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Service Tax - Service of Order-in-Original by affixture on registered premises and date of receipt for computing limitation for appeal - Adjudicating authority confirmed demand of service tax with interest and penalties, and the order sent by registered post to the registered address was returned undelivered, after which it was served by affixture on the registered premises under a panchnama - Appellant contended that the order was never received, that it became aware of the order only on a later date when it visited the office and obtained an uncertified copy, that the date of receipt should be that date, and that the cop... [Read more]

Service Tax - Service of Order-in-Original by affixture on registered premises and date of receipt for computing limitation for appeal - Adjudicating authority confirmed demand of service tax with interest and penalties, and the order sent by registered post to the registered address was returned undelivered, after which it was served by affixture on the registered premises under a panchnama - Appellant contended that the order was never received, that it became aware of the order only on a later date when it visited the office and obtained an uncertified copy, that the date of receipt should be that date, and that the copy of the panchnama was not provided - Whether the order was duly served on the Appellant on the date of affixture so as to reckon limitation from that date - HELD - The Appellant had a registered premises and the same address was mentioned in the appeal memos before the FAA and the Tribunal, in the challans for payment of pre-deposit and in the orders sent to it, and even the subsequent order in appeal sent by post was returned undelivered. The letter of the jurisdictional officer reporting service by affixture under a panchnama is an admissible piece of evidence, and the FAA cannot be faulted for presuming the correctness of the facts stated therein. As the order was served by affixture on the registered premises which the Appellant continued to hold, there is no reason to believe that the order was not served or received - The contention of non-receipt is rejected and the order is held to be served on the date of affixture - Condonation of delay in filing appeal before the FAA beyond the period prescribed under Section 85(3A) of the Finance Act, 1994 - Appeal against the order was filed several months after the date of service of the order, and the FAA dismissed it as time barred since the proviso permits condonation only for a further period of one month - Appellant contended that the appeal should be allowed on the ground of non-supply of the panchnama - Whether the delay beyond the further period of one month can be condoned - HELD - Section 85(3A) requires the appeal to be presented within two months from the date of receipt of the order, and the proviso empowers the FAA to allow presentation within a further period of one month on sufficient cause. The Hon'ble Supreme Court has held that the appellate authority, being a creature of statute, has no power to condone delay beyond the period provided in the proviso, and that Section 5 of the Limitation Act is completely excluded. The Hon'ble Supreme Court has further held that a liberal approach cannot be used to defeat the substantial law of limitation, and that no indulgence is warranted where the appeal is filed long after the statutory period without substantiating the plea of inability to file within time - The appeal being filed much beyond the condonable period was rightly dismissed as time barred, there is no merit in the appeal and it is dismissed. [Read less]

GST – Audit by tax authorities - Limitation for completion of audit under Section 65(4) of the CGST Act, 2017, Determination of commencement of Audit – Petitioner received notice in Form GST ADT-01 for audit of three financial years, furnished the documents by personal appearance and by email - While the audit was conducted at its place of business about two years after the first notice and the audit report was issued within about six weeks thereafter - SCNs under Section 74 were issued on the basis of the audit and Petitioner contended that the audit report was prepared beyond the period of three months from commencem... [Read more]

GST – Audit by tax authorities - Limitation for completion of audit under Section 65(4) of the CGST Act, 2017, Determination of commencement of Audit – Petitioner received notice in Form GST ADT-01 for audit of three financial years, furnished the documents by personal appearance and by email - While the audit was conducted at its place of business about two years after the first notice and the audit report was issued within about six weeks thereafter - SCNs under Section 74 were issued on the basis of the audit and Petitioner contended that the audit report was prepared beyond the period of three months from commencement of audit and that the SCNs were consequently time-barred - Respondent contended that the Petitioner did not furnish all the documents and delayed the audit, so that the audit commenced at its place of business and was completed within three months - Whether the audit report was issued within the period prescribed under Section 65(4) of the CGST Act - HELD - The Explanation to Section 65(4) provides two alternative events for determining commencement of audit, namely the date on which the records called for are made available or the actual institution of audit at the place of business, whichever is later. Even if the Petitioner's contention that it furnished all the documents in time is accepted, furnishing of documents cannot override the requirement of reckoning the later of the two events - Since there is a dispute of fact whether all documents were furnished, the Respondent cannot be compelled to treat the date of submission of documents as commencement. Where a registered person furnishes documents under a notice and some remain outstanding, the tax authorities are required to inform the person of the missing documents within a reasonable time so that the audit can be completed early, and the Respondent failed to do so despite three notices, which contributed to delay. The Court cannot, however, set aside the audit merely because three notices were issued, as the statute provides an alternative basis - Audit report held to be prepared within the period of three months from commencement of audit – Ordered accordingly - Challenge to SCNs under Section 74 of the CGST Act, 2017 in writ jurisdiction on merits - Petitioner challenged the SCNs issued consequent to audit and contended that the invocation of Section 74 alleging wilful misstatement and suppression was mechanical - Whether the SCNs should be set aside at the stage of show cause - HELD - The Court is not inclined to set aside the SCNs on merits at this stage, as the Petitioner may respond to the notices and also has the remedy of appeal under Section 107 of the CGST Act - The writ petition fails. [Read less]

GST - Refund - Relevant date under Explanation 2(d) to Section 54 of the CGST Act, 2017 where tax becomes refundable consequent to appellate order and summary in Form GST APL-04 was uploaded later - Petitioners deposited tax and penalty under Section 129 for goods in transit, the demand was set aside by the Appellate Authority which directed refund, the physical copy of the order was handed over to the authorised person soon thereafter – The summary in Form GST APL-04 was uploaded on the portal over two years later, and the refund application filed the next day was rejected as barred by limitation - Petitioners contended... [Read more]

GST - Refund - Relevant date under Explanation 2(d) to Section 54 of the CGST Act, 2017 where tax becomes refundable consequent to appellate order and summary in Form GST APL-04 was uploaded later - Petitioners deposited tax and penalty under Section 129 for goods in transit, the demand was set aside by the Appellate Authority which directed refund, the physical copy of the order was handed over to the authorised person soon thereafter – The summary in Form GST APL-04 was uploaded on the portal over two years later, and the refund application filed the next day was rejected as barred by limitation - Petitioners contended that the order was communicated only on the date of uploading of the summary - Respondent contended that the relevant date is the date of communication of the order and that Form GST APL-04 is only a summary - Whether the date of uploading of Form GST APL-04 is the relevant date - HELD - Under Explanation 2(d), the relevant date is the date of communication of the order of the Appellate Authority, which was the date of handing over the physical copy. Rule 113 shows that Form GST APL-04 is only a summary of the order indicating the final amount of demand confirmed. Neither Rule 89 nor Form GST RFD-01 requires a taxpayer to await uploading of the summary, as the form provides for refund on account of an order including an appeal, and a taxpayer holding a physical copy could file the application without waiting - The relevant date is ordinarily the date of communication of the physical order and the contention of the Petitioners on this aspect is not rejected - Whether refund directed by the Appellate Authority can be denied solely on the ground that the application was filed beyond two years under Section 54(1) - Appellate Authority set aside the demand and directed refund of the amount deposited, but the amount remained unrefunded and the refund application was rejected as time-barred, the summary of the order having been uploaded only after departmental instructions issued later - Whether the claim can be defeated by the procedural requirement relating to the relevant date - HELD - Once the demand is set aside and refund is directed, continued retention of the amount raises a serious question of legality, as no tax can be collected except by authority of law, a refund is property protected by Article 300A, and denial of refund affects the right under Article 19(1)(g). Procedural law is a servant and not a tyrant, and procedural requirements should facilitate and not frustrate substantive rights - The State is under a Constitutional obligation to act fairly, and the authorities are expected to ensure timely implementation of appellate orders, including by intimating the taxpayer to resort to the statutory process, as retention of the amount would indirectly revive the set aside order. The word ‘may’ in Section 54(1) does not make limitation optional, but a rigid interpretation cannot validate an illegal action - In the peculiar circumstances, the date of uploading of Form GST APL-04 is treated as the relevant date for the limited purpose of this case, the refund application is held to be within two years, the orders rejecting it are quashed - The Respondents are directed to process the application, with liberty to file a fresh offline application if the portal does not permit – The petition is allowed - Interest on delayed refund under Section 56 of the CGST Act, 2017 where refund arises from an appellate order - Petitioners claimed interest at the higher rate under the proviso to Section 56 but restricted their claim to the lower rate, although they did not file the refund application on receipt of the physical appellate order and the prayers did not specify rate or date - Whether interest is payable on the refund and from which date - HELD - The proviso to Section 56 provides for interest at a higher rate where refund arising from an order of the Appellate Authority which has attained finality is not made within sixty days from receipt of the application filed consequent to such order, and thus interest is linked to the filing of the application. Since the Petitioners were supposed to file the application on receipt of the physical copy of the order and did not do so, they are not entitled to interest from the date of that order. Treating the date of application as the date of upload of the summary, the sixty days would end on the date computed under the proviso, and in order to balance equities and since the Petitioners themselves restricted their claim - Petitioners held entitled to interest at the lower rate from the date fixed by the Court till actual payment, and if the refund is not made within twelve weeks, interest at the higher rate on the refund thereafter. [Read less]

GST - Bail - Grant of regular bail to accused in prosecution under Section 132(1) of the CGST Act, 2017 for passing of input tax credit on fake invoices - Applicant, an advocate who had filed GST returns on behalf of companies, was alleged to be involved in creation of fake companies and passing of input tax credit on the basis of fake invoice - Applicant contended that he only filed returns, had no criminal history and would cooperate in trial, whereas the Respondent opposed bail without disputing the factual matrix - Whether the applicant is entitled to bail - HELD - Personal liberty under Article 21 includes speedy tria... [Read more]

GST - Bail - Grant of regular bail to accused in prosecution under Section 132(1) of the CGST Act, 2017 for passing of input tax credit on fake invoices - Applicant, an advocate who had filed GST returns on behalf of companies, was alleged to be involved in creation of fake companies and passing of input tax credit on the basis of fake invoice - Applicant contended that he only filed returns, had no criminal history and would cooperate in trial, whereas the Respondent opposed bail without disputing the factual matrix - Whether the applicant is entitled to bail - HELD - Personal liberty under Article 21 includes speedy trial, there is a presumption of innocence before conviction, and the object of bail is to secure attendance at trial and not to punish. Even where a prima facie case exists, bail can be denied only in exceptional cases, and bail is the rule and jail the exception - Following the Hon'ble Apex Court in cases under Section 132 of the CGST Act, the maximum punishment is five years, the offences are triable by a Magistrate, the evidence is essentially documentary and electronic, and there is no apprehension of tampering. The Respondent did not show any criminal antecedents, any exceptional circumstance, any likelihood of tampering with evidence or intimidating witnesses, or any chance of fleeing from justice. The trial would not conclude within a year even if it commenced soon - Applicant held to have made out a case for bail and bail allowed [Read less]

GST - Refund - Provisional reversal of Input Tax Credit disclosed in Table 4(B)(2) of GSTR-3B whether amounts to discharge of self-assessed liability - Respondent, a manufacturer of edible oils, reversed Input Tax Credit in its return for the month of August 2018 following a reported stock shortage in a search by the Income Tax Department, and by a contemporaneous letter described the reversal as provisional while reserving the right to seek restoration - Refund claim was rejected on the ground that the reversal was voluntary and formed part of self-assessment - Rejection was set aside by the FAA - Department preferred app... [Read more]

GST - Refund - Provisional reversal of Input Tax Credit disclosed in Table 4(B)(2) of GSTR-3B whether amounts to discharge of self-assessed liability - Respondent, a manufacturer of edible oils, reversed Input Tax Credit in its return for the month of August 2018 following a reported stock shortage in a search by the Income Tax Department, and by a contemporaneous letter described the reversal as provisional while reserving the right to seek restoration - Refund claim was rejected on the ground that the reversal was voluntary and formed part of self-assessment - Rejection was set aside by the FAA - Department preferred appeal contending that reversal in a statutory return acknowledges liability under Section 59 - Whether the reversal constituted discharge of a self-assessed GST liability disentitling the Respondent from refund - HELD - Under Section 39 read with the prescribed return format, particulars of outward supplies and tax liability are distinct from particulars of Input Tax Credit availed and reversed. The amount was disclosed in Table 4(B)(2) with no liability on account of stock shortage declared in Table 3.1 - Section 59 provides for self-assessment, but the mere furnishing of a return does not mean that every amount disclosed in every table constitutes an admitted tax liability. Where an amount is expressly disclosed as a provisional reversal, the legal character must be determined from the nature of the entry, the statutory provisions and the contemporaneous documents - The letter issued at the time of reversal is consistent with the stand that the reversal was not intended to acknowledge a finally determined liability, and no contrary material showed an unequivocal admission - The Department did not establish that a demand under Section 73 or Section 74 had been determined at that time or that a quantified liability was admitted - The original rejection order did not establish that the amount was reversed towards a self-assessed GST liability. The Department's appeal on this ground is rejected - Refund - Effect of subsequent adjudication order and grounds beyond the scope of SCN on refund proceedings - Show cause notice for rejection of refund proposed rejection on the grounds that the reversal was voluntary and formed part of self-assessment, whereas the Department in appeal relied on a later Order-in-Original confirming demand on the alleged stock shortage, passed after the impugned Order-in-Appeal and under challenge in separate appellate proceedings - Whether the Department can rely on the subsequent Order-in-Original and fresh grounds to sustain rejection of refund and whether the earlier reversal can be treated as payment towards the subsequently confirmed demand - HELD - The SCN is the foundation of the Department's case, the allegations must enable the noticee to understand and answer the case. The legality of the impugned order must ordinarily be examined on the material existing when it was passed, and a subsequent order cannot cure a defect in the original reasoning - The demand confirmed later is the subject matter of separate proceedings whose merits cannot be conclusively determined in the refund appeal. The separate dispute on Input Tax Credit from a particular supplier arises from different transactions and does not determine entitlement to this refund - Reliance on the subsequent Order-in-Original is not accepted to restore the rejection - Retention of amount reversed during investigation on the basis of alleged stock shortage reported by another department, Article 265 of the Constitution and Section 54 of the CGST Act, 2017 - Department contended that the refund was premature as investigation was pending, that the book stock and physical stock difference established clandestine removal under Section 74, and that refund would cause loss to revenue - Respondent contended that an allegation by another department cannot by itself justify retention of tax without determination of liability - Whether refund can be rejected merely because the reversal was voluntary and an investigation or adjudication on the alleged stock shortage was pending - HELD - Article 265 requires that retention of an amount as tax be supported by statutory provisions and legally established liability, though it does not dispense with the requirements for refund claims. Information from another department may be an investigative lead, but a difference in stock valuation does not without further examination establish clandestine removal - Department must establish the taxable event, tax period, taxable value and rate of tax. Pendency of an investigation is not equivalent to determination of tax liability, cannot convert a provisional reversal into an established liability, and does not authorise indefinite retention. Initiation of proceedings under Section 74 does not by itself establish the alleged liability, and a later confirmation of demand does not show that the liability was admitted in the earlier return. - Rejection solely on the basis that the reversal was voluntary or the investigation was pending is not sustainable, the order of the First Appellate Authority is upheld subject to verification that the claim satisfies the requirements of Section 54 - The Department's appeal is dismissed - Pre-deposit for appeal before the Appellate Tribunal where the dispute pertains only to a refund claim - Appellant, being the Department, challenged an order of the First Appellate Authority which set aside rejection of a refund claim for provisionally reversed Input Tax Credit - Whether pre-deposit under Section 107(6) of the CGST Act, 2017 is required for the present appeal - HELD - Since the matter pertains to a refund claim and no amount of tax or duty is involved in the appeal, there is no need of pre-deposit under Section 107(6) of the CGST Act, 2017 - The appeal was entertained without pre-deposit. 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Central Sales Tax, 1956 - Concessional rate of tax under Section 8 of the CST Act on inter-State sales against Form C where original Form C is not produced and the procedure under Rule 12(2) and 12(3) of the Central Sales Tax (Registration and Turnover) Rules, 1957 is not followed - Appellant, whose head office had submitted the original Form C before the sales tax authorities of another State, could not produce the original Forms C before the Assessing Officer for part of the inter-State sales - Assessing Officer levied tax at the higher rate with penalty on such sales, the FAA accepted the forms verified online but rejec... [Read more]

Central Sales Tax, 1956 - Concessional rate of tax under Section 8 of the CST Act on inter-State sales against Form C where original Form C is not produced and the procedure under Rule 12(2) and 12(3) of the Central Sales Tax (Registration and Turnover) Rules, 1957 is not followed - Appellant, whose head office had submitted the original Form C before the sales tax authorities of another State, could not produce the original Forms C before the Assessing Officer for part of the inter-State sales - Assessing Officer levied tax at the higher rate with penalty on such sales, the FAA accepted the forms verified online but rejected the mere photocopies - Appellant contended that certified photocopies should be accepted since the genuine forms were available with the sales tax authorities of the other State and there was no intention of tax evasion - Whether the benefit of concessional rate of tax can be extended on the basis of photocopies of Form C when the original Forms C were not produced before the Assessing Officer - HELD - It is not in dispute that the Appellant had not followed the procedure prescribed under Rule 12(2) and 12(3). Where a Form C is lost or incapable of being produced before the Assessing Officer, the procedure of furnishing an indemnity bond or obtaining a duplicate form with the prescribed declaration has to be followed - The Hon'ble Supreme Court has held that the Rules are intended to prevent misuse of Forms C and are mandatory and not a mere formality or technicality - A dealer making no attempt to comply with them even after rejection of the claim is disentitled to the concessional rate under Section 8 irrespective of the genuineness of the transactions. Since Section 8 read with Rule 12 requires strict compliance and the Appellant failed to follow the prescribed procedure, the concessional rate was rightly denied by the Tribunal in upholding the order of the FAA - The appeal is dismissed [Read less]

GST - Assignment of leasehold rights in industrial plot - Petitioner acquired leasehold rights in an industrial plot and assigned the same to its wholly owned subsidiary for consideration, collected GST and deposited it with the Government – Respondent-Dept issued SCN under Section 74 of the CGST Act, 2017 alleging that input tax credit availed on the leasehold rights acquired was inadmissible - Whether the SCN proceeding on the footing that GST was leviable on such assignment is sustainable - HELD - The issue is no longer res integra, as the Court has held that assignment by sale or transfer of leasehold rights of a plo... [Read more]

GST - Assignment of leasehold rights in industrial plot - Petitioner acquired leasehold rights in an industrial plot and assigned the same to its wholly owned subsidiary for consideration, collected GST and deposited it with the Government – Respondent-Dept issued SCN under Section 74 of the CGST Act, 2017 alleging that input tax credit availed on the leasehold rights acquired was inadmissible - Whether the SCN proceeding on the footing that GST was leviable on such assignment is sustainable - HELD - The issue is no longer res integra, as the Court has held that assignment by sale or transfer of leasehold rights of a plot allotted by an industrial development corporation to a third party for consideration is a transfer of benefits arising out of immovable property - Section 7(1)(a) read with Clause 5(b) of Schedule II and Clause 5 of Schedule III is not applicable to such a transaction, which is not subject to levy of GST under Section 9. When the charging provision itself does not apply, any amount collected or retained by the Department, whether as tax or by way of reversal of input tax credit and interest, has no legal sanctity. The question of utilisation of ITC to discharge GST liability on such assignment does not arise - The proceeding premised on GST being leviable on the transaction does not survive - Blocked credit under Section 17(5)(d) and invocation of Section 74 of the CGST Act, 2017 - Respondent alleged that input tax credit on leasehold services received was blocked credit as it related to construction of immovable property, and invoked Section 74 alleging wrongly availed credit - Petitioner contended that it had not undertaken any construction activity and had collected and deposited GST on the onward assignment - Whether Section 17(5)(d) and Section 74 are attracted - HELD - Section 17(5)(d) presupposes the existence of a taxable inward supply on which tax is lawfully leviable and paid, and when the transaction is neither a supply under Section 7 nor chargeable under Section 9, the blocking provision does not arise. The bar on credit under Section 17(5)(d) applies exclusively to goods or services received for construction of immovable property, and the Respondent did not establish that the Petitioner undertook any construction activity - Following the Court's earlier decision on identical facts, the allegation of blocked credit is misconceived and shows non-application of mind. The question of fraud, wilful misstatement or suppression of facts does not arise to invoke Section 74(1) where the Petitioner collected GST from the assignee and deposited it in the return - The impugned SCNs are quashed and set aside. The petitions are allowed [Read less]

Customs - Penalty under Sections 112(a) and 114AA of the Customs Act, 1962 on a freight forwarder's employee - Facilitation of import of imitation stones by undervaluation through misuse of Importer Exporter Code obtained on rent - DRI investigation revealed an alleged scheme of importing branded glass chatons by gross undervaluation using Importer Exporter Codes obtained for consideration - Appellant, Assistant Manager of a logistics company, was alleged in his statements to have introduced the importer to a Customs clearing agent at Chennai and provided a contact who could arrange Importer Exporter Codes on rent - Commis... [Read more]

Customs - Penalty under Sections 112(a) and 114AA of the Customs Act, 1962 on a freight forwarder's employee - Facilitation of import of imitation stones by undervaluation through misuse of Importer Exporter Code obtained on rent - DRI investigation revealed an alleged scheme of importing branded glass chatons by gross undervaluation using Importer Exporter Codes obtained for consideration - Appellant, Assistant Manager of a logistics company, was alleged in his statements to have introduced the importer to a Customs clearing agent at Chennai and provided a contact who could arrange Importer Exporter Codes on rent - Commissioner imposed a consolidated penalty on the Appellant under Sections 112(a) and 114AA - Whether the penalty imposed under Sections 112(a) and 114AA is sustainable - HELD - There is no allegation showing that the Appellant committed any blameworthy act, and discussing the securing of an Importer Exporter Code on loan basis is not itself a violation of the Customs Act or the Rules. The question whether use of an Importer Exporter Code issued to another person is permissible, on which the Hon'ble Kerala High Court and the Hon'ble Patna High Court differed, is not relevant here, as the order does not find that the Appellant himself imported goods using a different code. Introducing freight forwarders to an importer is not a violation of the Customs Act, and the role of the Appellant in actually procuring the licence was not brought out with any evidence. Conspiracy is understood as an agreement to commit an illegal act or a lawful act by illegal means, and nothing shows that the Appellant was involved in an illegal act or had knowledge of any illegal activity - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Exclusion of value of goods from works contract service on the ground that VAT was not paid on the material used - Appellant, an unregistered individual service provider, undertook civil work for companies and received consideration, and SCN was issued on the basis of information received from the Income Tax Department in Form 26AS demanding service tax on the gross amount received - Adjudicating authority, on remand, dropped part of the demand and confirmed the remaining demand with interest and penalties under Sections 77 and 78 of the Finance Act, 1994, which was upheld by the FAA - Appellant contended tha... [Read more]

Service Tax - Exclusion of value of goods from works contract service on the ground that VAT was not paid on the material used - Appellant, an unregistered individual service provider, undertook civil work for companies and received consideration, and SCN was issued on the basis of information received from the Income Tax Department in Form 26AS demanding service tax on the gross amount received - Adjudicating authority, on remand, dropped part of the demand and confirmed the remaining demand with interest and penalties under Sections 77 and 78 of the Finance Act, 1994, which was upheld by the FAA - Appellant contended that the services were rendered along with material and that if the value of material is excluded on actual or presumptive basis, the aggregate value of services in each financial year falls below the threshold for registration and payment of service tax - FAA rejected the contention on the ground that the Appellant provided no evidence of payment of VAT on the material, that no VAT was charged in the invoices even after crossing the threshold under the State VAT law, and that transfer of property in goods was not established - Whether service tax can be charged on the goods component of a works contract merely because VAT was not paid on the goods used - HELD - The undisputed position is that the services rendered were works contracts, and the value of the goods has to be excluded either on actual or on presumptive basis, since service tax can be levied only on the service component. Whether VAT was paid or not paid on the goods is not relevant to determine the service component of a works contract. If VAT was chargeable but not paid, it is for the State Government to take action, and non-payment of VAT cannot justify charging service tax on the goods component - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Refund of interest paid on Bill of Entry owing to technical glitch in the ICEGATE portal - Waiver of interest under the Customs (Waiver of Interest) 3rd Order dated 17.04.2023 - Appellant remitted customs duty on time through the bank on the date of filing of the Bill of Entry on 20.04.2023, which was not reflected on the Customs portal owing to technical glitches, and was forced to pay interest - The waiver order covered B/E filed up to 13.04.2023 and an Advisory was issued on 27.07.2023 on the system inability - Refund of the interest was rejected by the lower authorities on the sole ground that the B/E was fil... [Read more]

Customs - Refund of interest paid on Bill of Entry owing to technical glitch in the ICEGATE portal - Waiver of interest under the Customs (Waiver of Interest) 3rd Order dated 17.04.2023 - Appellant remitted customs duty on time through the bank on the date of filing of the Bill of Entry on 20.04.2023, which was not reflected on the Customs portal owing to technical glitches, and was forced to pay interest - The waiver order covered B/E filed up to 13.04.2023 and an Advisory was issued on 27.07.2023 on the system inability - Refund of the interest was rejected by the lower authorities on the sole ground that the B/E was filed after the cut-off date of 13.04.2023 mentioned in the waiver order - Whether the Appellant is eligible for waiver and refund of interest on a Bill of Entry filed after the cut-off date mentioned in the waiver order - HELD - The issue is no longer res integra, as the Hon’ble High Court at Rajasthan considered the very same issue and held that, as per the Advisory, the date of removal of system inability in context of the waiver order is the date of issue of the Advisory, which shows that the technical glitches existed till 27.07.2023. No interest is demandable for delay in crediting to the Government account where the delay is due to technical glitches. The rejection order was held inconsistent with the conjoint reading of Section 47 of the Customs Act, 1962, the waiver order, the Advisory and the efforts of the taxpayer to make payment successfully on the date of filing of the B/E. Since the only ground on which the refund was rejected is the date mentioned in the waiver order, the decision of the High Court squarely applies - The impugned order is set aside, the appeal is allowed [Read less]

Service Tax - Taxability of commission received after the date on which commission agent service became taxable under Business Auxiliary Service for services rendered before that date - Appellant rendered service of transferring a licence to a third party and raised debit notes for the commission before 09.07.2004, while the commission was received between 09.07.2004 and 31.03.2005 - SCN alleged non-payment of service tax under BAS on the commission received during that period, and the demand was confirmed with interest and penalty and upheld by the FAA on the ground that the commission was received after 09.07.2004 - Appe... [Read more]

Service Tax - Taxability of commission received after the date on which commission agent service became taxable under Business Auxiliary Service for services rendered before that date - Appellant rendered service of transferring a licence to a third party and raised debit notes for the commission before 09.07.2004, while the commission was received between 09.07.2004 and 31.03.2005 - SCN alleged non-payment of service tax under BAS on the commission received during that period, and the demand was confirmed with interest and penalty and upheld by the FAA on the ground that the commission was received after 09.07.2004 - Appellant contended that services of a commission agent were exempted by Notification No. 13/2003-ST until the introduction of Notification No. 8/2004-ST dated 09.07.2004, and that under the second proviso to Rule 6(1)(ii) of the Service Tax Rules, 1994 no service tax is payable for the period when the service was rendered - Whether service tax is payable on commission for services rendered before 09.07.2004 when the commission was received after that date - HELD - The debit notes show that the services were rendered prior to 09.07.2004, during a period when commission agent service was not taxable under BAS. The view of the adjudicating authority that the demand is sustainable because the commission was received after 09.07.2004 is not accepted, since the date of rendering of the service is relevant for determining liability and the date of receipt of the amount is not relevant. As the service was not liable to service tax when rendered, receipt of the commission later does not make the amount taxable - The demand of service tax along with interest and penalty is not sustainable, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Valuation of chewing tobacco for National Calamity Contingent Duty under Section 4A of the Central Excise Act, 1944 for the period after introduction of GST - Appellants, manufacturers of chewing tobacco, cleared the goods on payment of National Calamity Contingent Duty by adopting valuation under Section 4 - Revenue alleged short payment on the ground that valuation should be on retail sale price after abatement under Section 4A read with Notification No. 49/2008-CE (N.T.) - Whether the demand of differential duty on the basis of valuation under Section 4A is sustainable - HELD - The dispute is not about ... [Read more]

Central Excise - Valuation of chewing tobacco for National Calamity Contingent Duty under Section 4A of the Central Excise Act, 1944 for the period after introduction of GST - Appellants, manufacturers of chewing tobacco, cleared the goods on payment of National Calamity Contingent Duty by adopting valuation under Section 4 - Revenue alleged short payment on the ground that valuation should be on retail sale price after abatement under Section 4A read with Notification No. 49/2008-CE (N.T.) - Whether the demand of differential duty on the basis of valuation under Section 4A is sustainable - HELD - The dispute is not about non-payment of duty but about the valuation to be adopted. The Tribunal in M/s.Trimurti Fragrances & Flavours Pvt. Ltd. case has held that the Notification issued under Section 4A referred to the Central Excise Tariff Act, 1985, which was repealed with effect from 01.07.2017, and no amendment was made to the Notification unlike other notifications, Revenue could not demonstrate how it remained operational. There was therefore no operating provision for assessment under Section 4A for the period from 01.07.2017 to 01.02.2022. That decision attained finality on dismissal of the appeal by the Supreme Court, and the issue is settled - The demand confirmed on valuation under Section 4A is set aside and the appeals are allowed [Read less]

Central Excise - Clandestine removal alleged on shortage of input found in stock verification - Appellant, a manufacturer of TMT bars, was found on verification of stock to have a shortage of MS ingots on which CENVAT credit was taken, and SCN demanded duty on the ground that the shortage represented removal without accounting - Appellant submitted that the material had been issued to the factory area but not properly recorded in the record book, and that Revenue produced no corroborative evidence - The adjudicating authority and the Commissioner (Appeals) confirmed the demand - Whether mere shortage of input on verificati... [Read more]

Central Excise - Clandestine removal alleged on shortage of input found in stock verification - Appellant, a manufacturer of TMT bars, was found on verification of stock to have a shortage of MS ingots on which CENVAT credit was taken, and SCN demanded duty on the ground that the shortage represented removal without accounting - Appellant submitted that the material had been issued to the factory area but not properly recorded in the record book, and that Revenue produced no corroborative evidence - The adjudicating authority and the Commissioner (Appeals) confirmed the demand - Whether mere shortage of input on verification of stock establishes clandestine removal so as to sustain the demand of duty - HELD - There was no dispute about the shortage on the date of verification. Revenue had not brought any corroborative evidence as to how the material was removed or how the Appellant received monetary consideration for it, and no proper documentary evidence was produced for the allegation of clandestine removal. Revenue is precluded from presuming clandestine removal unless it has corroborative evidence, and mere shortage of materials on its own will not prove clandestine removal. Following the Tribunal decision holding that clandestine removal is a serious charge to be discharged by tangible corroborative evidence such as sale of raw material, clandestine manufacture, flow back of funds or transport documents, the shortage was a case of improper accountal of inputs - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Demand and extended period of limitation where exemption was claimed but the notification was amended - Section 73(1) of the Finance Act, 1994 - Appellant, on scrutiny of ST-3 returns against Form 26AS and books of account, was found to have short paid service tax on services rendered to a public authority, Government and sister concerns - Demand was reduced by the adjudicating authority and the Commissioner (Appeals) to the extent of admissible exemption and abatement - Whether the demand confirmed beyond the normal period can be sustained when the Appellant pleaded ignorance of the amendment to the exemptio... [Read more]

Service Tax - Demand and extended period of limitation where exemption was claimed but the notification was amended - Section 73(1) of the Finance Act, 1994 - Appellant, on scrutiny of ST-3 returns against Form 26AS and books of account, was found to have short paid service tax on services rendered to a public authority, Government and sister concerns - Demand was reduced by the adjudicating authority and the Commissioner (Appeals) to the extent of admissible exemption and abatement - Whether the demand confirmed beyond the normal period can be sustained when the Appellant pleaded ignorance of the amendment to the exemption notification - HELD - The sole contention of the Appellant was ignorance of the change in the exemption notification. Ignorance of law cannot be an excuse. If the Appellant was aware that it was rendering taxable services and was entitled to the benefit of the exemption notification, it was incumbent upon it to keep track of any changes to the notification, including its non-applicability during any period. The Appellant produced no document to show that the services were exempt after the amendment. The lower authorities had been fair in dropping the demand to the extent the Appellant was entitled to exemption or abatement - The impugned order is upheld and the demand stands sustained and the appeal is dismissed [Read less]

Service Tax - Rejection of appeal by Commissioner (Appeals) as time barred - Service of adjudication order under Section 37C of the Central Excise Act, 1944 made applicable to service tax - Appellant's appeal was rejected on the ground that it was filed beyond the condonable period of 90 days from the adjudication order, and the Commissioner (Appeals) held that he cannot condone further delay under Section 35A - Whether the appeal was rightly rejected as time barred in view of non-service of the order in the manner required by Section 37C - HELD - The Appellant was not available at the address mentioned in the appeal memor... [Read more]

Service Tax - Rejection of appeal by Commissioner (Appeals) as time barred - Service of adjudication order under Section 37C of the Central Excise Act, 1944 made applicable to service tax - Appellant's appeal was rejected on the ground that it was filed beyond the condonable period of 90 days from the adjudication order, and the Commissioner (Appeals) held that he cannot condone further delay under Section 35A - Whether the appeal was rightly rejected as time barred in view of non-service of the order in the manner required by Section 37C - HELD - The Appellant was not available at the address mentioned in the appeal memorandum, and the adjudication order passed was not received by him, as evident from the affidavit and the contractor's certificate. The copy of the adjudication order was not personally delivered to the Appellant, so the requirement of Section 37C was not complied with. The Supreme Court has held that where the manner of doing an act is prescribed under the statute, the act must be done in that manner, and that an order must be tendered on the concerned person or his authorized agent and on no one else, with limitation computed from the date of knowledge. Since the delay was only 6 days and an application for condonation was filed, the Commissioner (Appeals) shall not insist on condonation and shall decide the appeal on the available records and the documents to be submitted at the personal hearing - The impugned order is set aside and the appeal is allowed by way of remand [Read less]

GST – Validity of Paragraph 4.6 of the Circular No. 197/09/2023 GST dated 17.07.2023, Refund of interest paid under Rule 96A of the CGST Rules, 2017 on delayed realisation of export proceeds where the tax so paid is refunded - Petitioner could not realise the export consideration in convertible foreign exchange within one year and deposited tax with interest under Section 50 as required by Rule 96A(1)(b) - When the consideration was realised later, the refund of tax was allowed but the refund of interest was rejected - Appellate Authority affirmed the rejection relying on paragraph 4.6 of the Circular dated 17.07.2023, w... [Read more]

GST – Validity of Paragraph 4.6 of the Circular No. 197/09/2023 GST dated 17.07.2023, Refund of interest paid under Rule 96A of the CGST Rules, 2017 on delayed realisation of export proceeds where the tax so paid is refunded - Petitioner could not realise the export consideration in convertible foreign exchange within one year and deposited tax with interest under Section 50 as required by Rule 96A(1)(b) - When the consideration was realised later, the refund of tax was allowed but the refund of interest was rejected - Appellate Authority affirmed the rejection relying on paragraph 4.6 of the Circular dated 17.07.2023, which provides that no refund of interest paid in compliance of Rule 96A(1) is admissible - Whether interest paid under Rule 96A can be retained by the Revenue solely on the strength of paragraph 4.6 of the Circular after the tax deposited has been refunded upon subsequent realisation of export proceeds - HELD - Section 54(1) expressly contemplates refund not only of tax but also of interest paid on such tax and any other amount paid. Rule 96A requires payment of tax with interest on failure to realise proceeds, but does not provide the consequence where proceeds are realised later and the tax is refunded, and does not provide that the interest shall be retained, the restriction being found only in paragraph 4.6 of the Circular. Having accepted subsequent realisation and refunded the tax, the Revenue cannot justify retention of interest merely by relying on the Circular in the absence of independent statutory basis. A Circular may clarify the manner of administering a provision but cannot override or alter the statute - Interest is compensatory and ordinarily follows the principal amount, and the contention that subsequent realisation cannot undo the default is not accepted – Further, the Rule 96B operates in a different field of recovery of refund already granted on export of goods and its silence on interest cannot be imported into Rule 96A or restrict Section 54(1) - Paragraph 4.6 of the Circular is declared bad in law and quashed to the extent that it denies refund of interest paid under Rule 96A(1) where the tax is subsequently refunded upon realisation of export proceeds - The order of the Appellate Authority rejecting refund of interest is set aside, the Respondents are directed to refund the interest corresponding to the tax already refunded - The writ petition is allowed. [Read less]

GST – Maharashtra AAR - Nature of activity of preparing ready-mix concrete from inputs supplied free of cost by a registered recipient, Scope of Job work under Section 2(68) of the CGST Act, 2017 - Applicant set up a ready-mix concrete batching plant at the recipient's project site and carried out weighing, batching, mixing, chemical treatment and primary transportation – The inputs supplied free of cost by the recipient, ownership of which never passed to the Applicant, while the Applicant bore only operational expenses such as power, fuel, labour and maintenance - Work orders and invoices described the activity as mi... [Read more]

GST – Maharashtra AAR - Nature of activity of preparing ready-mix concrete from inputs supplied free of cost by a registered recipient, Scope of Job work under Section 2(68) of the CGST Act, 2017 - Applicant set up a ready-mix concrete batching plant at the recipient's project site and carried out weighing, batching, mixing, chemical treatment and primary transportation – The inputs supplied free of cost by the recipient, ownership of which never passed to the Applicant, while the Applicant bore only operational expenses such as power, fuel, labour and maintenance - Work orders and invoices described the activity as mixing and primary transportation with rates stated to be without material - Whether the activity is a supply of goods or a supply of services and whether it qualifies as job work under Section 2(68) of the CGST Act, 2017 - HELD - Under Section 7(1A) read with Para 3 of Schedule II, any treatment or process applied to another person's goods is a supply of services, and the taxable event under GST is supply and not manufacture. Even if a distinct product emerges, the statutory deeming fiction prevails and the reliance on excise jurisprudence only establishes emergence of a new product without altering the classification of the activity as a service - Job work under Section 2(68) requires a treatment or process, on goods belonging to another person, who is a registered person. All three ingredients were satisfied since the recipient is a registered person, ownership of the inputs and resultant concrete remained with it, and substantial processing was undertaken. Following the Circular dated 26.03.2018, use of the job worker's own consumables such as power and fuel does not take the activity outside job work, and job work may or may not amount to manufacture - The documents on record showing rates without material and invoices only for mixing and primary transportation sufficiently addressed the objection of the jurisdictional officer - Applicant held not to be supplying ready-mix concrete as goods, and the activity held to be a supply of service qualifying as job work – Ordered accordingly - Classification of job work service of preparing ready-mix concrete on inputs owned by a registered recipient under Heading 9988 and SAC 998853 - Applicant claimed classification as other non-metallic mineral product manufacturing services within manufacturing services on physical inputs owned by others - Whether the activity is classifiable under Heading 9988 and, more specifically, under SAC 998853 - HELD - Heading 9988 covers services performed on physical inputs owned by units other than the service provider, characterised as outsourced portions of a manufacturing process or a complete outsourced manufacturing process, where the output is not owned by the service provider and the value is based on the service fee and not on the value of goods manufactured. This description exactly matches the Applicant's arrangement. SAC 998853 expressly includes concrete, cement and plaster article manufacturing services and other non-metallic mineral product manufacturing services, and ready-mix concrete being a form of concrete produced by a specialised automated process is directly relatable to it. No separate exclusion or more specific competing entry applies - Activity held classifiable under Heading 9988 and specifically under SAC 998853 as other non-metallic mineral product manufacturing services - Rate of tax on job work services relating to ready-mix concrete under Sl. No. 26(id) and Sl. No. 26(iv) of Notification No. 11/2017-Central Tax (Rate) and effect of substitution by Notification No. 15/2025-Central Tax (Rate) - Rate of tax for the periods before and after the substitution of Sl. No. 26 with effect from 22.09.2025 - HELD - As clarified by Circular dated 22.11.2019, there is a clear demarcation between the two entries, with Sl. No. 26(id) covering only job work as defined in Section 2(68) undertaken on goods belonging to another registered person, and Sl. No. 26(iv) being a residual entry excluding services covered by item (id) and therefore covering services on goods owned by persons other than registered persons. Since the recipient is a registered person and the activity qualifies as job work, the activity falls under Sl. No. 26(id) and recourse to the residual entry is not permissible. As the question concerns an ongoing continuous supply and the rate changed during pendency of the proceedings, the ruling is required to reflect the rate for both periods - GST is payable at 12% up to 21.09.2025 under Sl. No. 26(id) and at 18% from 22.09.2025 under Sl. No. 26 as substituted by Notification No. 15/2025-Central Tax (Rate). [Read less]

GST - Maharashtra AAR - Taxability of unconditional donations received by a charitable trust imparting yoga knowledge free of cost - Applicant, a public charitable trust registered under Section 12AA of the Income-tax Act, 1961, imparted yogic knowledge free of cost through volunteers at its centres and received donations from some of the participants - Whether unconditional donations received by the applicant attract GST - HELD - Supply under Section 7(1)(a) of the CGST Act, 2017 requires a supply of goods or services made for a consideration, and consideration under Section 2(31) requires a direct and clear nexus between... [Read more]

GST - Maharashtra AAR - Taxability of unconditional donations received by a charitable trust imparting yoga knowledge free of cost - Applicant, a public charitable trust registered under Section 12AA of the Income-tax Act, 1961, imparted yogic knowledge free of cost through volunteers at its centres and received donations from some of the participants - Whether unconditional donations received by the applicant attract GST - HELD - Supply under Section 7(1)(a) of the CGST Act, 2017 requires a supply of goods or services made for a consideration, and consideration under Section 2(31) requires a direct and clear nexus between the payment and a supply. A purely voluntary donation where no benefit or service is provided to the donor is not taxable, whereas a donation linked to a service, facility or benefit extended to the donor is treated as consideration. Taxability depends on the substance of the transaction and not on the label assigned to it - In the present case, yoga knowledge is imparted free of cost through volunteers, the donations are voluntary and unconditional, and no obligation exists on the trust to provide any identifiable service to the donor - Such voluntary and unconditional donations do not qualify as consideration and do not fall within the scope of supply, hence GST is not leviable, though any amount described as donation but linked directly or indirectly to participation, entry, training or any identifiable benefit would be liable to GST – Ordered accordingly - Exemption under Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) for fees charged for structured yoga training, examination and certification courses - Applicant, a trust registered under Section 12AA of the Income-tax Act, 1961 and accredited by the Yoga Certification Board under the Ministry of AYUSH, conducted curriculum-based courses, examinations and certification for fees, which enabled students to secure employment as yoga trainers - Whether the fees for such training, examination and certification are exempt as charitable activities - HELD - Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) requires both registration under Section 12AA or 12AB of Income Tax Act and that the service qualify as a charitable activity as defined in the notification. Mere registration as a charitable trust does not grant exemption. The phrase ‘advancement of yoga’ is intended to cover activities such as free yoga camps, public awareness programmes, spiritual yoga dissemination and non-commercial yoga promotion. Structured, curriculum-based courses for a prescribed fee, culminating in examination, certification and a professional qualification, assume the character of a formal training or coaching service provided for consideration, which remains commercial for GST purposes even when carried out by a charitable trust. The consideration charged is directly linked to the services provided - Activity held to be a supply of training or coaching services for consideration, exemption under Entry No. 1 is not available and the services are liable to GST - Exemption for supply of certified yoga instructors to hospitals on contractual terms - Applicant supplied AYUSH certified yoga instructors to hospitals under memoranda of understanding on a continuous basis for an agreed monthly consideration and claimed exemption under Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) as an entity registered under Section 12AA engaged in advancement of yoga - Whether such supply of instructors is exempt as a charitable activity - HELD - The arrangement involves deployment of trained personnel under contractual arrangements for periodic consideration in the course of an organised activity, and satisfies all elements of supply of services under Section 7(1)(a). In substance, it is provision of trained manpower, classifiable as support services under SAC 9985 in the nature of manpower supply. The exemption is conditional and depends on the nature of the service qualifying as a charitable activity and not merely on the status of the service provider. The trust is not directly providing free public health services to beneficiaries, the hospitals pay consideration, and the service is commercially structured through memoranda of understanding - The mere fact that the services relate to health or wellness does not alter the taxable nature of the transaction in the absence of a specific exemption - Services held not to be charitable activities, exemption held not available and the services are liable to GST - Exemption under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) for pure services to a local authority in relation to public health function under Article 243W of the Constitution - Applicant provided trained yoga instructors on an hourly basis to a Municipal Corporation for a public programme of training citizens in yoga to enable them to practise preventive health care, without supplying any goods or materials - Whether the services qualify as pure services provided to a local authority in relation to a function entrusted to a Municipality under Article 243W - HELD - Entry No. 3 requires three cumulative conditions, namely that the service be a pure service without supply of goods, that it be provided to the Government, a local authority or a governmental authority, and that it relate to a function entrusted to a Municipality under Article 243W read with the Twelfth Schedule - The Applicant supplied only instructors without any goods, and the consideration pertained solely to the service component, so the pure service condition stands satisfied. A Municipal Corporation is a local authority under Section 2(69) of the CGST Act - Though the arrangement bears characteristics of manpower supply, exemption notifications must be interpreted strictly having regard to the true nature and substance of the transaction. The instructors are the means through which the Municipal Corporation implements a public health and wellness programme in discharge of its constitutional functions. The dominant objective is execution of a civic health initiative and not commercial manpower supply, which has a direct nexus with public health falling within the Twelfth Schedule - All conditions of Entry No. 3 held fulfilled and the services held exempt as pure services provided to a local authority. [Read less]

GST - Maharashtra AAR - Taxability of supply of laboratory testing services rendered by a State agricultural university for fees - Supply in the course or furtherance of business under Section 7(1)(a) of the CGST Act, 2017 - Applicant, a statutory agricultural university substantially funded by the State Government, carried out soil, water, seed, plant pathology and feed testing and product testing for students, farmers, government departments, private companies and the public for nominal fees - Whether the laboratory testing services amount to supply for consideration in the course or furtherance of business - HELD - The ... [Read more]

GST - Maharashtra AAR - Taxability of supply of laboratory testing services rendered by a State agricultural university for fees - Supply in the course or furtherance of business under Section 7(1)(a) of the CGST Act, 2017 - Applicant, a statutory agricultural university substantially funded by the State Government, carried out soil, water, seed, plant pathology and feed testing and product testing for students, farmers, government departments, private companies and the public for nominal fees - Whether the laboratory testing services amount to supply for consideration in the course or furtherance of business - HELD - The definition of business under Section 2(17) is inclusive, covers any trade, commerce, profession, vocation or similar activity whether or not for pecuniary benefit, and also covers activities incidental or ancillary thereto, irrespective of volume, frequency, continuity or regularity. The services of testing and providing test reports are therefore covered by the definition of business. The fees charged are monetary consideration for the services rendered - Both the criteria of business and consideration were held to be met and the laboratory testing services held to be a supply of services under Section 7(1) – Ordered accordingly - Exemption under Entry Nos. 4 and 5 of Notification No. 12/2017-Central Tax (Rate) for services by a governmental authority in relation to functions entrusted to a Municipality or Panchayat - Applicant claimed that laboratory testing for private companies, farmers and government departments fell within agriculture including agricultural extension under the Eleventh Schedule and education under the Twelfth Schedule - Whether the laboratory testing services are in relation to functions entrusted to a Panchayat or Municipality under Article 243G or Article 243W of the Constitution - HELD - Exemption under these entries requires that the services be provided by a governmental authority and that they be in relation to a function entrusted to a Municipality or Panchayat, and both conditions must be satisfied simultaneously. Agriculture in the Eleventh Schedule covers activities related to cultivation, and laboratory testing services given to private companies or other recipients for fees are not covered by it - Agricultural extension is in the nature of training and education to farmers, and laboratory testing cannot be categorised as agricultural extension. Since the second condition is not met, it is unnecessary to examine whether the Applicant is a governmental authority - Services held not covered by Entry Nos. 4 and 5 and not exempt - Exemption under Entry 54 of Notification No. 12/2017-Central Tax (Rate) for agricultural operations and agricultural extension services and classification and rate of laboratory testing services - Applicant claimed exemption for testing directly related to production of agricultural produce and for agricultural extension services - Whether the laboratory testing services are classifiable under SAC 9986 and covered by Entry 54(a) or 54(f), and if not, the applicable classification and rate - HELD - Entry 54(a) covers services classifiable under SAC 9986 by way of agricultural operations directly related to production of agricultural produce. The firms whose products were tested are not carrying out cultivation, while testing for students and research scholars is part of academic curriculum and not directly related to production of agricultural produce - The tests of products did not lead directly to production of agricultural produce, being for commercial purposes. Agricultural extension is defined as application of scientific research and knowledge to agricultural practices through farmer education or training, and laboratory testing does not provide such education or training. The services are akin to technical testing and analysis of chemical and biological properties of materials such as soil, water and food, and are appropriately classifiable under SAC 998346, and the exemption available only to services under Heading 9986 is not available - Services held classifiable under SAC 998346 as technical testing and analysis services and liable to 18% GST - Exemption under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate) for laboratory testing charges collected by a university from its students, research scholars and faculty - Applicant, a state university recognised by the University Grants Commission, conducted undergraduate, postgraduate and doctoral programmes in agriculture and related disciplines and collected laboratory testing charges from students, research scholars and faculty as part of academic curriculum and research activities - Whether the Applicant is an educational institution and whether such charges are exempt - HELD - An educational institution under the notification includes an institution providing education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. The Applicant offers degree programmes recognised by law and is a public university with recognition, and therefore qualifies as an educational institution. Entry 66(a) exempts services provided by an educational institution to its students, faculty and staff - Laboratory testing charges collected from students, research scholars and faculty members as part of academic curriculum and research activities held exempt under Entry 66(a). [Read less]

Customs - Entitlement to interest on refund of amount deposited during investigation, from the date of deposit till realisation - Appellant cleared the imported goods on payment of duty and deposited an amount during investigation, after which the demand confirmed by the adjudicating authority was set aside by the Commissioner (Appeals) and the appeal of the Department was dismissed by the Tribunal in remand proceedings - Appellant thereafter claimed refund of the deposit in terms of the Board Circular, and the refund was sanctioned within three months of filing the claim, but interest was disallowed on the ground that it ... [Read more]

Customs - Entitlement to interest on refund of amount deposited during investigation, from the date of deposit till realisation - Appellant cleared the imported goods on payment of duty and deposited an amount during investigation, after which the demand confirmed by the adjudicating authority was set aside by the Commissioner (Appeals) and the appeal of the Department was dismissed by the Tribunal in remand proceedings - Appellant thereafter claimed refund of the deposit in terms of the Board Circular, and the refund was sanctioned within three months of filing the claim, but interest was disallowed on the ground that it is payable only after three months from the date of filing of the refund claim - Appellant relied on the decision of the Hon'ble High Court of Orissa allowing interest from the date of deposit till realisation - Whether the Appellant is entitled to interest on the refunded amount from the date of deposit till its realisation - HELD - The Hon'ble High Court of Orissa held that where the refund results from a finding that the amount ought not to have been collected in the first place, interest on the refunded amount should run from the date on which the claimant parted with the money and was restrained from using it. In the present case the customs duty was admittedly not payable by the Appellant in the first place, as the demand stood set aside - Following the decision of the Hon'ble High Court, the contention of Revenue that interest is payable only after three months from the date of filing of the refund claim is not accepted - The Appellant is entitled to interest from the date of payment till its realisation and both the appeals are disposed of accordingly [Read less]

Customs - Maintainability of demand of Anti-Dumping Duty under Section 28 of the Customs Act, 1962 on goods cleared on self-assessment without challenge to the assessment - Appellant imported cold rolled flat products of stainless steel from China under CTH 7219 and cleared them on self-assessment without paying Anti-Dumping Duty leviable under the relevant Notification - Revenue issued SCN under Section 28(1) proposing recovery with interest and penalty, which was confirmed and upheld by the FAA - Appellant contended that self-assessment, being an assessment order not appealed against or modified, cannot be reopened by SC... [Read more]

Customs - Maintainability of demand of Anti-Dumping Duty under Section 28 of the Customs Act, 1962 on goods cleared on self-assessment without challenge to the assessment - Appellant imported cold rolled flat products of stainless steel from China under CTH 7219 and cleared them on self-assessment without paying Anti-Dumping Duty leviable under the relevant Notification - Revenue issued SCN under Section 28(1) proposing recovery with interest and penalty, which was confirmed and upheld by the FAA - Appellant contended that self-assessment, being an assessment order not appealed against or modified, cannot be reopened by SCN, relying on the decision of the Hon'ble Supreme Court on refund of duty paid on self-assessment - Whether Revenue can demand duty under Section 28 without first challenging the self-assessment - HELD - The decision relied upon dealt with a refund claim under Section 27, where the Hon'ble Supreme Court held that refund cannot be entertained unless the self-assessment is modified in accordance with law. The present matter involves non-payment of duty during self-assessment and is governed by Section 28 for recovery of duties not levied or not paid, which is entirely different from the refund provisions. The Hon'ble Supreme Court in an earlier decision held that a clearance order under Section 47 cannot debar issuance of an SCN, and a coordinate Bench of the Tribunal followed it to reject the same contention - There is no bar on issuing an SCN under Section 28 without challenging the self-assessment, and the contention is rejected - Recovery of IGST on Anti-Dumping Duty and interest under Sections 28 and 28AA of the Customs Act, 1962 - Appellant contended that IGST is levied under the IGST Act, is not a duty of customs as defined in Section 2(15), and cannot be demanded under Sections 28 and 28AA - Whether IGST on the unpaid Anti-Dumping Duty is recoverable under Section 28 along with interest under Section 28AA - HELD - Section 3(7) of the Customs Tariff Act, 1975 makes imported articles liable to integrated tax, and Section 3(8) includes in its value any duty of customs chargeable under Section 12 of the Customs Act. Anti-Dumping Duty under Section 9A of the Customs Tariff Act is a duty of customs, since Section 2(15) read with Section 12 shows that duties of customs include all duties levied under the Customs Tariff Act. IGST is therefore leviable on the Anti-Dumping Duty not paid at self-assessment, following a coordinate Bench of the Tribunal - The demand of Anti-Dumping Duty and IGST thereon along with interest is affirmed - Quantum of penalty under Section 117 of the Customs Act, 1962 for non-payment of Anti-Dumping Duty - Goods were imported in the year 2019, and penalty was imposed at the enhanced maximum introduced with effect from 01.08.2019 by the Finance (No.2) Act, 2019 - Whether the penalty imposed under Section 117 is sustainable in quantum - HELD - Imposition of penalty under Section 117 is discretionary, and no question of law arises in the absence of any allegation of arbitrary or mala fide exercise, as held by the Hon'ble High Court of Karnataka. However, at the time of these imports the maximum penalty prescribed was lower than the enhanced maximum introduced later - The penalty is reduced to the maximum prevailing at the material time, the impugned order is upheld with this modification and the appeal is partly allowed. [Read less]

Central Excise - Abatement of appeal of corporate debtor on approval of resolution plan by the National Company Law Tribunal - Appellant company, which was held to be the real manufacturer of fabrics processed in the leased process-house and was saddled with duty, interest and penalty on the basis of SCN, had its resolution plan approved by the NCLT, which took note of the confirmed demands and provided for payment of a specified sum towards Government dues - Appellant contended that all proceedings stand settled in terms of the resolution plan and the appeal should abate under Rule 22 of the CESTAT Procedure Rules, 1982 -... [Read more]

Central Excise - Abatement of appeal of corporate debtor on approval of resolution plan by the National Company Law Tribunal - Appellant company, which was held to be the real manufacturer of fabrics processed in the leased process-house and was saddled with duty, interest and penalty on the basis of SCN, had its resolution plan approved by the NCLT, which took note of the confirmed demands and provided for payment of a specified sum towards Government dues - Appellant contended that all proceedings stand settled in terms of the resolution plan and the appeal should abate under Rule 22 of the CESTAT Procedure Rules, 1982 - Whether the appeal of the corporate debtor abates in view of the approved resolution plan - HELD - The NCLT order approving the resolution plan was passed after taking note of the confirmed demands along with interest and penalties, and the Hon'ble Supreme Court has held that claims not forming part of the approved resolution plan stand extinguished - In view of the approval order read with the decisions of the Hon'ble Supreme Court, the appeal is to be abated under Rule 22 of the CESTAT Procedure Rules, 1982 - The appeal filed by the corporate debtor is abated - Liability to pay duty of lessee company held not to be the manufacturer under Section 2(f) of the Central Excise Act, 1944 - Appellant, the lessee company which took over the process-house on lease from a related company, cleared processed fabrics on payment of duty after claiming deductions in the price declarations, and SCNs were issued demanding differential duty - The impugned order held that the lessor company was the manufacturer and the lease arrangement was a colourable device, and also held that the Appellant did not hold the position of a manufacturer and revoked its registration, whereas the demand was nevertheless confirmed against the Appellant - Appellant contended that once it is held not to be the manufacturer under Section 2(f), the demand against it is bad in law - Whether duty can be demanded from the Appellant who is held not to be the manufacturer - HELD - Though the incidence of duty arises on activities covered by the definition of manufacture, the duty is determined and payable at the time of clearance, and the statutory scheme distinguishes between the person who manufactures the goods and the person legally bound to pay duty upon clearance. Section 3 of the Act charges duty on goods manufactured, but the responsibility of payment is placed on the person who removes or clears the goods, and the Hon'ble Supreme Court has held that the taxable event is manufacture while the liability to pay duty is postponed till removal. Any person who presents the goods for clearance from the premises assumes the obligation to pay duty. The impugned order does not hold that the Appellant was not liable to pay duty on the goods cleared by it, and the Appellant cannot dispute this position since it cleared the goods on payment of duty by issuing invoices - The contention of the Appellant is rejected and the liability to pay duty on goods cleared by it is upheld - Admissibility of deductions towards grading expenses, cartage, handling charges, brokerage and interest on stock in determining assessable value under erstwhile Section 4 of the Central Excise Act, 1944 - Appellant claimed these deductions as post-clearance expenses in the price declarations, and the adjudicating authority allowed only the deduction towards value loss and denied the rest - Appellant contended that the expenses relate to activities after clearance and relied on decisions concerning packing and repacking and valuation on the basis of comparable goods - Whether the deductions claimed are admissible while arriving at the assessable value - HELD - The sale transaction between the lessee company and the lessor company was held by the adjudicating authority to be a colourable device, so that the goods entered the course of wholesale trade only when they were finally cleared to independent buyers. Expenses incurred up to the stage when goods enter the stream of wholesale trade, even if incurred after manufacture, are includible in the assessable value, as held by the Hon'ble Supreme Court in the decisions on storage charges, handling expenses and interest on stocks carried after clearance. The decision relied upon by the Appellant dealt with packing and repacking and the other decision determined value on the basis of comparable goods and not on the expenses claimed as deductions, so that both are distinguishable. The reasons recorded in the impugned order for allowing value loss and denying the other deductions are in agreement with the settled law - The demand of differential duty along with interest in respect of the SCNs is upheld - Liability of person taking over premises along with stock of processed fabrics to pay duty and imposition of penalty under Section 11AC - Appellant took over the process-house along with stock of processed fabrics from the lessee company and cleared the same for home consumption, and SCN demanded short paid duty with penalty - Appellant contended that it is not the manufacturer of the goods taken over - Whether the Appellant is liable to pay duty on the stock cleared by it and whether penalty under Section 11AC is imposable on the lessee company and on the Appellant - HELD - The observations that the duty is payable by the person who clears the goods apply equally to the clearances effected by the Appellant of the stock taken over along with the premises, so that the demand of duty with interest is upheld. In respect of the SCNs against the lessee company, the demand was made within the normal period of limitation and the impugned order recorded no finding that the Appellant was responsible for any of the acts specified in Section 11AC with intent to evade duty. Mere claim of deductions which as per Revenue were inadmissible cannot justify penalty, following the decision of the Hon'ble Supreme Court - The demand of duty with interest is upheld, while penalty under Section 11AC imposed in respect of these SCNs is not sustainable and is set aside - Penalty under erstwhile Rule 209A of the Central Excise Rules, 1944 on directors and officers in the absence of finding of confiscation - Penalty was imposed under Rule 209A on the Appellants who were directors, managing director, general managers and proprietors connected with the companies, in proceedings where the manufacturing company had been held liable to pay duty, interest and penalty - Appellants contended that penalty under Rule 209A requires that the excisable goods be held liable to confiscation and no such finding existed - Whether penalty under Rule 209A is sustainable against the Appellants - HELD - The proceedings against the manufacturing company stand abated, and the prerequisite for penalty under Rule 209A is that the person should be found guilty of the acts of omission and commission specified in the Rule in respect of excisable goods held liable for confiscation, which was not satisfied. However, each of the Appellants had played a part in the acts leading to evasion of a huge amount of duty, which is an undisputed fact - The penalty under Rule 209A is not sustainable, and a general penalty as prescribed by Rule 210 of the Central Excise Rules, 1944 is imposed upon each Appellant. [Read less]

Customs - Classification of Protector Tube of brake hose assemblies under CTH 40091100 or CTH 39172310 - Appellant imported brake hoses and other automobile brake components and declared Protector Tube under CTH 40091100 - Final Audit Report proposed classification under CTH 39172310, and the demand of differential duty was confirmed - Department relied upon the catalogue and photographs of the supplier showing that the Protector Tube is made of 100% PVC, while the Appellant contended that no testing report was produced - Whether Protector Tube is classifiable under CTH 40091100 as declared by the Appellant or under CTH 39... [Read more]

Customs - Classification of Protector Tube of brake hose assemblies under CTH 40091100 or CTH 39172310 - Appellant imported brake hoses and other automobile brake components and declared Protector Tube under CTH 40091100 - Final Audit Report proposed classification under CTH 39172310, and the demand of differential duty was confirmed - Department relied upon the catalogue and photographs of the supplier showing that the Protector Tube is made of 100% PVC, while the Appellant contended that no testing report was produced - Whether Protector Tube is classifiable under CTH 40091100 as declared by the Appellant or under CTH 39172310 as held by the Department - HELD - The controversy in classification disputes must be resolved by relying upon the Harmonised System of Nomenclature and the Explanatory Notes, which are binding guidance unless a contrary finding is found within the First Schedule of the Tariff Act, as held by the Hon'ble Supreme Court. Under both the headings, the constituent material of the goods is the relevant criterion, since a tube made of PVC is classifiable under CTH 39172310 and a tube made of vulcanized rubber falls under CTH 40091100. The reliance of the Department on the catalogue and photographs was never disputed by the Appellant, and those documents sufficiently deal with the constituents and other details and declare the product to be a 100% PVC tube. The absence of a testing report does not affect the Department adversely, as the Appellant produced no other document to falsify the catalogue - The impugned order rightly held mis-declaration, the Protector Tube is classifiable under CTH 39172310 and the demand of differential duty is upheld - Denial of benefit of Notification issued pursuant to the ASEAN Trade Agreement on reclassification of Protector Tube - Appellant availed the benefit of the Notification on the strength of a Certificate of Origin declaring the goods under CTH 40091100, and the benefit was denied after the goods were held classifiable under CTH 39172310 - Whether the benefit of the Notification can be extended to goods held classifiable under CTH 39172310 - HELD - The Appellant had claimed the benefit by declaring the goods under CTH 40091100. Since the goods have been held to be classifiable under CTH 39172310, the benefit of the Notification cannot be extended to these goods - The benefit has rightly been denied and the order to that extent is upheld - Classification of Bracket used in manufacture of brake hose assemblies under CTH 83025000, CTH 73269099 or CTH 87089900 - Appellant declared the Bracket as parts of automobile under CTH 83025000 and CTH 73269099, whereas the Department proposed classification under CTH 87089900 on the ground that it forms an integral part of the brake assembly used in motor vehicles - Appellant did not contest that the goods are not of general purpose use, and had itself declared the goods as parts of automobile in the import documents - Whether the Bracket is classifiable under CTH 83025000 or CTH 73269099 as declared by the Appellant or under CTH 87089900 as held by the Department - HELD - Heading 8302 covers base metal mountings and fittings, Heading 7326 is a residuary entry for other articles of iron or steel, and Heading 8708 covers parts and accessories of motor vehicles of Headings 8701 to 8705. Section Note 1(g) of Section XV excludes articles of Section XVII from its ambit, and Section Note 3 of Section XVII provides that references to parts or accessories in Chapters 86 to 88 apply only to parts suitable for use solely or principally with the vehicles of those Chapters. As per General Rule 3, a part answering to a description in two or more headings is to be classified under the heading corresponding to its principal use. There was no evidence that the goods are excluded by the provisions of Section XVII, and both conditions of the Explanatory Notes to Chapter 87 stand fulfilled, namely that the goods be suitable for use solely or principally with motor vehicles and that they not be excluded by the Section Notes - The Bracket is classifiable under CTH 87089900, the Appellant had wrongly declared the goods under CTH 83025000 and CTH 73269099, and the demand of differential duty is upheld - Classification of Connector used in brake hose assemblies under CTH 3917 or CTH 8708 - Appellant declared the Connector under CTH 3917, whereas the Department held that it is a part of motor vehicles classifiable under CTH 8708 - Connectors are admittedly used in brake hose assemblies to regulate the flow of brake fluid and are specifically designed for integration into automobile brake systems - Whether the Connector is classifiable under CTH 39174000 as fittings of plastics for tubes, pipes and hoses or under CTH 87089900 as parts and accessories of motor vehicles - HELD - Chapter Note 2(t) to Chapter 39 expressly excludes parts of vehicles of Section XVII. Irrespective of the constituent material of the goods, if the goods are admittedly parts of motor vehicles, they stand excluded from Chapter 39, and this observation is sufficient to hold the declaration under CTH 3917 to be a mis-declaration. The Connectors are not generic plumbing fittings, so that even on the common parlance test they cannot be classified under CTH 39174000 - The classification under CTH 3917 is rejected and the order of the Department to that extent is upheld - Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962 and imposition of penalty on mis-classification of imported goods - Appellant contended that the documents were verified and the goods were physically examined by Customs officers so that everything was within their notice, and that a claim of classification is a mistake of understanding and belief and cannot amount to suppression - Appellant had admitted the alleged mis-declaration for all other products and voluntarily paid the differential duty, and the Department showed that the Appellant had earlier declared the goods under the same tariff headings claimed by the Department and later changed to the classifications declared in the impugned Bills of Entry - Whether the extended period was rightly invoked under Section 28(4) and whether the penalties were rightly imposed - HELD - The present being an era of self-assessment, Section 46(4) of the Customs Act, 1962 casts an obligation upon the importer to make a true and correct classification. The wrong declaration resulted in customs duty benefit to the Appellant and the outcome of the act was non-payment or short payment of customs duty. The Appellant was earlier declaring the tariff headings claimed by the Department and later changed to the alleged ones, which supports the conclusion that the wrong classification was intentional and resulted in evasion of customs duty - The extended period under Section 28(4) was rightly invoked, there is no infirmity in the penalties imposed for the same reasons, the order under challenge is affirmed and the appeal is dismissed. [Read less]

Service Tax - Invocation of extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 where classification of services was disputed - Respondent rendered IT facility management services under agreements with clients and claimed that the services were business auxiliary services and not taxable, whereas the Commissioner held them taxable as management consultant service and invoked the extended period alleging suppression, as the nature of services was not disclosed - The Tribunal upheld the classification on merits but held the extended period not invocable as there was no suppression, the Depar... [Read more]

Service Tax - Invocation of extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 where classification of services was disputed - Respondent rendered IT facility management services under agreements with clients and claimed that the services were business auxiliary services and not taxable, whereas the Commissioner held them taxable as management consultant service and invoked the extended period alleging suppression, as the nature of services was not disclosed - The Tribunal upheld the classification on merits but held the extended period not invocable as there was no suppression, the Department being aware of the services through trial balance, audit report and the explanation furnished earlier, and restricted the demand to the normal period - Revenue preferred appeal under Section 35G of the Central Excise Act, 1944 - Whether the Revenue was entitled to invoke the extended period of limitation - HELD - A notice beyond one year from the relevant date can be sustained only if the short payment is by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention with intent to evade payment of tax. The allegation in the SCN that claiming the services as business auxiliary services amounted to suppression has no merit, as the controversy involves only classification of services. The Tribunal found that the services rendered were clearly discernible from the accounts, the audit report and the explanation furnished, and the Revenue did not contest that these documents failed to disclose the services - No infirmity found in the decision of the Tribunal that the extended period was not available and the appeal is dismissed [Read less]

Service Tax - Inclusion of wages paid to labourers in taxable value of Manpower Recruitment or Supply Agency Service - Appellant supplied manpower to a service recipient and raised separate invoices towards wages payable to labourers and towards service charges or commission - Department demanded service tax on the entire amount including wages - Whether wages are includible in the taxable value or service tax is payable only on the commission retained by the Appellant - HELD - Only the amount representing consideration for the service can be taxed under Section 67, and reimbursement of expenditure cannot become taxable me... [Read more]

Service Tax - Inclusion of wages paid to labourers in taxable value of Manpower Recruitment or Supply Agency Service - Appellant supplied manpower to a service recipient and raised separate invoices towards wages payable to labourers and towards service charges or commission - Department demanded service tax on the entire amount including wages - Whether wages are includible in the taxable value or service tax is payable only on the commission retained by the Appellant - HELD - Only the amount representing consideration for the service can be taxed under Section 67, and reimbursement of expenditure cannot become taxable merely because it flows through the service provider. The controversy does not depend entirely on whether every condition of Rule 5(2) is satisfied, since the fundamental question is whether the reimbursement of wages is itself consideration for the service. Following the orders of Hon'ble High Court and the Larger Bench of the Tribunal, wages separately identifiable and passing through the contractor without any element of profit cannot be treated as its income. The Hon'ble Supreme Court has held that taxability depends on the substance of the arrangement and not on nomenclature, and consolidated invoices do not alter this distinction. The Department produced no material to show that any portion of wages was retained as consideration - The order is set aside to the extent it includes wages in the assessable value, and the matter is remanded for limited re-quantification of tax on the commission actually retained - The essential facts were available from the contractual documents themselves, and the allegation of deliberate suppression is not sustainable. The issue relates to interpretation of valuation provisions on which divergent judicial views existed during the relevant period, so that the extended period is not justified, and once it fails the penalties cannot survive - The demand for the extended period and the penalties are set aside and the appeal is allowed by way of remand [Read less]

Central Excise - Inclusion of value of rails supplied free of cost by Indian Railways in assessable value of glued joints - Effect of retrospective exemption by insertion of Entry No. 205A in Notification No. 12/2012-C.E. through Finance Act, 2015 for the period 17.03.2012 to 03.02.2014 - Appellant manufactured glued joints classifiable under Chapter Heading 8530 using rails supplied free of cost by Indian Railways under contracts for supply to the Railways - Adjudicating authority confirmed duty, interest and penalty by adding the value of free-supplied rails to the assessable value solely on the ground that no exemption ... [Read more]

Central Excise - Inclusion of value of rails supplied free of cost by Indian Railways in assessable value of glued joints - Effect of retrospective exemption by insertion of Entry No. 205A in Notification No. 12/2012-C.E. through Finance Act, 2015 for the period 17.03.2012 to 03.02.2014 - Appellant manufactured glued joints classifiable under Chapter Heading 8530 using rails supplied free of cost by Indian Railways under contracts for supply to the Railways - Adjudicating authority confirmed duty, interest and penalty by adding the value of free-supplied rails to the assessable value solely on the ground that no exemption was available during the relevant period - Appellant contended that the foundation of the demand no longer survives after the retrospective amendment, which was not available before the adjudicating authority, and prayed for remand - Whether the impugned demand can be sustained in view of the retrospective exemption granted subsequent to the order - HELD - The adjudicating authority proceeded on the premise that no exemption existed, which no longer survives after the Finance Act, 2015. Where the legislature grants exemption with retrospective effect, the amended provision is deemed to have existed from the date specified therein, and all pending proceedings are required to be decided in accordance with the amended law. The period covered by the retrospective exemption is precisely the period involved in the present proceedings, and the Tribunal cannot ignore a retrospective legislative amendment which directly governs the dispute. The adjudicating authority had no occasion to examine the Appellant's eligibility under the exemption since the amendment did not exist when the order was passed. The interests of justice require reconsideration in light of the amendment - All issues including eligibility to exemption, valuation, quantification of demand, interest, penalty and limitation are kept open, the impugned order is set aside and the appeal is allowed by way of remand [Read less]