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Central Excise - Captive consumption of relays for manufacture of control panels - The Appellant was engaged in the manufacture of relays, control panels, ODs switches and parts thereto. Relays were captively used in the manufacture of control panels which were cleared without payment of duty for Mega Power Projects. The Department sought to deny the exemption to captively consumed relays under Notification No. 67/1995-CE dated 16.03.1995 on the ground that the control panel, the final product did not suffer duty. The exemption for captive consumption was rejected citing Rule 6 of Cenvat Credit Rules, 2004 - HELD - The iss... [Read more]

Central Excise - Captive consumption of relays for manufacture of control panels - The Appellant was engaged in the manufacture of relays, control panels, ODs switches and parts thereto. Relays were captively used in the manufacture of control panels which were cleared without payment of duty for Mega Power Projects. The Department sought to deny the exemption to captively consumed relays under Notification No. 67/1995-CE dated 16.03.1995 on the ground that the control panel, the final product did not suffer duty. The exemption for captive consumption was rejected citing Rule 6 of Cenvat Credit Rules, 2004 - HELD - The issue involved in these Appeals has already been decided and stands squarely covered by its earlier decisions in the Appellant's own case. The Appellant has complied with the provisions of Rule 6 of CCR, 2004 and is covered by the exclusion clause (vii) of the said Rule. The Department's contention that the Appellant did not discharge the obligation under Rule 6 was self-contradictory as the original authority had already recorded that the Rule prescribing the obligation is not applicable to the clearances under dispute. The eligibility of the Appellant for exemption under Notification No. 67/1995 cannot be disputed as they have followed the provisions and complied with the requirements of the said Notification - Accordingly, the impugned orders is set aside and the appeals are allowed [Read less]

Customs - Duty-free import under Target Plus Scheme, Fulfilment of Actual user condition and non-transferability requirement under Notification No. 32/2005-Cus by appellant-Merchant-exporter - Import of goods through high-seas sale and engagement of job workers for processing without endorsement on licenses - Whether the appellants have by complied with the conditions of Notification No. 32/2005-Cus. dated 08.04.2005, issued under the Target Plus Scheme, and whether the duty-free paper and paperboard imported thereunder were utilised in accordance with the actual-user and non-transferability conditions - HELD – The appel... [Read more]

Customs - Duty-free import under Target Plus Scheme, Fulfilment of Actual user condition and non-transferability requirement under Notification No. 32/2005-Cus by appellant-Merchant-exporter - Import of goods through high-seas sale and engagement of job workers for processing without endorsement on licenses - Whether the appellants have by complied with the conditions of Notification No. 32/2005-Cus. dated 08.04.2005, issued under the Target Plus Scheme, and whether the duty-free paper and paperboard imported thereunder were utilised in accordance with the actual-user and non-transferability conditions - HELD – The appellants failed to discharge the burden of proving compliance with the actual user and non-transferability conditions under the Target Plus Scheme. The imports through Haldia Port were routed through a non-existent job worker and delivered to an address where the importer did not have any presence, indicating diversion of goods. Similarly, the imports through Chennai Port involved high-seas sale to a third party and routing of goods through purported job workers who were either non-existent or did not have any control over the goods, establishing a pre-arranged mechanism to circumvent the scheme requirements - The failure to endorse the names and addresses of the job workers on the licenses, coupled with the lack of documentary evidence to demonstrate genuine utilization, lead to the conclusion that the goods were diverted in violation of the notification conditions. While the general legal principle is that utilization through job workers constitutes utilization by the importer, the specific facts of the case showed that the goods were not under the control of the license holder. Accordingly, the demand of duty, interest, and penalty under Sections 28 and 114A of the Customs Act, 1962 are upheld. However, the penalty under Section 112 is set aside - The appeals are disposed of [Read less]

Customs - Exemption under Notification No. 12/2012-Cus for "Reaper-cum-Binder" machinery - Whether imported paddy reapers without binder attachment are eligible for concessional duty under the notification – HELD - The exemption notification specifically refers to "Reaper-cum-Binder" which denotes an integrated machine performing both reaping and binding functions. Since the imported goods consisted only of paddy reapers without the binder attachment, they do not satisfy the description in the exemption notification and hence are not eligible for the concessional duty. The Tribunal relied on the principle of strict inter... [Read more]

Customs - Exemption under Notification No. 12/2012-Cus for "Reaper-cum-Binder" machinery - Whether imported paddy reapers without binder attachment are eligible for concessional duty under the notification – HELD - The exemption notification specifically refers to "Reaper-cum-Binder" which denotes an integrated machine performing both reaping and binding functions. Since the imported goods consisted only of paddy reapers without the binder attachment, they do not satisfy the description in the exemption notification and hence are not eligible for the concessional duty. The Tribunal relied on the principle of strict interpretation of exemption notifications and observed that the words "cum-binder" in the notification cannot be rendered otiose. However, the circumstances did not warrant confiscation of goods under Section 111(m) or imposition of redemption fine and penalty under Section 112(a) as there was no misdeclaration of goods and the dispute arose from a bona fide interpretation of the notification - the denial of exemption benefit was upheld, but the confiscation and penalty orders were set aside – The appeal is partly allowed - Confiscation under Section 111(m) and penalty under Section 112(a) of the Customs Act - Whether sustainable in the facts of the case – HELD – The confiscation and penalty cannot be justified merely because the importer claimed an exemption which was subsequently found inapplicable, in the absence of deliberate misdeclaration or intent to evade duty - In the present case, the goods were correctly declared as paddy reapers and the dispute was only with respect to the interpretation of the exemption notification. Consequently, the essential ingredient for invoking Section 111(m), i.e. misdeclaration of goods, was absent. Further, the Tribunal found that the circumstances indicated a bona fide claim of exemption, and hence the confiscation and penalty orders were not sustainable. Accordingly, the Tribunal set aside the confiscation and penalty orders. [Read less]

Service Tax - Eligibility of Cenvat credit - The appellant is engaged in the import and sale of heavy equipment, was subjected to a service tax audit by the revenue department. The revenue authority alleged that the appellant had not rendered any taxable service despite obtaining registration and was wrongly availing Cenvat credit on ineligible services - Whether the appellant's claim of Cenvat credit on the input services is eligible - HELD - The same issue had been previously decided in the appellant's favor by the same bench in its earlier order. It is not the case of the Revenue that the above common order of this Benc... [Read more]

Service Tax - Eligibility of Cenvat credit - The appellant is engaged in the import and sale of heavy equipment, was subjected to a service tax audit by the revenue department. The revenue authority alleged that the appellant had not rendered any taxable service despite obtaining registration and was wrongly availing Cenvat credit on ineligible services - Whether the appellant's claim of Cenvat credit on the input services is eligible - HELD - The same issue had been previously decided in the appellant's favor by the same bench in its earlier order. It is not the case of the Revenue that the above common order of this Bench has been set aside or reversed by higher judicial forum and hence, as long as the above order sustains, the same has to be followed – Further, the adjudicating authority had gone beyond the scope of the show-cause notice in denying the input tax credit - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Valuation of Works Contract Service - Whether the appellant, engaged in tyre retreading works contract involving transfer of property in goods, should pay service tax on the entire contract value or only on the service portion (labor charges) as per Rule 2A(i) of the Service Tax (Determination of Value) Rules, 2006 - HELD - The appellant's invoices separately disclosed the material cost and labor charges, and the value of goods transferred and labor charges were clearly ascertainable from the invoices. Accordingly, the valuation under Rule 2A(i) was squarely applicable, and the Department's reliance on Rule 2... [Read more]

Service Tax - Valuation of Works Contract Service - Whether the appellant, engaged in tyre retreading works contract involving transfer of property in goods, should pay service tax on the entire contract value or only on the service portion (labor charges) as per Rule 2A(i) of the Service Tax (Determination of Value) Rules, 2006 - HELD - The appellant's invoices separately disclosed the material cost and labor charges, and the value of goods transferred and labor charges were clearly ascertainable from the invoices. Accordingly, the valuation under Rule 2A(i) was squarely applicable, and the Department's reliance on Rule 2A(ii) was incorrect as the precondition for invoking Rule 2A(ii) was not satisfied. The Tribunal relied on various judicial precedents holding that once sales tax/VAT has been paid on the material portion, service tax cannot be levied on the same. Further, even if Rule 2A(ii) were to apply, service tax can be levied only on 30% of the contract value, as the appellant had already paid VAT on 70% of the contract value - the impugned order is set aside and the appeal filed by the appellant was allowed [Read less]

GST – Period of Limitation under Section 54 of the CGST Act, 2017 - Refund claim of GST paid under wrong head, Payment of IGST instead of CGST+SGST, Rejection of refund on ground of Limitation - Respondent-assessee had initially paid IGST treating the services as "export of services". Later, it paid CGST and SGST treating the transaction as an intra-State supply. The assessee filed a refund claim under Section 54 of the CGST Act, 2017 for the IGST paid, which was rejected as being filed beyond the prescribed period of two years – Revenue in appeal against the impugned orders passed by the Ld. Single Judge holding that ... [Read more]

GST – Period of Limitation under Section 54 of the CGST Act, 2017 - Refund claim of GST paid under wrong head, Payment of IGST instead of CGST+SGST, Rejection of refund on ground of Limitation - Respondent-assessee had initially paid IGST treating the services as "export of services". Later, it paid CGST and SGST treating the transaction as an intra-State supply. The assessee filed a refund claim under Section 54 of the CGST Act, 2017 for the IGST paid, which was rejected as being filed beyond the prescribed period of two years – Revenue in appeal against the impugned orders passed by the Ld. Single Judge holding that the refund application of the petitioner is within time and is not barred by limitation – HELD - In the absence of any enabling power either to condone the delay or to treat the period of two years as directory, the only possible interpretation of Section 54 is that the period prescribed therein is mandatory. The mere presence of the word “may”, as contended, cannot always be construed as directory; the expression must take its colour as either directory or mandatory depending upon the context in which it is used - The period of two years prescribed under Section 54 of the CGST Act for filing a refund claim is mandatory. However, merely because the provision under Section 54 is held to be mandatory, it cannot be said that the jurisdiction vested in this Court under Article 226 stands excluded - The bar imposed under Section 54 operates only in relation to the proper officer entertaining a refund claim after the expiry of two years. The said bar cannot be construed as being applicable to the Court while exercising its jurisdiction under Article 226 of the Constitution of India - Once the delay is condoned, the refund claim shall be treated as having been filed within the prescribed period of two years, enabling all consequential benefits to the claimant as well as the exercise of appropriate powers by the proper officer under the Act - The present case is a fit case for condonation of delay. Accordingly, the delay in filing the application under Section 54 of the Act is condoned. The application under Section 54 seeking refund is directed to be considered in accordance with law - Writ appeals are partly allowed - Section 54 enables a claim for refund but prescribes a limitation of two years. In cases of payment of tax on two counts, where the statute contemplates only one payment, Section 77 of the Act enables refund without prescribing any limitation. When Section 77 does not impose any time limit for claiming refund, rejection of such a refund claim solely on the basis of Section 54 would indicate that the scheme of the Act is not complete - where the statutory scheme does not provide an adequate remedy, the exercise of writ jurisdiction under Article 226 of the Constitution of India would be permissible - The condonation of delay ordered by the Court shall be subject to the condition that corresponding extension of time is granted in favour of the proper officer to invoke other applicable provisions, including Sections 73 and 74 of the Act, as may be necessary. If such other remedies were otherwise available had the refund claim been filed within two years under Section 54 of the Act, the same shall continue to remain available. [Read less]

Central Excise - Eligibility of CENVAT credit on capital goods such as towers, air conditioners, DG sets, battery sets, pre-fabricated structures, and input services used in construction/erection of transmission towers - The department denied CENVAT credit on the grounds that towers and its parts cannot be considered as parts & accessories of capital goods and would not fall under the definition of 'capital goods' as per Cenvat Credit Rules, and that towers and shelters are not covered as 'inputs' - Whether the Assessees are eligible for CENVAT credit on capital goods and input services used for towers and shelters - HELD ... [Read more]

Central Excise - Eligibility of CENVAT credit on capital goods such as towers, air conditioners, DG sets, battery sets, pre-fabricated structures, and input services used in construction/erection of transmission towers - The department denied CENVAT credit on the grounds that towers and its parts cannot be considered as parts & accessories of capital goods and would not fall under the definition of 'capital goods' as per Cenvat Credit Rules, and that towers and shelters are not covered as 'inputs' - Whether the Assessees are eligible for CENVAT credit on capital goods and input services used for towers and shelters - HELD - The Tribunal, following the judgments of the Supreme Court in Bharti Airtel Ltd. case and various High Courts and Tribunals, held that towers, pre-fabricated buildings, and input services used for their construction/erection are covered under the definition of 'capital goods' and 'inputs' under the Cenvat Credit Rules. These items are movable goods and not immovable property, and their use is essential for providing the output service of mobile telecommunications. Therefore, the Assessees are eligible for CENVAT credit on these items - The Tribunal allowed the Assessees' appeals and set aside the impugned orders denying the CENVAT credit - Transfer of CENVAT credit upon shifting of centralized registration from Jaipur to Gurgaon - The department denied transfer of CENVAT credit on the ground that the Assessees did not fulfill the conditions prescribed in Rule 10 of the Cenvat Credit Rules for transfer of CENVAT credit - Whether the Assessees are eligible to transfer the CENVAT credit upon shifting of centralized registration from Jaipur to Gurgaon - HELD – The Rule 10 does not bar the shifting of centralized accounting and billing function of a company. Shifting of centralized registration cannot be equated with the shifting or transfer of business, and there was no change in the Assessees' business or ownership status - Further, the mechanism of centralized registration was introduced for administrative and jurisdictional ease, and not to provide any tax advantage or credit benefits. The Tribunal also relied on the decisions in Central Bank of India and Mafatlal Industries Ltd. cases, which held that transfer of CENVAT credit cannot be denied merely on the ground of lack of proper documents - The Tribunal dismissed the Revenue's appeal and upheld the impugned order allowing the transfer of CENVAT credit upon shifting of centralized registration. [Read less]

Central Excise - Limitation period for demand of excise duty on clearance of capital goods as waste/scrap - The appellant, a manufacturer of excisable goods, was issued a show cause notice in 2017 for non-payment of excise duty on clearance of capital goods as waste/scrap during 2012-2013. The demand was confirmed by the adjudicating authority and upheld by the Commissioner - HELD - The entire demand is barred by limitation. The extended period of limitation cannot be invoked merely on the basis of audit objection, without any independent enquiry or evidence of suppression of facts by the appellant with intent to evade dut... [Read more]

Central Excise - Limitation period for demand of excise duty on clearance of capital goods as waste/scrap - The appellant, a manufacturer of excisable goods, was issued a show cause notice in 2017 for non-payment of excise duty on clearance of capital goods as waste/scrap during 2012-2013. The demand was confirmed by the adjudicating authority and upheld by the Commissioner - HELD - The entire demand is barred by limitation. The extended period of limitation cannot be invoked merely on the basis of audit objection, without any independent enquiry or evidence of suppression of facts by the appellant with intent to evade duty. Further, during the relevant period, there was no mechanism for recovering the amounts payable under Rule 3(5A) of the Cenvat Credit Rules on clearance of capital goods as waste/scrap. The impugned order is set aside on the grounds of limitation as well as merits - The appeal of the appellant is allowed [Read less]

Central Excise - Eligibility of cenvat credit on transportation of reject/waste materials from mines to dumping yards – Denial of cenvat credit on the ground that the activity of transportation the reject/waste - Whether the activity of transporting the reject/waste materials from the mines to the dumping yards is an 'input service' and the appellant is eligible for availing cenvat credit on such services - HELD - The removal of overburden/waste/reject and loading and transporting the same to the dump yard is a technical requirement for the extraction of limestone, which is the primary raw material for the appellant's ce... [Read more]

Central Excise - Eligibility of cenvat credit on transportation of reject/waste materials from mines to dumping yards – Denial of cenvat credit on the ground that the activity of transportation the reject/waste - Whether the activity of transporting the reject/waste materials from the mines to the dumping yards is an 'input service' and the appellant is eligible for availing cenvat credit on such services - HELD - The removal of overburden/waste/reject and loading and transporting the same to the dump yard is a technical requirement for the extraction of limestone, which is the primary raw material for the appellant's cement manufacturing activity. The Tribunal in the case of Thriveni Earthmovers (P) Ltd., wherein a similar activity was held to be 'mining services' for the purpose of service tax. The classification of an activity under a particular head for the purpose of service tax should not be different for the purpose of central excise - The activity of transporting the reject/waste materials from the mines to the dumping yards is an 'input service' and the appellant is eligible for availing cenvat credit on such services - the impugned order is set aside and the appeal is allowed [Read less]

Customs - Undervaluation of imported goods - The Department alleged that the appellant imported rubber belts and PVC conveyors from overseas suppliers by undervaluing the same. Based on statements recorded under Section 108 of the Customs Act, the Department enhanced the declared assessable value and demanded differential duty - Whether the enhancement of assessable value by 25% and the differential duty demand upheld by the Commissioner (Appeals) can be sustained - HELD - The adjudicating authority and the appellate authority have not analyzed the issue in detail. The enhancement of the assessable value by 25% solely on t... [Read more]

Customs - Undervaluation of imported goods - The Department alleged that the appellant imported rubber belts and PVC conveyors from overseas suppliers by undervaluing the same. Based on statements recorded under Section 108 of the Customs Act, the Department enhanced the declared assessable value and demanded differential duty - Whether the enhancement of assessable value by 25% and the differential duty demand upheld by the Commissioner (Appeals) can be sustained - HELD - The adjudicating authority and the appellate authority have not analyzed the issue in detail. The enhancement of the assessable value by 25% solely on the basis of the statements of the appellant, which were initially retracted and later restored, without proper corroboration and without analyzing the contemporaneous imports and their values, is not sustainable. The contradictory orders of the Commissioner (Appeals) in dropping the penalty on one person and upholding it on the other, where the allegations were more or less on the same platform, cannot be sustained. Accordingly, the enhancement of the assessable value, the differential duty demand, and the penalties imposed on the individuals are is set aside - The appeals are allowed [Read less]

Customs - Classification of imported technical documents as "printed books" under CTH 49.01 or "other printed matter" under CTH 49.11, Benefit of exemption Notification No.12/2012-Cus. dated 17.03.2012 - The appellant, engaged in manufacturing of defense equipment, imported various technical documents, reports and manuals related to the equipment it imported for defense projects. The Revenue authorities reclassified the imports under CTH 49.11 "other printed matter" and denied the benefit of exemption – Whether Technical Manuals, Specification Handbooks, reports etc. imported against the BOEs mentioned above are classifi... [Read more]

Customs - Classification of imported technical documents as "printed books" under CTH 49.01 or "other printed matter" under CTH 49.11, Benefit of exemption Notification No.12/2012-Cus. dated 17.03.2012 - The appellant, engaged in manufacturing of defense equipment, imported various technical documents, reports and manuals related to the equipment it imported for defense projects. The Revenue authorities reclassified the imports under CTH 49.11 "other printed matter" and denied the benefit of exemption – Whether Technical Manuals, Specification Handbooks, reports etc. imported against the BOEs mentioned above are classifiable under CTH 49019900 as claimed by the appellant OR under CTH 49119990 as held by the learned Commissioner - HELD - Following the principles laid down by the Supreme Court in Gujarat Perstorp Electronics Ltd. case, the imported technical documents are correctly classifiable under CTH 49.01 "printed books" as they contain textual matter in the form of sheets for binding in loose-leaf binders, brochures, pamphlets and leaflets consisting of scientific theses, instruction notices etc. issued for specific technical purposes, and not merely for general public consumption - As per the HSN explanatory notes, the scope of CTH 49.01 is not restricted only to publications meant for general public, but covers a wide range of printed materials including those intended for specific technical use. As per the Supreme Court's guidance, the specific entry of CTH 49.01 should be preferred over the residuary entry of CTH 49.11. Accordingly, the imported technical documents etc. are correctly classifiable under CTH 49019900 and the appellant are eligible to the benefit of Notification No.12/2012-Cus. dated 17.03.2012 and No.50/2017-Cus. dated 30.06.2017 - the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Eligibility of CENVAT Credit on inputs, capital goods and input services for setting up and operating telecom towers and shelters - The assessee, engaged in providing passive infrastructure support and related operation and maintenance services to telecom operators, procured various inputs, capital goods and input services and availed CENVAT Credit. The revenue authorities alleged that the assessee wrongly availed CENVAT Credit on such items and issued show cause notices proposing to deny the credit - Whether the assessee is eligible to avail CENVAT Credit on (i) inputs and capital goods used for setting up a... [Read more]

Service Tax - Eligibility of CENVAT Credit on inputs, capital goods and input services for setting up and operating telecom towers and shelters - The assessee, engaged in providing passive infrastructure support and related operation and maintenance services to telecom operators, procured various inputs, capital goods and input services and availed CENVAT Credit. The revenue authorities alleged that the assessee wrongly availed CENVAT Credit on such items and issued show cause notices proposing to deny the credit - Whether the assessee is eligible to avail CENVAT Credit on (i) inputs and capital goods used for setting up and operating telecom towers and shelters, and (ii) input services used for installation, maintenance and operation of telecom towers and shelters - HELD - The issues are no longer res integra and have been settled in favor of the assessee by the Supreme Court, High Courts and various Tribunal benches - Regarding inputs and capital goods, the Supreme Court has held that telecom towers and pre-fabricated shelters, although not devices for transmission or reception of signals, are essential infrastructure for rendering the output service of mobile telecommunications and hence, their use in providing output services qualifies them for CENVAT Credit under the Cenvat Credit Rules. The Tribunal's own earlier decisions and various High Court and Tribunal rulings have also consistently upheld the assessee's eligibility for CENVAT Credit on such items - Regarding input services, the Larger Bench of the Tribunal has held that the expression "input service" has a wide latitude and therefore, input services used for setting up and operation of telecom towers are eligible for credit, provided such services are used in the course of providing taxable output services. This position has also been affirmed by various Tribunal benches - Following the binding judicial precedents, the impugned orders denying the CENVAT Credit are set aside and the appeals filed by the assessee are allowed. The appeals filed by the revenue challenging the dropping of demands were dismissed [Read less]

Customs - Classification of personal computers cleared from SEZ through DTA to customers, Scope of “dutiable goods” under Section 2 (14) of the Customs Act, 1962 – Classification of goods under CTH 8471 3010, 84715000, 8528 5200 vs CTH 9804 9000 - Whether the goods cleared by the appellant from its SEZ unit to DTA customers are classifiable under CTH 8471 3010, 84715000 and 8528 5200 as claimed by the appellant or under CTH 9804 9000 as proposed by the revenue – HELD - The duty contemplated in the term ‘dutiable goods’ is only a duty levied under the Customs Act, 1961. IGST, therefore does not fall within this ... [Read more]

Customs - Classification of personal computers cleared from SEZ through DTA to customers, Scope of “dutiable goods” under Section 2 (14) of the Customs Act, 1962 – Classification of goods under CTH 8471 3010, 84715000, 8528 5200 vs CTH 9804 9000 - Whether the goods cleared by the appellant from its SEZ unit to DTA customers are classifiable under CTH 8471 3010, 84715000 and 8528 5200 as claimed by the appellant or under CTH 9804 9000 as proposed by the revenue – HELD - The duty contemplated in the term ‘dutiable goods’ is only a duty levied under the Customs Act, 1961. IGST, therefore does not fall within this scope. The levy of IGST will not per se render the goods ‘dutiable goods’. In the case of Customs duty, the levy is under Section 12 of the Customs Act, 1962, this section does not authorize the levy of IGST - The goods in question cannot be classified under CTH 9804 9000 as "all dutiable articles, intended for personal use" as the three ingredients required for such classification are not satisfied. Firstly, the goods are not "dutiable goods" as the Customs Tariff prescribes a "free" rate of duty for goods under CTH 8471 3010 and 84715000, and an exemption is available for goods under CTH 8528 5200. Secondly, the goods cannot be considered as "imported for personal use" as the goods were manufactured by the appellant and sold to its customers in the ordinary course of business, which is not the kind of "personal use" contemplated under Heading 9804 - The classification has to be determined at the time of importation. The purpose of use by the customer is not a relevant factor. Further, the burden of proof to establish misclassification is on the revenue, which was not discharged in the present case. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

GST - Natural Justice - Denial of opportunity to respond - Non-supply of relied upon documents (RUDs) – HELD - The grievances raised by the petitioner with regard to the alleged non-supply of the RUDs, delayed service of the summons, alleged non-service of the subsequent summons, the recording in the proceedings that no documents had been furnished, the alleged non-consideration of the reply, and the contention that the impugned OIO substantially reproduces the SCN, are all matters arising from the adjudicatory record itself. Their determination would necessarily require an examination of the SCN, the correspondence exch... [Read more]

GST - Natural Justice - Denial of opportunity to respond - Non-supply of relied upon documents (RUDs) – HELD - The grievances raised by the petitioner with regard to the alleged non-supply of the RUDs, delayed service of the summons, alleged non-service of the subsequent summons, the recording in the proceedings that no documents had been furnished, the alleged non-consideration of the reply, and the contention that the impugned OIO substantially reproduces the SCN, are all matters arising from the adjudicatory record itself. Their determination would necessarily require an examination of the SCN, the correspondence exchanged between the parties, the service record, the documents stated to have been furnished by the petitioner, the reply submitted by it, and the reasoning contained in the impugned order - These issues which, by their very nature, fall within the appellate framework - Mere dissatisfaction with the manner in which the adjudicating authority has dealt with the record cannot, by itself, furnish a ground to bypass the statutory remedy and invoke the extraordinary jurisdiction of this Court – There is no cause to interfere with the impugned OIO and the petitioner is granted liberty to avail of such remedies as may be available to it in accordance with law – The petition is dismissed [Read less]

GST - Limitation period for Appeal – Delay in filing of appeal - The petitioner argued that it was unable to file the appeal within the statutory limitation period due to the cancellation of its GST registration – HELD - The petitioner did not show sufficient cause for not availing the alternate remedy of appeal within the prescribed limitation period. The petitioner's registration was cancelled only on 29.05.2022, but the adjudication order dated 07.04.2022 pertained to the period from April 2020 to March 2021, during which the petitioner had a valid registration. Therefore, the petitioner could have filed an appeal d... [Read more]

GST - Limitation period for Appeal – Delay in filing of appeal - The petitioner argued that it was unable to file the appeal within the statutory limitation period due to the cancellation of its GST registration – HELD - The petitioner did not show sufficient cause for not availing the alternate remedy of appeal within the prescribed limitation period. The petitioner's registration was cancelled only on 29.05.2022, but the adjudication order dated 07.04.2022 pertained to the period from April 2020 to March 2021, during which the petitioner had a valid registration. Therefore, the petitioner could have filed an appeal during the period between 07.04.2022 and 29.05.2022. Further, the cancellation of registration did not preclude the petitioner from instituting a writ petition before the High Court within a reasonable time – Further, if, despite the service of a show cause and the grant of opportunities, the petitioner does not avail of the same, the resulting order cannot be attacked as ex parte – The writ petition is dismissed [Read less]

The Court is bound by the decision in Ambika Traders, wherein the Court accepted issue of consolidation of SCNs covering multiple FYs under both Sections 73 and 74, even in cases not involving allegations of availment of fraudulent ITC.

Service Tax - Levy of service tax on ocean freight charges collected by the appellant as a multimodal transporter - Whether the ocean freight charges collected by the appellant from its customers can be included in the taxable value for the purpose of payment of service tax - HELD - The law laid down by the Supreme Court in the case of Union of India v Intercontinental Consultants and Technocrats Pvt Ltd, is squarely applicable to the present case. The Supreme Court had held that the expenditure incurred by the service provider and reimbursed by the customer cannot be included in the taxable value for the purpose of paymen... [Read more]

Service Tax - Levy of service tax on ocean freight charges collected by the appellant as a multimodal transporter - Whether the ocean freight charges collected by the appellant from its customers can be included in the taxable value for the purpose of payment of service tax - HELD - The law laid down by the Supreme Court in the case of Union of India v Intercontinental Consultants and Technocrats Pvt Ltd, is squarely applicable to the present case. The Supreme Court had held that the expenditure incurred by the service provider and reimbursed by the customer cannot be included in the taxable value for the purpose of payment of service tax, as Section 67 of the Finance Act, 1994 does not permit such inclusion until the amendment made effective from May 14, 2015. Since the period involved in the present appeal is from April 2013 to March 2015, the Supreme Court's decision would apply, making the entire demand confirmed in the impugned order unsustainable – Further, the Department has failed to provide any evidence to show that the appellant is acting as an agent of either the shipping lines or the exporters. The collection of ocean freight by a multimodal transporter from its customers is a principal-to-principal transaction and not a taxable service. The issue has been consistently decided in favour of the appellant in various decisions of the CESTAT - In light of the above, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Transfer of land development rights as service - The appellants, co-owners of land, entered into a development agreement with a developer for construction of a residential complex. The department alleged that the transfer of development rights for consideration was a taxable service under Section 66B of the Finance Act, 1994 - Whether the transfer of land development rights amounted to rendering of service on which service tax liable to be paid - HELD - If there was no transfer of land development rights and the agreement was a joint collaboration between the appellants and the developer, then there was no qu... [Read more]

Service Tax - Transfer of land development rights as service - The appellants, co-owners of land, entered into a development agreement with a developer for construction of a residential complex. The department alleged that the transfer of development rights for consideration was a taxable service under Section 66B of the Finance Act, 1994 - Whether the transfer of land development rights amounted to rendering of service on which service tax liable to be paid - HELD - If there was no transfer of land development rights and the agreement was a joint collaboration between the appellants and the developer, then there was no question of any provision of service by the appellants and no liability to pay service tax. Even if there was a transfer of land development rights, the issue is squarely covered by several decisions, wherein it was held that the transfer of such development rights was a transfer of immovable property under Section 3(26) of the General Clauses Act, 1897, and hence was excluded from the definition of "service" under Section 65B(44) of the Finance Act - The transfer of undivided interest in the land to the developer's buyers was in return of the initial consideration paid by the developer for the transfer of land development rights, and thus constituted a transfer of ownership of the land, which was outside the purview of "service." Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Eligibility of CENVAT credit on common area maintenance service, vending machine service, photography service, and travel agent service - Whether the services in question can be considered as eligible input services under the CENVAT Credit Rules, 2004 – HELD - The common area maintenance service, vending machine service, and travel agent service have an indirect nexus to the output service provided by the appellant and are therefore eligible input services under the CENVAT Credit Rules. The definition of "input service" under Rule 2(l) of the CENVAT Credit Rules includes services that are used directly or i... [Read more]

Service Tax - Eligibility of CENVAT credit on common area maintenance service, vending machine service, photography service, and travel agent service - Whether the services in question can be considered as eligible input services under the CENVAT Credit Rules, 2004 – HELD - The common area maintenance service, vending machine service, and travel agent service have an indirect nexus to the output service provided by the appellant and are therefore eligible input services under the CENVAT Credit Rules. The definition of "input service" under Rule 2(l) of the CENVAT Credit Rules includes services that are used directly or indirectly by the provider of output service. There is no requirement for a one-to-one correlation between the input services and the output services. If the absence of any service adversely impacts the quality and efficiency of the output service, it should be considered as an eligible input service. The refund of CENVAT credit on these services was wrongly denied by the department – The impugned order is set aside and the appeal is allowed - Distinct person status of appellant and FRLON (USA) for the purpose of export of service - Whether the appellant and FRLON can be considered as distinct persons for the purpose of export of service under the Service Tax Rules, 1994 – HELD - The appellant and FRLON are two separate companies registered in different countries, managed by different professional people, and therefore, they are distinct persons. The definition of "distinct person" under Explanation 3(b) of Section 65B(44) of the Finance Act, 1994, states that an establishment of a person in the taxable territory and an establishment of any other person in a non-taxable territory shall be treated as establishments of distinct persons - The department had earlier sanctioned the refund filed by the appellant, accepting that the transaction between the appellant and FRLON was an export of service. Further, the High Court of Gujarat had also held that a holding company located outside India/non-taxable territory is to be treated as a distinct person from its Indian subsidiary for the purpose of export of service. Accordingly, the transaction between the appellant and FRLON should be treated as an export of service. [Read less]

GST - Circular No.224/18/2024-GST - The petitioner challenged the order passed by the adjudication order and the order rejecting the petitioner's application under Section 161 of the CGST Act, 2017 - Whether the petitioner could avail the alternative recovery process by filing an undertaking/declaration in terms of the Circular dated 11.07.2024 and the Circular dated 17.09.2025 – HELD – The CBIC had issued a circular dated 11.07.2024 providing guidelines for recovery of outstanding dues in cases where the first appeal has been disposed of till the Appellate Tribunal comes into operation. As per the Circular, the taxpay... [Read more]

GST - Circular No.224/18/2024-GST - The petitioner challenged the order passed by the adjudication order and the order rejecting the petitioner's application under Section 161 of the CGST Act, 2017 - Whether the petitioner could avail the alternative recovery process by filing an undertaking/declaration in terms of the Circular dated 11.07.2024 and the Circular dated 17.09.2025 – HELD – The CBIC had issued a circular dated 11.07.2024 providing guidelines for recovery of outstanding dues in cases where the first appeal has been disposed of till the Appellate Tribunal comes into operation. As per the Circular, the taxpayer could make a payment of an amount equal to the amount of pre-deposit and file an undertaking/declaration with the jurisdictional proper officer that they will file an appeal against the order of the appellate authority before the Appellate Tribunal, as and when it comes into operation - Considering the guidelines and the Notifications, the petitioner is at liberty to avail the alternative recovery process by complying with the necessary conditions of the circular dated 11.07.2024 and depositing the pre-deposit amount. If the petitioner complies with these requirements, the recovery of the remaining amount shall remain stayed as per the provisions of the CGST Act - The Writ Petition is disposed of [Read less]

GST - Issuance of proper SCN under Section 73(1) of the CGST Act, 2017 – The petitioner was issued a Summary of Show Cause Notice in GST DRC-01 with an attached determination of tax, but no separate SCN - Whether the attached determination of tax can substitute the requirement of a proper SCN under Section 73 of the CGST/SGST Acts - HELD - The issuance of a proper SCN under Section 73(1) is a mandatory requirement and the summary in DRC-01 cannot replace it. A Statement under Section 73(3) also cannot substitute the SCN - The Act requires the Proper Officer to issue a formal and duly authenticated SCN to initiate proceed... [Read more]

GST - Issuance of proper SCN under Section 73(1) of the CGST Act, 2017 – The petitioner was issued a Summary of Show Cause Notice in GST DRC-01 with an attached determination of tax, but no separate SCN - Whether the attached determination of tax can substitute the requirement of a proper SCN under Section 73 of the CGST/SGST Acts - HELD - The issuance of a proper SCN under Section 73(1) is a mandatory requirement and the summary in DRC-01 cannot replace it. A Statement under Section 73(3) also cannot substitute the SCN - The Act requires the Proper Officer to issue a formal and duly authenticated SCN to initiate proceedings under Section 73. The Statement of tax determination attached to the Summary cannot be treated as a valid SCN - Merely attaching a tax determination order to the Summary in DRC-01 does not amount to valid initiation under Section 73. The Summary is only supplementary to a full SCN, which was not provided in this case, violating the statutory requirements - The impugned order is set aside. The respondents are granted liberty to initiate de novo proceedings, if considered appropriate - Writ petition stands allowed - Opportunity of Hearing - The Summary of SCN did not mention any date for personal hearing, leaving the relevant column blank - Whether the failure to provide a hearing opportunity in terms of Section 75(4) of the CGST Act vitiates the order - HELD - Section 75(4) mandates that an opportunity of hearing must be granted either when requested by the assessee or when an adverse decision is contemplated, even if no reply is filed. Failure to do so violates the statutory requirement and principles of natural justice. The Court set aside the impugned order on this ground as well. [Read less]

GST - Issuance of proper SCN under Section 73(1) of the CGST Act, 2017 – Issue of Summary of Show Cause in GST DRC-01 along with attachment as regards the determination of tax - It is the case of the petitioner that as there was no proper Show Cause Notice attached to the Summary of the Show Cause Notice in the portal - Whether Summary in GST DRC-01 can substitute SCN – HELD - The Summary in GST DRC-01 cannot substitute the proper SCN required under Section 73(1) of the CGST Act. The Act requires the Proper Officer to issue a formal and duly authenticated SCN to initiate proceedings under Section 73. The Statement of t... [Read more]

GST - Issuance of proper SCN under Section 73(1) of the CGST Act, 2017 – Issue of Summary of Show Cause in GST DRC-01 along with attachment as regards the determination of tax - It is the case of the petitioner that as there was no proper Show Cause Notice attached to the Summary of the Show Cause Notice in the portal - Whether Summary in GST DRC-01 can substitute SCN – HELD - The Summary in GST DRC-01 cannot substitute the proper SCN required under Section 73(1) of the CGST Act. The Act requires the Proper Officer to issue a formal and duly authenticated SCN to initiate proceedings under Section 73. The Statement of tax determination attached to the Summary cannot be treated as a valid SCN - Merely attaching a tax determination order to the Summary in DRC-01 does not amount to valid initiation under Section 73. The Summary is only supplementary to a full SCN, which was not provided in this case, violating the statutory requirements. The respondents have proceeded under the mistaken impression that attaching the determination of tax to the summary constitutes a valid Show Cause Notice - The impugned order is set aside. The respondents are granted liberty to initiate de novo proceedings, if considered appropriate - Writ petition stands allowed - Authentication of documents - Requirement under Rule 26(3) of CGST Rules – HELD - The SCN, Statement, and final Order under Section 73(9) must be issued and passed only by the Proper Officer, as defined under Section 2(91), and these documents must be properly authenticated in accordance with Rule 26(3) of the CGST Rules, 2017. The summaries issued in GST DRC-01, DRC-02, and DRC-07 cannot override or replace the requirement of issuing proper and authenticated primary documents - Opportunity of Hearing - Violation of Section 75(4) – HELD - The impugned order contravenes Section 75(4) of the Act which mandates that a reasonable opportunity of hearing must be provided either when an adverse decision is contemplated or when a written request is made by the assessee. In the present case, although the DRC-01 summary specifies the date for filing a reply, it leaves the field regarding the date and time of personal hearing as "NA". In a situation where no reply is submitted, the Proper Officer cannot proceed to pass an adverse order without granting an opportunity of hearing, as doing so would render the safeguards under Section 75(4) ineffective and violate principles of natural justice. [Read less]

Central Excise - Admissibility of Cenvat Credit on steel items used for fabrication and erection of capital goods - The appellant, a manufacturer of sponge iron, availed Cenvat Credit on steel items such as MS Channels, MS Angles, TMT Bars, HRC Plates, MS Plates and electrodes, which were used for the erection of various capital goods in their factory - Whether the Cenvat Credit availed by the appellant on the steel items used for fabrication and erection of capital goods is admissible - HELD – The Madras High Court in Tiru Arroran Sugars Ltd. had held that structural steel used in the fabrication of capital goods necess... [Read more]

Central Excise - Admissibility of Cenvat Credit on steel items used for fabrication and erection of capital goods - The appellant, a manufacturer of sponge iron, availed Cenvat Credit on steel items such as MS Channels, MS Angles, TMT Bars, HRC Plates, MS Plates and electrodes, which were used for the erection of various capital goods in their factory - Whether the Cenvat Credit availed by the appellant on the steel items used for fabrication and erection of capital goods is admissible - HELD – The Madras High Court in Tiru Arroran Sugars Ltd. had held that structural steel used in the fabrication of capital goods necessary for manufacturing activity would be eligible for Cenvat Credit. Similarly, the Chhattisgarh High Court in the case of M/s Vandana Global Ltd. had held that the amendment made to Explanation-2 of Rule 2(k) vide notification dated 07.07.2009 is prospective and cannot be applied to the period prior to the amendment – Further, the Supreme Court in Commissioner of Central Excise Vs Rajasthan Spinning & Weaving Mills Ltd. had held that items used in relation to manufacture which are essential for the functioning of plant and machinery are eligible for credit - The denial of credit by applying the amended provision retrospectively cannot be sustained - The impugned Order-in-Original denying the Cenvat Credit is set aside and the appeal is allowed [Read less]

Service Tax - Statutory levy by Statutory Authority, Consideration for service - Appellant, a statutory authority, collects auction fee @ 2% as prescribed under the Statutory Regulations for facilitating tobacco auction, grading, classification and marketing under the Tobacco Board Act 1975 - Whether the auction fee collected by the Tobacco Board constitutes consideration for taxable service - HELD – The auction fee collected by the Tobacco Board is a statutory levy prescribed under the Act and not consideration for any service rendered. The activities performed pursuant to statutory mandate do not constitute taxable ser... [Read more]

Service Tax - Statutory levy by Statutory Authority, Consideration for service - Appellant, a statutory authority, collects auction fee @ 2% as prescribed under the Statutory Regulations for facilitating tobacco auction, grading, classification and marketing under the Tobacco Board Act 1975 - Whether the auction fee collected by the Tobacco Board constitutes consideration for taxable service - HELD – The auction fee collected by the Tobacco Board is a statutory levy prescribed under the Act and not consideration for any service rendered. The activities performed pursuant to statutory mandate do not constitute taxable service. The Tobacco Board performs regulatory functions under the statute and the fee collected is a statutory levy. Hence, the auction fee cannot be treated as consideration for taxable service – The impugned order is set aside and the appeal is allowed - Storage of agricultural produce - Whether storage of un-manufactured tobacco attracts service tax under the category of storage and warehousing service - HELD - As per Section 65(102) of the Finance Act, "storage and warehousing" excludes any service provided for storage of agricultural produce. The term 'agricultural produce' includes un-manufactured tobacco as per the CBEC Circular No. 1/2002-ST dated 01.08.2002. Therefore, the storage of un-manufactured tobacco is outside the scope of taxable service - The storage of un-manufactured tobacco is not liable to service tax - Demurrage charges – Appellant collected demurrage charges for delay in lifting of tobacco stocks stored in the godown - Whether demurrage charges collected by the Tobacco Board are liable to service tax - HELD - The demurrage charges are in the nature of penalty charges for delaying in lifting goods, and such penal charges cannot be treated as consideration for any service - The demurrage charges collected by the Tobacco Board are not liable to service tax. [Read less]

Service Tax - Taxability of construction of residential complex - Department alleged that the activities undertaken by the appellant were liable to Service Tax for the period 2007-08 to December 2011. The department denied the benefit of composition scheme on the ground that the option was not exercised prior to payment of Service Tax - Whether construction of residential complex undertaken by the appellant prior to 01.07.2010 is liable to Service Tax and whether the benefit of composition scheme or deductions is to be extended - HELD - The demand for the period prior to 01.07.2010 is not sustainable as the construction of... [Read more]

Service Tax - Taxability of construction of residential complex - Department alleged that the activities undertaken by the appellant were liable to Service Tax for the period 2007-08 to December 2011. The department denied the benefit of composition scheme on the ground that the option was not exercised prior to payment of Service Tax - Whether construction of residential complex undertaken by the appellant prior to 01.07.2010 is liable to Service Tax and whether the benefit of composition scheme or deductions is to be extended - HELD - The demand for the period prior to 01.07.2010 is not sustainable as the construction of residential complex undertaken for personal use was not taxable prior to this date. For the period beyond 01.07.2010, the matter is remanded to the Adjudicating Authority to re-calculate the duty liability by taking into account the amendment provisions and allowing the benefit of composition scheme or deductions. The denial of composition scheme merely on procedural grounds has been consistently disapproved by the Tribunal in similar matters - The extended period of limitation is not invokable in the absence of any cogent evidence of deliberate intent to evade tax. The penalty is also not imposable where the issue is interpretational - The demand for the period prior to 01.07.2010 is set aside, and the matter for the remaining period is remanded to the Adjudicating Authority for re-computation after granting the benefit of composition scheme/deductions in accordance with law - The appeal filed by the appellant is partly allowed [Read less]

Service tax – Liability to service tax under Business Auxiliary Service (BAS) category for threshing and redrying of tobacco leaves - The appellant challenged the demand of service tax under the BAS category for their activity of threshing and redrying of tobacco leaves – HELD - The issue was previously decided in favor of the appellant in the case of ML Agro Products Ltd Vs CCCE & ST, Guntur, wherein it was held that service tax liability on threshing and redrying of tobacco leaves does not arise under the BAS category. The revenue's appeal against this judgment was also dismissed by the Apex Court, making the issue s... [Read more]

Service tax – Liability to service tax under Business Auxiliary Service (BAS) category for threshing and redrying of tobacco leaves - The appellant challenged the demand of service tax under the BAS category for their activity of threshing and redrying of tobacco leaves – HELD - The issue was previously decided in favor of the appellant in the case of ML Agro Products Ltd Vs CCCE & ST, Guntur, wherein it was held that service tax liability on threshing and redrying of tobacco leaves does not arise under the BAS category. The revenue's appeal against this judgment was also dismissed by the Apex Court, making the issue settled. Therefore, the demand under the BAS category cannot be sustained and set aside – The appeal is allowed - Service tax liability under Goods Transport Agency Service (GTA) category - The department demanded service tax under the GTAS category for the appellant's activities – HELD - In order to fall under the GTA, the existence of a consignment note, as defined under the relevant provisions, is a necessary condition. However, in this case, the department did not provide any evidence that a consignment note was issued by the appellant. Relying on various judicial precedents, the Tribunal concluded that in the absence of a consignment note, the activity cannot be brought under the ambit of GTAS, and the demand cannot be sustained. [Read less]

Customs - Burden of proof under Section 123 of Customs Act - The appellants argued that the burden under Section 123 arises only when the seized gold bears foreign markings, which was not the case here – Whether the burden of proof to show the smuggled origin of the gold is on the department or whether section 123 of the Customs Act, shifts the burden to the appellant to prove that the gold in his possession was not smuggled gold - HELD - The burden of proving lawful possession of the gold shifts to the possessor under Section 123 irrespective of whether the gold bears foreign markings or not. The gold is easily divisibl... [Read more]

Customs - Burden of proof under Section 123 of Customs Act - The appellants argued that the burden under Section 123 arises only when the seized gold bears foreign markings, which was not the case here – Whether the burden of proof to show the smuggled origin of the gold is on the department or whether section 123 of the Customs Act, shifts the burden to the appellant to prove that the gold in his possession was not smuggled gold - HELD - The burden of proving lawful possession of the gold shifts to the possessor under Section 123 irrespective of whether the gold bears foreign markings or not. The gold is easily divisible, melted, and altered, and once melted, generally bears no identifying marks, making it impossible to determine by mere inspection whether it is lawfully imported or smuggled. Recognizing this practical difficulty, the law places the burden on the possessor to establish the lawful origin of the gold – The appellants failed to discharge this statutory burden by producing credible evidence of lawful acquisition of the seized gold, and hence, the confiscation of the gold is upheld - The confiscation of the gold and currency was upheld, while the penalties imposed on the appellants are set aside – The appeals are partly allowed [Read less]

Central Excise - Availment of CENVAT credit without receipt of goods in factory - Whether the appellant had received the goods in their factory and later cleared to other customers, or the goods were directly delivered to the other customers without coming to the appellant's factory – HELD - The evidence relied upon by the department to conclude that the goods did not reach the appellant's factory is based on various presumptions and assumptions. The appellant provided sufficient evidence to show that the goods were first received in their factory, necessary tests were conducted, and only then the goods were cleared to t... [Read more]

Central Excise - Availment of CENVAT credit without receipt of goods in factory - Whether the appellant had received the goods in their factory and later cleared to other customers, or the goods were directly delivered to the other customers without coming to the appellant's factory – HELD - The evidence relied upon by the department to conclude that the goods did not reach the appellant's factory is based on various presumptions and assumptions. The appellant provided sufficient evidence to show that the goods were first received in their factory, necessary tests were conducted, and only then the goods were cleared to the other customers. The CENVAT credit availed was also reversed at the time of such clearance - The Department failed to conclusively establish that the goods were directly delivered to the other customers without reaching the appellant's factory. Because of various submissions, it is obvious that the goods were procured and handled by the appellant first, who also conducted certain tests, which are mandatorily required and thereafter, sold the same to the customers – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Eligibility to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips – Appellant availed Cenvat credit on Special Additional Duty (SAD) imposed under section 3(5) of Customs Tariff Act, 1975, which was adjusted against various licenses issued to them under DEPB schemes - Department denied the credit, relying on various notifications and circulars which suggested that credit can only be availed if the duties are paid in cash, and not through adjustment against DEPB scrips - Whether the appellant was eligible to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips and not in cash – H... [Read more]

Central Excise - Eligibility to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips – Appellant availed Cenvat credit on Special Additional Duty (SAD) imposed under section 3(5) of Customs Tariff Act, 1975, which was adjusted against various licenses issued to them under DEPB schemes - Department denied the credit, relying on various notifications and circulars which suggested that credit can only be availed if the duties are paid in cash, and not through adjustment against DEPB scrips - Whether the appellant was eligible to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips and not in cash – HELD - As per the provisions of EXIM policy 2004-09, Cenvat credit is admissible even if the Additional Customs Duty is paid by way of debit under DEPB - As per Para 4.3 of EXIM policy 2002-07, there was a provision that in case where the Additional Customs Duty is adjusted from DEPB, no benefit of Cenvat credit/ drawback shall be admissible. However, with an amendment on 28.01.2004, this provision was deleted from Para 4.3.5. Therefore, there is no such explicit restriction for not taking credit if the payment has not been made in cash in terms of prevailing EXIM policy for the period post amendment i.e., 28.01.2004 - The importer is eligible for credit on the duty paid by debit in DEPB, as the CCR do not provide that the duty must be paid only in cash. The relaxation regarding allowing credit on duties paid through DEPB was not limited to the amended EXIM policy post 28.01.2004, but was applicable even under the old policy - The appellant was eligible to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Exclusion of land value from gross value for computation of service tax liability under 'club or association service' - The appellant provides 'health club & fitness center services' and 'club or association services' to its members. The appellant offers an option to purchase land along with the membership of the club, for which there is an additional charge over and above the membership fee – Demand of service tax on the amounts collected from the members towards membership fee (with/without land) - HELD - As per the settled position, the value of land cannot be included in the gross value for determining ... [Read more]

Service Tax - Exclusion of land value from gross value for computation of service tax liability under 'club or association service' - The appellant provides 'health club & fitness center services' and 'club or association services' to its members. The appellant offers an option to purchase land along with the membership of the club, for which there is an additional charge over and above the membership fee – Demand of service tax on the amounts collected from the members towards membership fee (with/without land) - HELD - As per the settled position, the value of land cannot be included in the gross value for determining service tax leviable on the services of club or association. It is irrelevant as to what mode is adopted for transferring the land to the members and by whom i.e., by the appellant directly or through their sister concern - The appellant is directed to produce the audited balance sheet and other financial and sales records to a Chartered Accountant, who shall clearly certify the amounts transferred by the appellant to their sister concern towards the value of the land, which was transferred by the sister concern to the members under this category of membership on behalf of the appellant. The value of land sold/transferred to members of the appellant's club through their sister concern, as verified by CA based on financial records, bank statements, other relevant documents and certified accordingly, would be accepted as value of land and the same will be excluded from the gross value for re-computation of tax liability, if any, keeping in view the payments of service tax already made - While computing the service tax liability net of land value, the cum-tax benefit will also be extended along with eligible credit lying in the balance and used for payment of service tax. Further, the penalty under section 78 will not be invokable as the issue relating to leviability of tax under the category of 'club or association service' was a matter of interpretation and the appellant was not in a position to take a firm stand. The demand, if any, will be confirmed only within the normal period - The appeal is allowed partly by way of remand [Read less]

Services Tax - Taxability of commission received from General Sales Agents (GSAs) and own branches under "Business Auxiliary Services" (BAS) and "Air Travel Agent Services" (ATAS) - Department held that the Appellant, engaged in providing "Air Travel Agent Services" (ATAS), was also liable to pay service tax under the category of BAS on the commission received from GSAs and its own branches for booking tickets. The Department also made demands on certain other charges like credit card account charges, travelling insurance, visa attestation, etc. - Whether the commission received from GSAs and own branches is liable to serv... [Read more]

Services Tax - Taxability of commission received from General Sales Agents (GSAs) and own branches under "Business Auxiliary Services" (BAS) and "Air Travel Agent Services" (ATAS) - Department held that the Appellant, engaged in providing "Air Travel Agent Services" (ATAS), was also liable to pay service tax under the category of BAS on the commission received from GSAs and its own branches for booking tickets. The Department also made demands on certain other charges like credit card account charges, travelling insurance, visa attestation, etc. - Whether the commission received from GSAs and own branches is liable to service tax under the category of BAS, and whether the other charges are also taxable - HELD – The commission received from GSAs as well as from the Appellant's own branches is not taxable under the category of BAS. The law on this issue is well-settled, and the Department's view cannot be sustained - Regarding the other charges, the visa attestation charges are not subject to service tax as per the Board's Circular, and the credit card account charges and travelling insurance would also not fall under the purview of BAS or ATAS - The demand under BAS and ATAS is set aside. The appeal is allowed [Read less]

Service Tax - Liability to service tax on fixed facility charges - Demand of service tax on the fixed facility charges (FFC) recovered for providing storage tanks to customers under 'Supply of Tangible Goods Service' – HELD - In the Appellant’s own case the very same issue the Tribunal has held that the FFC charges have to be included in the assessable value for payment of central excise duty and the appellant would be eligible for availing the credit of the duty paid - The ownership of the tanks remains with the appellant, and the possession and effective control of the tanks is with the customers during the full term... [Read more]

Service Tax - Liability to service tax on fixed facility charges - Demand of service tax on the fixed facility charges (FFC) recovered for providing storage tanks to customers under 'Supply of Tangible Goods Service' – HELD - In the Appellant’s own case the very same issue the Tribunal has held that the FFC charges have to be included in the assessable value for payment of central excise duty and the appellant would be eligible for availing the credit of the duty paid - The ownership of the tanks remains with the appellant, and the possession and effective control of the tanks is with the customers during the full term of the agreement. Accordingly, the FFC charges are not in the nature of consideration received by the appellant for providing supply of tangible goods, and therefore, are not liable to service tax - The impugned order is set aside and the appeals are allowed [Read less]

Customs - SAD exemption on clearance from FTWZ to DTA - Appellants imported goods like waste, scrap, billets, and ferro alloys and used them for manufacturing. These imported goods were supplied through FTWZ and when cleared to DTA availing exemption from Special Additional Duty (SAD) under Notification No. 45/2005-Customs dated 16.05.2005 - Department denied the exemption alleging that the appellants had suppressed the fact that the imported goods were used for self-consumption and not for sale in DTA – HELD - The issue of eligibility for SAD exemption on clearance from FTWZ to DTA has been conclusively settled in favor... [Read more]

Customs - SAD exemption on clearance from FTWZ to DTA - Appellants imported goods like waste, scrap, billets, and ferro alloys and used them for manufacturing. These imported goods were supplied through FTWZ and when cleared to DTA availing exemption from Special Additional Duty (SAD) under Notification No. 45/2005-Customs dated 16.05.2005 - Department denied the exemption alleging that the appellants had suppressed the fact that the imported goods were used for self-consumption and not for sale in DTA – HELD - The issue of eligibility for SAD exemption on clearance from FTWZ to DTA has been conclusively settled in favor of the appellants in several decisions. The practice adopted by the appellants, in obtaining a certificate from a Chartered Accountant for compliance with the condition of payment of sales tax/VAT, did not indicate any mala fide intention or suppression of facts. Further, the demands for the period April 2012 to March 2013 are beyond the normal period of limitation. The extended period could not be invoked in the absence of any collusion, wilful misstatement, or intent to evade duty – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of Facsimile Machines and their Parts - Appellant imported facsimile machines and parts from Singapore during 2007-08 and 2008-09, classifying them under CTH 8443 3260 and claiming exemption from Basic Customs Duty under Notification No. 24/2005-Customs dated 01.03.2005 – Demand of differential duty alleging that the facsimile machines are classifiable under CTH 8443 3970 and the parts under CTH 8443 9960, and are not eligible for the exemption – Whether the facsimile machines imported by the appellant were capable of connecting to Automatic Data Processing (ADP) machine or network - HELD - It ... [Read more]

Customs - Classification of Facsimile Machines and their Parts - Appellant imported facsimile machines and parts from Singapore during 2007-08 and 2008-09, classifying them under CTH 8443 3260 and claiming exemption from Basic Customs Duty under Notification No. 24/2005-Customs dated 01.03.2005 – Demand of differential duty alleging that the facsimile machines are classifiable under CTH 8443 3970 and the parts under CTH 8443 9960, and are not eligible for the exemption – Whether the facsimile machines imported by the appellant were capable of connecting to Automatic Data Processing (ADP) machine or network - HELD - It is the case of the appellant that by using external devices such as VBC of ATA adapters, machines were capable of networking and therefore, correctly classifiable under CTH 8443 3260 - The tariff entry clearly differentiates facsimile machines based on their capability to connect to an ADP machine or a network. If such connectivity is available, the classification would fall under the entry relating to machines capable of networking. Department failed to produce any technical evidence to establish that the imported machines were incapable of connecting to a network or ADP machine - Further, the dispute related to the interpretation of tariff entries and technical capability of the machines, which is a matter of classification or interpretation of law, and therefore, the extended period of limitation cannot be invoked. The Circular No. 11/2008-Cus dated 01.07.2008 relied upon by the Department could be applied only prospectively, particularly when it imposes a burden adverse to the importer - Department has failed to discharge the burden of proving that the imported machines were not capable of connecting to ADP machine or network. Therefore, the classification adopted by the appellant under CTH 8443 3260 appears to be correct - the impugned Order-in-Appeal is set aside and the appeal is allowed [Read less]

Service Tax – Taxability of Despatch Money Received from Vessel Owners under "Port Service" Category – Appellant received "despatch money" from vessel owners for expeditious unloading of cargo and quick turnaround of vessels - Department held that this despatch money is consideration for "port service" provided by the appellant to the vessel owners and hence liable to service tax - Whether the despatch money received by the appellant can be classified as consideration for "port service" and subjected to service tax – HELD - As per the charter party agreement, the despatch money was an incentive/bonus paid by the vess... [Read more]

Service Tax – Taxability of Despatch Money Received from Vessel Owners under "Port Service" Category – Appellant received "despatch money" from vessel owners for expeditious unloading of cargo and quick turnaround of vessels - Department held that this despatch money is consideration for "port service" provided by the appellant to the vessel owners and hence liable to service tax - Whether the despatch money received by the appellant can be classified as consideration for "port service" and subjected to service tax – HELD - As per the charter party agreement, the despatch money was an incentive/bonus paid by the vessel owners to the appellant for quicker turnaround of the vessels, and not consideration for any specific "port service" rendered by the appellant. The Tribunal in Vedanta Ltd. case held that the despatch money cannot be subjected to service tax under the "port service" category as no party had performed any activity amounting to "service" under the definition – Further, the despatch money and demurrage were interdependent conditions of the contract regulating the turnaround time, and cannot be vivisected as a separate "service" provided by the appellant. Accordingly, the demand for service tax on the despatch money received by the appellant is set aside - The appeal of the appellant is allowed [Read less]

Service Tax - Laying of optical fibre cables for Railways, Vivisection of Contract - Works Contract Service (WCS) or Business Support Service (BSS) - Laying of optical fibre cables and related telecom work including provisions for establishment charges, procurement charges, and project management charges – Receipt of consideration by way of 13% over and above the cost - Department alleged that the 13% charges constituted a separate BSS, while the appellant claimed it was a composite WCS – HELD - The contract should be read as a whole and cannot be vivisected into different services. The scope of work included material,... [Read more]

Service Tax - Laying of optical fibre cables for Railways, Vivisection of Contract - Works Contract Service (WCS) or Business Support Service (BSS) - Laying of optical fibre cables and related telecom work including provisions for establishment charges, procurement charges, and project management charges – Receipt of consideration by way of 13% over and above the cost - Department alleged that the 13% charges constituted a separate BSS, while the appellant claimed it was a composite WCS – HELD - The contract should be read as a whole and cannot be vivisected into different services. The scope of work included material, labour, supervision, and administration charges - For execution of the work, the appellants were either awarding this work to some other sub-contractor or were undertaking certain work on their own. Since the work order was essentially OFC laying and maintenance and therefore, there is clearly material portion involved. It is not correct for the department to pick one clause out of the said composite contract to allege that they were separately providing BSS. From reading of the entire contract, it does not appear that the contract was given only for the purpose of supervision or for any support service. It is essentially given for the execution of entire work - The 13% charges are a mode of cost determination, not consideration for a separate BSS. The nature of work allotted to the appellant is a composite works contract, which cannot be vivisected into two parts viz., WCS and BSS. Even otherwise, the predominance of contract is works contract, which is imparting essential character to the work allotted. Therefore, once it is considered as WCS, it will exclude the works contract provided to Railways and therefore, to that extent, it will not be subjected to any service tax under the category of WCS – The demand is set aside and the appeal is allowed [Read less]

Service Tax - Classification of service under Works Contract Service (WCS) or Construction of Residential Complex Service (CRCS) - The appellant had challenged the classification of the services rendered by it under WCS instead of CRCS - Adjudicating authority had held that the construction of residential houses involves transfer of property in goods, and therefore, the same is classifiable under WCS instead of CRCS. Appellant argued that it had paid service tax under the category of CRCS availing the abatement of 33% of the gross value – HELD - Once a specific heading of WCS was introduced, the activity which was earlie... [Read more]

Service Tax - Classification of service under Works Contract Service (WCS) or Construction of Residential Complex Service (CRCS) - The appellant had challenged the classification of the services rendered by it under WCS instead of CRCS - Adjudicating authority had held that the construction of residential houses involves transfer of property in goods, and therefore, the same is classifiable under WCS instead of CRCS. Appellant argued that it had paid service tax under the category of CRCS availing the abatement of 33% of the gross value – HELD - Once a specific heading of WCS was introduced, the activity which was earlier classified under CRCS would also come within the purview of WCS, if there is transfer of property in goods in the execution of the contract. Admittedly, there was transfer of property in goods involved in the execution of the contract and VAT had also been paid. Therefore, the classification of the services under WCS was correct. However, the matter is remanded back to the adjudicating authority for the purpose of recalculating the demand by extending the benefit of composition scheme available for WCS – The appeal is allowed by way of remand - Exemption from service tax on irrigation and water supply projects - Appellant claimed exemption from levy of service tax on earth work excavation and construction services relating to Kovvada Kalva Reservoir scheme and on civil works relating to Godavari Drinking Water Project awarded by Greater Visakhapatnam Municipal Corporation (GVMC) – HELD - The adjudicating authority had not brought on record any evidence that the said activities would fall under the category of WCS. Merely because of an expression 'commissioning on turnkey basis' in the agreement, it cannot be presumed that there is transfer of property in goods while executing the said project. There is no dispute that these works were relating to irrigation projects and water supply projects, and therefore, the same should be excluded from the purview of service tax. [Read less]

GST - Section 75(4) of the CGST Act, 2017 - Non-consideration of petitioner's additional reply and requests for a personal hearing – Violation of principles of natural justice for non-consideration of additional submissions – HELD - After the personal hearing the petitioner submitted further communications including an online reply and an email requesting a personal hearing, which were not considered by the adjudicating authority. The authority considered the final reply filed earlier but inadvertently overlooked the online submissions and the request for personal hearing - The failure to consider the additional reply ... [Read more]

GST - Section 75(4) of the CGST Act, 2017 - Non-consideration of petitioner's additional reply and requests for a personal hearing – Violation of principles of natural justice for non-consideration of additional submissions – HELD - After the personal hearing the petitioner submitted further communications including an online reply and an email requesting a personal hearing, which were not considered by the adjudicating authority. The authority considered the final reply filed earlier but inadvertently overlooked the online submissions and the request for personal hearing - The failure to consider the additional reply and to grant the requested personal hearing amounted to non-compliance with the statutory mandate of Section 75(4) of CGST act and breach of natural justice - The impugned order and the consequential demand notice in Form DRC-07 are quashed and the matter is remanded to the competent authority to pass a fresh order after granting the petitioner a personal hearing and considering the additional submissions – The petition is allowed [Read less]

Service Tax - Limitation for filing appeal, Proof of delivery of the Order-in-Original - The appellant challenged the Order-in-Original before the Commissioner (Appeals) which was rejected on the ground of limitation - HELD - The appellant did not inform the department about the change in address. The Department established proof of delivery of the Order-in-Original at the address available on their records, though the occupant of the address delayed in communicating the receipt to the appellant. Under Section 85(3A) of the Finance Act, 1994, an appeal has to be filed within two months from the date of receipt of the order... [Read more]

Service Tax - Limitation for filing appeal, Proof of delivery of the Order-in-Original - The appellant challenged the Order-in-Original before the Commissioner (Appeals) which was rejected on the ground of limitation - HELD - The appellant did not inform the department about the change in address. The Department established proof of delivery of the Order-in-Original at the address available on their records, though the occupant of the address delayed in communicating the receipt to the appellant. Under Section 85(3A) of the Finance Act, 1994, an appeal has to be filed within two months from the date of receipt of the order, extendable by one month on showing sufficient cause. In the present case, the appeal was filed after 195 days, well beyond the maximum allowable period of three months. The appellate authority has no power to condone the delay beyond the period specified in the statute. Therefore, the impugned order rejecting the appeal on the ground of limitation is upheld and the appeal is rejected [Read less]

Service Tax - Taxability of supply of water under "Port Services" - The appellant is engaged in providing ship chandelling services to various ships calling at ports and raised debit notes to parties/owners for reimbursement of actual expenses incurred in supplying fresh water to the vessels - Whether the supply of water by the appellant to various vessels falls under sale of water or supply of water service under "Port Services" - HELD - Prior to 01.07.2010, the supply of water by the appellant within the port area is covered under the category of "Port Services" and is leviable to service tax, as per the CBIC clarificati... [Read more]

Service Tax - Taxability of supply of water under "Port Services" - The appellant is engaged in providing ship chandelling services to various ships calling at ports and raised debit notes to parties/owners for reimbursement of actual expenses incurred in supplying fresh water to the vessels - Whether the supply of water by the appellant to various vessels falls under sale of water or supply of water service under "Port Services" - HELD - Prior to 01.07.2010, the supply of water by the appellant within the port area is covered under the category of "Port Services" and is leviable to service tax, as per the CBIC clarification dated 09.07.2001. The invoices do not indicate a sale and purchase of water, but rather show that the fresh water was supplied by barge which would include cost of procurement, transportation and other costs incurred in relation to provision of service in the port - In the case of Jaisu Dredging & Shipping wherein it was held that the supply of water to vessels, where the port's authorization is required, would be considered as part of "Port Services" and not merely a sale of goods – The appellant could not produce any evidence to show that they were acting as a pure agent and providing service on behalf of another person. Therefore, claim of the appellant as pure agent is liable to be rejected - Accordingly, the demand of service tax for the period prior to 01.07.2010 is upheld, but set aside the penalty imposed under Section 78 considering the absence of mens rea, while affirming the penalty under Section 77 - The appeal is disposed of [Read less]

Service Tax – Taxability of grants/subsidies received from BCCI – HELD - The subsidies received by them are grants/ subventions made by BCCI to its member associations pursuant to BCCI's own constitutional and charitable obligations. The said grants or subsidies were not paid as quid pro quo for any identified taxable service rendered by the Appellant to BCCI. There is no service tax liability on the grants received by the appellant from BCCI – Further, the 'doctrine of mutuality' applies in this case as BCCI is an association of its member state associations and the subsidy is distributed inter se among members. In ... [Read more]

Service Tax – Taxability of grants/subsidies received from BCCI – HELD - The subsidies received by them are grants/ subventions made by BCCI to its member associations pursuant to BCCI's own constitutional and charitable obligations. The said grants or subsidies were not paid as quid pro quo for any identified taxable service rendered by the Appellant to BCCI. There is no service tax liability on the grants received by the appellant from BCCI – Further, the 'doctrine of mutuality' applies in this case as BCCI is an association of its member state associations and the subsidy is distributed inter se among members. In law, an association cannot render services to itself and amounts flowing from a mutual surplus to members cannot be treated as taxable 'consideration' or as 'service'. Accordingly, demand of service tax is set aside and the appeal is allowed - Taxability of Bundled services for promotion of sporting events - Whether liable to service tax – HELD - All the services provided by the appellant are in the nature of 'bundled services', with the predominant nature of promotion of sporting event. Such services for promotion of sporting events are not leviable to service tax both prior to 30.06.2012 in terms of Notification No. 30/2010-ST dated 22.06.2010 and thereafter in terms of Clause 10(b) of the Mega Exemption Notification No. 25/2012-S.T. dated 20.06.2012. The services rendered by the association in connection with promotion of sports are naturally bundled and constitute a single exempt service of promotion of sports - Since the appellant has rendered 'bundled services' in connection with promoting the game of cricket and hence not liable to service tax - Demand of service tax under the category of 'Event Management Services' - The event management services under Section 65(40) of the Finance Act pre-supposes a commercial arrangement where an 'event manager" undertakes planning, promotion, organizing or presentation of an event 'for a client' for consideration. However, in the present case, the Appellant hosts matches in its own right as a full constituent member of BCCI, in furtherance of its own constitutional objects, and there is no contract by which BCCI engages the Appellant as its event manager for a fee - Disallowance of CENVAT credit – HELD - There is no allegation in the OIO that the quantum of CENVAT credit disallowed relates to ineligible input services. The entire credit availed by the appellant has been utilized for payment of service tax on output services. Thus, the cenvat credit availed and utilized by the appellant cannot be denied on the ground that there was no documentary evidence available. The Tribunal also held that the CENVAT credit on Rent-a-cab service availed by the appellant cannot be disallowed as the rent-a-cab services were used for transporting players, officials etc. in connection with cricket matches, and not for personal commute or perquisite transport of employees. Accordingly, the disallowance of CENVAT credit is not sustainable and set aside [Read less]

Maharashtra VAT Act, 2002 - Adjustment of Refund against demand for another tax period by ignoring the provisions of Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 - Petitioner sought refund for tax period 2007-08 which was adjusted against demand for tax period 2008-09 - Whether adjustment of refund for tax period 2007-08 against demand for tax period 2008-09 is valid – HELD - The Settlement Act is a self-contained code and once the conditions mentioned therein are fulfilled, the assessee can avail the benefits of the scheme. The provisions of Section 50 of the MVAT Act cannot be impo... [Read more]

Maharashtra VAT Act, 2002 - Adjustment of Refund against demand for another tax period by ignoring the provisions of Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 - Petitioner sought refund for tax period 2007-08 which was adjusted against demand for tax period 2008-09 - Whether adjustment of refund for tax period 2007-08 against demand for tax period 2008-09 is valid – HELD - The Settlement Act is a self-contained code and once the conditions mentioned therein are fulfilled, the assessee can avail the benefits of the scheme. The provisions of Section 50 of the MVAT Act cannot be imported into the Settlement Act - At the time of passing the impugned order, the Petitioner had already paid the settled amount for tax period 2008-09 under the Settlement Act, and there were no outstanding dues. The adjustment of refund for tax period 2007-08 against the demand for tax period 2008-09 defeats the very purpose of the Settlement Act and is not permissible - The impugned order passed under Section 13(1) of the Settlement Act has erroneously applied the provisions of Section 50 of the MVAT Act. Further, the impugned order was passed without providing the Petitioner an opportunity of being heard, violating the principles of natural justice - The impugned order is quashed and set aside. The Respondents are directed to refund the amount to the Petitioner – The petition is allowed [Read less]

Service Tax - VCES declaration and subsequent demand for the same period - The appellant rendered site formation, clearance, excavation, and earth-moving services - Prior to adjudication, the Appellant filed a declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES). The Appellant paid the entire declared tax dues for 'site formation' service, including the balance amount with interest and discharge certificate was issued - Whether the subsequent demand for the same period covered under the VCES declaration can be sustained after the discharge certificate was issued - HELD - Once a discharge... [Read more]

Service Tax - VCES declaration and subsequent demand for the same period - The appellant rendered site formation, clearance, excavation, and earth-moving services - Prior to adjudication, the Appellant filed a declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES). The Appellant paid the entire declared tax dues for 'site formation' service, including the balance amount with interest and discharge certificate was issued - Whether the subsequent demand for the same period covered under the VCES declaration can be sustained after the discharge certificate was issued - HELD - Once a discharge certificate is issued, no demand can be raised for the period covered by the declaration for the same issue. The Supreme Court judgment in the case of M/s Armour Security (India) Ltd. Vs Commissioner, CGST, Delhi, held that the bar on the "same subject matter" is attracted only where both proceedings seek to assess or recover an identical liability, or even where there is the slightest overlap in the tax liability or obligation. In the present case, the Adjudicating Authority sought to assess and recover tax on an overlapping liability, a portion of which had already been verified and settled under the VCES. Such a demand is barred under section 108 of the Finance Act, 1994 and cannot be sustained – Further, the section 108(1) of the Act grants complete immunity from penalty, interest, and further proceedings once the declared tax dues and applicable interest under Section 107 are paid, and the VCES declaration was accepted - The impugned order is set aside and the appeal is disposed of accordingly [Read less]

Service Tax - Refund of service tax paid on exempted services, Recovery of refund already paid - Refund of service tax paid on exempted services rendered to Military Engineering Services (MES) during the relevant period - Appellant applied for refund of the service tax paid, which was initially sanctioned but then rejected by the authorities on the ground that the burden of the service tax had been passed on to the MES, and therefore, the refund could not be granted to the appellant under the doctrine of unjust enrichment - Whether the appellant is entitled to the refund of service tax paid on the exempted services, even t... [Read more]

Service Tax - Refund of service tax paid on exempted services, Recovery of refund already paid - Refund of service tax paid on exempted services rendered to Military Engineering Services (MES) during the relevant period - Appellant applied for refund of the service tax paid, which was initially sanctioned but then rejected by the authorities on the ground that the burden of the service tax had been passed on to the MES, and therefore, the refund could not be granted to the appellant under the doctrine of unjust enrichment - Whether the appellant is entitled to the refund of service tax paid on the exempted services, even though the burden of such tax was passed on to the customer (MES) - HELD - The appellant is entitled to the refund on merits as the services were exempted from service tax. However, the provisions of unjust enrichment under Section 11B of the Central Excise Act, 1944 (made applicable to service tax) would apply in the present case as the appellant had passed on the burden of service tax to the MES. The principles of unjust enrichment would apply to all cases of refund where the burden of tax has been passed on to the customer - The NOC issued by the MES authorizing the appellant to claim the refund has no legal validity as it is contrary to the provisions of Section 11B and the judgment of the Supreme Court in Mafatlal Industries Ltd. v. UOI – However, the direction to the appellant to deposit the refund amount that was already paid to him is set aside, as there is no provision in Section 11B to recover an erroneously sanctioned refund. The remaining refund amount be credited to the Consumer Welfare Fund as per the provisions of Section 11B - The appeal is partly allowed [Read less]

GST - Discrepancy in GSTR 9 and GSTR 9C Adjustments – Order for tax and penalty on the ground of a discrepancy in adjustments of turnover mentioned in GSTR 9 and GSTR 9C - HELD - While the Authority had considered the petitioner's argument that the tax component was wrongly included in the turnover, it did not reject this contention. If the tax component is included in the turnover, it would amount to double taxation, which goes against the core principles of law. Therefore, the matter deserves reconsideration by the Authority - The impugned order is set aside and matter is remitted back to the respondent for fresh consi... [Read more]

GST - Discrepancy in GSTR 9 and GSTR 9C Adjustments – Order for tax and penalty on the ground of a discrepancy in adjustments of turnover mentioned in GSTR 9 and GSTR 9C - HELD - While the Authority had considered the petitioner's argument that the tax component was wrongly included in the turnover, it did not reject this contention. If the tax component is included in the turnover, it would amount to double taxation, which goes against the core principles of law. Therefore, the matter deserves reconsideration by the Authority - The impugned order is set aside and matter is remitted back to the respondent for fresh consideration after providing an opportunity of hearing to the petitioner and deciding the matter afresh in accordance with law. The petitioner was directed to deposit a sum of Rs. 5,00,000/- with the second respondent upon which the impugned order shall stand set aside – The petition is dismissed of [Read less]

GST - Input Tax Credit Claim, Belted filing of GSTR-3B – Denial of ITC claim on the ground that it was beyond the time limit prescribed under Section 16(4) of the CGST Act, 2017 – HELD - The Section 16(5) of the CGST Act, which was inserted retrospectively with effect from 01.07.2017 by the Finance (No.2) Act, 2024, is a non-obstante clause that overrides the time restriction under Section 16(4). As per the clarification issued by the CBIC, claims of ITC availed through GSTR-3B returns filed up to 30th November 2021 are permissible. The petitioner's return was filed on 28.10.2019, which is within the extended time pres... [Read more]

GST - Input Tax Credit Claim, Belted filing of GSTR-3B – Denial of ITC claim on the ground that it was beyond the time limit prescribed under Section 16(4) of the CGST Act, 2017 – HELD - The Section 16(5) of the CGST Act, which was inserted retrospectively with effect from 01.07.2017 by the Finance (No.2) Act, 2024, is a non-obstante clause that overrides the time restriction under Section 16(4). As per the clarification issued by the CBIC, claims of ITC availed through GSTR-3B returns filed up to 30th November 2021 are permissible. The petitioner's return was filed on 28.10.2019, which is within the extended time prescribed under Section 16(5) - The impugned order is set aside and matter is remitted to the respondent authorities to consider the factual aspects of the eligibility of the ITC claim, without revisiting the permissibility of the claim under the extended time limit - The writ petition is allowed [Read less]

Service Tax - Exemption for Legal Services by Advocates - The petitioner, a practicing advocate, challenged the show cause notice, order, and recovery notice issued against him for recovering service tax – HELD - The legal issue is squarely covered by the decisions of the High Court in Advocate Pooja Patil v. Deputy Commissioner, CGST and other cases. As per Notification No. 25/2012-Service Tax and Notification No. 30/2012-Service Tax, the services provided by an individual advocate or a firm of advocates by way of legal services are exempt from the levy of service tax - The designated officer had acted without jurisdict... [Read more]

Service Tax - Exemption for Legal Services by Advocates - The petitioner, a practicing advocate, challenged the show cause notice, order, and recovery notice issued against him for recovering service tax – HELD - The legal issue is squarely covered by the decisions of the High Court in Advocate Pooja Patil v. Deputy Commissioner, CGST and other cases. As per Notification No. 25/2012-Service Tax and Notification No. 30/2012-Service Tax, the services provided by an individual advocate or a firm of advocates by way of legal services are exempt from the levy of service tax - The designated officer had acted without jurisdiction in passing the impugned order, as it was contrary to the binding notifications. Accordingly, the impugned show cause notice, order, and recovery notice are set aside by holding that the petitioner was not liable to pay the demanded service tax - The Writ Petition is allowed [Read less]

Service Tax - Limitation Period for demanding Interest on delayed payment of Service Tax - The appellant is engaged in providing Cleaning and Manpower Services and due to slow down in the industry and delayed receipt of payments from clients, they discharged the service tax liability belatedly. The department issued a show cause-cum-demand notice demanding interest under Section 75 of the Finance Act, 1994 for the periods 2014-15 till 30.6.2017 - Whether the normal period of limitation prescribed under Section 73 applies for demanding interest under Section 75 as well, even though Section 75 does not prescribe any specific... [Read more]

Service Tax - Limitation Period for demanding Interest on delayed payment of Service Tax - The appellant is engaged in providing Cleaning and Manpower Services and due to slow down in the industry and delayed receipt of payments from clients, they discharged the service tax liability belatedly. The department issued a show cause-cum-demand notice demanding interest under Section 75 of the Finance Act, 1994 for the periods 2014-15 till 30.6.2017 - Whether the normal period of limitation prescribed under Section 73 applies for demanding interest under Section 75 as well, even though Section 75 does not prescribe any specific limitation period - HELD - It is a well-settled principle that when a statute provides a power without specifying a particular time limit, the authority must exercise that power within a reasonable period. Interest under Section 75 is incidental to the principal tax liability under Section 73, and therefore, the limitation framework governing the principal demand must logically extend to the demand of interest unless the statute expressly provides otherwise. The Supreme Court and High Courts have held that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon. In the absence of any specific allegations warranting invocation of the extended period of limitation under Section 73, the demand including interest can be sustained only within the normal period of limitation. Since the show-cause notice was issued beyond the normal period of limitation, it is barred by limitation and the same is set aside - The appeal filed by the appellant is allowed [Read less]

GST – Tamil Nadu AAAR - GST Rate Applicability of ‘multi-pack of sets’ for retail sale – Set of two vs Individual Pieces, Set for retail sale – The appellant is engaged in export of men's pyjama sets consisting of a top (kurta/shirt) and bottom (pyjama/trouser) packed in 2 sets per pack - Appeal against the order of the Authority for Advance Ruling which held that the applicable GST rate on the pyjama sets packed in a single pack and costing less than Rs. 1,000 per piece is 5% - Appellant case that the 2-set value pack does not convert the goods into independent pieces; it remains a multi-pack of sets with a sing... [Read more]

GST – Tamil Nadu AAAR - GST Rate Applicability of ‘multi-pack of sets’ for retail sale – Set of two vs Individual Pieces, Set for retail sale – The appellant is engaged in export of men's pyjama sets consisting of a top (kurta/shirt) and bottom (pyjama/trouser) packed in 2 sets per pack - Appeal against the order of the Authority for Advance Ruling which held that the applicable GST rate on the pyjama sets packed in a single pack and costing less than Rs. 1,000 per piece is 5% - Appellant case that the 2-set value pack does not convert the goods into independent pieces; it remains a multi-pack of sets with a single MRP and the effective rate per set value exceeds Rs.1,000, therefore, the applicable GST rate is 12% and not 5% - Whether the GST rate should be determined based on the value per set or per individual piece – HELD - The GST rate should be determined based on the value per individual piece, not per set. As per the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, the GST rate is based on the sale value per piece, not per set. Even though the goods are marketed and sold as a set, the combination of top and bottom cannot be considered as a single 'piece' for the purpose of determining the GST rate - One pyjama set consists of 1 shirt (top) and 1 pant (bottom), and the price of Rs.1,371/- is for two such pyjama sets, not a single set. Therefore, the price per piece is less than Rs.1,000, hence the applicable GST rate is 5% as per the relevant Notification. The Appellant's contention that the effective rate per set value exceeds Rs.1,000 and hence the applicable rate should be 12% is not accepted, as the relevant unit for determining the rate is the individual 'piece', not the set. The Advance Ruling Authority's decision is upheld, and the appeal is dismissed [Read less]

Service Tax - Invocation of extended period of limitation - The appellant, a state instrumentality, had availed CENVAT credit of service tax paid on construction services received prior to July 2012, during which period the appellant was not registered as a service provider - Department invoked the extended period of limitation to demand the wrongfully availed CENVAT credit - Whether the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 was correctly invoked by the department - HELD - The extended period of limitation cannot be invoked in the absence of any positive act of fraud, col... [Read more]

Service Tax - Invocation of extended period of limitation - The appellant, a state instrumentality, had availed CENVAT credit of service tax paid on construction services received prior to July 2012, during which period the appellant was not registered as a service provider - Department invoked the extended period of limitation to demand the wrongfully availed CENVAT credit - Whether the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 was correctly invoked by the department - HELD - The extended period of limitation cannot be invoked in the absence of any positive act of fraud, collusion, suppression of facts or willful misstatement by the appellant with an intent to evade payment of tax. The mere fact that the issue was detected during an audit and that the appellant was operating under self-assessment is not sufficient to invoke the extended period. The intentional and willful suppression of facts cannot be presumed merely because the appellant was operating under self-assessment or because the department discovered the alleged inadmissible CENVAT credit only during the audit. The appellant had discharged its obligation by filing the ST-3 returns, and the burden was on the department to scrutinize the returns and make a best judgment assessment under Section 72. In the absence of any positive allegation of fraud or suppression against the appellant, the extended period of limitation was not correctly invoked - The impugned order is set aside on the ground of limitation – The appeal is allowed [Read less]

GST – Condonation of delay in filing of Appeal - Delay in filing appeal due to lapse of internal auditor – HELD - The petitioner came to know of the passing of the order only on the recovery notice - The petitioner's grievance requires to be adjudicated by way of an appeal instead of writ proceedings. However, the petitioner fairly admits the lapse of the internal auditor, against whom certain internal proceedings have been initiated - In the peculiar facts of the case the Appellate Authority is directed to entertain the appeal without raising any objection on the ground of delay, if the appeal is filed within three we... [Read more]

GST – Condonation of delay in filing of Appeal - Delay in filing appeal due to lapse of internal auditor – HELD - The petitioner came to know of the passing of the order only on the recovery notice - The petitioner's grievance requires to be adjudicated by way of an appeal instead of writ proceedings. However, the petitioner fairly admits the lapse of the internal auditor, against whom certain internal proceedings have been initiated - In the peculiar facts of the case the Appellate Authority is directed to entertain the appeal without raising any objection on the ground of delay, if the appeal is filed within three weeks from the date of receipt of the certified copy of the order – The petition is disposed of [Read less]

GST – Blocking of Electronic Credit Ledger in wrongful availment of ITC by customer - Invocation of Rule 86A of the CGST Rules, 2017 alleging that the petitioner has issued invoices without any supply of goods, thereby enabling the customer to avail of fraudulent ITC – HELD - The power under Rule 86A can be exercised only when the assessee has fraudulently availed or is ineligible for the ITC. In the present case, the allegation relates to the wrongful availment of ITC by the petitioner's customer and not the petitioner itself – The Rule 86A cannot be pressed into action against the petitioner in such circumstances, ... [Read more]

GST – Blocking of Electronic Credit Ledger in wrongful availment of ITC by customer - Invocation of Rule 86A of the CGST Rules, 2017 alleging that the petitioner has issued invoices without any supply of goods, thereby enabling the customer to avail of fraudulent ITC – HELD - The power under Rule 86A can be exercised only when the assessee has fraudulently availed or is ineligible for the ITC. In the present case, the allegation relates to the wrongful availment of ITC by the petitioner's customer and not the petitioner itself – The Rule 86A cannot be pressed into action against the petitioner in such circumstances, as the allegations do not relate to the credit availed by the petitioner or that the petitioner is not conducting business from the place for which registration has been obtained. Therefore, the show-cause notice issued proposing to prevent the utilization of credit under Rule 86A is held to be improper and set aside - The respondents are directed to unblock the Electronic Credit Ledger of the petitioner forthwith – The petition is allowed [Read less]

GST – Rajasthan AAR - Classification and applicable rate of tax on biodegradable/compostable carry bags – HELD - The determination of biodegradability or compostability is a scientific and technical matter falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST Act - The bags in question are made from polymer materials (including PBAT and PLA) and are classifiable under Chapter 39 – Plastics and articles thereof, specifically under heading 3923, being articles for the conveyance or packing of goods. This classification is independent ... [Read more]

GST – Rajasthan AAR - Classification and applicable rate of tax on biodegradable/compostable carry bags – HELD - The determination of biodegradability or compostability is a scientific and technical matter falling within the jurisdiction of the environmental authorities and not within the scope of this Authority under Section 97(2) of the CGST Act - The bags in question are made from polymer materials (including PBAT and PLA) and are classifiable under Chapter 39 – Plastics and articles thereof, specifically under heading 3923, being articles for the conveyance or packing of goods. This classification is independent of whether the material is biodegradable or not – Ordered accordingly - Applicable GST rate on biodegradable/compostable carry bags - The applicant submitted that the supply of its biodegradable/compostable carry bags is covered under Entry No. 319 of Schedule I to Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025, which provides a concessional GST rate of 5% for "Paper Sacks/Bags and bio-degradable bags" under Chapters 39 and 48 – HELD - The concessional rate is conditional and applies only if the goods supplied are biodegradable as understood in the context of the said entry. The Authority held that if the bags supplied by the applicant are biodegradable, then the benefit of Entry No. 319 would be available, and GST would be payable at the rate of 5%. If the product is not biodegradable, then the concessional rate would not apply, and the applicable rate under the general classification for plastic bags under Chapter 39 would apply. [Read less]

Bombay Sales Tax Act, 1959 - Hire premium charges on vehicles sold and re-purchased – Reference by Tribunal, Withdrawal of case by the party - HELD – Once a reference is made by the Tribunal, the party at whose instance it has been made cannot be allowed to withdraw it. However, if the party fails to appear at the hearing of the reference or appears and says it is not interested in the reference being answered, the Court is not bound to answer the question referred and can decline to do so. The preliminary condition of a hearing taking place must be satisfied before the Court is obligated to decide the question of law ... [Read more]

Bombay Sales Tax Act, 1959 - Hire premium charges on vehicles sold and re-purchased – Reference by Tribunal, Withdrawal of case by the party - HELD – Once a reference is made by the Tribunal, the party at whose instance it has been made cannot be allowed to withdraw it. However, if the party fails to appear at the hearing of the reference or appears and says it is not interested in the reference being answered, the Court is not bound to answer the question referred and can decline to do so. The preliminary condition of a hearing taking place must be satisfied before the Court is obligated to decide the question of law referred to it. In the present case, since the applicant did not wish to pursue the reference, the Court declined to answer the questions referred, keeping them open to be answered in an appropriate case in the future – Ordered accordingly [Read less]

GST – Rejection of rectification application under Section 161 of CGST Act - The petitioner filed an application for rectification of an order passed by the respondent, which was rejected on the grounds that the issues raised did not qualify as "errors apparent on the face of the record" – HELD - The conclusion in the impugned order indicates that the petitioner had generated multiple E-way bills using the same invoice, resulting in under-declaration of invoice details in GSTR-1 and short payment of GST. There should have been a proper determination in the impugned order as to whether a single vehicle could have transp... [Read more]

GST – Rejection of rectification application under Section 161 of CGST Act - The petitioner filed an application for rectification of an order passed by the respondent, which was rejected on the grounds that the issues raised did not qualify as "errors apparent on the face of the record" – HELD - The conclusion in the impugned order indicates that the petitioner had generated multiple E-way bills using the same invoice, resulting in under-declaration of invoice details in GSTR-1 and short payment of GST. There should have been a proper determination in the impugned order as to whether a single vehicle could have transported the quantity of teak wood mentioned in the invoice, or whether it required multiple vehicles - The impugned order is quashed and matter is remitted back to the respondent to pass a fresh order on merits, after the petitioner establishes the quantum of items transported in each vehicle and the corresponding bank statements - The Writ Petition is disposed of [Read less]

Customs - Assessable Value of Diamond Cutting and Scanning Machines - Whether the value of the software and the value of the hardware can be taken together to determine the transaction value of Diamond Cutting and Scanning Machines for the purpose of Section 14 of the Customs Act, and whether such redetermination of assessable value can be done after assessment by the proper Officer followed by clearance of goods - HELD - As per the settled position of law laid down by the Supreme Court in PSI Data Systems Ltd. and subsequent Constitution Bench decisions, the value of software sold along with the computer is not includable... [Read more]

Customs - Assessable Value of Diamond Cutting and Scanning Machines - Whether the value of the software and the value of the hardware can be taken together to determine the transaction value of Diamond Cutting and Scanning Machines for the purpose of Section 14 of the Customs Act, and whether such redetermination of assessable value can be done after assessment by the proper Officer followed by clearance of goods - HELD - As per the settled position of law laid down by the Supreme Court in PSI Data Systems Ltd. and subsequent Constitution Bench decisions, the value of software sold along with the computer is not includable in the assessable value of the computers as software and hardware are distinct and separate articles. The Larger Bench decision relied upon by the Department is not applicable as it dealt with a case where there was no separate invoice for hardware and software, whereas in the present case, separate invoices were available. Further, when in the instant case the Larger Bench decision is found to be contrary to the findings of the Hon'ble Supreme Court, whose decisions are regarded as law of the land, its ratio can’t be taken as an aid to the determination of this appeal and on this score alone Appellants would succeed in their appeals - The re-opening of the assessment and the imposition of penalties and redemption fine are not sustainable in law as the goods were not imported in violation of any regulations and all the details were available with the Department at the time of import clearance - the impugned orders are set aside and the appeals are allowed [Read less]

GST - Grounds of arrest and reasons to believe – Petitioner was arrested under Section 69 of the CGST Act, 2017 without providing the "grounds of arrest" or the "reasons to believe" prior to his arrest and production before the Magistrate - Whether the absence of providing the "grounds of arrest" and "reasons to believe" to the petitioner at the time of arrest renders the arrest and subsequent remand illegal – HELD - As per the judgment of the Supreme Court in Radhika Agrawal v. Union of India, the "grounds of arrest" and the "reasons to believe" are mandatorily required to be provided to the arrestee. While the "reaso... [Read more]

GST - Grounds of arrest and reasons to believe – Petitioner was arrested under Section 69 of the CGST Act, 2017 without providing the "grounds of arrest" or the "reasons to believe" prior to his arrest and production before the Magistrate - Whether the absence of providing the "grounds of arrest" and "reasons to believe" to the petitioner at the time of arrest renders the arrest and subsequent remand illegal – HELD - As per the judgment of the Supreme Court in Radhika Agrawal v. Union of India, the "grounds of arrest" and the "reasons to believe" are mandatorily required to be provided to the arrestee. While the "reasons to believe" are not required to be provided to the arrestee as per the Supreme Court's decision, the "grounds of arrest" must be explained to the arrested person and furnished to him in writing as an annexure to the arrest memo - In the present case, the arrest memo did not mention any annexure containing the "grounds of arrest", and the "grounds of arrest" were provided to the petitioner only after the remand order was passed. This is in violation of the Supreme Court's guidelines and the department's own circular dated 13.01.2025. Therefore, the remand order was not in accordance with law and set it aside - The petitioner is ordered to be released from custody. The writ petition is allowed [Read less]

Central Excise - Duty demand and penalties on the appellants for alleged clandestine manufacture and clearance of pan masala/gutka - The Department alleged that the appellants were engaged in illicit manufacture and clearance of pan masala/gutka from the farmhouse without payment of central excise duty - Whether the duty demand and penalties imposed on the appellants are sustainable - HELD – The evidence on record clearly showed that the machines used for manufacturing of pan masala/gutka were installed at the farmhouse only on 16.05.2011 and the trial production commenced from that date, contrary to the department's all... [Read more]

Central Excise - Duty demand and penalties on the appellants for alleged clandestine manufacture and clearance of pan masala/gutka - The Department alleged that the appellants were engaged in illicit manufacture and clearance of pan masala/gutka from the farmhouse without payment of central excise duty - Whether the duty demand and penalties imposed on the appellants are sustainable - HELD – The evidence on record clearly showed that the machines used for manufacturing of pan masala/gutka were installed at the farmhouse only on 16.05.2011 and the trial production commenced from that date, contrary to the department's allegation that the manufacturing activity started from February 2011 - The statements of various persons, including the supplier of the machines, the transporter, and the electrician who installed the electrical connections, corroborated the appellant's case that the machines were installed only on 16.05.2011. The department has not brought any independent evidence to controvert the appellants' case - Further, the statements of the Bhattad brothers, on which the department had relied, could not be considered in the absence of their cross-examination, as per the settled legal position. The discrepancies in the panchnama proceedings has also not been satisfactorily explained by the department - Regarding the contention that the documents were fabricated due to the absence of authenticated Form No. 402, the absence of such authentication alone cannot be considered as conclusive evidence against the genuineness of the documents. The duty demand can be confirmed only for the period from 16.05.2011 to 18.05.2011, as the machines were in operation during this period - The duty demand along with penalties are set aside, except for the period from 16.05.2011 to 18.05.2011 – The appeal is partly allowed [Read less]

Service Tax - Liability to pay Service Tax on job-work for manufacturing of cigarettes under the category of 'Business Auxiliary Service' - Whether the appellant is liable to pay service tax on the job-work activities performed for ITC Ltd – HELD - The appellant's job-work activities are fully exempted from service tax on two grounds. Firstly, if the job-work is considered as a manufacturing activity, it is exempt from service tax under Section 66D(f) of the Finance Act, 1994, which exempts services by way of carrying out any process amounting to manufacture or production of goods. Secondly, as per Notification No. 25/20... [Read more]

Service Tax - Liability to pay Service Tax on job-work for manufacturing of cigarettes under the category of 'Business Auxiliary Service' - Whether the appellant is liable to pay service tax on the job-work activities performed for ITC Ltd – HELD - The appellant's job-work activities are fully exempted from service tax on two grounds. Firstly, if the job-work is considered as a manufacturing activity, it is exempt from service tax under Section 66D(f) of the Finance Act, 1994, which exempts services by way of carrying out any process amounting to manufacture or production of goods. Secondly, as per Notification No. 25/2012-ST, when the job-work is carried out on an intermediate product and the final product is cleared by the principal manufacturer (ITC) on payment of excise duty, no service tax is required to be paid by the job-worker (the appellant) - In the present case, it is clear that the manufactured cigarettes are being cleared by the principal manufacturer ITC on payment of excise duty. Therefore, service tax demand cannot be confirmed against the appellant – Further, the Department failed to bring any concrete evidence to show that the appellant had indulged in any activity amounting to suppression. Given the exemption and the negative list provisions, the appellant had a bona fide belief that no service tax was required to be paid. Accordingly, the demand for the extended period is set aside on the ground of time-barred – The impugned order is set aside and the appeal is allowed [Read less]

GST – Karnataka AAR - Taxability of Corpus Fund Contribution by Apartment Owners Association - The applicant, an Apartment Owners' Association/Resident Welfare Association, collects a corpus fund from its members in addition to regular monthly maintenance charges - The corpus fund is intended to be used for future capital expenditures such as building repairs, replacements, and refurbishment - Whether the collection of the corpus fund amounts to a "supply" under Section 7 of the CGST Act, 2017, and if so, whether the applicant is entitled to the exemption provided under Entry No. 77 of Notification No. 12/2017-Central Ta... [Read more]

GST – Karnataka AAR - Taxability of Corpus Fund Contribution by Apartment Owners Association - The applicant, an Apartment Owners' Association/Resident Welfare Association, collects a corpus fund from its members in addition to regular monthly maintenance charges - The corpus fund is intended to be used for future capital expenditures such as building repairs, replacements, and refurbishment - Whether the collection of the corpus fund amounts to a "supply" under Section 7 of the CGST Act, 2017, and if so, whether the applicant is entitled to the exemption provided under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - HELD - The collection of the corpus fund from members constitutes a "supply" under Section 7(1)(aa) of the CGST Act, 2017, as the applicant, being an association of persons, is performing an activity for its members for consideration. The corpus fund is in the nature of an advance towards future supply of services and not a deposit, and therefore, GST is payable at the time of collection of the corpus fund under Section 13(2)(a) of the CGST Act, 2017 - The exemption of Rs.7,500 per member per month provided under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to the corpus fund, as it is distinct from the monthly maintenance charges and cannot be clubbed together for the purpose of the exemption. The corpus fund is collected for specific capital expenditures, while the monthly charges are for regular, recurring expenses, and therefore, the two cannot be treated as a single supply for the purpose of the exemption – Ordered accordingly [Read less]

GST – Karnataka AAR - Liability to GST on recovery of water charges by Residential Welfare Association (RWA) – Applicant-RWA recovers the actual cost of water supply from its members through separate monthly debit notes - Whether the recovery of water charges from its members, on an actual cost basis through separate monthly debit notes, is liable to GST even though water itself is exempt from tax – HELD - Though water is exempt from GST, the recovery of water charges is considered part of the overall maintenance services provided by the RWA to its members - The Association is not selling water as goods to its member... [Read more]

GST – Karnataka AAR - Liability to GST on recovery of water charges by Residential Welfare Association (RWA) – Applicant-RWA recovers the actual cost of water supply from its members through separate monthly debit notes - Whether the recovery of water charges from its members, on an actual cost basis through separate monthly debit notes, is liable to GST even though water itself is exempt from tax – HELD - Though water is exempt from GST, the recovery of water charges is considered part of the overall maintenance services provided by the RWA to its members - The Association is not selling water as goods to its members. It is only recovering from members the actual cost of water procured from third parties such as municipalities or tanker suppliers. This recovery is integrally linked to the overall service of maintaining the residential complex and its common facilities - The recovery cannot be treated as a separate supply of water (goods) as the RWA is not selling water but only recovering the actual cost incurred - The recovery of water charges from members is taxable under GST as it forms part of the maintenance services provided by the RWA – Ordered accordingly - Taxability of recovery of electricity charges for common areas – HELD - The RWA recovers the actual electricity charges for the common areas from its members. Though electrical energy is exempt from GST, the recovery of such charges is considered part of the maintenance services provided by the RWA to its members and is subject to GST at the applicable rates, in accordance with the ceilings specified under the relevant GST notification. The RWA does not satisfy the conditions to be treated as a 'pure agent' for the recovery of electricity charges, and hence the recovered amount forms part of the consideration for the maintenance services. The recovery of electricity charges for common areas from members is taxable under GST - Collection of corpus fund - The amounts collected by the RWA from its members towards a 'corpus fund' for meeting future capital expenditures constitute a 'supply' under GST law. Such collections are treated as advances for a future supply, and GST is payable at the time of receipt of the corpus fund, as per the provisions of the CGST Act. The collection of corpus fund from members is taxable under GST at the time of receipt - Monthly charges for community center - The monthly charges levied by the RWA for the upkeep of the community center within the residential complex are classified as 'Monthly Maintenance Charges' and qualify for the exemption threshold of Rs. 7,500 per member per month as per the relevant GST notification, provided the total monthly contribution per member (including water and electricity charges) does not exceed the exemption limit. The monthly charges for the community center are exempt from GST up to the prescribed limit. [Read less]

Customs - Confiscation of Smuggled Goods and Imposition of Penalty - The appellant's vehicle was intercepted near the Indo-Nepal border carrying foreign peas, which were being transported through unauthorized routes in violation of Customs laws. The peas were confiscated, the vehicle was seized, and penalties were imposed on the appellant and others involved - Whether the confiscation of the peas and the vehicle, as well as the imposition of penalties, were justified under the Customs Act, 1962 - HELD - In absence of any challenge by any other person who was involved in the handling and transportation of the illicitly impo... [Read more]

Customs - Confiscation of Smuggled Goods and Imposition of Penalty - The appellant's vehicle was intercepted near the Indo-Nepal border carrying foreign peas, which were being transported through unauthorized routes in violation of Customs laws. The peas were confiscated, the vehicle was seized, and penalties were imposed on the appellant and others involved - Whether the confiscation of the peas and the vehicle, as well as the imposition of penalties, were justified under the Customs Act, 1962 - HELD - In absence of any challenge by any other person who was involved in the handling and transportation of the illicitly imported peas. the confiscation of the peas under Section 111(b) of the Customs Act, 1962 is upheld. Since the persons involved were unable to provide any documentary evidence to establish the legitimate importation of the goods. The confiscation of the vehicle under Section 115(2) of the Act was also upheld, as it was used for the illegal transportation of the smuggled goods - Regarding the penalty imposed on the appellant under Section 112 of the Act, the appellant was not directly involved in the interception and was not named by any of the persons involved. However, the appellant's delayed claim to the seized goods justified the imposition of a penalty, though the amount was reduced from the original order to Rs. 2,500/- - The appeal is partly allowed [Read less]

GST – Tamil Nadu AAAR - Filing of appeal before AAAR, Technical error on common Portal - Condonation of delay in filing of appeal beyond the prescribed time limit of 30 days from the date of the AAR order - Whether the delay in filing the appeal can be condoned - HELD - The appellant was unable to file the appeal within the stipulated time limit due to technical glitches/issues in the online portal. The appellant had made repeated attempts to file the appeal online but could not do so due to the technical error - The authority is convinced that the appellant had presented sufficient cause that prevented them from filing ... [Read more]

GST – Tamil Nadu AAAR - Filing of appeal before AAAR, Technical error on common Portal - Condonation of delay in filing of appeal beyond the prescribed time limit of 30 days from the date of the AAR order - Whether the delay in filing the appeal can be condoned - HELD - The appellant was unable to file the appeal within the stipulated time limit due to technical glitches/issues in the online portal. The appellant had made repeated attempts to file the appeal online but could not do so due to the technical error - The authority is convinced that the appellant had presented sufficient cause that prevented them from filing the appeal within the normal period - The Appellate Authority condoned the delay of 28 days in filing the appeal, in terms of the proviso to Section 100(2) of the CGST/TNGST Acts, 2017 - The delay in filing the appeal by the appellant beyond the normal time limit of 30 days is condoned, and the appeal will be taken up for consideration on merits – Ordered accordingly [Read less]