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Customs – Provisional attachment of bank account under Section 110(5) of Customs Act basis allegations of fraudulent export activities and wrongful availment of Input Tax Credit – Validity of provisional attachment orders issued without approval of Commissioner and without prior written order to bank account holder – Whether provisional attachment can be ordered without compliance with procedural and substantive requirements of Section 110(5) including prior Commissioner approval and issuance of written order to account holder containing reasons – HELD - The power of provisional attachment is draconian in nature an... [Read more]

Customs – Provisional attachment of bank account under Section 110(5) of Customs Act basis allegations of fraudulent export activities and wrongful availment of Input Tax Credit – Validity of provisional attachment orders issued without approval of Commissioner and without prior written order to bank account holder – Whether provisional attachment can be ordered without compliance with procedural and substantive requirements of Section 110(5) including prior Commissioner approval and issuance of written order to account holder containing reasons – HELD - The power of provisional attachment is draconian in nature and must strictly conform to both substantive and procedural requirements of statute. The Proper officer must form opinion that attachment is necessary for protecting interest of revenue or preventing smuggling based on tangible material. Such opinion must bear proximate and live nexus to purpose of protecting revenue and not merely be expedient - Each ingredient of Section 110(5) is integral and must be strictly complied with. Legislature was conscious of severity of such power and serious consequences flowing from attachment of bank account hence conditioned exercise of power by requiring approval of superior authority; power is not intended to authorize preemptive strikes on property merely because it is available for being attached – The Provisional attachment orders issued without Commissioner approval are not in accordance with statute; post facto issuance of provisional attachment orders to validate earlier debit freezes without prior authorization cannot retrospectively cure the illegality of earlier unauthorized freezes – Further, extension orders issued without prior notice and opportunity of hearing to account holder and without recording reasons are bad in law as Section 110(5) contemplates pre-decisional hearing for extension – The provisional attachment orders issued without Commissioner approval are quashed; extension orders are set aside for non-compliance with statutory requirements of providing reasons and pre-decisional hearing to account holder - Respondent may proceed afresh with provisional attachment orders in accordance with law if so advised by following all substantive and procedural requirements of Section 110(5) – The writ petition is allowed [Read less]

GST – Refund of accumulated Input Tax Credit under inverted duty structure, Relevance of classification as manufacturer or trader, Basis for refund eligibility – Revenue appealed against refund of accumulated ITC granted by first Appellate Authority under Section 54(3)(ii) of CGST Act 2017 - Revenue contended that respondent is engaged in trading and not manufacturing and therefore not eligible for refund of ITC under inverted duty structure - Respondent-assessee submitted that definition of registered person under Section 2(94) makes no distinction between trading entity and manufacturing entity and that the business ... [Read more]

GST – Refund of accumulated Input Tax Credit under inverted duty structure, Relevance of classification as manufacturer or trader, Basis for refund eligibility – Revenue appealed against refund of accumulated ITC granted by first Appellate Authority under Section 54(3)(ii) of CGST Act 2017 - Revenue contended that respondent is engaged in trading and not manufacturing and therefore not eligible for refund of ITC under inverted duty structure - Respondent-assessee submitted that definition of registered person under Section 2(94) makes no distinction between trading entity and manufacturing entity and that the business involves substantial value addition through processes including bleaching, dyeing, cutting, stitching, packing, branding and labelling – Whether refund of accumulated ITC under inverted duty structure depends on whether the taxpayer is classified as a manufacturer or trader – HELD – In the GST regime the levy of GST is not on the point of manufacture but on the point of supply. As per Section 9(1) of the CGST Act 2017, GST is payable on supplies of goods or services or both. It is immaterial whether the respondent is engaged in trading or manufacturing of goods. The definition of registered person under Section 2(94) does not make any distinction between a trading entity and a manufacturing entity. The statute does not provide that the benefit of refund under Section 54(3)(ii) is available only to a manufacturer as opposed to any other registered person - The first Appellate Authority has correctly discussed in detail the processes adopted by the respondent and concluded that the respondent is engaged in value addition. The fact that respondent purchased raw or semi-finished goods and subjected them to substantial processing before emergence of finished marketable product demonstrates genuine value addition - Revenue's contention that respondent's eligibility for refund should be based on manufacturing classification is unsustainable. Refund eligibility under inverted duty structure depends on accumulation of ITC due to inputs being taxed at higher rate than output supplies, not on the classification of the taxpayer as manufacturer or trader - There is no infirmity in the order passed by the first Appellate Authority – Revenue appeal is dismissed - Refund of ITC under inverted duty structure despite overlapping HSN classification of input and output, Applicability of Circular 135/05/2020-GST, Scope of value addition through processing – Respondent purchased raw and semi-finished goods including ready-made garments and cloth, subjected them to dyeing, bleaching, printing, cutting, stitching, packing and branding and sold finished apparel at 5% GST. The inputs included dyes, chemicals, printing ink, packing materials at rates up to 18 percent and 28 percent – Whether refund of accumulated ITC under inverted duty structure can be denied when input and output have overlapping HSN classification merely on the basis of Circular No. 135/05/2020-GST notwithstanding value addition through processing and use of higher-taxed ancillary inputs – HELD – Circular No. 135/05/2020-GST is applicable only to cases where there is reduction in the rate of GST on the same goods over time. The heading of para 3 of the Circular clearly indicates it addresses refund on account of reduction in GST rate. The wordings such as attracting different tax rates at different points in time clearly indicate the Circular applies only when the same goods attract different rates at different points of time due to rate reduction - In the instant case the issue is entirely different since final products are sold at the same rate of GST with no reduction in rate. The fact that input fabric and output garment may carry overlapping HSN description does not preclude refund where accumulation of ITC arises due to various other inputs taxed up to 18% and 28% being used in manufacture of final product taxed at 5 percent - Section 54(3)(ii) read with Rule 89(5) does not make any distinction between principal and ancillary inputs or minor components. If there is higher rate of tax on other inputs used in the manufacturing process, the taxpayer is entitled to claim refund of unutilised input tax credit. The statutory formula under Rule 89(5) is a self-contained mechanism for computing refund covering all inputs used in manufacture – Revenue's reliance on Circular No. 135/05/2020-GST is factually incorrect and inapplicable to the present case. Refund cannot be denied merely on the basis of overlapping HSN between input and output when genuine value addition through processing and use of higher-taxed ancillary inputs creates inverted duty structure - Computation of refund of accumulated ITC on period-specific or annual basis, Application of Rule 89(5) formula, Significance of annual verification – Revenue contended that refund under inverted duty structure must be determined for each tax period and not on cumulative annual basis – Whether refund of accumulated ITC can be computed on annual basis or must strictly be computed on period-wise basis applying Rule 89(5) formula – HELD – The statutory formula prescribed under Rule 89(5) of CGST Rules 2017 requires computation of refund on the basis of Net ITC calculated for each relevant tax period applying the specific formula. Rule 89(5) does not mandate or permit computation of refund on cumulative annual basis - The operative basis of quantification of refund must be strictly governed by period-wise application of the Rule 89(5) formula to the data of each tax period. However, the overall annual basis verification used by adjudicating and appellate authorities to corroborate that the taxpayer's business model genuinely generates inverted duty structure and that month-to-month fluctuation in ITC accumulation is attributable to ordinary variation in purchase and sale volumes is permissible as verification mechanism. Such annual verification does not constitute the operative basis of computation but serves only to verify the authenticity and genuineness of the inverted duty claim - The computation of refund must be strictly on period-wise basis applying Rule 89(5) formula to period-specific data. The use of annual figures for overall verification to demonstrate genuine inverted duty structure is permissible as a corroborative mechanism but not as the operative basis of computation. The actual quantification undertaken by OAA was on period-wise basis hence there is no violation of Rule 89(5). [Read less]

Customs - Misdeclaration of goods, Concealment of undeclared branded goods, Violation of Intellectual Property Rights Enforcement Rules, Confiscation under Sections 111 and 118 of Customs Act – Consignment was found to be grossly mis-declared in quantity, description and value. Large quantities of branded goods of internationally recognized brands were concealed within the declared goods without any purchase order or NOC from brand owners. Importer claimed goods were wrongly shipped by supplier due to packing mistake - Right holders of branded goods joined the proceedings and submitted technical reports requesting strict... [Read more]

Customs - Misdeclaration of goods, Concealment of undeclared branded goods, Violation of Intellectual Property Rights Enforcement Rules, Confiscation under Sections 111 and 118 of Customs Act – Consignment was found to be grossly mis-declared in quantity, description and value. Large quantities of branded goods of internationally recognized brands were concealed within the declared goods without any purchase order or NOC from brand owners. Importer claimed goods were wrongly shipped by supplier due to packing mistake - Right holders of branded goods joined the proceedings and submitted technical reports requesting strict action against the importer – Whether goods that were mis-declared and contained undeclared branded goods in violation of Intellectual Property Rights Enforcement Rules can be confiscated and penalty can be imposed under Section 112 of Customs Act – HELD – Goods are liable to confiscation under Section 111 of Customs Act as they were used to conceal and smuggle prohibited branded goods and were imported in violation of IPR Enforcement Rules. The importer who claimed innocence and attributed goods to supplier's mistake presented an afterthought defense which was not supported by any contemporaneous documentary evidence such as invoice, purchase order or any shipping documents - The Customs authority correctly followed procedures of IPR Enforcement Rules by informing brand owners and obtaining their technical reports. The goods were seized in presence of the importer and independent witnesses. The importer cannot claim innocence when clear breach of IPR rules was established and large quantities of undeclared branded goods were found without any authorization from brand owners - Redemption originally imposed is found to be excessive and was reduced to 10 percent of declared assessed value. Penalty of Rs. 4 lakhs originally imposed under Section 112 of Customs Act for misdeclaration and violation of IPR rules is found to be excessive and reduced to Rs. 2 lakhs as the statutory violation was established though full quantum of penalty was not warranted – Order of confiscation of branded goods is upheld - The appeal is partially allowed [Read less]

Customs – Rejection of declared transaction value, Burden of proof on Department to establish under-valuation, Evidentiary requirements for displacing transaction value under Rule 12 of Customs Valuation Rules 2007 – Importer imported fresh apples from Brazil through a French intermediary on CIF terms - Revenue rejected the declared CIF transaction value and sought to re-determine it on the basis of upstream Brazilian supplier's FOB price – Whether declared transaction value can be rejected and replaced with an upstream FOB price when no evidence has been brought on record of any additional or extra payment by the im... [Read more]

Customs – Rejection of declared transaction value, Burden of proof on Department to establish under-valuation, Evidentiary requirements for displacing transaction value under Rule 12 of Customs Valuation Rules 2007 – Importer imported fresh apples from Brazil through a French intermediary on CIF terms - Revenue rejected the declared CIF transaction value and sought to re-determine it on the basis of upstream Brazilian supplier's FOB price – Whether declared transaction value can be rejected and replaced with an upstream FOB price when no evidence has been brought on record of any additional or extra payment by the importer beyond the declared CIF value or any flow-back of funds – HELD – Section 14(1) of the Customs Act 1962 read with Rule 3(1) of Customs Valuation Rules makes the transaction value being the price actually paid or payable for goods when sold for export to India the primary and preferred basis of customs valuation - The law is settled that the burden of proving under-valuation lies upon the Department and that the declared value cannot be displaced except upon cogent positive evidence such as flow-back of funds, extra consideration passing outside the invoice or a relationship between parties influencing price. No evidence or any finding was brought on record to the effect that the importer made any payment to the foreign supplier in excess of the declared CIF invoice value - The CA-certified reconciliation of remittances placed on record demonstrates that remittances did not exceed and were in fact marginally lower than the declared value in every period under consideration. In the absence of any finding of excess payment or flow-back, the declared transaction value could not have been rejected. Mere suspicion regarding the correctness of the declared CIF price cannot take the place of evidence and without any cogent and corroborative evidence establishing additional payment by the importer or any flow-back of differential amount, the declared CIF transaction value could not have been rejected – The declared CIF transaction value is accepted and the enhancement of assessable value is set aside - Customs – Applicability of Rule 10(2) of Customs Valuation Rules 2007 for addition of freight and insurance – Revenue proposed re-determination of assessable value by adding freight and insurance under Rule 10(2) of CVR 2007 on the basis that the declared CIF price did not include actual freight and insurance elements – Whether freight and insurance can be added under Rule 10(2) when invoices are issued on CIF terms and freight was arranged and paid by the foreign supplier – HELD – Rule 10(2) of CVR 2007 permits addition to the price actually paid or payable of the cost of transport and insurance only to the extent not included therein. Where a contract is on CIF terms, the price paid by the buyer already by definition embeds the cost of freight and insurance to the place of importation and no further addition is warranted unless it is shown that the invoiced price though styled CIF did not in fact include these elements - On the material on record, invoices issued by the foreign supplier to the importer record the destination as Nhava Sheva and are admittedly on CIF terms - No evidence has been brought on record by Revenue of any payment of freight or insurance by the importer to any carrier insurer or to the foreign supplier over and above the declared CIF value - Where the declared transaction value is a CIF price and the Department has not established by cogent and objective material that the freight and insurance attributable to transportation of goods to the place of importation were not comprehended in the price actually paid or payable, no addition can be made under Rule 10. The existence and quantum of any additional cost attributable to transportation or insurance has not been established – No addition of freight or insurance under Rule 10(2) is warranted. The importer's declared CIF price is accepted - Customs – Status of Non-GMO certificates as valuation documents, Relevance of upstream transaction between foreign entities – Revenue relied upon Non-GMO certificates issued by Brazilian authorities for FSSAI compliance which disclosed a FOB value and on upstream FOB invoices issued by Brazilian supplier to the French intermediary to re-determine the assessable value of goods imported by the importer - Revenue proposed that the FOB value appearing on Non-GMO certificates and on Brazilian supplier's invoices be added with actual freight and insurance to determine the assessable value – Whether Non-GMO certificates and upstream FOB invoices can be used as basis for rejecting or replacing the importer's declared CIF transaction value for customs valuation purposes – HELD – Non-GMO certificate issued by competent Brazilian authorities is a regulatory instrument addressed to an entirely different statutory purpose for compliance with FSSAI non-GMO advisory - A Non-GMO certificate by itself cannot be used as basis for determining or enhancing the customs value of imported goods. It is not a valuation document and does not establish the price actually paid or payable nor does it by itself establish the quantum of any price differential. These certificates are neither commercial invoices exchanged between the importer and its seller nor documents prescribed under Section 14 of the Customs Act or CVR 2007 as constituting or evidencing transaction value - Section 14(1) confines the inquiry to the price paid or payable in the transaction when goods are sold for export to India being the sale between the foreign exporter and the importer. A prior upstream transaction in the supply chain between parties other than the importer and its own seller is not the transaction contemplated by the statute and cannot be substituted for it absent a specific finding that the upstream price influenced or was reflected in the price actually paid by the importer - The Brazilian FOB price pertains to an upstream transaction between two foreign entities and cannot be substituted for the CIF transaction value declared by the importer in the absence of evidence establishing that the two transactions were merely different manifestations of the same commercial transaction or that the difference between the two prices represented consideration actually paid or payable by the importer. The Department has failed to establish such a nexus. Elevating an ancillary regulatory compliance document over the primary commercial invoice and treating incidental figures appearing on it as determinative of assessable value is not warranted – Upstream FOB prices and Non-GMO certificates cannot be treated as basis for rejecting or replacing the importer's transaction value. The declared CIF transaction value is accepted - Customs – Invocation of extended period of limitation under Section 28(4), Meaning of suppression of facts and wilful misstatement, Distinction between difference of opinion on valuation and deliberate evasion – Whether extended period of limitation under Section 28(4) can be invoked on the basis of a disputed valuation methodology when no positive finding of collusion wilful misstatement or suppression of facts with intent to evade duty is established – HELD – Section 28(4) of the Customs Act can be invoked only upon a positive finding of collusion wilful misstatement or suppression of facts with intent to evade duty. It is not in dispute that all primary import documents were furnished to Customs at the time of assessment - The declared Incoterm CIF was disclosed on the face of every invoice and nothing was concealed. Suppression in the context of extended period connotes a positive deliberate act with intent to evade duty and not a mere omission nor a difference of opinion on valuation methodology - The present dispute is a contested question of valuation methodology whether an upstream FOB figure on a third party document can override a disclosed CIF transac [Read less]

Central Excise – Eligibility of services used for setting up manufacturing facility after 01.04.2011 - Department denied credit on the ground that the relevant services were received before commencement of commercial production and that the expression setting up stood deleted from the inclusive portion of Rule 2(l) of CENVAT Credit Rules 2004 with effect from 01.04.2011 - Whether CENVAT credit can be denied on input services used for setting up a manufacturing facility merely because such services were received before commencement of commercial production and because the word setting up was deleted from the inclusive por... [Read more]

Central Excise – Eligibility of services used for setting up manufacturing facility after 01.04.2011 - Department denied credit on the ground that the relevant services were received before commencement of commercial production and that the expression setting up stood deleted from the inclusive portion of Rule 2(l) of CENVAT Credit Rules 2004 with effect from 01.04.2011 - Whether CENVAT credit can be denied on input services used for setting up a manufacturing facility merely because such services were received before commencement of commercial production and because the word setting up was deleted from the inclusive portion of Rule 2(l) – HELD – Deletion of the words setting up from the inclusive limb of the definition does not automatically mean that every service connected with setting up of a manufacturing facility stands excluded from the definition of input service. The substantive portion of Rule 2(l) continued to cover services used by the manufacturer directly or indirectly in or in relation to manufacture of final products. A factory cannot manufacture its final products unless the manufacturing facility is first brought into existence and made operational - Services which have a direct and demonstrable nexus with creation or installation of the manufacturing facility satisfy the substantive part of the definition unless specifically covered by the exclusion clause. The test remains whether the services have a nexus with manufacture and not whether production had actually begun on the date of receipt of each service - The reasoning adopted that credit necessarily becomes inadmissible merely because the services were received prior to commencement of production is not sustainable – The demand relating to CENVAT credit on input services used for setting up the manufacturing facility is set aside - CENVAT Credit – Eligibility of credit on common services for maintenance of infrastructure, Location of facility in relation to factory premises, Nexus with manufacturing activity – Department denied credit principally because these facilities were situated outside the registered factory premises – Whether CENVAT credit can be denied on common services for maintenance of infrastructure such as roads, street lights and drainage merely because the facilities are located outside the physical boundary of the factory premises – HELD – Location of the facility outside the physical boundary of the factory cannot by itself be determinative of admissibility of input service credit - The test remains whether the service has a nexus direct or indirect with manufacture or the manufacturing business. Maintenance of approach roads, common roads, drainage, lighting and similar infrastructure facilitating operation of an industrial premises cannot be treated as wholly unrelated to manufacturing activity merely because the infrastructure is common or situated beyond the factory gate. Such facilities have a nexus with the manufacturing operation and the business activity of the manufacturer - The demand relating to common fixed expense services for maintenance of roads, street lights, drainage and allied infrastructure is set aside - CENVAT Credit – Eligibility of credit on goods as inputs under Rule 2(k), Distinction between capital goods and inputs - CENVAT credit on goods such as stainless steel stools, SS buckets, SS containers, drum racks, HDGI cable tray ladders, fire extinguishers and glass fittings. Department denied credit on the ground that these articles were not capital goods and had not been shown to be used directly in the manufacture of finished goods – Whether CENVAT credit can be denied on goods merely because they are not capital goods and not used directly as components in the final product – HELD – The expression ‘input’ has a wide amplitude and is not confined to goods that form part of the final product or are classified as capital goods. Rule 2(k) as applicable during the material period gave a wide meaning to inputs and subject to specified exclusions included goods used in the factory by the manufacturer in the manufacture of the final product - Department has not disputed that the goods were received and used within the factory. There is also no finding that they fall within any specific exclusion from Rule 2(k). Denial of credit solely for want of direct use in production cannot be sustained – The demand relating to CENVAT credit on goods such as SS stools, buckets, containers, drum racks, HDGI cable trays, fire extinguishers and glass fittings is set aside - CENVAT Credit – Adjustment of differential duty through supplementary GST invoice, Transitional provisions under CGST Act - Department rejected the supplementary invoice principally because of reference to an incorrect provision of Section 142 of CGST Act, discrepancy in quantity and charging of IGST – Whether differential duty liability can be satisfied through a supplementary GST invoice issued under the transitional provisions and whether mere procedural defects in the invoice preclude acceptance of the payment – HELD – Section 142(2)(a) of the CGST Act specifically contemplates issuance of supplementary invoice or debit note where the price of goods supplied prior to the appointed day is revised upwards after the appointed day. CBIC Circular No. 76/50/2018-GST dated 31.12.2018 clarifies that in such cases the rate and nature of tax applicable under GST would govern the supplementary invoice. Merely because IGST was paid on an inter-state supplementary invoice cannot by itself lead to the conclusion that the earlier differential liability remains unpaid. A mere clerical reference to an incorrect sub-clause if the substantive requirements otherwise stand satisfied shall not by itself be a ground to deny benefit. A substantive benefit should not ordinarily be denied merely on account of a procedural lapse – The issue relating to differential duty on CAS-4 valuation is remanded for verification of the payment made through the supplementary GST invoice. No double recovery shall be made if the payment is duly established - CENVAT Credit – Appropriation of credit reversed in statutory returns, Reconciliation of electronic credit ledger and statutory records, Negative balance not bar to credit reversal - Whether CENVAT credit can be denied to the extent reversal results in negative balance in electronic credit ledger when the entire reversal has been recorded in the statutory return – HELD – The relevant question is not merely what was the positive balance in the electronic credit ledger on the date of reversal but whether the appellant had in fact accounted for the entire reversal and whether the consequential tax liability if any arising from a negative balance stood discharged. If the appellant's statutory return records reversal of the entire amount and such reversal has either reduced available credit or increased its output tax liability to the corresponding extent, the same amount cannot again be demanded merely because part of the reversal produced a negative figure in the return. The necessary reconciliation between pre-GST CENVAT records, TRAN-1, GSTR-3B and electronic credit ledger is essentially factual and must be verified. The appellant shall be given credit for the entire amount to the extent the reversal or payment is established from the statutory records. There shall be no duplication of recovery – The issue relating to the alleged unappropriated amount out of the total reversal is remanded for reconciliation and verification of TRAN-1, GSTR-3B, CENVAT records and electronic credit ledger. Appropriate credit shall be given for the amount actually reversed or discharged - Central Excise - Invocation of extended period of limitation on interpretational issues – Whether extended period of limitation can be invoked on the basis of allegation of suppression when the underlying disputes are primarily interpretational in nature and the taxpayer was regularly filing statutory [Read less]

Central Excise - Eligibility of CENVAT credit on supplementary invoices, Applicability of exclusion clause in Rule 9(1)(b) of CENVAT Credit Rules 2004, Conditions for denial of credit when short-levy of duty by supplier occurred – Appellant availed CENVAT credit on supplementary invoices issued by supplier who had initially excluded certain amounts from assessable value for computation of central excise duty. Supplier later paid differential central excise duty upon dispute and issued supplementary invoices - Revenue disallowed CENVAT credit arguing that supplier had short-paid duty due to suppression of facts and denial... [Read more]

Central Excise - Eligibility of CENVAT credit on supplementary invoices, Applicability of exclusion clause in Rule 9(1)(b) of CENVAT Credit Rules 2004, Conditions for denial of credit when short-levy of duty by supplier occurred – Appellant availed CENVAT credit on supplementary invoices issued by supplier who had initially excluded certain amounts from assessable value for computation of central excise duty. Supplier later paid differential central excise duty upon dispute and issued supplementary invoices - Revenue disallowed CENVAT credit arguing that supplier had short-paid duty due to suppression of facts and denial was justified under proviso to Rule 9(1)(b) of CENVAT Credit Rules - Whether supplementary invoices on which differential excise duty was paid by supplier are eligible for CENVAT credit when Rule 9(1)(b) excludes credit where short-levy occurred due to fraud, collusion, willful misstatement or suppression of facts – HELD – Supplementary invoices issued by the supplier are eligible documents for taking CENVAT credit under Rule 9(1)(b) of CENVAT Credit Rules 2004. The Tribunal in its decision involving the same supplier examined the question of whether the short payment or non-payment was by reason of fraud, collusion, willful misstatement or suppression of facts - The Tribunal specifically examined the question of whether extended period of limitation was correctly invoked and held that it was not. The Tribunal examined whether penalty under section 11AC was justified and held that it was not. The Tribunal clearly held that the short payment or non-payment was not by reason of fraud, collusion, willful misstatement or suppression of facts and did not attract the exclusion in Rule 9(1)(b). Therefore, the appellant was entitled to take CENVAT credit on the supplementary invoices and the disallowance of credit was not justified – The impugned order disallowing CENVAT credit is set aside and the appeal is allowed [Read less]

Service Tax – Taxability of freight rebate, brokerage and incentives, Nature of activity of cargo space seller – Appellant is a registered service provider of Customs House Agency Services and other services - Demand of service tax on incentives received, airway bill fees, rebate and brokerage. Department took position that activities undertaken by appellant with respect to incentives, airway bill fees, rebate and brokerage would fall under Business Auxiliary Services - Whether profit earned by sale and purchase of cargo space and freight rebate, brokerage and incentives earned by a freight forwarder acting as principa... [Read more]

Service Tax – Taxability of freight rebate, brokerage and incentives, Nature of activity of cargo space seller – Appellant is a registered service provider of Customs House Agency Services and other services - Demand of service tax on incentives received, airway bill fees, rebate and brokerage. Department took position that activities undertaken by appellant with respect to incentives, airway bill fees, rebate and brokerage would fall under Business Auxiliary Services - Whether profit earned by sale and purchase of cargo space and freight rebate, brokerage and incentives earned by a freight forwarder acting as principal can be levied to service tax under Business Auxiliary Services – HELD – The profit earned by sale and purchase of cargo space cannot be levied to service tax. The Tribunal has in a number of similar decisions found that the profit earned by sale and purchase of cargo space cannot be levied to service tax. The issue is no more res integra and the Tribunal in its prior decisions has held that demands made on similar allegations have been set aside - A freight forwarder when acting as a principal will not be liable to pay service tax when the activity involves sale of cargo space as difference between price at which cargo space is booked and price at which it is offered to customers. The activity of selling cargo space is distinct from providing taxable services under BAS or any other category of services under the Finance Act – Demands for service tax on incentives received, airway bill fees, rebate and brokerage are set aside as such amounts do not constitute consideration for any taxable service - The impugned order is set aside and the appeals are allowed [Read less]

Service Tax – Determination of taxable value based on differential between Balance Sheet and ST-3 returns, Burden of proof on Department – Demand of service tax on differential value between amounts shown in Balance Sheet and ST-3 returns. Department contended that excess income shown in Balance Sheet compared to ST-3 returns represents unclaimed and untaxed revenue – Whether service tax can be demanded on differential value between Balance Sheet and ST-3 returns without identifying the specific taxable services rendered and without accepting the CA certificate explaining the differences – HELD – The burden lies ... [Read more]

Service Tax – Determination of taxable value based on differential between Balance Sheet and ST-3 returns, Burden of proof on Department – Demand of service tax on differential value between amounts shown in Balance Sheet and ST-3 returns. Department contended that excess income shown in Balance Sheet compared to ST-3 returns represents unclaimed and untaxed revenue – Whether service tax can be demanded on differential value between Balance Sheet and ST-3 returns without identifying the specific taxable services rendered and without accepting the CA certificate explaining the differences – HELD – The burden lies on the Department to prove the allegation of short payment or non-payment of service tax - Service tax cannot be recovered based on returns shown in income tax returns or balance sheet figures without establishing the specific taxable service provided.. In the present case the CA had given a certificate explaining the differences including amounts pertaining to prior period before 01.06.2007 when renting of immovable property was not subject to service tax, exempted payments like property and municipal taxes, and non-receipt of payment towards services provided for certain periods when liability was based on receipt of consideration - The Department has confirmed the demand without specifying the nature of the service provided as per Section 66 of the Finance Act. Mere numerical differences between accounting records prepared on different bases cannot establish service tax liability. The CA certificate as professional evidence distinguishing accrual and cash basis accounting should have been given due weight – Demand for service tax confirmed based on differential value between Balance Sheet and ST-3 returns is set aside - Service Tax – Eligibility of CENVAT credit on input services used for providing output services, Requirement to produce evidence of receipt of service, Invoices in name of other entities – Department denied credit on two grounds that appellant had not produced proof of actual receipt of services and that certain invoices were addressed to Safina Technology Park and Safina Hotels and not to appellant – Whether CENVAT credit can be denied on input services merely because invoices are in the name of other entities and whether credit requires proof of receipt or merely documentary evidence – HELD – Input services credit is available for services used in providing output taxable services. Most of the services claimed namely pest care, rent, repairs and maintenance, building maintenance, travel and conveyance, telephone charges, license fee and similar services fall legitimately within the category of input services used in business operations - The main issue concerns the documentary evidence and whether credit can be denied based on invoices being in name of other entities. Where the invoices are clearly in the name of entities other than the appellant, namely Safina Technology Park and Safina Hotels, and these are admitted to be separate legal entities irrespective of common ownership or commercial space designation, the invoices cannot be considered as evidence of receipt of service by the appellant - DGFT documents showing Safina Technology Park as part of commercial space do not alter the separate entity status for tax purposes. However services which are demonstrably used by the appellant for its business operations and where proper invoices addressing the appellant are produced are eligible for credit – CENVAT credit on services including pest care, rent, stall fees, membership, repairs and maintenance, building maintenance, travel, telephone charges, license fee and import clearance is allowed. Credit on pooja expenses and credit card payments is rightly denied. Credit cannot be allowed on invoices addressed to Safina Technology Park or Safina Hotels as separate entity invoices - Service Tax – Invocation of extended period of limitation for differential service tax demand and denied CENVAT credit – Whether extended period of limitation can be invoked where the assessee was regularly filing statutory returns and the demand is based on differential value assessment – HELD – Mere difference in figures between Balance Sheet and ST-3 returns does not constitute suppression particularly when the assessee was regularly filing statutory returns disclosing the income and amounts - The appellant was regularly filing ST-3 returns showing the income, departmental audit parties had earlier visited the unit and examination of the records, and earlier show cause notice based on audit observations had not considered these disputed issues. The fact that the Department and audit teams had access to the records and the appellant was openly declaring the income in statutory returns is inconsistent with a finding of deliberate suppression. The demand is based on the Department's interpretation of what constitutes taxable value and not on concealment of facts by the assessee – Invocation of extended period of limitation is set aside. The demand for service tax by invoking extended period is limited to the normal period under Section 73(1) of the Finance Act. Penalties imposed on basis of extended period invocation are set aside - The appeal is partly allowed [Read less]

GST – Rectification of order under Section 161 of CGST Act, Timeline for decision on rectification application – Rejection of rectification application on the ground that the time period prescribed for deciding the rectification application had expired - Whether rejection of rectification application solely on the ground that more than three months have elapsed since filing is sustainable notwithstanding that application was filed within prescribed time – HELD – The petitioner's application for rectification was made well within the time prescribed under Notification No. 22/2024-CT dated 08.10.2024. The competent a... [Read more]

GST – Rectification of order under Section 161 of CGST Act, Timeline for decision on rectification application – Rejection of rectification application on the ground that the time period prescribed for deciding the rectification application had expired - Whether rejection of rectification application solely on the ground that more than three months have elapsed since filing is sustainable notwithstanding that application was filed within prescribed time – HELD – The petitioner's application for rectification was made well within the time prescribed under Notification No. 22/2024-CT dated 08.10.2024. The competent authority could not have refused to decide the application on merits merely because a period of more than three months has elapsed after filing of the application - The Clause-4 of the Notification dated 08.10.2024 unequivocally fixes a timeline of three months, however that timeline is not mandatorily to be followed and it indicates that the competent authority shall make endeavor to take decision on rectification application within three months. The expression used is ‘as far as’ possible which connotes a target or endeavor and not a hard deadline beyond which the authority loses jurisdiction. It does not mean that once the three-month period has expired the competent authority becomes functus officio or loses the power to decide the application on merits - The impugned order rejecting the rectification application is quashed and set aside. Matter is remitted to the Assistant Commissioner to decide the rectification application on merits within three months – The petition is disposed of [Read less]

GST – Binding nature of Order-in-Appeal under Section 107(16), Operative effect when further appeal is contemplated, Obligation of subordinate authorities to implement appellate order – Appellate Authority allowed assessee’s appeal holding that the restriction under Section 17(5)(d) did not apply since the construction was not undertaken on the petitioner's own account but was intended for leasing - The refund authority declined to process the refund claiming the appellate order was subject to review by competent authority who opined it was not legal and proper – Petitioner contended that Section 107(16) makes the ... [Read more]

GST – Binding nature of Order-in-Appeal under Section 107(16), Operative effect when further appeal is contemplated, Obligation of subordinate authorities to implement appellate order – Appellate Authority allowed assessee’s appeal holding that the restriction under Section 17(5)(d) did not apply since the construction was not undertaken on the petitioner's own account but was intended for leasing - The refund authority declined to process the refund claiming the appellate order was subject to review by competent authority who opined it was not legal and proper – Petitioner contended that Section 107(16) makes the Order-in-Appeal final and binding on parties – Whether refund authority can withhold grant of refund on the ground that Order-in-Appeal setting aside demand has not attained finality and that Department proposes to challenge such order before GSTAT – HELD – A plain reading of Section 107(16) of the CGST Act demonstrates that merely because a further statutory remedy may be available or contemplated, the appellate order does not cease to operate unless it is modified, stayed or set aside in accordance with law - On the date of the impugned order dated 12.01.2026 there was no order under Section 108 nor was there any order of GSTAT, High Court or Supreme Court modifying, staying or setting aside the Order-in-Appeal. The Department's appeal was filed only on 25.03.2026 subsequent to the impugned order. The Order-in-Appeal dated 16.09.2025 remained operative and binding upon the parties as on 12.01.2026 - The subsequent filing of an appeal before GSTAT does not retrospectively render the Order-in-Appeal inoperative as on the date when the impugned order was passed - In the absence of any order staying, modifying or setting aside the Order-in-Appeal, the respondents were required to give due effect to the appellate decision in accordance with law - The mere decision or intention to challenge the appellate order could not have the effect of nullifying, suspending or rendering inoperative the order. The observation that the Order-in-Appeal has not attained finality inasmuch as the competent authority reviewed it and decided to file an appeal cannot justify rejection of refund claim – The refund authority was obligated to give effect to the operative Order-in-Appeal. The rejection of refund claim on the ground that the Order-in-Appeal had not attained finality is unsustainable and set aside – The petition is allowed - GST – Refund authority cannot reopen substantive findings of appellate authority, Impermissibility of indirectly questioning or disregarding appellate determinations, Principle of judicial discipline – The refund authority sought to use refund proceedings to indirectly reopen substantive determination of appellate authority on admissibility of ITC relating to construction of warehouses intended for leasing – Whether refund authority can rely upon depreciation schedules and other material not placed before appellate authority to indirectly question or reopen substantive findings regarding admissibility of ITC already rendered by appellate authority – HELD – The Refund authority while exercising the distinct statutory function of processing refund claim effectively reopened and disregarded findings which had already been adjudicated upon by the appellate authority. The refund sanctioning authority could not use the refund proceedings as a means of reopening or indirectly questioning the substantive determination already rendered by the appellate authority in respect of the disputed ITC - If the respondents considered that the appellate determination required reconsideration in light of any additional material, the remedy lay in pursuing the statutory appellate or revisional mechanism and not in disregarding the operative appellate order at the stage of processing the refund. The refund authority cannot reopen indirectly questioning or refusing to give effect to substantive findings of the operative Order-in-Appeal on the very issue which formed basis of the demand. The aforesaid course of action is contrary to the principle of judicial discipline - The refund proceedings constitute an independent statutory process governed by Section 54 which is distinct from the adjudication proceedings and cannot be converted into a collateral proceeding for reconsidering substantive findings of appellate authority - GST – Statutory mechanism under Section 54(11) for withholding refund, Specific conditions for withholding including opinion of Commissioner and malfeasance or fraud – Refund authority rejected refund application without invoking the specific statutory mechanism under Section 54(11) – Whether refund authority could reject refund application on ground of pending or contemplated appeal without complying with specific statutory mechanism prescribed under Section 54(11) – HELD – Section 54(11) of the CGST Act provides a specific statutory mechanism for withholding a refund where order giving rise to refund is subject matter of appeal or further proceedings or where other proceedings under Act are pending and the Commissioner is of opinion that grant of refund is likely to adversely affect the revenue on account of malfeasance or fraud committed. The provisions specifically contemplate that opportunity of being heard must be afforded to the taxable person before refund is withheld - The petitioner was not afforded any opportunity of being heard before refund was withheld. The respondents could not circumvent the specific statutory mechanism under Section 54(11) by rejecting refund application under Section 54(8) on ground that Order-in-Appeal was under review or proposed to be challenged. If respondents intended to withhold refund they were required to fulfill statutory requirements of Section 54(11) including recording requisite opinion and affording petitioner opportunity of hearing. The mere decision to pursue further proceedings cannot serve as basis for rejecting refund in absence of compliance with Section 54(11) – Refund authority improperly rejected refund application without complying with specific statutory mechanism under Section 54(11). [Read less]

GST - Blocking and freezing of GST portal preventing access to file Form GSTR-1 under Section 37 of CGST Act, 2017 – Cancellation of registration – Petitioner had GST portal access blocked by the Department after issuance of show cause notice for cancellation of registration alleging that petitioner conducted no business at declared premises and issued invoices without actual supply of goods - Whether blocking of GST portal access can be justified as an interim measure during pendency of show cause proceedings for registration cancellation – HELD - The opportunity already granted by Department to furnish documents to... [Read more]

GST - Blocking and freezing of GST portal preventing access to file Form GSTR-1 under Section 37 of CGST Act, 2017 – Cancellation of registration – Petitioner had GST portal access blocked by the Department after issuance of show cause notice for cancellation of registration alleging that petitioner conducted no business at declared premises and issued invoices without actual supply of goods - Whether blocking of GST portal access can be justified as an interim measure during pendency of show cause proceedings for registration cancellation – HELD - The opportunity already granted by Department to furnish documents to rebut allegations should be made effective and meaningful by ensuring that petitioner retains access to file statutory returns. For effective adjudication, competent authority must consider all relevant documents in detailed representation filed in reply to notice issued under Rule 56(18) within prescribed timeline with personal hearing afforded to petitioner; blocking of portal access during pendency of registration cancellation proceedings without ensuring opportunity to file statutory returns would be onerous and disproportionate – The writ petition is disposed directing petitioner to file comprehensive detailed representation in reply, authority to consider and dispose by reasoned order, with portal to be reactivated within 48 hours if petitioner found bonafide – The petition is disposed of [Read less]

Madhya Pradesh Value Added Tax, 2002 – Classification of Furnace Oil and Light Diesel Oil, Distinction based on technical and chemical characteristics, Principle of classification in tax statutes – Revenue classified Furnace Oil under the same entry as Light Diesel Oil and imposed tax at identical rate arguing that both products are used as fuel and have similar characteristics. Petitioner contended that Furnace Oil and Light Diesel Oil are two distinct commodities with different technical specifications and chemical composition and that Furnace Oil should not be taxed at the same rate as Light Diesel Oil - Whether Fur... [Read more]

Madhya Pradesh Value Added Tax, 2002 – Classification of Furnace Oil and Light Diesel Oil, Distinction based on technical and chemical characteristics, Principle of classification in tax statutes – Revenue classified Furnace Oil under the same entry as Light Diesel Oil and imposed tax at identical rate arguing that both products are used as fuel and have similar characteristics. Petitioner contended that Furnace Oil and Light Diesel Oil are two distinct commodities with different technical specifications and chemical composition and that Furnace Oil should not be taxed at the same rate as Light Diesel Oil - Whether Furnace Oil and Light Diesel Oil can be classified under the same tariff entry and taxed at the same rate on the basis that both are fuels despite significant differences in their technical and chemical specifications – HELD – A comparative analysis of the technical specifications, physical characteristics and legal arguments demonstrates that Furnace Oil and Light Diesel Oil are distinct commercial and chemical commodities. The differences are not merely superficial but are fundamental and material - Due to significant variance in viscosity and combustion profile, Furnace Oil cannot substitute for Light Diesel Oil without causing mechanical failure or fuel-pump seizure in engines designed for lighter fuels. Crude oil undergoes fractional distillation yielding fractions based on escalating boiling points and carbon chain lengths. Light Diesel Oil distils at an intermediate middle-distillate phase whereas Furnace Oil is a heavier bottom-fraction residual fuel oil - The principle of tax classification requires that goods are classified based on their actual characteristics and nature not merely on a general category such as fuel. Classification cannot be based on a single common characteristic such as usage as fuel while ignoring all other distinguishing characteristics – The material tax liability cannot be imposed on FO at par with LDO under an omnibus concept of "fuel". The fact that legislature provides a specific distinct tariff heading for Light Diesel Oil means an identical rate cannot be extended to Furnace Oil in the absence of a shared uniform entry - The impugned orders classifying Furnace Oil under the Light Diesel Oil entry are quashed. Furnace Oil and Light Diesel Oil must be treated as distinct commodities for tax purposes - The writ petitions are allowed [Read less]

Central Excise - Applicability of customs exemption conditions to domestic manufacturers under mutatis mutandis clause, Interpretation of procedural conditions in exemption notifications governing International Competitive Bidding supplies – Appellant engaged in manufacture of electric motors cleared alternators during June 2013 to August 2014 without payment of duty by availing exemption under Notification No. 12/2012-CE against International Competitive Bidding contracts. Department alleged non-fulfilment of conditions under corresponding Customs Notification No. 12/2012-Cus and demanded central excise duty - Whether p... [Read more]

Central Excise - Applicability of customs exemption conditions to domestic manufacturers under mutatis mutandis clause, Interpretation of procedural conditions in exemption notifications governing International Competitive Bidding supplies – Appellant engaged in manufacture of electric motors cleared alternators during June 2013 to August 2014 without payment of duty by availing exemption under Notification No. 12/2012-CE against International Competitive Bidding contracts. Department alleged non-fulfilment of conditions under corresponding Customs Notification No. 12/2012-Cus and demanded central excise duty - Whether procedural conditions prescribed under corresponding Customs exemption notification applicable to importers can be mechanically imported and enforced against domestic manufacturers claiming exemption under excise exemption notification incorporating such conditions mutatis mutandis – HELD – The expression mutatis mutandis occurring in the excise exemption condition cannot be read to mean that every condition prescribed under the Customs notification automatically applies in the same manner to a domestic manufacturer. Only those conditions which are capable of being applied in the context of domestic clearances can be imported into the excise notification. Conditions which are specifically connected with import procedures cannot by themselves be mechanically enforced against a manufacturer supplying goods within India under ICB contracts - Once Project Authority Certificate stands issued and its authenticity remains undisputed, insistence upon further procedural compliance would defeat the legislative object of maintaining parity between imported and domestically manufactured goods supplied against International Competitive Bidding. Conditions which are procedural in nature should not be interpreted in a manner that defeats the substantive exemption itself - Revenue has nowhere disputed the actual end use of the goods. It is not the Department's case that the alternators cleared by the appellant were diverted misused or supplied to any ineligible entity. Once actual end use project eligibility and authenticity of the Project Authority Certificate remain undisputed, denial of exemption merely on technical procedural objections amounts to elevating form over substance - The appellant had substantially complied with all essential requirements governing exemption under Notification No. 12/2012-CE. The Department has incorrectly assumed that every procedural condition prescribed under the corresponding Customs notification automatically applies with identical force to domestic manufacturers – Denial of exemption to the appellant under Notification No. 12/2012-CE is not legally sustainable. The appellant was entitled to exemption under Notification No. 12/2012-CE – The appeal is allowed - Central Excise – Survival of duty demand, interest and penalties when exemption denial is set aside, Liability to pay interest and penalties when underlying levy is unsustainable – Whether duty demand, interest and penalties can be sustained as derivative liabilities once the substantive basis for levy being the denial of exemption itself is held unsustainable – HELD – Once the substantive basis for levy fails, the consequential liabilities cannot independently survive. The appellant had paid the disputed duty amount during the course of proceedings under protest. Such payment by itself cannot validate a demand which is otherwise not sustainable in law - Interest under Section 11AA is compensatory and presupposes existence of legally recoverable principal duty liability. Since the principal demand itself fails, consequential interest liability automatically fails. The penalties imposed under Rule 25 are equally unsustainable. The appellant had effected clearances openly under the exemption notification, furnished prior intimation, produced the Project Authority Certificate and disclosed all relevant documents. There is neither allegation of suppression nor clandestine removal. The dispute being purely interpretational, penal consequences do not arise. Both the adjudicating authority and Commissioner (Appeals) proceeded on an erroneous assumption that every procedural formality prescribed under the customs exemption notification automatically governed domestic clearances under the excise exemption notification – The entire demand the consequential interest levied under Section 11AA of the Central Excise Act and the penalties imposed under Rule 25 of the Central Excise Rules 2002 are set aside in toto - The appeal is allowed [Read less]

Service Tax – Eligibility of Group Insurance for CENVAT credit under Rule 2(l) of CENVAT Credit Rules 2004 - Refund claim under Rule 5 of CENVAT Credit Rules, 2004 towards accumulated and unutilised CENVAT credit on input services. The refund claim included service tax paid on Group Insurance premium for employees - Adjudicating Authority rejected the Group Insurance component on the ground that it was an employee-welfare personal service and lacked direct or indirect nexus with the exported output service – Whether Group Insurance paid for employees can be treated as eligible input service under Rule 2(l) of CENVAT Cr... [Read more]

Service Tax – Eligibility of Group Insurance for CENVAT credit under Rule 2(l) of CENVAT Credit Rules 2004 - Refund claim under Rule 5 of CENVAT Credit Rules, 2004 towards accumulated and unutilised CENVAT credit on input services. The refund claim included service tax paid on Group Insurance premium for employees - Adjudicating Authority rejected the Group Insurance component on the ground that it was an employee-welfare personal service and lacked direct or indirect nexus with the exported output service – Whether Group Insurance paid for employees can be treated as eligible input service under Rule 2(l) of CENVAT Credit Rules for the period January to March 2010 and consequently refundable under Rule 5 – HELD – Rule 2(l) as applicable during the material period prior to 01.04.2011 had a materially wider definition than the amended definition effective from 01.04.2011 whereby activities relating to business got deleted. The refund claim must be tested against the law prevailing during the material period. The expression activities relating to business in the pre-01.04.2011 definition of input service was of wide import and was not confined to services directly used in manufacture - The lower authorities rejected the Group Insurance component principally on the ground that it was an employee-welfare personal service and lacked direct or indirect nexus with the exported output service. Such reasoning cannot be sustained merely because the insurance covered employees. The statutory position and the judicial decisions establish that Group Insurance did not fall to be excluded from Rule 2(l) during the material period – Group Insurance is eligible as CENVAT credit under Rule 2(l) and is refundable under Rule 5 subject to verification of the precise amount and fulfilment of remaining statutory requirements – The rejection of the Club Service component is upheld - The appeal is partially allowed by remand - Service Tax – Eligibility of CENVAT credit for services pertaining to a period subsequent to the refund claim period, Scope of Rule 5 of CENVAT Credit Rules, 2004 refund to cover only accumulated credit available during the specified refund period – Whether service tax credit relating to services provided after 31.03.2010 can be included in and refunded as part of the refund claim for the period January to March 2010 – HELD – A Rule 5 refund for January to March 2010 can cover only eligible accumulated credit available for that refund period. The accumulated credit is the credit that accumulated during the specified refund claim period being January to March 2010. Services pertaining to a period after 31.03.2010 cannot be included in the refund claim for the period January to March 2010 as such credit would not have formed part of the accumulated balance during the claim period - The appellant has not established that the amount relating to services after 31.03.2010 formed part of the eligible accumulated balance for the refund period of January to March 2010. The principle relied upon from Warburg Pincus that a refund authority cannot simply deny credit already availed without prescribed procedure does not answer the separate question whether services pertaining to a later period could form part of the refund claim for an earlier specified period. The statutory framework governing Rule 5 requires that refund claims must be limited to the accumulated credit available during the claimed refund period - Inclusion of credit from a subsequent period would go beyond the scope of the refund claim period itself – The rejection of this amount from the refund claim is upheld. [Read less]

Service Tax – Place of provision of services under Place of Provision of Service Rules 2012, Classification of intermediary services – Appellant engaged City One Tourism and Travel LLC, Dubai to provide visa processing services for its Dubai visa application website. Appellant hired the foreign service provider to assist in visa issuance procedures. Appellant's clients were all located outside India whereas the service provider was situated in Dubai. Revenue demanded service tax alleging place of provision of service was India as per Rule 3 of POPS Rules since recipient of service was in India – Whether services prov... [Read more]

Service Tax – Place of provision of services under Place of Provision of Service Rules 2012, Classification of intermediary services – Appellant engaged City One Tourism and Travel LLC, Dubai to provide visa processing services for its Dubai visa application website. Appellant hired the foreign service provider to assist in visa issuance procedures. Appellant's clients were all located outside India whereas the service provider was situated in Dubai. Revenue demanded service tax alleging place of provision of service was India as per Rule 3 of POPS Rules since recipient of service was in India – Whether services provided by a foreign service provider to assist in visa processing constitute intermediary services under Rule 9 of POPS Rules, 2012 – HELD – An intermediary service requires a tripartite arrangement where one party facilitates provision of service by the second to the third party. The agreement in the present case was only between the foreign service provider and the appellant and the Government of Dubai was not a party to the agreement - The foreign service provider assisted the appellant in carrying out its work with the Government of Dubai. The agreement specifically forbade both parties from assigning work to any third party without prior consent. Such arrangement does not constitute a tripartite agreement and the services provided were not intermediary services. Therefore Rule 3 of POPS Rules applies and the place of provision of service is the location of the recipient of service that is India - The appellant is liable to pay service tax on the services received from the foreign service provider under RCM - Service tax shall only be charged on service charges paid to the foreign service provider and not on visa fees paid to the foreign Government through the service provider - Sufficient grounds existed to invoke the extended period of limitation as the appellant did not disclose details of services received from the foreign service provider and the facts came to light only during audit - Service tax imposition on visa fee amounts is set aside. Matter is remanded to the original authority for re-computation of service tax on service charges only with consequential adjustments to interest and penalty - The appeal is partly allowed [Read less]

GST – Validity of notice and detention order under Section 129(3) CGST Act, 2017; Adherence to statutory time limits - Petitioner's goods were detained and a notice under Section 129(3) and final order were issued. Petitioner contended that both notices were issued beyond the statutorily mandated time limit – Whether notices and orders issued under Section 129(3) beyond the time frame fixed under the Act are valid – HELD – Prima facie there are issues which ought to have seized the attention of the Single Bench in considering whether notice under Form MOV-7 was issued beyond the time frame fixed under Section 129(3... [Read more]

GST – Validity of notice and detention order under Section 129(3) CGST Act, 2017; Adherence to statutory time limits - Petitioner's goods were detained and a notice under Section 129(3) and final order were issued. Petitioner contended that both notices were issued beyond the statutorily mandated time limit – Whether notices and orders issued under Section 129(3) beyond the time frame fixed under the Act are valid – HELD – Prima facie there are issues which ought to have seized the attention of the Single Bench in considering whether notice under Form MOV-7 was issued beyond the time frame fixed under Section 129(3) of the CGST Act when the impugned order stands challenged. The contention that notices were issued beyond statutorily mandated time requires to be assessed on its merits and cannot be dismissed merely on the ground that petitioner failed to cooperate with proceedings - The date of detention is material and must be compared with the date of issuance of notice to determine if time limits were adhered to - The burden lies on the authorities to demonstrate strict adherence to statutory time limits prescribed under Section 129(3) especially when a citizen's property is detained and proceedings are initiated. The relegation of petitioner to alternative statutory remedy cannot be sustained when prima facie the substantive issue regarding compliance with statutory time limits for issuing notices and orders has not been properly adjudicated – The impugned judgment is set aside and matter remitted for fresh consideration on merits with specific advertence to whether notices and orders were issued within prescribed time limits and whether any delay was attributable to petitioner or the authorities - The impugned judgment is set aside; consequently, requesting the learned Single Judge to decide and issue fresh judgment in the Writ Petition - The appeal is allowed [Read less]