and applied consistently in respect of all the terms including ‘ITC’ as well as ‘turnover’ and also the ‘adjusted turnover’.

GST – Chhattisgarh AAR - Applicability of GST on Diesel and Petrol charges invoiced separately on a per kilometer basis for providing Fleet operation services – Applicant is engaged in fleet operations and would be providing services such as repair and maintenance, insurance, drivers, and fuel charges to clients based on a per kilometer basis. The applicant would raise separate invoices for the services and the fuel charges - Whether the invoice for diesel and petrol charges, invoiced separately on a per kilometer basis, would be considered a supply of goods and liable to VAT, or liable to GST – HELD - GST is not lev... [Read more]

GST – Chhattisgarh AAR - Applicability of GST on Diesel and Petrol charges invoiced separately on a per kilometer basis for providing Fleet operation services – Applicant is engaged in fleet operations and would be providing services such as repair and maintenance, insurance, drivers, and fuel charges to clients based on a per kilometer basis. The applicant would raise separate invoices for the services and the fuel charges - Whether the invoice for diesel and petrol charges, invoiced separately on a per kilometer basis, would be considered a supply of goods and liable to VAT, or liable to GST – HELD - GST is not leviable on diesel and petrol charges as these petroleum products are currently outside the purview of GST as per the provisions of Section 9(2) of the CGST Act, 2017. Petroleum products, including petrol and diesel, continue to be taxed under the pre-GST regime - The transaction in question cannot be treated as a composite supply as defined under Section 2(30) of the CGST Act, 2017, and the concept of bundled services is not relevant. The opinion of the applicant that when diesel is used as part of a bundled service (like fleet management or transport service billed per kilometer), the transaction may be considered a composite supply of service, is not sustainable under law - The fuel component (diesel and petrol) is to be treated independently for tax purposes, and VAT is applicable on such fuel charges, but Input Tax Credit is not eligible on the VAT paid, in terms of the provisions of Sections 16 and 17 of the CGST Act, 2017- Ordered accordingly - Whether the fuel component, when not bundled with the service and invoiced distinctly, is to be treated independently for tax purposes – HELD - Since GST is presently not applicable on fuel charges (fuel component) comprising of petroleum products, the fuel component is to be treated independently and is subject to the existing taxation structure, which includes Central Excise Duty and VAT. [Read less]