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Central Excise - Department appeal against the dropping of the demand by the Adjudicating Authority and the subsequent upholding of the same by the Commissioner (Appeals) - Commissioner (Appeals) had relied on the judgment of the Gujarat High Court in the case of Indsur Global Ltd. v. UOI, which had held Rule 8(3A) of the Central Excise Rules, 2002 as unconstitutional and ultra vires - HELD - Despite the low revenue involved in the present case, the issue of the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002 is still pending before the Supreme Court in other cases. Therefore, the Commissioner (Appe... [Read more]

Central Excise - Department appeal against the dropping of the demand by the Adjudicating Authority and the subsequent upholding of the same by the Commissioner (Appeals) - Commissioner (Appeals) had relied on the judgment of the Gujarat High Court in the case of Indsur Global Ltd. v. UOI, which had held Rule 8(3A) of the Central Excise Rules, 2002 as unconstitutional and ultra vires - HELD - Despite the low revenue involved in the present case, the issue of the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002 is still pending before the Supreme Court in other cases. Therefore, the Commissioner (Appeals) should have taken into account the other pending judgments of the Supreme Court while deciding the issue, and not solely relied on the Gujarat High Court judgment, which had attained finality due to the low revenue involved - The ground of low revenue would not come into play for the Department to withdraw the appeal, as the issue involves the constitutional validity of the provisions or rules - the matter is still pending in view of the fact that Department has decided to move for restoration application in respect of three matters, which were earlier disposed of by the Hon’ble Supreme Court as not pressed, keeping in view the revenue involvement being more than the threshold limit. Presently, these restoration applications are still pending before the Hon’ble Supreme Court - Accordingly, the impugned order is set aside, and the matter was remanded back to the Commissioner (Appeals) to decide the issue afresh in accordance with the decisions of the Supreme Court in the pending cases – The appeal is allowed by way of remand [Read less]

Customs - Classification of "Aluminium Formwork Structure with Accessories" made of Aluminium - Appellant classified the goods under Customs Tariff Item No. 76109010 and claimed exemption benefit under Notification No. 152/2009-Customs - Revenue challenged the classification and claimed that the goods were appropriately classifiable under Tariff Item No. 84806000 and eligible for a different exemption benefit - Whether the imported goods are correctly classified under Customs Tariff Item No. 76109010 or should be reclassified under Tariff Item No. 84806000 – HELD - The Aluminium Formwork Structure with Accessories are in... [Read more]

Customs - Classification of "Aluminium Formwork Structure with Accessories" made of Aluminium - Appellant classified the goods under Customs Tariff Item No. 76109010 and claimed exemption benefit under Notification No. 152/2009-Customs - Revenue challenged the classification and claimed that the goods were appropriately classifiable under Tariff Item No. 84806000 and eligible for a different exemption benefit - Whether the imported goods are correctly classified under Customs Tariff Item No. 76109010 or should be reclassified under Tariff Item No. 84806000 – HELD - The Aluminium Formwork Structure with Accessories are in the nature of panels which are predesigned and used as shutters and support for pouring concrete, and cannot be considered as moulds. The self-assessment by the importer under the Bill of Entry was not challenged by the Revenue before issuing the demand notice, and therefore, the demand is not sustainable - Since the goods are correctly classified under CTH 76109010, the appellant is entitled to the exemption benefit under Sl. No. 610 of Notification No. 152/2009-Customs - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Undervaluation, Rejection of declared value, Redetermination of value – appellant imported goods "100% Viscose Rayon Embroidery thread". DRI investigation alleged undervaluation of the imported goods and demand of differential duty - The adjudicating authority rejected the declared value, redetermined the value, and imposed duty demand, confiscation, redemption fine, and penalties on the importer and its authorized signatory - Whether the redetermination of value and consequent demand of differential duty are tenable when the goods were cleared by the proper officer after examination and assessment, and the ass... [Read more]

Customs - Undervaluation, Rejection of declared value, Redetermination of value – appellant imported goods "100% Viscose Rayon Embroidery thread". DRI investigation alleged undervaluation of the imported goods and demand of differential duty - The adjudicating authority rejected the declared value, redetermined the value, and imposed duty demand, confiscation, redemption fine, and penalties on the importer and its authorized signatory - Whether the redetermination of value and consequent demand of differential duty are tenable when the goods were cleared by the proper officer after examination and assessment, and the assessment order has not been challenged - HELD - When the transaction value, description, and quantity at the time of importation based on the commercial invoices were declared, the goods were cleared after duly scrutinizing the supporting documents, and the assessing officers had also enhanced the value at the time of assessment, the allegation of suppression or misdeclaration against the appellant cannot sustain. The demand is therefore time-barred - The burden is on the department to prove undervaluation, and value cannot be determined on inference or statement alone without credible evidence of additional consideration. In the absence of an appeal against the assessment order, the value cannot be redetermined - The demand of duty and imposition of penalties on the appellants are set aside – The appeal is allowed [Read less]

Service Tax on advance received, activity in relation to conducting examination - Demand under the category of 'Consulting Engineer Service' and 'Commercial Training or Coaching Service' for the period from 01.04.2004 to 31.07.2009 - Demand on advance received for the period prior to 16.06.2005 (categorized under 'Consulting Engineer Service' – HELD - The requirement of discharging service tax on advance received for services to be provided in the future was introduced only w.e.f. 16.06.2005 by amending the Finance Act, 1994 and the Service Tax Rules, 1994. Thus, the amount received prior to 16.06.2005 and kept in the bo... [Read more]

Service Tax on advance received, activity in relation to conducting examination - Demand under the category of 'Consulting Engineer Service' and 'Commercial Training or Coaching Service' for the period from 01.04.2004 to 31.07.2009 - Demand on advance received for the period prior to 16.06.2005 (categorized under 'Consulting Engineer Service' – HELD - The requirement of discharging service tax on advance received for services to be provided in the future was introduced only w.e.f. 16.06.2005 by amending the Finance Act, 1994 and the Service Tax Rules, 1994. Thus, the amount received prior to 16.06.2005 and kept in the books of accounts for future service cannot be considered as taxable as per the amended provisions of law – Regarding demand under the category 'Consulting Engineer Service', the activities undertaken by the appellant, such as processing of applications, issuing hall tickets, preparation of venue list, fixing up of examination center, preparation of question papers, conducting examination in OMR sheets and preparation of rank list, cannot be considered as advice, consultancy or technical assistance in any of the disciplines of Engineering. Further, computer software engineering was specifically excluded from the purview of Consulting Engineer Service, and the attempts to relate the appellant's activities to a discipline of Engineering are ill-founded - the activities of the appellant are not classifiable under the categories of 'Consulting Engineer Service' and 'Commercial Training or Coaching Service' – The impugned order is set aside and the appeal is allowed - Demand under the category of Commercial Training or Coaching Service – HELD - The courses undertaken by the appellant and covered by orders issued by the Government of Kerala would fall outside the purview of taxation under the category of Commercial Training or Coaching Service, as they are recognized as valid qualifications. [Read less]

Service Tax – Activities in relation to setting up of sub-station, Eligibility to Exemption, Services related to Transmission of Electricity, Works Contract Service, Railway Construction - Whether the services provided by the appellant to PGCIL and RITES for transmission of electricity are exempt from service tax under Notification Nos. 11/2010 and 45/2010 - HELD - the various work orders have been awarded to the appellant by PGCIL for site levelling and civil construction work in connection with setting up of sub-station and smooth functioning of the same. It is a fact that transmission of electricity cannot be accompli... [Read more]

Service Tax – Activities in relation to setting up of sub-station, Eligibility to Exemption, Services related to Transmission of Electricity, Works Contract Service, Railway Construction - Whether the services provided by the appellant to PGCIL and RITES for transmission of electricity are exempt from service tax under Notification Nos. 11/2010 and 45/2010 - HELD - the various work orders have been awarded to the appellant by PGCIL for site levelling and civil construction work in connection with setting up of sub-station and smooth functioning of the same. It is a fact that transmission of electricity cannot be accomplished unless the site levelling and civil construction services are availed by PGCIL. The services of civil construction and site levelling provided to PGCIL, the national electric transmission utility, are used in relation to transmission of electricity and are therefore exempt from service tax under the said notifications - From the definition of “sub-station”, it is clear that without a sub-station, transmission of electricity is not possible. Therefore, in the instant case, the nexus between the site formation services and works contract services with transmission of electricity is very much evident. The observation in the impugned order, that works under the impugned work orders do not have any nexus with the transmission of electricity, is not sustainable – Further, as and when the appellant became aware that the exemption under Notification No 11/2010 was no longer available, they immediately suo motu calculated the Service Tax liability on the services provided to PGCIL and deposited the Service Tax liability, along with interest and intimated the same to the Department. Thus, in these facts and circumstances, there was no need to issue SCN for this demand - As the demand of Service Tax along with applicable interest, has been paid before issue of the notice, no penalty is imposable – The impugned order is set aside and the appeal is allowed - Whether the construction and repairing of approach road in Sikkim Project, meant for general public use, is exempt from service tax under Notification No. 25/2012 - HELD - The construction and repairing of the approach road, which is to be used by the general public, is exempt from service tax under Sl. No. 13(a) of Notification No. 25/2012-ST. The Ld. Commissioner had not provided any substantial evidence to contradict the certificate issued by the PGCIL official stating that the road is for general public use - Whether the construction of railway line from Salakati Railway Station to Bongaigaon Thermal Power Project is exempt from service tax - HELD - The construction of the railway line, including formation of railway embankment and construction of bridges, is exempt from service tax. The definition of "railway" under the Railways Act, 1989 includes sidings and branches used for the purposes of or in connection with a railway, the exemption is available for all works in relation to railways, irrespective of whether it is a Government or private railway. [Read less]

Central Excise – Rejection of Refund, Unjust Enrichment - The appellant was manufacturing Aluminium Milk Cans and clearing them under Chapter Heading 7612 by paying Central Excise Duty at the rate of 12.5%. Later, they started clearing the same goods under Chapter Heading 7615 by paying duty at 6% ad valorem – Refund claim of differential duty paid during 04.06.2016 to 29.10.2016 – Rejection of refund on the ground that the appellant had already passed on the incidence of duty to the customers, thus the principle of unjust enrichment was attracted - Whether the appellant is entitled to the refund of excess duty - HEL... [Read more]

Central Excise – Rejection of Refund, Unjust Enrichment - The appellant was manufacturing Aluminium Milk Cans and clearing them under Chapter Heading 7612 by paying Central Excise Duty at the rate of 12.5%. Later, they started clearing the same goods under Chapter Heading 7615 by paying duty at 6% ad valorem – Refund claim of differential duty paid during 04.06.2016 to 29.10.2016 – Rejection of refund on the ground that the appellant had already passed on the incidence of duty to the customers, thus the principle of unjust enrichment was attracted - Whether the appellant is entitled to the refund of excess duty - HELD - The Punjab and Haryana High Court in the case of Steel Strips Ltd. and the CESTAT in the case of Interach Building Products, has held that when the duty is separately shown in the invoices, it is presumed that the appellant has passed on the incidence of duty to the customers - The appellant failed to rebut this presumption and discharge the burden of proving that the incidence of duty was not passed on to the customers - The appellant did not provide any evidence to show that the duty was charged only for the purpose of compliance and not actually passed on to the customers. Therefore, the refund claim was rightly rejected on the ground of unjust enrichment - The appeal of the appellant is dismissed [Read less]

Maharashtra Value Added Tax Act, 2002 - Secured creditor, Attachment order, priority of claims - Whether the Bank, as a secured creditor, has priority over the dues of the Sales Tax department under the MVAT Act - HELD - The issue is squarely covered by the decision of the Full Bench of the High Court in Jalgaon Janta Sahakari Bank Ltd. & Anr. Vs. Joint Commissioner of Sales Tax. The Full Bench had conclusively settled the legal position that secured creditors have statutory priority in realization of dues from the sale of secured assets, over and above all other debts including government revenues, taxes, cesses and rates... [Read more]

Maharashtra Value Added Tax Act, 2002 - Secured creditor, Attachment order, priority of claims - Whether the Bank, as a secured creditor, has priority over the dues of the Sales Tax department under the MVAT Act - HELD - The issue is squarely covered by the decision of the Full Bench of the High Court in Jalgaon Janta Sahakari Bank Ltd. & Anr. Vs. Joint Commissioner of Sales Tax. The Full Bench had conclusively settled the legal position that secured creditors have statutory priority in realization of dues from the sale of secured assets, over and above all other debts including government revenues, taxes, cesses and rates, subject to compliance with the statutory conditions such as registration under the SARFAESI Act – Further, the Bank had registered its security interest with CERSAI prior to the attachment order of the department, and therefore, the Bank has priority to realize its dues - The Court rejected the department's contention that the amended Section 37 of the MVAT Act, which gave priority to the State dues, would prevail over the Bank's priority - The writ petition is allowed and the attachment order passed by the Sales Tax department is quashed. The amount realized through the sale of the secured asset shall be communicated to the Sales Tax department, and if the Bank recovers any amount exceeding the amount of debt, such excess amount should be paid to the department – The writ petition is allowed [Read less]

Central Excise – Classification of “Dhatri Brand Fairness Face Pack (DFFP)” - Ayurvedic medicament or Cosmetic - The Department proposed to classify the DFFP product under Chapter sub-heading 33049990 of the Central Excise Tariff Act, 1985 as a cosmetic instead of the appellant's classification under Chapter sub-heading 30049011 as an ayurvedic medicament - appellants discharged duty under Chapter sub-heading 30049011 on the transaction value whereas Department proposed to recover differential duty considering the classification under Chapter sub-heading 33049990, subject to MRP assessment under Section 4A of the CEA... [Read more]

Central Excise – Classification of “Dhatri Brand Fairness Face Pack (DFFP)” - Ayurvedic medicament or Cosmetic - The Department proposed to classify the DFFP product under Chapter sub-heading 33049990 of the Central Excise Tariff Act, 1985 as a cosmetic instead of the appellant's classification under Chapter sub-heading 30049011 as an ayurvedic medicament - appellants discharged duty under Chapter sub-heading 30049011 on the transaction value whereas Department proposed to recover differential duty considering the classification under Chapter sub-heading 33049990, subject to MRP assessment under Section 4A of the CEA, 1944 - Whether the DFFP product manufactured by the appellant is classifiable under Chapter sub-heading 30049011 as an ayurvedic medicament or under Chapter sub-heading 33049990 as a cosmetic - HELD - The ingredients used in the manufacture of DFFP are mentioned in the Authoritative Text Books. The appellant has satisfied the requirements for classification of the DFFP product as an ayurvedic medicament. The appellant has produced overwhelming evidence to establish that the DFFP is manufactured as per the Authoritative Ayurvedic Text Books and is recognized and sold as an ayurvedic medicament - the authorities below had erred in discarding the evidences produced by the appellant against the allegation of revision of classification from Chapter sub-heading 30049011 to Chapter sub-heading 33049990. It is a bare allegation in the SCN without mentioning any evidences on the basis of which the Revenue proposed to change the classification - The burden of proof is on the Revenue to lead evidence to change the classification, which the Revenue failed to do. Accordingly, the DFFP product are classifiable under Chapter sub-heading 30049011 as an ayurvedic medicament - the impugned orders are set aside and the appeals are allowed [Read less]

GST - Challenge to Constitutional validity of Rules 89(4B) and Rule 96(10) of the CGST Rules, 2017, Effect of omission of the impugned Rules without any savings clause - Petitioners, which are exporters and importers of goods, challenged the constitutional validity of Rules 89(4B) and 96(10) of the CGST Rules, which provided certain conditions for claiming refund of IGST paid on exports. During the pendency of these petitions, the impugned Rules were omitted by a Notification dated 08 October 2024, without any savings clause to protect the pending proceedings – Whether the impugned show cause notices or orders issued the... [Read more]

GST - Challenge to Constitutional validity of Rules 89(4B) and Rule 96(10) of the CGST Rules, 2017, Effect of omission of the impugned Rules without any savings clause - Petitioners, which are exporters and importers of goods, challenged the constitutional validity of Rules 89(4B) and 96(10) of the CGST Rules, which provided certain conditions for claiming refund of IGST paid on exports. During the pendency of these petitions, the impugned Rules were omitted by a Notification dated 08 October 2024, without any savings clause to protect the pending proceedings – Whether the impugned show cause notices or orders issued thereon, citing non-compliance with the omitted or repealed Rules, are valid and can be enforced - HELD – There is no need to examine the issue of Constitutional validity of the impugned Rules as the petitions can be disposed of on other grounds. However, it is noted that the High Court in Kerala had already declared Rule 96(10) as unconstitutional, which would have effect throughout India - In the absence of any savings clause, the common law principle that a repeal or omission obliterates the repealed provision from the statute book would apply. The pending proceedings, including show cause notices and orders not attaining finality, would lapse upon the omission of the impugned Rules - The Rule 89(4B) and 96(10) of the CGST Rules are not purely procedural but impact substantive rights of the parties. Therefore, the removal or repeal of Rules 89(4B) and 96(10) would essentially erase these Rules from existence as if they had never been enacted or passed, and they should be regarded as provisions that never existed, except in relation to “transactions past and closed” – In the present petitions, none of the impugned show cause notices or orders could be regarded as "transactions past and closed" as they had not attained finality – Further, the Section 174(3) cannot be regarded as a savings clause to protect the pending proceedings under the impugned Rules omitted vide Notification dated 08 October 2024 - The impugned show cause notices and orders are quashed and the authorities are directed to consider and dispose of the petitioners' refund applications within four months – The writ petitions are disposed of in favour of assessees - Whether Section 6 of the General Clauses Act saves the impugned pending proceedings or orders - HELD - The Section 6 of the General Clauses Act does not apply as the impugned Rules were omitted by a notification and not by a Central Act or Regulation as required under Section 6. The Constitution Bench decisions in Rayala Corporation Pvt Ltd and Kolhapur Cane Sugar Works Ltd were relied upon - Based upon the provisions of Section 6 of the General Clauses Act, 1897, the Respondents cannot assert that the show cause notices issued under the omitted or repealed Rules or the orders made in disposing of show cause notices after the Rules or the orders that had not attained finality are saved by virtue of the provisions of Section 6 of the General Clauses Act, 1897. [Read less]

Service Tax - Information Technology Software Service, Right to use software - Appellant entered into distribution agreements with foreign vendors for distribution of Anti-Virus software in India. The appellant paid VAT on the sale of the software and also discharged service tax out of abundant caution - Department held that the appellant was eligible to use the vendor's trademarks and had the right to distribute and sell the software, and hence the transaction fell under the category of ITSS - Whether the transaction between the appellant and the foreign vendors was a sale of goods or provision of service liable to servic... [Read more]

Service Tax - Information Technology Software Service, Right to use software - Appellant entered into distribution agreements with foreign vendors for distribution of Anti-Virus software in India. The appellant paid VAT on the sale of the software and also discharged service tax out of abundant caution - Department held that the appellant was eligible to use the vendor's trademarks and had the right to distribute and sell the software, and hence the transaction fell under the category of ITSS - Whether the transaction between the appellant and the foreign vendors was a sale of goods or provision of service liable to service tax - HELD - The foreign vendors had not transferred the right to use the software to the appellant, but only granted a non-exclusive intellectual property right to distribute the products. The EULA was between the foreign vendors and the end-users, and the appellant merely provided the unique activation keys to the end-users. Based on the agreement and the ratio of the judgments in Sakri IT Solutions Pvt Ltd and Quick Heal Technologies Ltd, the transaction amounted to deemed sale of goods and was not liable to service tax – Further, there the case is revenue neutral as the appellant had paid more service tax than what would have been payable under the Reverse Charge. In the absence of any deliberate suppression or malafide intent, the extended period of limitation cannot be invoked, and no penalty can be imposed - The demand of service tax, interest and penalty is set aside and the appeal is allowed [Read less]

Service Tax – Benefit of Abatement, Composite Works Contract, Finishing and Completion Services or "original works" – Revenue alleged that the appellant had wrongly availed the benefit of abatement as they did not include the value of all materials used by them in execution of such works. Further, the revenue authorities contended that the appellant's work of electrical, sanitary, flooring, tiling etc. in relation to a residential complex should be considered as "finishing and completion services" and not "original works", and therefore, not eligible for 60% abatement - Whether the appellant is liable to pay service ta... [Read more]

Service Tax – Benefit of Abatement, Composite Works Contract, Finishing and Completion Services or "original works" – Revenue alleged that the appellant had wrongly availed the benefit of abatement as they did not include the value of all materials used by them in execution of such works. Further, the revenue authorities contended that the appellant's work of electrical, sanitary, flooring, tiling etc. in relation to a residential complex should be considered as "finishing and completion services" and not "original works", and therefore, not eligible for 60% abatement - Whether the appellant is liable to pay service tax for the period prior to the amendment introducing the definition of "Works Contract" under the Finance Act, 1994 – HELD - The Supreme Court in the cases of Larsen & Toubro Ltd. and Total Environment Building Systems Pvt. Ltd. has held that for the period prior to the amendment introducing the definition of "Works Contract" under the Finance Act, 1994, service tax was not leviable on the indivisible/composite works contracts. The Tribunal, following the Supreme Court decisions, held that the appellant was not liable to pay any service tax for the pre-amended period and the issue of levy of exemption notification would also not apply – Further, the nature of work carried out by the appellant involves not merely cosmetic finishing work but also extensive work in terms of making the building habitable, and therefore, the appellant's work should be considered as "original works" and not merely "finishing and completion services". Accordingly, the appellant would be entitled to 60% abatement and service tax has to be paid only on 40% of the value - the impugned order is set aside and appeal is allowed [Read less]

Service Tax – Eligibility to abatement on commission, Penalty - Appellant received a commission of 8.5% of net sales from VVF Limited and paid service tax only on the net commission after claiming abatement of the commission paid to sub-contractors - Whether the appellant is liable to pay service tax on the gross commission received or can it claim abatement on the commission paid to sub-contractors - HELD - As per Section 67 of the Finance Act, 1994, the consideration for the purpose of levy of service tax shall be the gross amount charged. The appellant's claim of abatement on the commission paid to sub-contractors is ... [Read more]

Service Tax – Eligibility to abatement on commission, Penalty - Appellant received a commission of 8.5% of net sales from VVF Limited and paid service tax only on the net commission after claiming abatement of the commission paid to sub-contractors - Whether the appellant is liable to pay service tax on the gross commission received or can it claim abatement on the commission paid to sub-contractors - HELD - As per Section 67 of the Finance Act, 1994, the consideration for the purpose of levy of service tax shall be the gross amount charged. The appellant's claim of abatement on the commission paid to sub-contractors is not legally supported, and the correct course would have been to pay service tax on the entire gross commission received from VVF Limited - No penalty should be levied unless prescribed in the Show cause notice. Since the show cause notice did not propose any penalty under Section 76, the confirmation of such penalty by the lower authorities is set aside - The demand of service tax for the normal period is confirmed, but the penalty under Section 76 is set aside - The appeal is partly allowed [Read less]

Central Excise - CENVAT Credit in relation to setting up and administering 'first aid' in factory - Whether the appellant is eligible to avail the CENVAT Credit in respect of the services used in setting up and administering of 'first aid' in the factory – HELD - Setting up of first aid in the factory is a mandatory requirement as per Section 45 of the Factories Act, 1948. As per the CENVAT Credit Rules, 2004, a manufacturer is eligible to take CENVAT Credit in respect of all the inputs/input services used in connection with the manufacture of the final product - The services used by the appellant in setting up and admin... [Read more]

Central Excise - CENVAT Credit in relation to setting up and administering 'first aid' in factory - Whether the appellant is eligible to avail the CENVAT Credit in respect of the services used in setting up and administering of 'first aid' in the factory – HELD - Setting up of first aid in the factory is a mandatory requirement as per Section 45 of the Factories Act, 1948. As per the CENVAT Credit Rules, 2004, a manufacturer is eligible to take CENVAT Credit in respect of all the inputs/input services used in connection with the manufacture of the final product - The services used by the appellant in setting up and administering of 'first aid' in the factory were in relation to the manufacture of the final product, and hence the appellant is eligible to avail the CENVAT Credit - the appellant is eligible to avail the CENVAT Credit in respect of the services used in setting up and administering of 'first aid' in their factory - the impugned order denying the CENVAT Credit is set aside and the appeal is allowed [Read less]

Customs - Focus Product Scheme License (FPS), Vishesh Krishi and Gram Udhyog Yojana License (VKGUY), Provisional assessment - The appellant filed Bills of Entry (BoEs) for import of Copper Concentrate. The BoEs were filed provisionally as the appellant did not have the final invoices. The appellant later paid the differential duty arising from the increase in final invoice value through FPS and VKGUY licenses. The Department denied the benefit of payment through these licenses, arguing that the exemption under the relevant notifications could only be claimed at the time of clearance by producing the licenses - Whether the ... [Read more]

Customs - Focus Product Scheme License (FPS), Vishesh Krishi and Gram Udhyog Yojana License (VKGUY), Provisional assessment - The appellant filed Bills of Entry (BoEs) for import of Copper Concentrate. The BoEs were filed provisionally as the appellant did not have the final invoices. The appellant later paid the differential duty arising from the increase in final invoice value through FPS and VKGUY licenses. The Department denied the benefit of payment through these licenses, arguing that the exemption under the relevant notifications could only be claimed at the time of clearance by producing the licenses - Whether the appellant was entitled to claim the benefit of exemption under the FPS and VKGUY licenses even though the licenses were not produced at the time of provisional clearance of the goods - HELD - The expression "clearance" should be interpreted in the context of the factual matrix of the case, where the goods were cleared provisionally - The Tribunal on the decision in Zuari Agro Chemicals Ltd. v. Collector of Customs, Bombay, distinguished between "removal" and "clearance", and held that the goods can be said to be cleared for home consumption only after final assessment and orders of the proper officer – The matter is remanded to the original authority to consider the benefit of the licenses and the consequent exemption, if the appellant had complied with the eligible certificates and other conditions prior to the final clearance upon final assessment - The appeals were allowed by way of remand [Read less]

Service Tax - Export of Services – Providing of sales and promotion services to foreign-based client - Based on information received from the Income Tax Department, a show cause notice was issued alleging non-payment of Service Tax - Whether the services provided by the appellant to its foreign-based client are export of services - HELD - The amount received by the appellant from its foreign-based client for providing consultancy services, after deducting the expenses incurred, is for export of services. The place of provision of service is outside India and the payment was received in convertible foreign exchange. The c... [Read more]

Service Tax - Export of Services – Providing of sales and promotion services to foreign-based client - Based on information received from the Income Tax Department, a show cause notice was issued alleging non-payment of Service Tax - Whether the services provided by the appellant to its foreign-based client are export of services - HELD - The amount received by the appellant from its foreign-based client for providing consultancy services, after deducting the expenses incurred, is for export of services. The place of provision of service is outside India and the payment was received in convertible foreign exchange. The conditions prescribed under Rule 6A of the Service Tax Rules, 1994 for export of services are fulfilled in the present case – The learned Commissioner (Appeals) has observed that the FIRC documents were not correlated with the invoices. The production of FIRC being a procedural requirement and if the Appellant is able to establish the receipt of foreign exchange with the invoices, there is no reason to take an adverse view - the services provided by the appellant to its foreign-based client are export of services and hence not taxable under Service Tax – The appeal is allowed [Read less]

Service Tax - Cost Sharing Arrangement, Demand under Reverse Charge Mechanism, Extended Period of Limitation - The appellant is a subsidiary of M/s. General Physics Corporation, USA (GPC) - GPC raised invoices on the Appellant for consulting services rendered by GPC to Appellant - Whether the appellant is liable to pay service tax on the cost sharing arrangement entered with the group companies towards operational cost, administrative expenses and other miscellaneous expenses - HELD - The services incurred can be categorized as cost sharing or operational or administrative assistance for the period in question which has al... [Read more]

Service Tax - Cost Sharing Arrangement, Demand under Reverse Charge Mechanism, Extended Period of Limitation - The appellant is a subsidiary of M/s. General Physics Corporation, USA (GPC) - GPC raised invoices on the Appellant for consulting services rendered by GPC to Appellant - Whether the appellant is liable to pay service tax on the cost sharing arrangement entered with the group companies towards operational cost, administrative expenses and other miscellaneous expenses - HELD - The services incurred can be categorized as cost sharing or operational or administrative assistance for the period in question which has already been settled in various decisions of the Tribunal - The Tribunal, relying on various judicial precedents, held that the services incurred can be categorized as cost sharing or operational or administrative assistance, which are not subject to service tax until the amendment made effective from 01.05.2011 - The essence of the agreement was to share expenses incurred by the group as a whole, and not for any specific services - Accordingly, the demand for service tax cannot be sustained for the period prior to 01.05.2011 - the impugned order is set aside on merits as well as on the ground of limitation – The appeal is allowed - Whether the extended period of limitation can be invoked in the facts of the present case - HELD - The activity was revenue neutral, as the tax paid would have been available as CENVAT credit to the appellant - The Tribunal held that in cases where the situation is revenue neutral, there is no justification for invoking the extended period of limitation and for imposing penalties. [Read less]

Service Tax - Cargo Handling Service, Transportation of goods by road, Commercial or Industrial Construction Service, Exemption Notification, Extended Period of Limitation - The appellant, is a supplier of building materials who had been awarded sub-contract works for paving blocks, rubble stones, and precast concrete blocks at the Tuticorin Port - Department alleged that the appellant provided composite services of BAS, cargo handling services, transportation of goods by road, and site formation and clearance - Department also alleged that the appellant was not eligible for the exemption under Notification No. 25/2007-ST ... [Read more]

Service Tax - Cargo Handling Service, Transportation of goods by road, Commercial or Industrial Construction Service, Exemption Notification, Extended Period of Limitation - The appellant, is a supplier of building materials who had been awarded sub-contract works for paving blocks, rubble stones, and precast concrete blocks at the Tuticorin Port - Department alleged that the appellant provided composite services of BAS, cargo handling services, transportation of goods by road, and site formation and clearance - Department also alleged that the appellant was not eligible for the exemption under Notification No. 25/2007-ST for the construction work at the port - Whether the appellant is liable to pay service tax under the category of cargo handling service or whether the transportation of goods by road service should be considered as the principal service - HELD - the appellants are sub-contractors who are performing services under the contact entered into for quarrying of stones, transportation, construction and maintenance of the proposed bund, approved quality of material, etc., within the scope of the main contract - The transportation of goods by road should be considered as the principal service, and the cargo handling service is only an incidental or support service – As per the CBEC Circular No. 104/07/2008-ST, the intermediary and ancillary services provided in relation to the principal service of road transport of goods should be considered as part of the composite Goods Transport Agency service - in this case, Cargo Handling Service is only a support service to the transport of goods by road. The cargo handling service is a part of the composite service which mainly comprises transportation of goods by road service and so, should be taken as an incidental / support service and not as a principal service - The demand of service tax under the cargo handling service category – The appeal is allowed - Whether the appellant is entitled to the benefit of exemption under Notification No. 25/2007-ST for the construction work at the Tuticorin Port - HELD - The work undertaken by the appellant was related to the construction of the cargo berth at the port and not mere finishing operations - Accordingly, the appellant is eligible for the benefit of the exemption under Notification No. 25/2007-ST. [Read less]

GST – Gujarat AAR - Export of pre-packaged and labelled rice, Supply of pre-packaged and labelled rice to exporter - Applicant supplies rice to customers in pre-packaged & labelled packages having quantity up to 25 Kg. - Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 kgs to exporter on 'bill to ship to' to a foreign buyer – HELD - Export of goods, as per section 16 of the IGST Act, 2017 is a zero-rated supply - the applicant has the option to either export the goods without payment of tax under bond or LUT and claim refund of unutilized ITC, or export the goods on payment of IGST a... [Read more]

GST – Gujarat AAR - Export of pre-packaged and labelled rice, Supply of pre-packaged and labelled rice to exporter - Applicant supplies rice to customers in pre-packaged & labelled packages having quantity up to 25 Kg. - Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 kgs to exporter on 'bill to ship to' to a foreign buyer – HELD - Export of goods, as per section 16 of the IGST Act, 2017 is a zero-rated supply - the applicant has the option to either export the goods without payment of tax under bond or LUT and claim refund of unutilized ITC, or export the goods on payment of IGST and claim refund of IGST paid - As the applicant has on record said that they are engaged in supplying rice in pre-packaged & labelled packages having quantity of upto 25 kgs, in terms of section 5 of the IGST Act, 2017, if the applicant opts for export on payment of IGST and claiming refund of IGST, he is liable to pay IGST @ 5% in terms of notification No. 1/2017-IT (R) dtd. 28.06.2017, as amended. This is subject to the condition that the pre-packaged & labelled packages of rice exported by the applicant, fall within the expression ‘pre-packaged & labelled’ defined under the explanation to the notification – Ordered accordingly - Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 kgs to exporter on 'bill to ship to' basis – HELD – GST of 5% would be applicable on supply of pre-packaged and labelled rice up to 25 kgs to exporter on 'bill to ship to' basis, i.e. bill to exporter and ship to customs port, wherein the exporter ultimately exports the rice to foreign buyer. However, the benefit of concessional rate of IGST @ 0.1% or GST @ 0.1% as per the Notification No. 41/2017-IT (R) dated 23.10.2017 /Notification No. 40/2017-CT(R) dated 23.10.2017, is also available to the applicant, subject to adherence of the conditions specified therein - Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 kgs, to the factory of exporter – HELD - GST @ 5% would be applicable on supply of pre-packaged and labelled rice up to 25 kgs, to the factory of exporter, who will export the rice, subject to the condition that the pre-packaged & labelled packages of rice exported by the applicant fall within the expression 'pre-packaged & labelled' defined under the relevant notification - Whether GST would be applicable on goods procured from other party at concessional rate of 0.1% and exported directly to foreign buyers for pre-packaged and labelled rice up to 25 Kgs at 5% - HELD - GST @ 5% would be applicable on the export of pre-packaged and labelled rice up to 25 kgs to foreign buyers, which have been procured/purchased by availing the concessional rate notifications, subject to adherence of the conditions specified therein. Further, the applicant can also avail the option to export the said goods without payment of integrated tax, under Bond or LUT. [Read less]

GST - Power to remit the matter, Scope of powers of Appellate Authority under Section 107(11) of the CGST Act, 2017 - Whether the Appellate Authority has the power to remit the matter back to the Adjudicating Authority to decide the matter afresh – HELD - Under Section 107(11) of the CGST Act, 2017, there is a mandatory bar for the Appellate Authority to not remit the cases back to the Adjudicating Authority that passed the original decision or order - The Appellate Authority can only confirm, modify or annul the order under appeal, and cannot remand the matter back to the original authority. Accordingly, the latter part... [Read more]

GST - Power to remit the matter, Scope of powers of Appellate Authority under Section 107(11) of the CGST Act, 2017 - Whether the Appellate Authority has the power to remit the matter back to the Adjudicating Authority to decide the matter afresh – HELD - Under Section 107(11) of the CGST Act, 2017, there is a mandatory bar for the Appellate Authority to not remit the cases back to the Adjudicating Authority that passed the original decision or order - The Appellate Authority can only confirm, modify or annul the order under appeal, and cannot remand the matter back to the original authority. Accordingly, the latter part of the impugned order remitting the matter back to the Adjudicating Authority is set aside - The writ petition is disposed of with the direction that the Appellate Authority to decide the appeals filed in accordance with law, without remanding the matter back to the Adjudicating Authority – The petition is disposed of [Read less]

Central Excise – Refund pursuant to order passed by CESTAT, Limitation Period - After a chequered litigation history, the CESTAT finally upheld the petitioner's contention and set aside the impugned order - Petitioner filed a refund claim which was rejected on the ground that it was time-barred under Section 11B of the Central Excise Act, 1944 - Whether the rejection of the petitioner's refund claim on the ground of limitation was legally sustainable – HELD - The CESTAT had earlier set aside the finding on the issue of limitation and allowed the petitioner's appeal. This order of the CESTAT had attained finality as it ... [Read more]

Central Excise – Refund pursuant to order passed by CESTAT, Limitation Period - After a chequered litigation history, the CESTAT finally upheld the petitioner's contention and set aside the impugned order - Petitioner filed a refund claim which was rejected on the ground that it was time-barred under Section 11B of the Central Excise Act, 1944 - Whether the rejection of the petitioner's refund claim on the ground of limitation was legally sustainable – HELD - The CESTAT had earlier set aside the finding on the issue of limitation and allowed the petitioner's appeal. This order of the CESTAT had attained finality as it was not challenged by the Department - The rejection of the refund claim on the ground of limitation was perverse and unsustainable in law, especially when the objection of limitation had already been rejected by the CESTAT. The petitioner had to undergo a chequered litigation history spanning over two decades to get its rightful refund and it would be unjust to relegate the petitioner to the windmill of statutory appeals – the approach adopted by the Department clearly reflects that they are time and again harassing petitioner on the same ground, which has already been adjudged as unsustainable by the CESTAT and has attained legal quietus - The department is under a statutory obligation to refund the amount with interest. In order to compensate petitioner for unjust hardship suffered at the hands of arbitrary action by respondents-department, the Court is inclined to award interest @ 12% p.a. on the refund amount. The interest shall be calculated from the date of the first refund application until the date of payment of refund – The writ petition is allowed [Read less]

GST – Tamil Nadu AAR - Section 17(5)(c) & 17(5)(d) of the CGST Act, 2017 - Construction of new factory, Input Tax Credit on Construction, Immovable Property, Plant and Machinery - Applicant is expanding its business operations and has constructed a new factory adjacent to its existing factory, for which it has entered into a contract for "Design and Construction Works" of the new industrial building project - Whether ITC is eligible on steel reinforcements for expansion of factory for manufacturing activity - HELD - The activities of the applicant ideally gets covered as a composite service of ‘Works Contract’ as spe... [Read more]

GST – Tamil Nadu AAR - Section 17(5)(c) & 17(5)(d) of the CGST Act, 2017 - Construction of new factory, Input Tax Credit on Construction, Immovable Property, Plant and Machinery - Applicant is expanding its business operations and has constructed a new factory adjacent to its existing factory, for which it has entered into a contract for "Design and Construction Works" of the new industrial building project - Whether ITC is eligible on steel reinforcements for expansion of factory for manufacturing activity - HELD - The activities of the applicant ideally gets covered as a composite service of ‘Works Contract’ as specified under Section 2(119) of the CGST Act, 2017 - The applicant would be eligible for proportionate ITC on the steel structural support erected in relation to the secondary steel works that is attributable to the support of HVAC machine and overhead crane movement, as these are considered as 'Plant and Machinery' under the GST law. While the comprehensive Pre-Engineered Building (PEB) Work, including the sheeting work and structural steel work, cannot be categorized as 'Plant and Machinery', the secondary steel structural support that is relatable exclusively to the overhead crane movement and HVAC machine is not blocked under Section 17(5) of the CGST Act, 2017, and as a result becomes eligible for availment of ITC by the applicant – The applicant is eligible for proportionate ITC on the steel structural support used for HVAC machines and overhead cranes, and the timeline to avail ITC on advance invoices is as per Section 16(4) of the CGST Act - Ordered accordingly - Time of Supply - Section 13(2) of the CGST Act, 2017 - What should be the basis to arrive the timeline to avail ITC on tax invoice raised by Supplier to bill "Advance Component" of the Contract and Subsequent Adjustment of Advance in the Service Bills - HELD - The timeline to avail ITC on tax invoice raised by the Supplier to bill the "Advance Component" of the Contract is already covered under the provisions of Section 16(4) of the CGST Act, 2017, which stipulates that ITC shall be availed by the recipient before the thirtieth day of November following the end of financial year to which such invoice pertains or furnishing of the relevant annual return, whichever is earlier. [Read less]

GST – Tamil Nadu AAR - Classification and applicable rate of tax on Fly ash bricks - Determination of the correct HSN Code and applicable GST rate for fly ash bricks – HELD - The HSN code for fly ash bricks is 6815 99 10 and the applicable GST rate is 12% with the availment of ITC - From 01.04.2022 onwards, the applicant has options to pay tax at the overall rate of 12% GST, claiming ITC on the inputs and input services, as eligible or pay tax at the overall rate of 6% GST without claiming ITC on the inputs and input services and reverse the proportionate ITC under Section 17(2) of the CGST Act, 2017 – Ordered accord... [Read more]

GST – Tamil Nadu AAR - Classification and applicable rate of tax on Fly ash bricks - Determination of the correct HSN Code and applicable GST rate for fly ash bricks – HELD - The HSN code for fly ash bricks is 6815 99 10 and the applicable GST rate is 12% with the availment of ITC - From 01.04.2022 onwards, the applicant has options to pay tax at the overall rate of 12% GST, claiming ITC on the inputs and input services, as eligible or pay tax at the overall rate of 6% GST without claiming ITC on the inputs and input services and reverse the proportionate ITC under Section 17(2) of the CGST Act, 2017 – Ordered accordingly - Eligibility of fly ash bricks for any GST exemption or reduced rate due to he use of recycled/sustainable materials - HELD - Fly ash bricks are not eligible for any GST exemption or reduced rate, as they are not included in the list of exempted goods notified under the CGST Act - Eligibility of the applicant to claim Input Tax Credit on the purchase of raw materials used in the manufacture of fly ash bricks – HELD - The applicant, as a manufacturer of fly ash bricks, can claim ITC on the purchase of raw materials used in the production, if they are otherwise eligible. The applicant needs to pay GST at the overall rate of 12% when such ITC is availed - GST treatment for the sale of fly ash bricks used in construction projects – HELD - The sale of fly ash bricks used in construction projects is subject to GST under the normal taxation system and not under the Reverse Charge Mechanism - Eligibility of fly ash bricks for any special GST exemption or reduced rate when sold to Government or Public Sector Undertakings (PSUs) – HELD - The fly ash bricks are not eligible for any special GST exemption or reduced rate, even when sold to Government or PSUs for public infrastructure projects - Eligibility of the applicant for the GST Composition Scheme as a manufacturer of fly ash bricks – HELD - The applicant, being a manufacturer of fly ash bricks, is not eligible for the GST Composition Scheme. [Read less]

Service Tax - Tour Operator Service, Reimbursable Amounts - Whether the appellant is liable to pay service tax on the considerations received from the primary travel agents for whose clients the appellant had rendered various services that were rightly classifiable under tour operators - HELD - Prior to the amendment of the definition of 'Tour Operator' w.e.f. 10.09.2004, the demand for the period from 2001-02 to 10.09.2004 cannot be sustained as the appellant was merely acting as a booking agent and not engaged in planning, scheduling, organizing or arranging tours. However, for the period from 10.09.2004 to 2005-2006, th... [Read more]

Service Tax - Tour Operator Service, Reimbursable Amounts - Whether the appellant is liable to pay service tax on the considerations received from the primary travel agents for whose clients the appellant had rendered various services that were rightly classifiable under tour operators - HELD - Prior to the amendment of the definition of 'Tour Operator' w.e.f. 10.09.2004, the demand for the period from 2001-02 to 10.09.2004 cannot be sustained as the appellant was merely acting as a booking agent and not engaged in planning, scheduling, organizing or arranging tours. However, for the period from 10.09.2004 to 2005-2006, the amended definition of 'Tour Operator' is applicable, and the appellant is liable to pay service tax on the services rendered in terms of hotel bookings and transportation for the clients of other travel agents. The appellant is not eligible for the benefit of the Notification No.25/2004-ST dated 10.09.2004 as it is for a person other than Tour Operator – The reimbursable amounts received by the appellant from the primary travel agents towards hotel charges, ticket bookings, etc. are not liable for service tax - The appeal is disposed of by way of remand [Read less]

Service Tax - Valuation, Free Supply of Goods - Service of treating water for industrial production - In the course of rendering the service, the appellant consumes water treating chemicals (chlorine) supplied free of cost by the service recipients - Demand service tax on the value of the free supply of chlorine - Whether the value of materials/goods (chlorine) supplied free of cost by the service recipient to the service provider/assessee is to be included in the 'gross amount' charged by the service provider for the purposes of Section 67 of the Finance Act, 1994 and be subjected to service tax - HELD - The cost of chlor... [Read more]

Service Tax - Valuation, Free Supply of Goods - Service of treating water for industrial production - In the course of rendering the service, the appellant consumes water treating chemicals (chlorine) supplied free of cost by the service recipients - Demand service tax on the value of the free supply of chlorine - Whether the value of materials/goods (chlorine) supplied free of cost by the service recipient to the service provider/assessee is to be included in the 'gross amount' charged by the service provider for the purposes of Section 67 of the Finance Act, 1994 and be subjected to service tax - HELD - The cost of chlorine supplied free of cost by the service recipient to the appellant is not includible in the taxable value of services provided by the appellant for levy of service tax. The Supreme Court in CST v Bhayana Builders (P) Ltd, held that the value of materials/goods supplied free of cost by the service recipient to the service provider/assessee is not to be included to arrive at the 'gross amount' charged by the service provider, as the cost of free supply goods provided by the service recipient to the service provider is neither an amount "charged" by the service provider nor can it be regarded as a consideration for the service provided by the service provider - the impugned orders are set aside and the appeals are allowed [Read less]

GST – Parallel/Duplicate proceedings for wrongful availment of CENVAT Credit and carried forward the closing balance of CENVAT credit in TRAN-1 – Petitioner filed Form GST TRAN-1 to carry forward closing balance of CENVAT Credit arising out of service tax - Department issued a show-cause notice alleging wrongful availment of CENVAT Credit, which was adjudicated resulting in an Order-in-Original. Meanwhile, the Joint Commissioner issued another show-cause notice under Section 74 of the CGST Act, 2017 on the same issue, leading to the impugned Order-in-Original raising the same demand - Whether the impugned Order-in-Orig... [Read more]

GST – Parallel/Duplicate proceedings for wrongful availment of CENVAT Credit and carried forward the closing balance of CENVAT credit in TRAN-1 – Petitioner filed Form GST TRAN-1 to carry forward closing balance of CENVAT Credit arising out of service tax - Department issued a show-cause notice alleging wrongful availment of CENVAT Credit, which was adjudicated resulting in an Order-in-Original. Meanwhile, the Joint Commissioner issued another show-cause notice under Section 74 of the CGST Act, 2017 on the same issue, leading to the impugned Order-in-Original raising the same demand - Whether the impugned Order-in-Original passed by the Joint Commissioner is without jurisdiction, as it is on the same subject matter which was already adjudicated by the Commissioner in the earlier Order-in-Original - HELD - The impugned Order-in-Original is without jurisdiction, as the same subject matter was already adjudicated by the Commissioner in the earlier Order-in-Original, which is pending in appeal before the CESTAT - The Joint Commissioner could not have initiated parallel proceedings under Section 74 of the CGST Act, 2017 on the same issue, as it amounts to abuse of the legal process. Further, the Department cannot raise the same demand twice on the same set of facts and cause of action - The show-cause notice culminating into impugned Order-in-originals are, on face of it, without jurisdiction and quashed and set aside – The petition is allowed [Read less]

Central Excise - Valuation, Limitation, Extended Period - Department alleged that appellant contravened the provisions by failing to correctly assess the duty payable on clearances to OMCs during 01.04.2002 to 30.09.2004, as the IPP adopted was not in conformity with the definition of transaction value under Section 4 of the CEA, 1944 - The Department invoked the extended period of limitation under the proviso to Section 11A(1) on the ground that IOCL suppressed the MOU from the Department with an intent to evade duty - Whether the demand raised by the Department is sustainable - HELD – In view of the judgment of the Sup... [Read more]

Central Excise - Valuation, Limitation, Extended Period - Department alleged that appellant contravened the provisions by failing to correctly assess the duty payable on clearances to OMCs during 01.04.2002 to 30.09.2004, as the IPP adopted was not in conformity with the definition of transaction value under Section 4 of the CEA, 1944 - The Department invoked the extended period of limitation under the proviso to Section 11A(1) on the ground that IOCL suppressed the MOU from the Department with an intent to evade duty - Whether the demand raised by the Department is sustainable - HELD – In view of the judgment of the Supreme Court in the case of Bharat Petroleum Corporation Ltd. v. CCE, the extended period of limitation under the proviso to Section 11A(1) cannot be invoked in the present case. The Supreme Court observed that the Department was already aware of the MOU through a Circular dated 14.02.2007 and the Tribunal's decision in Hindustan Petroleum Corporation Ltd. case, and thus, the mere non-submission of the MOU cannot be a ground for invoking the extended period of limitation. Further, the allegation that IOCL made the Department believe that the dual pricing was adopted as per the directive of the Government was also not substantiated - the entire demand is barred by limitation and set aside – The appeal is allowed [Read less]

Central Excise - Clandestine Manufacture and Removal, unverified Input-Output Ratio, Corroborative Evidence - Revenue alleged that the appellant had suppressed the actual quantum of production and did not record the production of finished goods actually manufactured, with the intent to evade payment of central excise duty - Whether the reconciliation of the seized challan books carried out by the Range Officer, without providing the same to the appellant, can be relied upon to confirm the demand - HELD - The appellant was not provided the purported reconciliation report submitted by the Range Officer to the Commissioner, v... [Read more]

Central Excise - Clandestine Manufacture and Removal, unverified Input-Output Ratio, Corroborative Evidence - Revenue alleged that the appellant had suppressed the actual quantum of production and did not record the production of finished goods actually manufactured, with the intent to evade payment of central excise duty - Whether the reconciliation of the seized challan books carried out by the Range Officer, without providing the same to the appellant, can be relied upon to confirm the demand - HELD - The appellant was not provided the purported reconciliation report submitted by the Range Officer to the Commissioner, violating principles of natural justice. The Commissioner cannot rely on such an unshared reconciliation report to confirm the demand – Further, the Revenue's allegations are based on mere assumptions and presumptions, without any positive and tangible legal evidence. The Revenue failed to provide details of excess raw material procurement, increased electricity consumption, statements of purported buyers, etc. to corroborate the clandestine removal. Mere confessional statements without corroboration cannot sustain the demand - the Revenue has not conducted any independent verification of the input-output ratio and has relied solely on theoretical calculations. The appellant has provided documentary evidence, including a Chartered Engineer's certificate, supporting its claimed input-output ratio. In the absence of any independent verification by the Revenue, the appellant's claim on the input-output ratio has to be accepted - the demand for the extended period is not sustainable due to time-bar, as the Revenue failed to effectively bring any evidence of suppression by the appellant – The impugned order is set aside and the appeal is allowed [Read less]

The amended clause (e) of Explanation 2 to Sec 54, which made the due date for furnishing of return as the relevant date for computing the limitation period, would not be applicable to claim of refunds pertaining to the period prior to 01.02.2019.

If the refund made in relation to any amounts payable in relation to proceedings under the KVAT Act is found to be admissible, the same is refundable in cash, regardless of whether the payment was made in cash or through ITC/Electronic Credit Ledger.