More Judgements

1. Home
2. More Judgements

GST – Gujarat AAR - GST Exemption, Charitable Activities, Activity of plantation and maintenance of trees, including avenue plantation for the preservation of environment - Eligibility of activities of tree plantation and maintenance activities for GST exemption under Entry No. 1 of Notification No. 12/2017-CT(R) dated 28.06.2017, which provides exemption to "Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities" - Whether the applicant's tree plantation and maintenance activities would qualify as "charitable activities" under the definition provided in th... [Read more]

GST – Gujarat AAR - GST Exemption, Charitable Activities, Activity of plantation and maintenance of trees, including avenue plantation for the preservation of environment - Eligibility of activities of tree plantation and maintenance activities for GST exemption under Entry No. 1 of Notification No. 12/2017-CT(R) dated 28.06.2017, which provides exemption to "Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities" - Whether the applicant's tree plantation and maintenance activities would qualify as "charitable activities" under the definition provided in the notification, which includes "activities relating to preservation of environment including watershed, forests and wildlife" – HELD - The applicant's tree plantation and maintenance activities, including the work under the Harit Van Path Yojna scheme, would be covered under the definition of "charitable activities" as per the GST exemption notification, as they relate to the preservation of the environment. Therefore, the applicant would be eligible for GST exemption on the services provided for these activities under Entry No. 1 of Notification No. 12/2017-CT(R) – Ordered accordingly [Read less]

GST – Gujarat AAR - Input Tax Credit on construction of warehouse - Whether ITC eligible on the construction of the warehouse under Section 17(5)(c) of the CGST Act, 2017 – HELD - The Supreme Court in the case of Safari Retreats held that the expression "plant and machinery" used in Section 17(5)(c) has a plain and natural meaning as defined in the explanation to Section 17, which excludes land, building, or any other civil structures. Therefore, the ITC of the works contract services supplied for the construction of the warehouse is not available - The ITC is not admissible for the goods or services utilized for the c... [Read more]

GST – Gujarat AAR - Input Tax Credit on construction of warehouse - Whether ITC eligible on the construction of the warehouse under Section 17(5)(c) of the CGST Act, 2017 – HELD - The Supreme Court in the case of Safari Retreats held that the expression "plant and machinery" used in Section 17(5)(c) has a plain and natural meaning as defined in the explanation to Section 17, which excludes land, building, or any other civil structures. Therefore, the ITC of the works contract services supplied for the construction of the warehouse is not available - The ITC is not admissible for the goods or services utilized for the construction of the warehouse or shed from which storage and warehousing services are provided as furtherance of business or provided on rent – Ordered accordingly - Whether ITC is available on the construction of the warehouse under Section 17(5)(d) of the CGST Act, 2017 – HELD - The Supreme Court in Safari Retreats held that the expression "plant or machinery" used in Section 17(5)(d) should be interpreted based on the functionality test. However, the Legislature has amended Section 17(5)(d) and substituted the words "plant or machinery" with "plant and machinery" with effect from 01.07.2017. The new explanation also clarifies that any reference to "plant or machinery" shall be construed as a reference to "plant and machinery", which is defined in the explanation to Section 17 and excludes land, building, or any other civil structures. Therefore, the applicant is not eligible to avail ITC on the cement, steel, beams, columns, and construction services used for the construction of the warehouse. [Read less]

Goa Value Added Tax Act, 2005 - Taxability of Extra Neutral Alcohol (ENA)/Rectified Spirit (RS)/High Bouquet Spirit (HBS) - Levy of interest under Section 25(4) of the Goa VAT Act for delayed payment of VAT on the sales of ENA/RS/HBS effected during FY 2019-20 - Whether the levy of interest is valid given the ambiguity and lack of clarity on the taxability of ENA/HBS/RS under the GST or VAT law - HELD - Though there was some ambiguity regarding the taxability of ENA/RS/HBS under the GST regime after its introduction from 1st July 2017, the petitioner was aware that these goods would continue to be taxable under the Goa VAT... [Read more]

Goa Value Added Tax Act, 2005 - Taxability of Extra Neutral Alcohol (ENA)/Rectified Spirit (RS)/High Bouquet Spirit (HBS) - Levy of interest under Section 25(4) of the Goa VAT Act for delayed payment of VAT on the sales of ENA/RS/HBS effected during FY 2019-20 - Whether the levy of interest is valid given the ambiguity and lack of clarity on the taxability of ENA/HBS/RS under the GST or VAT law - HELD - Though there was some ambiguity regarding the taxability of ENA/RS/HBS under the GST regime after its introduction from 1st July 2017, the petitioner was aware that these goods would continue to be taxable under the Goa VAT Act. The petitioner had collected VAT on sale of these goods but did not deposit the same within the prescribed time, which attracted the interest liability under Section 25(4). Once the petitioner filed the returns, even showing 'zero' liability, the tax became 'due and payable' as per the statutory scheme under Section 25 and the GVAT Rules. The petitioner cannot justify the delay on the ground of uncertainty – Further, the petitioner had already paid VAT for the first quarter and cannot claim benefit of uncertainty selectively. The petitioner was conscious of the goods being taxable under the GVAT Act and it had earlier approached the Court challenging the condition of furnishing an undertaking for payment of any future GST liability on ENA/RS/HBS, thereby acknowledging the applicability of the Goa VAT Act. There is no merit in the petitioner's contention that the delay in payment was on account of the uncertainty and the interest was rightly levied for the delayed payment of tax - The levy of interest under Section 25(4) of the GVAT Act on the petitioner is valid - The writ petition is dismissed [Read less]

Central Excise – Rule 173Q of Central Excise Rules, 1944 – Demand of duty – Imposition of penalty – Appellant claimed benefit of concessional rate of duty on clearance of goods as prescribed under SSI Notification No.1/93-CE – Assistant Commissioner disallowed benefit of Notification No.1/93-CE to Appellant and confirmed demand of duty and also imposed penalty on Appellant under Rule 173Q of the Rules – Commissioner (Appeals) upheld order of lower authority – Whether Appellant is entitled to SSI benefit for their clearances under Notification No.1/93-CE – HELD – Concessional rate of duty as per Notificati... [Read more]

Central Excise – Rule 173Q of Central Excise Rules, 1944 – Demand of duty – Imposition of penalty – Appellant claimed benefit of concessional rate of duty on clearance of goods as prescribed under SSI Notification No.1/93-CE – Assistant Commissioner disallowed benefit of Notification No.1/93-CE to Appellant and confirmed demand of duty and also imposed penalty on Appellant under Rule 173Q of the Rules – Commissioner (Appeals) upheld order of lower authority – Whether Appellant is entitled to SSI benefit for their clearances under Notification No.1/93-CE – HELD – Concessional rate of duty as per Notification No.1/93-CE shall only be available, if aggregate value of clearance of all excisable goods for home consumption by a manufacturer, from one or more factories or from any factory, by one or more manufacturers, does not exceed Rs.200 Lakh in preceding Financial Year. There is no dispute in present case that aggregate value of clearance by both units of Appellant during relevant period had exceeded the limit prescribed under notification and therefore, clearances of excisable goods will not be eligible to concessional rate of duty and it will have to suffer excise duty at normal rate. Appellant will not be entitled to SSI benefit for their clearances under Notification No.1/93-CE. There is no infirmity with impugned order, but considering the quantum of duty involved in this case, it is inclined to reduce penalty imposed on Appellant by lower authority. With above modifications, impugned order is uphold – Appeal disposed of [Read less]

Customs – Section 113(d) of Customs Act, 1962 – Export of prohibited goods – Order of confiscation – Sustainability – Appellant filed two shipping bills for export of Natural Abrasive – Investigation revealed that export consignment contain Natural Garnet, a prohibited item for export as per DGFT Notification No.26/2015-20 – After following the due process of law, Additional Commissioner ordered for confiscation of impugned goods under Section 113(d) of the Act – Commissioner (Appeals) upheld order of Additional Commissioner – Whether impugned goods are liable for confiscation under Section 113(d) of the ... [Read more]

Customs – Section 113(d) of Customs Act, 1962 – Export of prohibited goods – Order of confiscation – Sustainability – Appellant filed two shipping bills for export of Natural Abrasive – Investigation revealed that export consignment contain Natural Garnet, a prohibited item for export as per DGFT Notification No.26/2015-20 – After following the due process of law, Additional Commissioner ordered for confiscation of impugned goods under Section 113(d) of the Act – Commissioner (Appeals) upheld order of Additional Commissioner – Whether impugned goods are liable for confiscation under Section 113(d) of the Act – HELD – As per Notification No.26/2015-20, Garnet could only be exported by India Rare Earth Limited (IREL) and no other entity. Notification itself dealt with sensitive materials seen from perspective of national security and placed restrictions of canalising the same to designated agencies and not otherwise. From point of view of national security, restrictions of this nature in any law or notification are required to be strictly interpreted. Test reports in respect of samples drawn from export goods indicating that it is in form of Pinkish red coarse powder and had characteristics of Natural Almandine Pyrope Garnet. Appellant had exported goods without involving canalising agency, i.e. IREL, even when they had knowledge of procedures as well as restrictions involved, therefore, this conduct cannot be justified. Garnet in question being of Rajasthan origin does not take it out of scope of DGFT notification, whose intention is to restrict export of Garnet irrespective of its origin. Order of confiscation of exported goods under Section 113(d) of the Act is uphold – Appeal dismissed [Read less]

GST - Refund of Unutilized Input Tax Credit under inverted duty structure, Supply of e-rickshaws – Petitioner sought refund on the ground that the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws is eligible for refund under the inverted duty structure - Whether the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws is eligible for refund under the inverted duty structure – HELD - The clarification provided by the Additional CCT (Law), confirms that the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws i... [Read more]

GST - Refund of Unutilized Input Tax Credit under inverted duty structure, Supply of e-rickshaws – Petitioner sought refund on the ground that the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws is eligible for refund under the inverted duty structure - Whether the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws is eligible for refund under the inverted duty structure – HELD - The clarification provided by the Additional CCT (Law), confirms that the ITC involved in the purchase of "stereo system" used in the manufacturing of e-rickshaws is eligible for refund under the inverted duty structure. The clarification states that as per the definition of "input" under the CGST Act, 2017, any goods used or intended to be used by a supplier in the course or furtherance of business are eligible for refund, irrespective of whether they are used in the manufacturing process or not. Since the "stereo system" is used in the manufacturing of e-rickshaws, which is the petitioner's primary business activity, it qualifies as an "input" and is eligible for refund under the inverted duty structure - In such view of the matter, nothing further remains to be adjudicated in this writ petition. The impugned appellate order is set aside and the respondents are directed to refund the eligible amount to the petitioner as per law – The petition is disposed of [Read less]

GST - Condonation of Delay, Social audit - Misc. Civil Case (MCC) seeking restoration of a writ petition that was earlier dismissed due to the applicant's counsel's inadvertence in not curing the default within the stipulated time. The applicant filed an application under Section 5 of the Limitation Act seeking condonation of the delay in filing the MCC – HELD - The reasons assigned by the applicant's counsel for the delay appeared to be genuine and bona fide. A litigant should not be made to suffer for the fault of their counsel. The application for condonation of delay is allowed and the writ petition is restored to it... [Read more]

GST - Condonation of Delay, Social audit - Misc. Civil Case (MCC) seeking restoration of a writ petition that was earlier dismissed due to the applicant's counsel's inadvertence in not curing the default within the stipulated time. The applicant filed an application under Section 5 of the Limitation Act seeking condonation of the delay in filing the MCC – HELD - The reasons assigned by the applicant's counsel for the delay appeared to be genuine and bona fide. A litigant should not be made to suffer for the fault of their counsel. The application for condonation of delay is allowed and the writ petition is restored to its original number - The applicant's counsel is directed to visit a "Mercy Home", along with the applicant, and spend an hour with the children/inmates/families of the home, carrying food items and clothes worth Rs. 10,000 - This is a test case to give concept of 'Social Audit' a chance to gain grounds. Responsible and Resourceful persons of the Society who are occupying important positions and other related fields including Professionals like CAs/ Doctors/ Lawyers etc., to take some responsibility to visit the places (like orphanage/old age home/ mercy home/ one stop center etc.) where persons with disability/orphans/old age people/ victims of the crime and other destitute are institutionalized so that they can come to know about the plight of these inmates and would be able to contribute while raising their standards of living and to create sense of well being amongst them - The application for condonation of delay is allowed [Read less]

GST - Adverse post-GST Registration visit report - Cancellation of Registration under Section 29(2)(e) of the GST Act citing fraud, wilful misstatement or suppression of facts – HELD - The notice issued to the petitioner is vague and did not provide a copy of the adverse post-registration visit report. The order of cancellation was merely based on assumption without any evidence of fraud, wilful misstatement or suppression of facts. The petitioner's absence during inspection was justified due to his serious health issues, which was supported by medical evidence. Further, the order of cancellation was passed without provi... [Read more]

GST - Adverse post-GST Registration visit report - Cancellation of Registration under Section 29(2)(e) of the GST Act citing fraud, wilful misstatement or suppression of facts – HELD - The notice issued to the petitioner is vague and did not provide a copy of the adverse post-registration visit report. The order of cancellation was merely based on assumption without any evidence of fraud, wilful misstatement or suppression of facts. The petitioner's absence during inspection was justified due to his serious health issues, which was supported by medical evidence. Further, the order of cancellation was passed without providing the petitioner an opportunity to respond, violating principles of natural justice - The authorities are directed to allow the petitioner to deposit the applicable tax and interest and file returns, failing which the cancellation order shall stand - The order of cancellation is set aside and the writ petition is disposed of [Read less]

GST - Taxability of medicines, consumables and medical devices dispensed to in-patients as part of health services in hospitals – Dept issued a show cause notice alleging that the Petitioner has collected GST on the medicines, consumables, etc. billed at MRP to in-patients, but has not paid the same to the Government - Whether the medicines, medical devices and consumables dispensed to in-patients as part of the health services provided by the hospital are liable to GST – HELD - This is an interesting issue regarding the taxability of medicines, medical devices and other consumables that are dispensed to in-patients as... [Read more]

GST - Taxability of medicines, consumables and medical devices dispensed to in-patients as part of health services in hospitals – Dept issued a show cause notice alleging that the Petitioner has collected GST on the medicines, consumables, etc. billed at MRP to in-patients, but has not paid the same to the Government - Whether the medicines, medical devices and consumables dispensed to in-patients as part of the health services provided by the hospital are liable to GST – HELD - This is an interesting issue regarding the taxability of medicines, medical devices and other consumables that are dispensed to in-patients as part of the overall health services provided by hospitals. The hospitals often bill these items either as part of the overall package or on an item-by-item basis, but the Petitioner claims that it does not separately reflect any GST on the invoices raised to patients - If the medicines, devices and consumables are an integral part of the health services administered to the in-patients, and are not billed separately with GST, then the question arises whether GST would be payable on these items or not - The petitioner is directed to file a proper reply to the SCN and provide details of the invoices, procurement of the medicines/consumables, and the manner in which they are billed to the patients. The adjudication proceedings before the authority shall continue, but the final order shall not be given effect during the pendency of the writ petition – Ordered accordingly [Read less]

GST - Section 107(1), (4) and (11) and Section 169 of the CGST Act, 2017 - Rule 142 (1), (1A) and (2) of the CGST Rules, 2017 - Mode and manner of service of notices/orders under GST - Service of notice only through electronic mode and not through physical mode – Whether Electronic service of notice/orders amounts to 'communication' under the CGST Act, 2017 - The petitioner’s grievance that the show cause notices and adjudication orders were not served on the petitioners physically/offline, and were only made available on the Common Portal managed. The petitioners contend that this deprived them of an opportunity to fi... [Read more]

GST - Section 107(1), (4) and (11) and Section 169 of the CGST Act, 2017 - Rule 142 (1), (1A) and (2) of the CGST Rules, 2017 - Mode and manner of service of notices/orders under GST - Service of notice only through electronic mode and not through physical mode – Whether Electronic service of notice/orders amounts to 'communication' under the CGST Act, 2017 - The petitioner’s grievance that the show cause notices and adjudication orders were not served on the petitioners physically/offline, and were only made available on the Common Portal managed. The petitioners contend that this deprived them of an opportunity to file replies and impaired their right to challenge the orders within the hard statutory period of limitation. The revenue authorities maintained that under Section 169 of the GST laws, service through electronic mode, including uploading on the Common Portal, is valid - Whether service of show cause notices and adjudication orders through electronic mode, including uploading on the Common Portal, is valid and sufficient for the purposes of Section 107 of the CGST Act, 2017 – HELD – The service of notices and orders through electronic mode, including uploading on the Common Portal, is permissible under the law. However, the deeming fiction of 'deemed service' under Section 169(2) and (3) of the CGST Act applies only to service through modes specified in Clauses (a), (b), (e) and (f) of Section 169(1), and not to service through electronic mode under Clauses (c) and (d) - The GST laws have undergone a transformative change from the earlier offline/physical mode of service to an electronic mode. This has caused difficulties for small and medium-sized assessees who were accustomed to the earlier physical mode of service and communication. The legislature has consciously used the term 'communicated' in Section 107 for the purpose of start of limitation to file appeals, which requires actual or constructive service of the contents of the notice or order, and not merely 'receipt' of the electronic communication. The legislature has deliberately not used the word ‘upload’ and its derivatives but the phrase 'making it available'. Thereby the legislative intent has been clearly expressed that the document or communication should be readily available to the noticee - In the absence of any verifiable mechanism with the GSTN or revenue authorities to ascertain when the notices or orders were retrieved, downloaded or viewed by the assessees on the Common Portal, the date of 'communication' for the purpose of Section 107 would be governed by actual or constructive service strictly in terms of Section 169 of the Act – In the absence of any legislative intent, uploading of notices/orders on the Common Portal cannot be equated with the modes of 'tendering', 'publishing' or 'affixation' under Section 169(2) and (3) for the purpose of deemed service - The individual adjudication orders are set aside subject to the petitioners depositing 10% of the disputed demand of tax and matters are remitted to the Adjudicating Authority for fresh consideration after providing the petitioners with copies of the show cause notices and documents and an opportunity of hearing – The writ petitions are allowed [Read less]

Customs – Import of goods – Classification – Appellant is engaged in business of import and manufacture of Automatic Data Processing Unit for learning, educating and interacting with humans under brand name MIKO – Appellant imported MIKO-3 by classifying same under CTH 84714190 and claimed exemption under Sl.No.8 of Notification No.24/2005-Cus. from payment of Basic Customs Duty – Assessment Group viewed that goods in question were only ‘toys’ liable to be classified under CTH 9503 which attracted BCD at 60% – Original authority confirmed demand of duty – Commissioner (Appeals) upheld order passed by Orig... [Read more]

Customs – Import of goods – Classification – Appellant is engaged in business of import and manufacture of Automatic Data Processing Unit for learning, educating and interacting with humans under brand name MIKO – Appellant imported MIKO-3 by classifying same under CTH 84714190 and claimed exemption under Sl.No.8 of Notification No.24/2005-Cus. from payment of Basic Customs Duty – Assessment Group viewed that goods in question were only ‘toys’ liable to be classified under CTH 9503 which attracted BCD at 60% – Original authority confirmed demand of duty – Commissioner (Appeals) upheld order passed by Original authority – Whether classification as declared by Appellant is correct or re-classification made by Revenue is sustainable in law – HELD – Model in dispute, i.e. MIKO 3 is sold by Appellant on its own website as well as through e-commerce platforms and it is claimed that said model is a social Robot. Goods are Artificial Intelligence based Robot toy, which is programmable, voice activated, customizable with Face-ID and has motion sensors and it is designed to entertain, educate kids and young learners using Artificial Intelligence. Classification declared by Appellant under CTH 84714190 is upheld. Revenue had not discharged its burden of disproving classification declared by Appellant and also not establishing with evidence as to its attempt to re-classify goods in question as “electronic toys” alone. Re-classification attempted by Revenue cannot survive. Order under challenge is set aside – Appeals allowed [Read less]

Service Tax - Refund of CENVAT credit, Classification of services – Appellant are engaged in providing various services such as Back Office Operations, Human Resources Services, Geographic Information System Services, Data Processing Services and Support Centre Services to their overseas group company. The appellants filed a refund claim under Rule 5 of CCR, 2004, which was partly allowed and partly rejected by the authorities - Whether the services provided by the appellants are correctly classified as Management or Business Consultant Services or under Legal Consultancy Services – HELD - The nature of the service ren... [Read more]

Service Tax - Refund of CENVAT credit, Classification of services – Appellant are engaged in providing various services such as Back Office Operations, Human Resources Services, Geographic Information System Services, Data Processing Services and Support Centre Services to their overseas group company. The appellants filed a refund claim under Rule 5 of CCR, 2004, which was partly allowed and partly rejected by the authorities - Whether the services provided by the appellants are correctly classified as Management or Business Consultant Services or under Legal Consultancy Services – HELD - The nature of the service rendered by the appellants is Management or Business Consultant Services rather than Legal Consultancy Services - The classification adopted by the appellants as Management or Business Consultant Services is correct - Further, the Revenue's attempt to deny the CENVAT credit while deciding the refund application, without challenging the assessment/self-assessment order and without initiating proceedings under Rule 14 of CENVAT Credit Rules, is not permissible. The refund proceedings are executionary in nature and the eligibility or applicability of service for refund cannot be questioned at the time of refund if the facts were declared in the ST-3 Returns - The appeal filed by the assessee is allowed and the appeal filed by the Revenue is rejected - Whether the denial of CENVAT credit on the ground of delayed payment is valid – HELD - The denial of CENVAT credit on the ground of delayed payment is not valid. The Tribunal relied on the decision in AD-2 Pro Global Creative Solutions Pvt. Ltd. case, wherein it was held that the credit cannot be denied if the payment was made much before the filing of the refund claims and was indicated in the Returns. [Read less]

Customs – Import of automobile parts – Rejection of transaction value – Demand of differential duty – Appellant is engaged in import of automobile parts – Department received information to effect that Appellant is involved in mis-declaration in respect of brand description and value of imported goods – Investigation revealed that goods were of reputed brands, however no brand was declared by Appellant – Original authority rejected declared value of imported goods and re-determined the transaction value and also ordered for recovery of differential duty – Commissioner (Appeals) affirmed order passed by Orig... [Read more]

Customs – Import of automobile parts – Rejection of transaction value – Demand of differential duty – Appellant is engaged in import of automobile parts – Department received information to effect that Appellant is involved in mis-declaration in respect of brand description and value of imported goods – Investigation revealed that goods were of reputed brands, however no brand was declared by Appellant – Original authority rejected declared value of imported goods and re-determined the transaction value and also ordered for recovery of differential duty – Commissioner (Appeals) affirmed order passed by Original authority – Whether impugned order upholding rejection of transaction value of imported goods is sustainable – HELD – Onus to prove that declared price did not reflect true transaction value is always on department. Undervaluation is alleged based on allegation that goods imported by Appellant were of renowned brand, but no brand was declared by Appellant in Bill of Entry. Proprietor of Appellant had stated in his statement that goods in question/automobile parts were not actually branded and were only bearing some spurious markings/brand names on outer covering of packages. No enquiries were conducted by Investigating Officers with respective brand owners. There is no evidence produced by department to discharge their onus that impugned goods were branded goods. Findings in impugned order that goods in question were branded are held to be wrong without any basis/evidence for same. Impugned order upholding rejection of transaction value is not sustainable. Impugned order passed by Commissioner (Appeals) is set aside – Appeals allowed [Read less]

Customs – Section 138C of Customs Act, 1962 – Import of goods – Allegation of undervaluation – Rejection of declared value – Appellant is engaged in business of import and trading of goods and is mainly importing LED TV and Drywall Screws – Department got an information about Appellant being engaged in evasion of Customs duty by way of undervaluation of imported goods – In view of the observed under-valuation, department issued show cause notice proposing rejection of declared transaction value, re-determination of value and demand of differential duty – Adjudicating Authority confirmed proposals made in sh... [Read more]

Customs – Section 138C of Customs Act, 1962 – Import of goods – Allegation of undervaluation – Rejection of declared value – Appellant is engaged in business of import and trading of goods and is mainly importing LED TV and Drywall Screws – Department got an information about Appellant being engaged in evasion of Customs duty by way of undervaluation of imported goods – In view of the observed under-valuation, department issued show cause notice proposing rejection of declared transaction value, re-determination of value and demand of differential duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether rejection of declared value and re-determination by Adjudicating authority is sustainable – HELD – Impugned show cause notice had raised demand with respect to one live Bill of Entry, through which, Appellant had imported LED TV and six past Bill of Entries, through which, Appellant had imported Drywall Screws. When goods imported vide live Bill of Entry were examined by SIIB on 100% basis, goods were found to be in conformity with Bill of Entry, commercial invoice and packing list. Department had merely relied upon documents which were the print outs of retrieved data. Since department had not followed mandatory requirement provided under Section 138C of the Act, retrieved proforma invoice are not admissible into evidence. Admittedly, rejection of value declared in six Bill of Entries is based on comparison of proforma invoices issued by third party. Comparison of rates with third party is not permissible. Department failed to produce any evidence above Drywall Screws to be undervalued. Entire allegations are the result of mere presumptions and assumptions. Rejection of declared value and re-determination by Adjudicating authority is not sustainable. In light of entire above discussion arrived at with respect to one live as well as six past bills of entry, order under challenge is set aside – Appeal allowed [Read less]

GST - Anticipatory bail, Wrongful utilisation of input tax credit, offences under Section 132(1)(b) and (c) of the CGST Act, 2017 – The DGGI issued multiple summons to the petitioner under Section 70 of the CGST Act, 2017 - Apprehending his arrest, the petitioner filed the present petition under Section 482 of the BNSS seeking anticipatory bail - Whether the petitioner is entitled to anticipatory bail under the CGST Act considering the nature and gravity of the offence - HELD - There is no embargo under the CGST Act restraining the petitioner from seeking pre-arrest bail. While it is imperative to maintain law and order ... [Read more]

GST - Anticipatory bail, Wrongful utilisation of input tax credit, offences under Section 132(1)(b) and (c) of the CGST Act, 2017 – The DGGI issued multiple summons to the petitioner under Section 70 of the CGST Act, 2017 - Apprehending his arrest, the petitioner filed the present petition under Section 482 of the BNSS seeking anticipatory bail - Whether the petitioner is entitled to anticipatory bail under the CGST Act considering the nature and gravity of the offence - HELD - There is no embargo under the CGST Act restraining the petitioner from seeking pre-arrest bail. While it is imperative to maintain law and order in society, the power to arrest must also always be subject to necessary safeguards - As per the scheme of the CGST Act, though the offence is of economic nature yet the punishment prescribed cannot be ignored to determine the heinousness of the offence. The offences under the CGST Act, though categorized as economic offences, are not as grave as offences under other special statutes like the Prevention of Money Laundering Act. The maximum punishment prescribed under the CGST Act for the alleged offences is imprisonment for five years and fine, which is not a heinous offence. Further, the offences under the CGST Act are compoundable under Section 138, except for certain specified offences - The custodial interrogation in the instant matter is neither warranted nor provided for by the statute. Detaining the petitioner in judicial custody would serve no purpose rather would adversely impact the business of the petitioner. Accordingly, anticipatory bail is granted to the petitioner subject to certain conditions to ensure his cooperation in the investigation and to prevent him from tampering with evidence or influencing witnesses – The petition is allowed [Read less]

Central Excise – Payment of pre-deposit – Entitlement of refund – Appellant filed refund claim of amount paid by them as pre-deposit during course of investigation – Adjudicating Authority rejected major portion of refund claim – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is entitled to refund of amount paid by them during course of investigation – HELD – Perusal of Order-in-Original which stood approved in respective impugned Order-in-Appeal revealed that rejection of portion of refund claim had been made apparently relying on report of Range Officer. Authoriti... [Read more]

Central Excise – Payment of pre-deposit – Entitlement of refund – Appellant filed refund claim of amount paid by them as pre-deposit during course of investigation – Adjudicating Authority rejected major portion of refund claim – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is entitled to refund of amount paid by them during course of investigation – HELD – Perusal of Order-in-Original which stood approved in respective impugned Order-in-Appeal revealed that rejection of portion of refund claim had been made apparently relying on report of Range Officer. Authorities cannot have control over any amount paid either as a deposit or pre-deposit or whatever mode during investigation. Revenue cannot pretend ignorance in not refunding entire amount. Reasoning spelt out in Order-in-Original, which unfortunately came to be upheld by Commissioner (Appeals) is clearly illogical. Rejection of refund is unsustainable, which deserves to be set aside. Insofar as interest claimed by Appellants are concerned, they have prayed for 12%, but it is appropriate to restrict interest at 6% in terms of provisions of statute – Appeals allowed [Read less]

Central Excise - Valuation of Tabacco products for the period from 01.07.2017 - Appellants were paying Central Excise Duty and NCCD for the period from 01.07.2017 to 03.03.2021 at the rate of 5% Basic Excise Duty and 10% of NCCD ad-valorem on the basis of price actually paid for transaction - The contention of the Revenue is that the goods under question are covered by the provision of Section 4A of the Central Excise Act and abatement was provided under Notification No.49/2008-CE(NT) dated 24.12.2008 issued under Section 4A was applicable even after 01.07.2017 till issue of Notification No.01/2022-CE (NT) dated 01.02.2022... [Read more]

Central Excise - Valuation of Tabacco products for the period from 01.07.2017 - Appellants were paying Central Excise Duty and NCCD for the period from 01.07.2017 to 03.03.2021 at the rate of 5% Basic Excise Duty and 10% of NCCD ad-valorem on the basis of price actually paid for transaction - The contention of the Revenue is that the goods under question are covered by the provision of Section 4A of the Central Excise Act and abatement was provided under Notification No.49/2008-CE(NT) dated 24.12.2008 issued under Section 4A was applicable even after 01.07.2017 till issue of Notification No.01/2022-CE (NT) dated 01.02.2022 – The Tribunal held that there is no support of law for application of provisions of Section 4A of the Central Excise Act, 1944 for arriving at the value for assessment of BED & NCCD during the period of dispute – Revenue in appeal against the Tribunal Order – SC HELD - There is no good ground to interfere with the impugned order passed by the CESTAT – The Revenue appeal is dismissed [Read less]

Customs - Mis-declaration of goods, Demand of differential duty – Appellant imported consignment declared as "Women Knitted Scarves, Shawl Assorted and others" and classified under Customs Tariff Heading (CTH) 61171040 - On examination the authorities found that the consignment included 'ponchos' and 'capes' which were mis-declared as "Women Knitted Scarves, Shawl Assorted." The Textile Committee confirmed the classification of the goods as ponchos and capes - Whether the impugned goods were correctly classified as ponchos and capes under CTH 61023010/61023020, instead of the declared classification under CTH 61171040 �... [Read more]

Customs - Mis-declaration of goods, Demand of differential duty – Appellant imported consignment declared as "Women Knitted Scarves, Shawl Assorted and others" and classified under Customs Tariff Heading (CTH) 61171040 - On examination the authorities found that the consignment included 'ponchos' and 'capes' which were mis-declared as "Women Knitted Scarves, Shawl Assorted." The Textile Committee confirmed the classification of the goods as ponchos and capes - Whether the impugned goods were correctly classified as ponchos and capes under CTH 61023010/61023020, instead of the declared classification under CTH 61171040 – HELD - The appellant did not provide any substantive evidence to counter the Textile Committee's report. The appellant's reliance on the goods being cleared under CTH 61171040 at other Customs stations is not supported by evidence - The classification must be based on the specific facts and circumstances of the case, and the mere fact that similar goods were cleared elsewhere does not create a legal right or estoppel against the Department - The classification of the impugned goods as ponchos and capes under CTH 61023010/61023020, as determined by the Customs authorities and the Textile Committee's expert report is upheld - The imposition of redemption fine and penalty is justified as the appellant had mis-declared the goods. However, considering the delay and hardship faced by the appellant, the redemption fine is reduced from Rs. 2,00,000 to Rs. 20,000 and the penalty from Rs. 50,000 to Rs. 5,000 - The appeal is partly allowed [Read less]

Customs - Classification of goods as "Handheld Mobile Barcode Scanner" under Customs Tariff Heading 8471 or "Smartphone" under Customs Tariff Heading 8517 - Import of 'Newland NLS Handheld Barcode Scanners' and classifying them under CTH 8471 6050, claiming exemption from Basic Customs Duty. The adjudicating authority, however, assessed the consignment of scanner as classifiable under CTH 85171300 as telephones for cellular network/mobile phones, not eligible for any exemption of Basic Customs Duty - Whether the imported goods are correctly classified as "Handheld Mobile Barcode Scanner" under CTH 8471 or as "Smartphone" u... [Read more]

Customs - Classification of goods as "Handheld Mobile Barcode Scanner" under Customs Tariff Heading 8471 or "Smartphone" under Customs Tariff Heading 8517 - Import of 'Newland NLS Handheld Barcode Scanners' and classifying them under CTH 8471 6050, claiming exemption from Basic Customs Duty. The adjudicating authority, however, assessed the consignment of scanner as classifiable under CTH 85171300 as telephones for cellular network/mobile phones, not eligible for any exemption of Basic Customs Duty - Whether the imported goods are correctly classified as "Handheld Mobile Barcode Scanner" under CTH 8471 or as "Smartphone" under CTH 85171300 – HELD - The classification of goods under the Customs Tariff is governed by the principles of General Rules of Interpretation (GRI) and the relevant Section and Chapter Notes. As per Note 6(A) to Chapter 84, for a machine to be classified under Heading 8471 as Automatic Data Processing Machine, it needs to satisfy certain criteria such as storing processing programs, being freely programmable, and performing arithmetical computations without human intervention - The mobile phone functionality in the impugned goods is ancillary, and the specific function is that of a barcode scanner. Relying on the Circular No. 20/2013-Cus. dated 14.05.2013, it is observed that the mobile phone calling function could be provided by the products only as a supplementary function, and these devices are not intended to be a substitute for a mobile phone but are designed as a substitute for laptops - Further, as per the principle of 'trade parlance test' the product in question is used for logistic purposes by warehouses and inventory management, and the features of a mobile phone are merely ancillary. The physical features of the imported goods, such as the handle, are also not typical of a mobile phone - The goods in question are to be classified as "Handheld Mobile Barcode Scanner" under CTH 8471 and not as "Smartphone" under CTH 85171300 - the impugned order is set aside and the appeal is allowed [Read less]

GST - Wrong PIN code on e-Way Bill, Validity of proceedings under Section 129 of CGST Act for minor errors in e-way bill - Whether the proceedings under Section 129 of the CGST Act were justified when the only discrepancy was the wrong mentioning of the PIN code on the e-way bill, while the address of the consignor and consignee was correct – HELD - If the address of the consignor or consignee is correct and only the PIN code has been wrongly mentioned, the proceedings under Section 129 may not be initiated - The Clause 5(b) of the CBEC Circular No. 64/38/2018-GST dated 14.09.2018 provides that proceedings under Section ... [Read more]

GST - Wrong PIN code on e-Way Bill, Validity of proceedings under Section 129 of CGST Act for minor errors in e-way bill - Whether the proceedings under Section 129 of the CGST Act were justified when the only discrepancy was the wrong mentioning of the PIN code on the e-way bill, while the address of the consignor and consignee was correct – HELD - If the address of the consignor or consignee is correct and only the PIN code has been wrongly mentioned, the proceedings under Section 129 may not be initiated - The Clause 5(b) of the CBEC Circular No. 64/38/2018-GST dated 14.09.2018 provides that proceedings under Section 129 may not be initiated if there is an error in the PIN code but the address of the consignor and consignee is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill - In the present case, the goods were accompanied by all the requisite documents, and no other discrepancy was pointed out except the wrong mentioning of the PIN code. Since there was no intent to evade the payment of tax, the proceedings under Section 129 are not justified - The impugned order is set aside and the writ petition is allowed [Read less]

Once the Appellate Authority has adjudicated the issue of refund on merits, the order is binding on the subordinate authorities. The Joint Commissioner cannot sit in appeal over the quasi-judicial decision of the Appellate Authority.

Central Excise - Limitation period, CENVAT credit reversal on inputs not subjected to any process - Appellant sold CR/HR sheets without subjecting them to any manufacturing process and paid duty on the transaction value - Revenue of the view that the appellant was required to reverse the CENVAT credit availed on such inputs, and that by clearing the inputs at a higher price and paying duty through CENVAT credit, the appellant was passing on the excess duty to its customers, thereby contravening the provisions of law - Whether the extended period of limitation can be invoked to demand the duty – HELD - The revenue's alleg... [Read more]

Central Excise - Limitation period, CENVAT credit reversal on inputs not subjected to any process - Appellant sold CR/HR sheets without subjecting them to any manufacturing process and paid duty on the transaction value - Revenue of the view that the appellant was required to reverse the CENVAT credit availed on such inputs, and that by clearing the inputs at a higher price and paying duty through CENVAT credit, the appellant was passing on the excess duty to its customers, thereby contravening the provisions of law - Whether the extended period of limitation can be invoked to demand the duty – HELD - The revenue's allegation that the appellant suppressed material facts and did not disclose the same in their ER-1 returns is not substantiated by any evidence. The mere fact that the issue was discovered during an Audit does not justify the invocation of the extended period of limitation, as the Department was required to scrutinize the returns filed by the assessee. In the present case, the appellant had been regularly filing their ER-1 returns, and the department failed to scrutinize the same - When the appellants were filing the ER-1 Returns, it is not open for the Revenue to choose not to scrutinize the Returns and to invoke extended period to demand the duty. The extended period of limitation cannot be invoked in the present case. The show cause notice and the impugned order are set aside on the ground of limitation – The appeal is allowed [Read less]

Central Excise – Section 11AC and 11D of Central Excise Act, 1944 – Rule 2(k) of Cenvat Credit Rules, 2004 – Demand of credit – Appellant is engaged in manufacture of MS bars, ingots, etc. – Appellant received duty paid imported HR/CR coils from dealers and availed CENVAT credit on dealer invoices and sent coils to job workers for cutting and slitting – After audit, department issued show cause notice proposing demand of reversal of CENVAT credit and directing deposit of amounts collected as duty under Section 11D of the Act – Commissioner confirmed demands as proposed in show cause notice – Whether cutting... [Read more]

Central Excise – Section 11AC and 11D of Central Excise Act, 1944 – Rule 2(k) of Cenvat Credit Rules, 2004 – Demand of credit – Appellant is engaged in manufacture of MS bars, ingots, etc. – Appellant received duty paid imported HR/CR coils from dealers and availed CENVAT credit on dealer invoices and sent coils to job workers for cutting and slitting – After audit, department issued show cause notice proposing demand of reversal of CENVAT credit and directing deposit of amounts collected as duty under Section 11D of the Act – Commissioner confirmed demands as proposed in show cause notice – Whether cutting/slitting amounts to Manufacture or not – HELD – Issue is no longer res integra, as Delhi High Court in case of Faridabad Iron & Steel Traders Association held that cutting/slitting does not amount to manufacture, which was affirmed by Supreme Court. Ratio of above case make it crystal clear that cutting/slitting does not amount to manufacture. Appellant knew this legal position well before the period of dispute. Issue is decided in favour of Revenue – Appeal dismissed - Absence of manufacturing activity – Denial of credit – Whether HR/CR coils were Inputs eligible for CENVAT credit – HELD – Rule 2(k) of the Rules excludes goods that have no relationship with manufacture. Input must have a direct and immediate nexus with manufacture of a final product. If there is no manufacturing activity, question of availment of input credit does not arise. Since no manufacturing activity was existed at Appellant’s factory during relevant period, HR/CR coils fails the very existential requirement of input under Rule 2(k) of the Rules. Payment of duty on non-manufactured goods cannot legitimise the credit. Demand of credit along with interest is upheld - Encashment of lapsed credit – Whether there was inflated valuation to encash lapsed credit – HELD – Department relied upon audit findings to arrive at overvaluation. Material available on record support Respondent’s allegation on inflation of data to attempt to encash the accumulated CENVAT Credit when there is no manufacture after 2010. There is a conscious inflation with intention to utilize & pass on lapsed credit by using a colourable device to circumvent credit lapsing - Collection of duty – Whether amounts collected as duty are liable under Section 11D of the Act – HELD – Section 11D(1A) of the Act mandates that any amount collected as representing duty of excise on goods that are exempt or not manufactured shall be deposited with Government. Since goods were not manufactured at all, amounts collected as duty from dealers are liable under Section 11D of the Act. Impugned order had rightly ordered deposit of amounts collected as duty under Section 11D of the Act. Recovery of deposits collected as laid down in Section 11D of the Act is confirmed - Invoking of extended period of limitation – Whether extended period was rightly invoked or not – HELD – Appellant’s ER-1 returns merely reflected that inputs were removed as such, but did not disclose that manufacture had ceased in 2010. Mere filing of returns does not automatically absolve suppression of facts unless all primary facts are disclosed. ER-1 Returns did not disclose essential facts. Extended period of limitation stands justified - Imposition of penalty – Whether penalty imposed under Section 11AC of the Act is sustainable – HELD – Since process undertaken by Appellant did not amount to manufacture, any amount collected as “duty” must be deposited under Section 11D of the Act. Not depositing such amount and misusing credit constitutes intentional misappropriation attracting penalty. Once conditions for invoking extended period are fulfilled, penalty under Section 11AC of the Act is mandatory. Penalty imposed under Section 11AC of the Act is upheld. [Read less]

Service Tax – Demand of tax – Sustainability – Department served show cause notice to Appellant with allegation of non-payment of Service Tax under categories of Commercial or Industrial Construction Service (CICS), Works Contract Service (WCS) & Renting of Immovable property Service with intention to evade Service Tax – Commissioner confirmed demands as proposed in show cause notice – Whether demands confirmed in impugned order against Appellant are sustainable – HELD – Demand had been confirmed under various categories including Commercial or Industrial Construction Service, Works Contract Service and Renti... [Read more]

Service Tax – Demand of tax – Sustainability – Department served show cause notice to Appellant with allegation of non-payment of Service Tax under categories of Commercial or Industrial Construction Service (CICS), Works Contract Service (WCS) & Renting of Immovable property Service with intention to evade Service Tax – Commissioner confirmed demands as proposed in show cause notice – Whether demands confirmed in impugned order against Appellant are sustainable – HELD – Demand had been confirmed under various categories including Commercial or Industrial Construction Service, Works Contract Service and Renting of Immovable Property Services. In so far as CICS is concerned, matter is no longer res-integra, as it is now settled that no demand can sustain for period prior to 1-7-2010 as clarified by CBEC Circular No.108/02/2009-ST. Demand made either under category of CICS or under WCS for period prior to 1-7-2010 would not sustain. Demand beyond 1-7-2010 is in respect of services provided by Appellant, which would fall under category of WCS and not under category of CICS as alleged. In so far as Service Tax on renting of immovable property is concerned, there is no dispute that Service Tax is leviable on such service. During relevant period, it could be bonafidely believed that there was no need to pay Service Tax on renting of immovable property. Therefore, to that extent and in absence of any other substantive evidence to suggest suitable evasion, extended period cannot be invoked for recovering Service Tax on this service. Demand will not sustain on grounds of merit and partly on grounds on limitation. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Customs – Import of garments – Demand of duty – Investigation revealed that Jatin Seth of R.K. Enterprises had imported garment accessories at Nil rate of Custom Duty as provided under Customs Notification No.21/2002 by using Importer Exporter Codes (IECs) of 15 Exporters – After investigation, department issued show cause notice to various persons including Appellants – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellants are liable to pay duty jointly and/or severally with Jatin Seth – HELD – It is an undisputed fact that none of 15 IEC holders imported subject goo... [Read more]

Customs – Import of garments – Demand of duty – Investigation revealed that Jatin Seth of R.K. Enterprises had imported garment accessories at Nil rate of Custom Duty as provided under Customs Notification No.21/2002 by using Importer Exporter Codes (IECs) of 15 Exporters – After investigation, department issued show cause notice to various persons including Appellants – Adjudicating authority confirmed demand as proposed in show cause notice – Whether Appellants are liable to pay duty jointly and/or severally with Jatin Seth – HELD – It is an undisputed fact that none of 15 IEC holders imported subject goods for their own use. Impugned consignments have actually been imported by a trader, viz., Jatin Seth in name of various garment exporters misusing their IE Codes. Jatin Seth is the actual importer and beneficiary of subject import. Show cause notice apprehended that some of Appellants have willfully colluded with Jatin Seth and allowed their IECs and Import Certificates to be used in import of garment accessories by Jatin Seth for monetary consideration. Appellants are separate legal entities/juridical persons and therefore, there could not be any proposal in first place to demand jointly and/or severally which was unfortunately confirmed in impugned Order-in-Original. Demand of duty cannot be confirmed against various persons on “jointly and/or severally” basis. Impugned Order-in-Original is set aside. Cases remanded back to file of Original Authority to decide against whom the actual demands could be made – Appeals disposed of [Read less]

Customs AAR - Classification of Copper Cables, Capacitor, Ceramic pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer to be used for manufacture of ‘Combo 3-in-1 (OBC+DC/DC+PDU)’, which will in turn be used in motor vehicles – HELD – HELD - Although the said products are for manufacture of the Combo 3- in-1 (OBC+DC/DC+PDU) which is classifiable under Heading 8504, the same cannot be classified as parts of the same. The subject goods are covered under specific heading of the tariff, therefore, by the virtue of GRI rule 1, Note 2(a) to Section XVI. of the Tariff ('parts of machines' falling under... [Read more]

Customs AAR - Classification of Copper Cables, Capacitor, Ceramic pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer to be used for manufacture of ‘Combo 3-in-1 (OBC+DC/DC+PDU)’, which will in turn be used in motor vehicles – HELD – HELD - Although the said products are for manufacture of the Combo 3- in-1 (OBC+DC/DC+PDU) which is classifiable under Heading 8504, the same cannot be classified as parts of the same. The subject goods are covered under specific heading of the tariff, therefore, by the virtue of GRI rule 1, Note 2(a) to Section XVI. of the Tariff ('parts of machines' falling under Chapters 84 and 85), HSN Explanatory Notes to Note 2 of Section XVI, Note 2 to Section XVII (Chapter 86 to 89) of the Tariff and General explanatory notes of section XVII, the same are to be classified under respective Tariff Headings of the First Schedule to the Customs Tariff Act, 1975, not as parts of Combo 3-in-1 (OBC+DC/DC+PDU) - The products in question i.e. Copper cables, Capacitor, Ceramic gap pad, Connector, Fuse, Relay, Inductor, MOSFET/Transistor and Transformer, proposed to be imported by the applicant, identifiable for use in electric vehicles would attracts merit classification under the respective headings viz. Copper Cables: Heading 8544, Capacitor: Heading 8532, Ceramic pad: Heading 8547, Connector: Heading 8536, Fuse: Heading 8536, Relay: Heading 8536, Inductor: Heading 8504, MOSFET/Transistor: Heading 8541, and Transformer: Heading 8504 – Ordered accordingly [Read less]

GST – Cancellation of registration on account of non-filing of returns - The appeal filed by the petitioner was dismissed solely on the ground of delay – HELD – The petitioner is not adequately educated and lacks the requisite technical competence to operate a computer or to comprehend the complexities of the online filing system. Therefore, he engaged the services of an accountant/ local advocate to carry out such compliances on his behalf. However, during the relevant period, the said accountant/local advocate neither informed the petitioner about the requirement of online filing of GST returns nor filed the same o... [Read more]

GST – Cancellation of registration on account of non-filing of returns - The appeal filed by the petitioner was dismissed solely on the ground of delay – HELD – The petitioner is not adequately educated and lacks the requisite technical competence to operate a computer or to comprehend the complexities of the online filing system. Therefore, he engaged the services of an accountant/ local advocate to carry out such compliances on his behalf. However, during the relevant period, the said accountant/local advocate neither informed the petitioner about the requirement of online filing of GST returns nor filed the same on their own accord. As a result of this omission and lack of communication, the GST returns for a continuous period of six months could not be filed by the petitioner - the reasons mentioned in the petition for non-compliance with the relevant provisions of the Act within the prescribed time appear to be genuine - The cancellation of GST registration is virtually a civil death, thereby bringing the business operations of the petitioner to a standstill. The petitioner's complete dependence on the accountant/local advocate, his lack of education and technical competence, and the non-communication of the requirement of filing GST returns by the accountant/local advocate can be considered as genuine reasons for the delay - The Appellate Authority is directed to consider and decide the appeal of the petitioner on its own merits, in accordance with law, subject to the petitioner firm depositing the late fees, penalty and other statutory deposits for entertaining the appeal, as admissible – The petition is disposed of [Read less]

Central Excise – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Bar of limitation – Appellant is engaged in manufacture of transformers – Appellant filed an application under Section 11B of the Act for refund of excise duty paid on goods cleared under invoices – Original Authority rejected refund claim filed by Appellant on ground of limitation – Aggrieved Appellant filed appeal before Commissioner (Appeals), which had been dismissed by impugned order – Whether refund claim filed by Appellant is barred by limitation or not – HELD – Appellant had filed refund claim for refund of excis... [Read more]

Central Excise – Section 11B of Central Excise Act, 1944 – Filing of refund claim – Bar of limitation – Appellant is engaged in manufacture of transformers – Appellant filed an application under Section 11B of the Act for refund of excise duty paid on goods cleared under invoices – Original Authority rejected refund claim filed by Appellant on ground of limitation – Aggrieved Appellant filed appeal before Commissioner (Appeals), which had been dismissed by impugned order – Whether refund claim filed by Appellant is barred by limitation or not – HELD – Appellant had filed refund claim for refund of excise duty paid by them on goods cleared under excise invoices on grounds that product cleared by them on these invoices were exempted from payment of duty vide S.No.336 of Notification No.12/2012-CE and their buyer had not paid/reimbursed excise duty to them. Section 11B(5)(B) of the Act dealt with relevant date of filing of refund claim. For purposes of clearances pertaining to refund claim, relevant date cannot be the date of adjustment of duty after final assessment and it has to the date of payment of duty. Refund claim filed by Appellant is barred by limitation period of one year as prescribed under Section 11B of the Act. Order under challenge is affirmed – Appeal dismissed [Read less]

Central Excise - Finalisation of provisional assessment, Refund of excess duty paid, Bar of unjust enrichment, Government-controlled prices - Appellant is a manufacturer of Para Chloro Meta Xylenol (PCMX), which is subject to statutory price control under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995 - For the period 2009-2010, the appellant resorted to provisional assessment under the Central Excise Valuation Rules, 2000, due to fluctuations in the exchange rate of the imported raw material. Upon finalization of the provisional assessment, it was determined that the appellant had paid exce... [Read more]

Central Excise - Finalisation of provisional assessment, Refund of excess duty paid, Bar of unjust enrichment, Government-controlled prices - Appellant is a manufacturer of Para Chloro Meta Xylenol (PCMX), which is subject to statutory price control under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995 - For the period 2009-2010, the appellant resorted to provisional assessment under the Central Excise Valuation Rules, 2000, due to fluctuations in the exchange rate of the imported raw material. Upon finalization of the provisional assessment, it was determined that the appellant had paid excess duty, and the appellant filed refund claims - Whether the refund of excess duty paid by the appellant is barred by the principle of unjust enrichment – HELD - The doctrine of unjust enrichment does not apply in the present case, as the prices of PCMX were fixed by the government under the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 1995. The bar of unjust enrichment is inapplicable when the price of the goods is fixed or regulated by the Government - Further, the PCMX manufactured by the appellant was stock-transferred to its own sister units, and in such cases, the question of passing on the incidence of duty does not arise. The Tribunal in Pearl Polymers v. CCE, Bangalore and Banzali Engineering Polymer Ltd. v. CCE, Bhopal, held that the doctrine of unjust enrichment is inapplicable to stock-transfer transactions - The appellant is eligible for the refund of excess duty paid. The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Reversal of Cenvat credit, Rule 6(3) of Cenvat Credit Rules 2004, Non-excisable goods – Demand on the ground that the appellant cleared packing materials (used drums) without reversing the Cenvat credit at the rate of 6% as per Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the appellant is required to reverse the Cenvat credit at the rate of 6% as per Rule 6 of the CCR, 2004 amended by Notification No. 6/2015-CE (NT) dated 01.03.2015, for the clearance of packing materials (used drums) – HELD - The scope of Rule 6 is with respect to the inputs/input services used in or in relation to the manufac... [Read more]

Central Excise - Reversal of Cenvat credit, Rule 6(3) of Cenvat Credit Rules 2004, Non-excisable goods – Demand on the ground that the appellant cleared packing materials (used drums) without reversing the Cenvat credit at the rate of 6% as per Rule 6(3) of the Cenvat Credit Rules, 2004 - Whether the appellant is required to reverse the Cenvat credit at the rate of 6% as per Rule 6 of the CCR, 2004 amended by Notification No. 6/2015-CE (NT) dated 01.03.2015, for the clearance of packing materials (used drums) – HELD - The scope of Rule 6 is with respect to the inputs/input services used in or in relation to the manufacture of exempted goods along with the manufacture of non-exempted goods. Unless the exempted goods are manufactured along with non-exempted goods, the applicability of Rule 6 does not arise - The appellant is manufacturing only one kind of goods. Admittedly, the packing material- used drums as have been cleared by the appellant, irrespective for consideration, are not the goods manufactured by the appellant. The empty packaging material of cenvatable input is not liable for payment either as excise duty or as Cenvat credit under Rule 6(3) of CCR, 2004. The packing materials (used drums) cleared by the appellant are not the goods manufactured by the appellant, and therefore, the provisions of Rule 6 of CCR, 2004 are not applicable. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Rules 2(l) and 5 of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is a global IT services company engaged in development of software & exporting thereof through internet to various customers situated outside India – On scrutiny of documents submitted by Appellant, department observed that Appellant had irregularly availed Cenvat credit of service tax paid on inadmissible services – Department issued show cause notice proposing demand of inadmissible credit by invoking extended period of limitation – Commissioner confirmed demand of inadmissi... [Read more]

Service Tax – Rules 2(l) and 5 of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is a global IT services company engaged in development of software & exporting thereof through internet to various customers situated outside India – On scrutiny of documents submitted by Appellant, department observed that Appellant had irregularly availed Cenvat credit of service tax paid on inadmissible services – Department issued show cause notice proposing demand of inadmissible credit by invoking extended period of limitation – Commissioner confirmed demand of inadmissible credit – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Appellant was taking credit of various input services received by them and they were also filing ST-3 returns for claiming credit. Proceedings were initiated on basis of refund claims filed by Appellant under Rule 5 of the Rules. When all facts were being made known to department in form of credit declared in ST-3 return and also in form of refund claims filed, there cannot be a valid ground for invocation of extended period of limitation. Demand beyond normal period of limitation cannot be upheld – Appeal partly allowed - Disallowance of credit – Whether demand raised within normal period of limitation is sustainable – HELD – As outdoor catering service have been put in specific exclusion in Rule 2(l) of the Rules defining input services. CENVAT Credit availed by Appellant on outdoor catering services is disallowed. Credit taken against invoices on which no proper description of service is mentioned on invoice is also disallowed. In respect of CENVAT Credit availed by Appellant against Gym Equipment Services, there is no merit in submissions made by Appellant for reason that these services are meant for person use of employees and hence fall under excluded category. Impugned order rejected submission made by Appellant with regard to demand being made twice in respect of same credit in a very simple manner without going into the details. Question of fact as to either demand had been made twice in respect of same credit, needs to be verified before Original Authority. For this very limited purpose of verification, matter is remanded back to Original Authority [Read less]

Service Tax - Cenvat credit on Insurance Policy - Appellant entered into an agreement with Reliance Infocomm Ltd (RIC) to provide Business Auxiliary Services, which included providing comprehensive surveillance and maintenance support services for RIC's telecom networks – Appellant had taken insurance policies to cover the risk of default in payment by telecom subscribers of RIC and mobile handsets given to such subscribers. These insurance policies were valid from May/June 2003 for a period of 3 years - Admissibility of Cenvat credit on the insurance services received prior to July 1, 2003, when the BAS became taxable -... [Read more]

Service Tax - Cenvat credit on Insurance Policy - Appellant entered into an agreement with Reliance Infocomm Ltd (RIC) to provide Business Auxiliary Services, which included providing comprehensive surveillance and maintenance support services for RIC's telecom networks – Appellant had taken insurance policies to cover the risk of default in payment by telecom subscribers of RIC and mobile handsets given to such subscribers. These insurance policies were valid from May/June 2003 for a period of 3 years - Admissibility of Cenvat credit on the insurance services received prior to July 1, 2003, when the BAS became taxable - Whether Cenvat credit is admissible on insurance services received during the period when the output service (BAS) was out of the tax net – HELD - It is not forthcoming from the agreement as to who was the owner of Mobile hand sets and under what terms and conditions were these provided to the subscribers. The agreement between Appellant-RIL and RIC did not clearly indicate the ownership of the mobile handsets and the terms and conditions under which these were provided to the subscribers. The details regarding the relation of the insurance services to the output services provided by RIL and the consumption of these services on or after July 1, 2003 are not clear. These aspects need to be verified by the Adjudicating Authority to determine the allowability of the disputed Cenvat credit - The credit availer (appellant) is obliged to satisfy the jurisdictional authorities as to how the insurance services were related to the output services provided and were indeed consumed on or after July 1, 2003. The matter is remanded back for a limited purpose to verify these aspects and take a decision on the allowability of the disputed Cenvat credit - The appeal is disposed of by way of remand [Read less]

Service Tax – Rules 2(l) and 5 of CENVAT Credit Rules, 2004 – Unutilized credit – Entitlement of refund – Appellant is a 100% Export Oriented Unit engaged in providing call centre services to its overseas affiliate – Appellant filed refund claim for unutilized CENVAT credit under Rule 5 of the Rules – Deputy Commissioner rejected refund claim on ground that certain input services were not essential for providing output services and lacked direct nexus – Commissioner (Appeals) rejected appeal filed by Appellant – Whether disputed input services have any nexus with exported output services – HELD – Rules ... [Read more]

Service Tax – Rules 2(l) and 5 of CENVAT Credit Rules, 2004 – Unutilized credit – Entitlement of refund – Appellant is a 100% Export Oriented Unit engaged in providing call centre services to its overseas affiliate – Appellant filed refund claim for unutilized CENVAT credit under Rule 5 of the Rules – Deputy Commissioner rejected refund claim on ground that certain input services were not essential for providing output services and lacked direct nexus – Commissioner (Appeals) rejected appeal filed by Appellant – Whether disputed input services have any nexus with exported output services – HELD – Rules permits taking of credit of inputs and input services which are used for providing output services. Rule 5 of the Rules provides that accumulated credit which cannot be utilized can be refunded to exporter subject to stipulated conditions. Legal consultancy service is already included in definition of input services. General Insurance Services and Outdoor Catering services are eligible input service as clarified by Circular No.120/01/2010-ST. Courier Services and Scientific or Technical Consultancy Services are considered as eligible input services, as held by CESTAT Bench in case of Commissioner of Central Excise, Hyderabad Vs Deloitte Tax Services India Pvt Ltd. Architect Services, Consulting Engineer’s Services and Health & Fitness Services are input services in terms of Rule 2(l) of the Rules. Since all these input services have nexus to output services, refund of unutilized credit in respect of same has to be given in accordance with conditions and procedure prescribed – Appeals allowed [Read less]

Service Tax - Refund, Voluntary payment under Section 73(3) - Appellant paid service tax, interest and penalty on the advice of the Department, in the belief that it was payable. Later, the appellant realized that as per the Place of Provision of Services Rules, 2012, the services being received from outside India were not liable to service tax. The appellant filed a refund claim, which was rejected by the Assistant Commissioner on the ground that the refund claim was filed beyond the limitation period and the amount had been voluntarily paid by the appellant - Whether the appellant is entitled to refund of service tax, in... [Read more]

Service Tax - Refund, Voluntary payment under Section 73(3) - Appellant paid service tax, interest and penalty on the advice of the Department, in the belief that it was payable. Later, the appellant realized that as per the Place of Provision of Services Rules, 2012, the services being received from outside India were not liable to service tax. The appellant filed a refund claim, which was rejected by the Assistant Commissioner on the ground that the refund claim was filed beyond the limitation period and the amount had been voluntarily paid by the appellant - Whether the appellant is entitled to refund of service tax, interest and penalty paid on services received from a foreign service provider – HELD - The service tax amount was paid by the appellant during the course of an inquiry initiated against them by the Department. The appellant had voluntarily opted for concluding the inquiry proceedings against them under Section 73(3) of the Finance Act, 1994. The Tribunal in the case of Amar Engineering Company held that once the assessee opts for voluntary payment of service tax and interest and intimates the Department, the matter stands closed and the Department has no liberty to issue any show cause notice - The appellant had voluntarily paid the service tax, interest and penalty and had relinquished their right to challenge the assessment of tax under the proceedings, and hence, the appellant is not entitled to the refund claimed - The impugned order is upheld and the appeal is dismissed [Read less]

Service Tax - Works contract services, Construction of residential complex services – Appellant were engaged in construction of various projects - Demand of service tax under the category of 'Construction of Residential Complex Services' for the period from 01.10.2005 to 31.03.2010 - Whether the services provided by the appellant should be classified under 'works contract services' instead of 'construction of residential complex services' – HELD - Following the judgment of the Supreme Court in Commissioner of CE & Cus., Kerala vs. Larsen & Toubro Ltd and various decisions of the Tribunal, it is held that the services p... [Read more]

Service Tax - Works contract services, Construction of residential complex services – Appellant were engaged in construction of various projects - Demand of service tax under the category of 'Construction of Residential Complex Services' for the period from 01.10.2005 to 31.03.2010 - Whether the services provided by the appellant should be classified under 'works contract services' instead of 'construction of residential complex services' – HELD - Following the judgment of the Supreme Court in Commissioner of CE & Cus., Kerala vs. Larsen & Toubro Ltd and various decisions of the Tribunal, it is held that the services provided by the appellant were in the nature of a 'composite contract' or 'works contract service', which was not taxable prior to 01.06.2007. The introduction of 'works contract service' category implies that the same was not covered by any of the pre-existing entries, including 'construction of residential complex services'. Therefore, the demand of service tax under the category of 'construction of residential complex services' for the period prior to 01.06.2007 is not sustainable. However, the imposition of penalty under Section 77 of the Finance Act, 1994 for failure to get registered and file ST-3 returns under the 'works contract services' category is upheld - The demand of service tax, interest, and penalty under Section 78 are set aside, while the penalty under Section 77 is upheld - The appeal is partially allowed [Read less]

Service Tax on Director's remuneration, Employer-employee relationship - Demand of tax, interest and penalty on account of non-payment of service tax under Reverse Charge Mechanism in respect of remuneration paid to Directors/Chairman - Whether the amounts paid by the appellant-company to its Directors constitute "salary" paid in the course of employment, falling within the exclusion under Section 65B(44)(b) of the Finance Act, 1994 or whether such payments amount to "consideration" for taxable services rendered by the Directors in an independent capacity – HELD - The appellant has established through documentary evidenc... [Read more]

Service Tax on Director's remuneration, Employer-employee relationship - Demand of tax, interest and penalty on account of non-payment of service tax under Reverse Charge Mechanism in respect of remuneration paid to Directors/Chairman - Whether the amounts paid by the appellant-company to its Directors constitute "salary" paid in the course of employment, falling within the exclusion under Section 65B(44)(b) of the Finance Act, 1994 or whether such payments amount to "consideration" for taxable services rendered by the Directors in an independent capacity – HELD - The appellant has established through documentary evidence that the directors were functioning as whole-time employees. The appointment letters, AGM resolutions fixing salary, ledger entries as "Director's Salary", TDS deduction, Form-16 issuance, and classification of these amounts under "Salaries & Wages" in audited financial statements clearly demonstrate an employer-employee relationship – Further, the Tribunal has consistently held that remuneration paid to whole-time Directors, where TDS is deducted, falls within the exclusion under Section 65B(44)(b) and is not taxable under RCM - Since the payments to the Directors were found to be "salary" and not consideration for taxable services, the RCM provisions under Notification No.30/2012-ST have no application. RCM is triggered only upon receipt of a taxable service, and in the absence of a taxable service, the RCM provisions cannot be mechanically applied - The remuneration paid to the Directors constitutes "salary" under an employer-employee relationship and is therefore not exigible to service tax. Consequently, the impugned order is set aside and the appeal is allowed [Read less]

GST – Requirement of specific categorical finding of fraud, willful misstatement or suppression of fact for proceedings under Section 74 of the CGST Act, 2017 - Authorities initiated proceedings against the petitioner alleging circular trading - Whether the proceedings under Section 74 can be initiated without recording any specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax - HELD - For initiating proceedings under Section 74 of the GST Act, the adjudicating authority must record specific categorical finding of fraud, willful misstatement or suppression of fact to e... [Read more]

GST – Requirement of specific categorical finding of fraud, willful misstatement or suppression of fact for proceedings under Section 74 of the CGST Act, 2017 - Authorities initiated proceedings against the petitioner alleging circular trading - Whether the proceedings under Section 74 can be initiated without recording any specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax - HELD - For initiating proceedings under Section 74 of the GST Act, the adjudicating authority must record specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax or wrongful availment of input tax credit. Mere allegation of circular trading without any such finding is not sufficient to confer jurisdiction on the authorities to proceed under Section 74 - In the absence of specific finding of fraud, willful misstatement or suppression of fact, the proceedings under Section 74 are without jurisdiction. Further, the petitioner had duly disclosed all the transactions in its books of accounts and GST returns, and the authorities had failed to point out any defect in the same - Once the proceedings has been dropped against the supplier of the petitioner itself, no adverse inference can be drawn against the petitioner on that basis. The allegation made by the revenue that petitioner is engaged in the circular trading is of no aid to and without any material on record. The impugned orders passed by the State GST authorities under Section 74 of the GST Act are quashed – The writ petition is allowed - Whether the State GST authorities had jurisdiction to initiate proceedings against the petitioner in the absence of any cross-empowerment notification - HELD - The petitioner falls within the jurisdiction of Central GST department. The petitioner had specifically raised the issue of lack of jurisdiction of the State GST authorities in the absence of any cross-empowerment notification, but the authorities had failed to justify their jurisdiction. Mere initiation of proceedings by the State GST authorities does not confer jurisdiction on them, and in the absence of any material to establish the cross-empowerment, the proceedings initiated by the State GST authorities were without jurisdiction - Whether the authorities were justified in drawing adverse inference against the petitioner for non-production of toll plaza receipts - HELD - The GST Act and Rules do not mandate the production of toll plaza receipts to justify the actual physical movement of goods. The petitioner had produced tax invoices, e-way bills, and bilty, along with the bank statements showing the payments made to the transporter, which were sufficient to establish the actual movement of goods. The authorities had failed to point out any defect in the documents produced by the petitioner. The adverse inference drawn by the authorities against the petitioner for non-production of toll plaza receipts was patently perverse and without any basis. [Read less]

GST – Maintainability of writ petition in the face of statutory remedy of appeal – Challenge to orders imposing penalty under Section 129(1)(b) of the UPGST Act, 2017 and release of the seized vehicle and goods - The respondent State raised a preliminary objection regarding the maintainability of the writ petition in view of the availability of a statutory remedy of appeal – HELD - The petitioner had not responded to the show cause notice. There is no material with the authorities to lead to any doubt that the supplier does not exist - The petitioner had relied on an earlier order in the case of M/S Mz Momin Products... [Read more]

GST – Maintainability of writ petition in the face of statutory remedy of appeal – Challenge to orders imposing penalty under Section 129(1)(b) of the UPGST Act, 2017 and release of the seized vehicle and goods - The respondent State raised a preliminary objection regarding the maintainability of the writ petition in view of the availability of a statutory remedy of appeal – HELD - The petitioner had not responded to the show cause notice. There is no material with the authorities to lead to any doubt that the supplier does not exist - The petitioner had relied on an earlier order in the case of M/S Mz Momin Products vs State of Uttar Pradesh & Anr, where the court had observed that the goods were traceable to a bonafide dealer and had directed the authorities to determine the quantum of penalty in accordance with Section 129(1)(a) of the UPGST Act, 2017 - The two orders passed in similar matters, M/S Mz Momin Products and M/S Caviar Trading Company, were not in conflict as they were based on the specific facts presented before the Court. In the present case, the petitioner had failed to file any reply to the show cause notice, and there was no material to show that the goods were traceable to a bona fide dealer. The fact disputes involved in the case should be considered in the appeal proceedings – The petition is dismissed leaving it open to the petitioner to pursue its statutory remedy of appeal [Read less]

Central Excise - Excess CENVAT Credit allocation by Input Service Distributor, Invocation of Extended Period of Limitation – Audit pointed out that the appellant had received excess CENVAT Credit allocated by the Input Service Distributor - Appellant was issued show cause notice for recovery of central excise invoking extended period on the ground that the appellant had suppressed material facts with an intent to evade payment of duty – HELD - To invoke the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944, there has to be, amongst others, suppression of facts and such suppression must ... [Read more]

Central Excise - Excess CENVAT Credit allocation by Input Service Distributor, Invocation of Extended Period of Limitation – Audit pointed out that the appellant had received excess CENVAT Credit allocated by the Input Service Distributor - Appellant was issued show cause notice for recovery of central excise invoking extended period on the ground that the appellant had suppressed material facts with an intent to evade payment of duty – HELD - To invoke the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944, there has to be, amongst others, suppression of facts and such suppression must be wilful and with an intent to evade payment of central excise duty. The SCN and the impugned orders did not allege that any particular column in the ER-1 return had not been correctly filled by the appellant and material facts had not been disclosed with an intent to evade payment of central excise duty - The mere fact that the irregularity was detected during an audit would not by itself be sufficient to invoke the extended period of limitation - the conditions set out in Section 11A(4) of the CEA for invoking the extended period of limitation has not been scrupulously followed by the department, and therefore, the invocation of the extended period is not sustainable - the impugned order is set aside and the appeal is allowed [Read less]

GST - Waiver of interest and penalty under Section 128A of CGST Act, 2017 - During the pendency of the appeal, Section 128A of the CGST Act, 2017, providing for waiver of interest and penalty, was notified on November 1, 2024. The petitioner sought to avail the benefit of this provision for the Financial Year 2018-19, however, the application for waiver was rejected citing non-submission of the reply to the show-cause notice and the non-furnishing of the copy of Form DRC-03A - Whether the petitioner was entitled to the benefit of waiver of interest and penalty under Section 128A of the CGST Act, 2017 for the FY 2018-19 - H... [Read more]

GST - Waiver of interest and penalty under Section 128A of CGST Act, 2017 - During the pendency of the appeal, Section 128A of the CGST Act, 2017, providing for waiver of interest and penalty, was notified on November 1, 2024. The petitioner sought to avail the benefit of this provision for the Financial Year 2018-19, however, the application for waiver was rejected citing non-submission of the reply to the show-cause notice and the non-furnishing of the copy of Form DRC-03A - Whether the petitioner was entitled to the benefit of waiver of interest and penalty under Section 128A of the CGST Act, 2017 for the FY 2018-19 - HELD - The Appellate authority and the Proper officer had failed to properly consider the petitioner's application for availing the benefit of waiver of interest and penalty under Section 128A of the Act - The petitioner had notified the Appellate authority of his intent to avail the benefit of waiver under Section 128A well in advance, i.e., on March 31, 2025, and had provided proof of payment of tax for the relevant period. However, the Appellate authority had ignored these documents and proceeded to reject the petitioner's appeal without considering his application for waiver - Similarly, the Proper officer had failed to consider the petitioner's reply to the SCN and had wrongly cited the non-submission of the reply and the non-furnishing of the copy of Form DRC-03A as grounds for rejecting the petitioner's application for waiver - The appellate order is set aside to the extent it rejected the petitioner's appeal for the FY 2018-19 and the Appellate authority is directed to revisit the petitioner's case and his application for availing the benefit of waiver under Section 128A of the CGST Act in light of the Board Circular dated March 27, 2025 – The petition is disposed of [Read less]

Kerala VAT Act, 2003 - Limitation period for assessment and merits of assessment - Ld. Single Judge allowed the writ petition on the ground of limitation, without examining the merits of the assessment order. The Revenue authorities appealed against this finding on limitation. The Division Bench allowed the appeal, finding that the assessment notice was issued within the 6-year limitation period as per the amended Kerala VAT Act. The Division Bench granted the assessee-appellant liberty to challenge the assessment order on merits before the first appellate authority. The appellant later filed the present writ appeal to cha... [Read more]

Kerala VAT Act, 2003 - Limitation period for assessment and merits of assessment - Ld. Single Judge allowed the writ petition on the ground of limitation, without examining the merits of the assessment order. The Revenue authorities appealed against this finding on limitation. The Division Bench allowed the appeal, finding that the assessment notice was issued within the 6-year limitation period as per the amended Kerala VAT Act. The Division Bench granted the assessee-appellant liberty to challenge the assessment order on merits before the first appellate authority. The appellant later filed the present writ appeal to challenge the Single Judge's order for not examining the merits of the assessment order - Whether the writ appeal filed by the appellant challenging the Single Judge's order for not examining the merits of the assessment order is maintainable, given the principle of merger - HELD - The principle of merger would not apply in this case as the earlier Division Bench had only granted liberty to the appellant to challenge the assessment order on merits before the appellate authority and had not examined the merits itself. Further, a binding precedent of the Supreme Court has since been established, which the appellant can rely on to argue that the items in question (SIM cards, recharge coupons, fixed monthly charges, value-added services) are not 'goods' taxable under the Kerala VAT Act. Relegating the appellant to the appellate authority would be meaningless in light of this binding precedent - Based on the binding judgment of the Supreme Court affirming the Andhra Pradesh High Court's decision, the items in question cannot be considered 'goods' taxable under the Kerala VAT Act - The assessment order is quashed to the extent it demanded tax under the Kerala VAT Act on the amounts received by the appellant towards the items in question, as they are not 'goods' taxable under the Act – The writ appeal is allowed [Read less]

GST - Refund of unutilized Input Tax Credit under inverted duty – Petitioner is engaged in the business of procuring and packing various edible oils on which they pay tax at 5%. The petitioner accumulated ITC as the rate of tax on certain inputs was higher than the rate of tax charged on the packed edible oil (the output supply), and sought refund of the accumulated and unutilized ITC - Whether the petitioner would be entitled to refund of accumulated ITC under Section 54(3)(ii) of the CGST Act, where the input and output supplies are the same, i.e. edible oil, even though they attract different tax rates - HELD - The Se... [Read more]

GST - Refund of unutilized Input Tax Credit under inverted duty – Petitioner is engaged in the business of procuring and packing various edible oils on which they pay tax at 5%. The petitioner accumulated ITC as the rate of tax on certain inputs was higher than the rate of tax charged on the packed edible oil (the output supply), and sought refund of the accumulated and unutilized ITC - Whether the petitioner would be entitled to refund of accumulated ITC under Section 54(3)(ii) of the CGST Act, where the input and output supplies are the same, i.e. edible oil, even though they attract different tax rates - HELD - The Section 54(3)(ii) of the CGST Act does not proscribe or forbid the grant of refund where the input and the output are the same. Clause (ii) of the proviso to sub-section (3) of Section 54 does not contemplate comparing the rate of tax on the principal input with the rate of tax chargeable on the principal output supply. There is neither any reason nor any scope to further confine the refund of unutilized ITC only to cases where the rate on the main input is higher than the rate of tax on the principal output - The legislative intent behind the grant of refund of unutilized ITC that has accumulated on account of inverted tax structure is to confine the tax to the tax on the output supplies at the rate so fixed. Therefore, the Revenue's contention that the petitioner is not entitled to refund of unutilized ITC as the rate of bulk edible oil (input) and packed edible oil (output) is the same, is unsustainable - The impugned orders rejecting the refund claim of the petitioner is set aside. The respondent is directed to refund the amount due to the petitioner along with applicable interest – The writ petition is allowed [Read less]

Customs – Sections 111 and 112(a) of Customs Act, 1962 – Import of restricted item – Order of confiscation – Sustainability – Department received intelligence to effect that Appellant No.1 had imported Ethephon, a restricted item, by mis-declaring same as Ethylene ripener – After investigation, department issued show cause notice proposing confiscation of restricted goods and imposition of penalty upon Appellants – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether goods imported by Appellant are liable for ... [Read more]

Customs – Sections 111 and 112(a) of Customs Act, 1962 – Import of restricted item – Order of confiscation – Sustainability – Department received intelligence to effect that Appellant No.1 had imported Ethephon, a restricted item, by mis-declaring same as Ethylene ripener – After investigation, department issued show cause notice proposing confiscation of restricted goods and imposition of penalty upon Appellants – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating authority – Whether goods imported by Appellant are liable for confiscation under Section 111(d), (f) & (m) of the Act – HELD – Undisputedly, goods imported by Appellant and subsequently seized by Custom Authorities have been declared by Appellant as ethylene ripener, but imported goods contain an active ingredient, i.e ethephon, which is specified in Schedule to Insecticide Act and is thus covered by definition of insecticide as per Section 3(e) of the Act. Goods under importation have noticeable harmful effects on rats examined in research and it have harmful effect on humans also. Even if submissions of Appellant were to be accepted that imported goods are meant for uses other than insecticide, then also in terms of Notification No.106/2009-2014 issued by DGFT, goods could be imported against an import permit issued by Central Insecticide Board and Registration Committee (CIB & RC). It is an admitted fact that Appellants had never obtained any import permit from CIB & RC. As goods have been imported contrary to prescriptions as per Notification No.106/2009-2014, goods have been rightly held liable to confiscation under Section 111(d), (f) & (m) of the Act. Since goods have been held liable for confiscation, penalty imposed upon Appellants under Section 112(a) of the Act is justified. Order under challenge is affirmed – Appeals dismissed [Read less]

Central Excise – Area-based Exemption, fixation for special value addition rate – Rejection of special value addition applications - The CESTAT held that the rejection of the applications filed by the appellant for Special rate fixation on the ground that they have foregone such option, is legally not tenable – The High Court dismissed the Revenue appeal on the ground of maintainability – SC HELD - There is a gross delay of 816 days in filing the Civil Appeal which has not been satisfactorily explained by the appellant. Even otherwise, there are no good ground to interfere with the impugned order passed by the High... [Read more]

Central Excise – Area-based Exemption, fixation for special value addition rate – Rejection of special value addition applications - The CESTAT held that the rejection of the applications filed by the appellant for Special rate fixation on the ground that they have foregone such option, is legally not tenable – The High Court dismissed the Revenue appeal on the ground of maintainability – SC HELD - There is a gross delay of 816 days in filing the Civil Appeal which has not been satisfactorily explained by the appellant. Even otherwise, there are no good ground to interfere with the impugned order passed by the High Court/Tribunal – Revenue appeal is dismissed on the ground of delay as well as on merits [Read less]

Customs - Classification of 50 GSM coated paper, Applicability of exemption notification – Appellant imported 50 GSM coated paper classifying it under Customs Tariff Item (CTI) 4810 19 90 and claiming the benefit of exemption notification No. 152/2009 - Customs authorities reclassified the goods under CTI 4810 13 00, deny the exemption, and impose duty, interest, and penalties - Whether 50 GSM coated paper classifiable under CTI 4810 13 90 (as held by the authorities) or under CTI 4810 19 90 (as claimed by the appellant) or under CTI 4810 29 00 (as an alternative claim by the appellant) – HELD - The correct classificat... [Read more]

Customs - Classification of 50 GSM coated paper, Applicability of exemption notification – Appellant imported 50 GSM coated paper classifying it under Customs Tariff Item (CTI) 4810 19 90 and claiming the benefit of exemption notification No. 152/2009 - Customs authorities reclassified the goods under CTI 4810 13 00, deny the exemption, and impose duty, interest, and penalties - Whether 50 GSM coated paper classifiable under CTI 4810 13 90 (as held by the authorities) or under CTI 4810 19 90 (as claimed by the appellant) or under CTI 4810 29 00 (as an alternative claim by the appellant) – HELD - The correct classification of the imported goods is under CTI 4810 13 90, as the goods were in roll form and did not fall under the categories of imitation art paper, art paper, or chrome paper. Even if the appellant had cleared goods classifying them under a CTI in some Bills of Entry in the past and the department did not take any action that does not prove the correctness of the classification of the goods in those Bills of Entry - The appellant's alternative claim of classification under CTI 4810 29 00 is rejected, as it is impermissible for the appellant to claim that the goods had both less than 10% and more than 10% of fibre obtained through mechanical or chemi-mechanical processes - The exemption notification was not applicable to the goods classified under CTI 4810 13 90, and therefore, the demand of duty along with interest is justified - The classification of the goods under CTI 4810 13 90 and the demand of duty with interest are upheld, but the confiscation of the goods and imposition of penalty are set aside – The appeal is partly allowed [Read less]

GST - Voluntary Cancellation of GST registration - Cancellation of registration ab initio – Revenue contention that intention of the petitioner to have the registration cancelled is a mala fide intention, in order to evade the proceedings which may occur due to the activities undertaken by the petitioner, from the date of inception of the Company – HELD – The impugned orders of rejection are non-speaking orders as they merely stating that the petitioner’s replies were not found to be satisfactory. Such cryptic orders without proper reasons are not in accordance with law. The High Court therefore quashed and set asi... [Read more]

GST - Voluntary Cancellation of GST registration - Cancellation of registration ab initio – Revenue contention that intention of the petitioner to have the registration cancelled is a mala fide intention, in order to evade the proceedings which may occur due to the activities undertaken by the petitioner, from the date of inception of the Company – HELD – The impugned orders of rejection are non-speaking orders as they merely stating that the petitioner’s replies were not found to be satisfactory. Such cryptic orders without proper reasons are not in accordance with law. The High Court therefore quashed and set aside the impugned orders – By calling upon the petitioner to show-cause as to why the cancellation of the registration should not be done ab initio, it cannot be held that the matter has become infructuous as the lacuna of non-speaking order still remains - The petitioner is requesting to cancel its registration from the date of Agreement whereas the department is directing the petitioner to show-cause as to why the number should not be cancelled ab initio. The petitioner can very well reply the issue which is pending for adjudication vide notice - The petitioner is free to raise all contentions in the proceedings initiated pursuant to the SCN - The petition is allowed to the extent of quashing the impugned orders, with the petitioner being at liberty to contest the subsequent proceedings for cancellation of registration - The petition is partly allowed [Read less]

GST – Supply to SEZ Unit, Refund of Unutilised Input Tax Credit of Compensation Cess – Petitioner paid Compensation Cess on the purchase of coal, which was used as an input in the manufacturing process. The petitioner made claims for refund of the unutilized ITC of the Compensation cess on zero-rated – Rejection of refund on the ground that the petitioner had exported the goods on payment of IGST whereas, as per the Circular No. 45/19/2018-GST dated 30.05.2018, a supplier cannot claim refund of compensation cess in case of zero-rated supplies made on payment of IGST - Whether the petitioner is entitled to claim refun... [Read more]

GST – Supply to SEZ Unit, Refund of Unutilised Input Tax Credit of Compensation Cess – Petitioner paid Compensation Cess on the purchase of coal, which was used as an input in the manufacturing process. The petitioner made claims for refund of the unutilized ITC of the Compensation cess on zero-rated – Rejection of refund on the ground that the petitioner had exported the goods on payment of IGST whereas, as per the Circular No. 45/19/2018-GST dated 30.05.2018, a supplier cannot claim refund of compensation cess in case of zero-rated supplies made on payment of IGST - Whether the petitioner is entitled to claim refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act – HELD - The Gujarat Court in the cases of Patson Papers Private Limited v. Union of India and Others and Atul Limited and Another v. Union of India and Others, has held that the petitioner is entitled to claim the refund of the unutilized input tax credit of the Compensation cess paid on the inputs (coal) used in the manufacturing of goods exported as zero-rated supplies under the Cess Act - The goods exported by the petitioner were non-taxable supplies under the Cess Act, and therefore, the petitioner was not required to pay any compensation cess on such exports. In such a scenario, the petitioner is eligible to claim the refund of the unutilized ITC of Compensation cess paid on the inputs used in the manufacturing of the exported goods, which were zero-rated supplies - The impugned orders are set aside and the matter is remanded to the original authority to take a fresh decision in accordance with law after providing an opportunity of hearing to the petitioner – The Writ Petitions are disposed of [Read less]

GST – Bonafide Mistake or malafide intention, Imposition of penalty for error destination in E-Way Bill - Petitioner transferred goods from one warehouse to another warehouse. While the consignment notes and invoices correctly mentioned the destination, the E-way bill mentioned wrong destination due to a clerical error – Authorities imposed penalty under Section 129 of the MPGST Act, 2017 for the discrepancy in the E-way bill - Whether the imposition of 100% penalty under Section 129 of the MP GST Act, 2017 is justified where the error in the E-way bill was a bona fide clerical mistake and the tax had already been paid... [Read more]

GST – Bonafide Mistake or malafide intention, Imposition of penalty for error destination in E-Way Bill - Petitioner transferred goods from one warehouse to another warehouse. While the consignment notes and invoices correctly mentioned the destination, the E-way bill mentioned wrong destination due to a clerical error – Authorities imposed penalty under Section 129 of the MPGST Act, 2017 for the discrepancy in the E-way bill - Whether the imposition of 100% penalty under Section 129 of the MP GST Act, 2017 is justified where the error in the E-way bill was a bona fide clerical mistake and the tax had already been paid by the petitioner - HELD - In consignment bills as well as invoices, the correct address of consigner and consignee was mentioned, but only in the E-way bill, the address was wrongly typed as "location at Indore" in place of "location at Jabalpur". If there had been any mistake in the E-way bill, the same could have been noticed by the petitioner within four days, however, no steps were taken to correct the said mistake. The petitioner had sufficient time to correct the error in the E-way bill, but failed to do so – Further, in the present case, the consigner and consignee are both the same; therefore, there can't be an inadvertent mistake in mentioning the address. Every time it cannot be said that there can be a bonafide error in mentioning the address in the E-way bills - The E-way bill could have been used multiple times along with several consignment bills and invoices. The petitioner has not produced any other supporting document to show that these goods were booked and transported for the warehouse at Jabalpur. The office record could have been filed in support of the plea taken by the petitioner that these goods were actually booked for the warehouse at Jabalpur and not for Indore; therefore, in the absence of any other evidence, it cannot be treated as a bona fide mistake – The writ petition is dismissed [Read less]

When the statute itself vests discretion in the Appellate Authority to examine whether sufficient cause has been shown for condonation of delay, the doctrine of deemed service of order/notice cannot be applied mechanically or punitively.

Punjab/Haryana VAT Act - Taxability of sunglasses under VAT laws – Challenge to the orders passed by the authorities and Tribunals in Punjab and Haryana classifying the product ‘sunglasses’ as unclassified items under the residual entry - Whether sunglasses could be considered as "spectacles" for the purpose of taxation under the VAT laws, and hence be taxed at the lower rate applicable to spectacles, or whether they should be taxed at the higher residuary rate – HELD - The term 'spectacles' is an exhaustive and restrictive entry, and does not include sunglasses within its ambit. The Court relied on the common parl... [Read more]

Punjab/Haryana VAT Act - Taxability of sunglasses under VAT laws – Challenge to the orders passed by the authorities and Tribunals in Punjab and Haryana classifying the product ‘sunglasses’ as unclassified items under the residual entry - Whether sunglasses could be considered as "spectacles" for the purpose of taxation under the VAT laws, and hence be taxed at the lower rate applicable to spectacles, or whether they should be taxed at the higher residuary rate – HELD - The term 'spectacles' is an exhaustive and restrictive entry, and does not include sunglasses within its ambit. The Court relied on the common parlance test and in common understanding, spectacles and sunglasses are distinct products used for different purposes- spectacles for vision correction and sunglasses for protection from sun glare - The Court rejected the argument that with technological advancements, the distinction between the two has diminished, stating that even if a product like photochromic lenses blurs the line, it would still be covered under spectacles as it is primarily for vision correction – Further, the subsequent amendment to include sunglasses in the entry for spectacles in the Punjab VAT Act in fact indicated that sunglasses were not originally covered under the term 'spectacles' - The authorities are justified in not giving a broad interpretation to include sunglasses under the entry for 'spectacles' for the purpose of taxation - The orders of the authorities and Tribunals, which had classified sunglasses under the residuary entry for taxation at the higher rate, and not under the entry for spectacles are upheld and the appeals are dismissed - Interpretation of taxation entries - When the language used in the statute is clear, the intention must be gathered from the language used, and a construction requiring addition or substitution of words must be avoided. The principles of statutory interpretation laid down by the Supreme Court is, when the general words follow specific words, the general words must be construed as referring to things of the same kind as the specific words, unless there is a clear manifestation of a contrary intention. Since the entry specifically mentioned 'spectacles', it cannot be expanded to include sunglasses, which are a distinct product – The authorities are justified in not giving a broad interpretation to include sunglasses under the entry for 'spectacles' for the purpose of taxation. [Read less]

GST - Denial of input tax credit to bonafide purchaser solely due to retrospective cancellation of supplier’s Registration – Assessee challenge the High Court order which refused to interference with the adjudication order and directed the petitioner to pursue appellate remedy - Supreme Court Issues Notice in the matter

UPVAT Act, 2008 – Blank Form-31, Penalty under Section 15A(1)(o) of the UPVAT Act – At the time of interception, all requisite documents were produced, except Form-31 which was found blank. The authorities imposed a penalty on the ground that the blank Form-31 and the vehicle being on a different route amounted to evasion of tax – HELD - The mere fact that Form-31 was blank, which was a procedural defect, and the vehicle being on a different route, without any finding of actual tax evasion, cannot justify the imposition of penalty under Section 15A(1)(o). The goods were not final products but raw materials, and were ... [Read more]

UPVAT Act, 2008 – Blank Form-31, Penalty under Section 15A(1)(o) of the UPVAT Act – At the time of interception, all requisite documents were produced, except Form-31 which was found blank. The authorities imposed a penalty on the ground that the blank Form-31 and the vehicle being on a different route amounted to evasion of tax – HELD - The mere fact that Form-31 was blank, which was a procedural defect, and the vehicle being on a different route, without any finding of actual tax evasion, cannot justify the imposition of penalty under Section 15A(1)(o). The goods were not final products but raw materials, and were duly disclosed in the books of account. Merely because some columns in the Form-31 were not filled, it cannot be presumed that the form was reused to evade tax, in the absence of any supporting material on record - The penalty order is set aside and revision filed by the assessee is allowed [Read less]

GST – Generation of one e-Way Bill for goods transported in two trucks - Since the goods (sorter machine) could not be accommodated in a single truck, they were loaded in two trucks, and the e-way bill mentioned both the truck numbers as well as the use of multiple vehicles. However, the goods were seized, and an order under Section 129(3) of the GST Act was passed - Whether the seizure of the goods was justified when the details of the multiple vehicles used for transportation were duly disclosed in the e-way bill – HELD - It is a matter of common knowledge that once the goods cannot be accommodated in one truck, thou... [Read more]

GST – Generation of one e-Way Bill for goods transported in two trucks - Since the goods (sorter machine) could not be accommodated in a single truck, they were loaded in two trucks, and the e-way bill mentioned both the truck numbers as well as the use of multiple vehicles. However, the goods were seized, and an order under Section 129(3) of the GST Act was passed - Whether the seizure of the goods was justified when the details of the multiple vehicles used for transportation were duly disclosed in the e-way bill – HELD - It is a matter of common knowledge that once the goods cannot be accommodated in one truck, though issued by one tax invoice, can always be accommodated in two trucks and the e-way bill for each truck should have been generated, but in the case in hand, only one e-way bill was generated specifically mentioning both the truck numbers, which were in transit and the goods in question were loaded as well as on the e-way bill, multi vehicle was also mentioned. Once the disclosure has duly been made in the e-way bill, no intention to evade payment of tax can be attributed - There was no contravention of the law as all true and correct disclosures were made in the e-way bill. The fact that the goods could not be accommodated in a single truck and were therefore transported in two trucks, with both the truck numbers mentioned in the e-way bill, clearly demonstrated the petitioner's intention to comply with the legal requirements - When the details of the goods are duly disclosed in the e-way bill, no intention to evade payment of tax can be attributed to the taxpayer - The impugned orders are set aside and the petition is allowed [Read less]

Central Excise – Manufacture of vehicles – Classification – Appellant is engaged in manufacture of Bullet Proof Special Purpose Vehicle – Appellant cleared impugned vehicles by classifying same under CETH 8705 9000 and availing exemption under Notification No.12/2012 – Revenue issued show cause notice proposing classification of impugned vehicles under CETH 8710 0000 and demand of duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether impugned vehicles merits classification under CETH 8705 9000 as claimed by Appellant or under CETH 8710 0000 as held in impugned order – HELD �... [Read more]

Central Excise – Manufacture of vehicles – Classification – Appellant is engaged in manufacture of Bullet Proof Special Purpose Vehicle – Appellant cleared impugned vehicles by classifying same under CETH 8705 9000 and availing exemption under Notification No.12/2012 – Revenue issued show cause notice proposing classification of impugned vehicles under CETH 8710 0000 and demand of duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether impugned vehicles merits classification under CETH 8705 9000 as claimed by Appellant or under CETH 8710 0000 as held in impugned order – HELD – Light armoured bulletproof vehicles are specifically excluded from classification under tariff heading 87.10. Bulletproof vehicles manufactured by Appellant are light armoured bulletproof vehicles. Primary purpose of said vehicle was patrolling, surveillance and security of forces inside vehicle while being stationed at battlefield. Impugned vehicles are not principally designed for transport of passengers or goods and hence, are not excluded from purview of heading 8705. Bulletproof special purpose vehicles deserved to be classified under chapter heading 8705. Admittedly, vehicle in question is a special purpose vehicle, therefore, same have merited classification under tariff heading 8705 9000 as claimed by Appellant. Since issue of classification of vehicles is decided in favour of Appellant, impugned vehicles are eligible for exemption. Impugned order passed by Adjudicating Authority is set aside – Appeal allowed [Read less]

Service Tax – Providing of services from outside India – Tax liability – Appellant, a Company registered under laws of USA, entered into License Agreement with Petroleum Companies in India, vide which, it granted non-exclusive right to use licensed technology, which was patented outside India, to Petroleum Companies in India – Petroleum Companies in India had agreed to pay a fixed consideration at pre-determined intervals – Department issued show cause notice to Appellant by proposing demand of Service Tax on consideration received for Intellectual Property Rights (IPR) services – Adjudicating Authority confirm... [Read more]

Service Tax – Providing of services from outside India – Tax liability – Appellant, a Company registered under laws of USA, entered into License Agreement with Petroleum Companies in India, vide which, it granted non-exclusive right to use licensed technology, which was patented outside India, to Petroleum Companies in India – Petroleum Companies in India had agreed to pay a fixed consideration at pre-determined intervals – Department issued show cause notice to Appellant by proposing demand of Service Tax on consideration received for Intellectual Property Rights (IPR) services – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of IPR services – HELD – It is not dispute that patents and IPR are registered in USA. Terms of agreement indicate that payment for such transfers is to be made in USD. Neither show cause notice nor impugned order established that liaison office in India had provided services on their own to Indian Petroleum companies. Services were rendered by Appellant from USA, a place outside India. Services were provided entirely from outside of India and no part of services were ever performed in India. Appellant did not have any establishment, office, employee or any assets in India where the disputed services were provided. Services provided beyond territorial waters of India are not liable to service tax, as provisions of Service Tax have not been extended to such areas to a service recipient in India. Presence of a liaison office in India would not have made any difference. Appellant cannot be obligated to discharge Service Tax on services provided by it from outside India. Impugned order cannot be sustained – Appeals allowed [Read less]

Customs – Section 14 of Customs Act, 1962 – Import of motor controller – Enhancement of value – Setting aside of assessment order – Respondent imported Motor Controller vide bills of entry – Assessing Officer reassessed importation by enhancing CIF value and rejected declared value of impugned goods – Commissioner (Appeals) set aside orders of assessment and accepted the value declared by Respondent – Whether Commissioner (Appeals) is justified in setting aside of orders of assessment passed by Assessing Officer – HELD – Assessing officer had rejected transaction values without any valid basis and witho... [Read more]

Customs – Section 14 of Customs Act, 1962 – Import of motor controller – Enhancement of value – Setting aside of assessment order – Respondent imported Motor Controller vide bills of entry – Assessing Officer reassessed importation by enhancing CIF value and rejected declared value of impugned goods – Commissioner (Appeals) set aside orders of assessment and accepted the value declared by Respondent – Whether Commissioner (Appeals) is justified in setting aside of orders of assessment passed by Assessing Officer – HELD – Assessing officer had rejected transaction values without any valid basis and without following the due procedure as laid down under Section 14 of the Act and especially when there is nothing on record to suggest that transaction values declared by Respondent were not the price actually paid for goods when sold for export to India. Department had adduced no evidence that Respondent had paid any amount over and above the invoice value to foreign supplier. In these circumstances, enhancement of assessable value by Assessing officer is liable to be struck down and set aside and impugned bill of entry is to be assessed at values declared by Respondent. Impugned order passed by Commissioner (Appeals) is uphold – Appeals dismissed [Read less]

Service Tax – Sections 77 and 78 of Finance Act, 1994 – Demand of tax – Imposition of penalty – Appeal had been filed by Appellant assailing Order-In-Appeal passed by Commissioner (Appeals) – Whether impugned order confirming demand of Service Tax raised against Appellant is sustainable – HELD – Vide impugned order, Commissioner (Appeals) partly allowed appeal filed by Appellant to extent of exempting works contract service pertaining to construction of Government Industrial Training Institute, but disallowed exemption on remaining service value received for construction of residential houses. Admittedly, wor... [Read more]

Service Tax – Sections 77 and 78 of Finance Act, 1994 – Demand of tax – Imposition of penalty – Appeal had been filed by Appellant assailing Order-In-Appeal passed by Commissioner (Appeals) – Whether impugned order confirming demand of Service Tax raised against Appellant is sustainable – HELD – Vide impugned order, Commissioner (Appeals) partly allowed appeal filed by Appellant to extent of exempting works contract service pertaining to construction of Government Industrial Training Institute, but disallowed exemption on remaining service value received for construction of residential houses. Admittedly, work contract for construction of residential buildings did not fall within period covered under Sr.No.12A of Exemption Notification No.25/2012-ST. Confirmation of demand of Service Tax is upheld, but penalty imposed under Sections 77 and 78 of the Act is set aside, as there is no suppression of fact on part of Appellant with intent to evade payment of Service Tax. Impugned order passed by Commissioner (Appeals) is modified to above extent – Appeal partly allowed [Read less]

Central Excise – Manufacture of goods – Denial of exemption – Demand of duty – Appellant is engaged in manufacture of Builders ware of Plastics – Appellant availed exemption under Notification No.8/2003-CE on manufacture and clearance of excisable goods – Department issued show cause notice alleging that Appellant had wrongly availed exemption under Notification No.8/2003 – Adjudicating Authority denied exemption and confirmed demand of duty – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is eligible for exemption under Notification No.8/2003-CE – HELD – impu... [Read more]

Central Excise – Manufacture of goods – Denial of exemption – Demand of duty – Appellant is engaged in manufacture of Builders ware of Plastics – Appellant availed exemption under Notification No.8/2003-CE on manufacture and clearance of excisable goods – Department issued show cause notice alleging that Appellant had wrongly availed exemption under Notification No.8/2003 – Adjudicating Authority denied exemption and confirmed demand of duty – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is eligible for exemption under Notification No.8/2003-CE – HELD – impugned order denied benefit of exemption on ground that Appellant had used inputs bearing brand names or trademarks of third parties in manufacture of final excisable goods. Burden of proving that finished goods bear another person’s brand so as to indicate a trade connection, rests on Department. There is no satisfactory evidence that finished goods as removed from Appellant’s factory carried the brand name or trade name of some other person in such a manner as to indicate that goods belonged to or were the produce of such other person. Department had not established any intention on part of Appellant in affixing brand name of other persons In absence of such proof, legal embargo in Notification cannot be invoked to deny SSI benefit. Impugned Order-in-Appeal denying SSI exemption under Notification No.8/2003-CE is set aside. Appellant is entitled to benefit of SSI exemption – Appeal allowed [Read less]

Service Tax – Section 78 of Finance Act, 1994 – Providing of construction service – Tax liability – Appellant is engaged in providing Construction of Residential Complex Service – Appellant agreed to construct and hand over 33 apartments to landowners, who in turn handed over their land as consideration for construction activity – As Appellant had failed to pay service tax on consideration, department issued show cause notice – Adjudicating Authority confirmed demand along with interest and penalty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant/Developer has p... [Read more]

Service Tax – Section 78 of Finance Act, 1994 – Providing of construction service – Tax liability – Appellant is engaged in providing Construction of Residential Complex Service – Appellant agreed to construct and hand over 33 apartments to landowners, who in turn handed over their land as consideration for construction activity – As Appellant had failed to pay service tax on consideration, department issued show cause notice – Adjudicating Authority confirmed demand along with interest and penalty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant/Developer has provided any construction service to land owner and service tax is exigible on owner's share – HELD – Department issued show cause notice demanding service tax on owner's share on ground that Appellant had rendered taxable construction service to land?owner and had not discharged due service tax on value of owner's share. Prior to 1-7-2010, there is no leviability of tax on owner’s share of apartments. After 1-7.2010, Developer is liable to pay service tax on construction service provided to land owner and value of flats should ordinarily be taken as the price of similar flats charged to independent buyers at nearest point of time. Value of flats given to landowner, which was the consideration for development rights, was used to determine service tax liability. Service tax is payable by builder at time when possession or right in property was transferred to landowner. Appellant is providing construction services to land owner for a consideration (owner's share). Appellant is liable to pay service tax on owner’s share of flats constructed – Appeal partly allowed - Imposition of penalty – Sustainability – Whether penalty imposed on Appellant under Section 78 of the Act is sustainable – HELD – During disputed period, there is a lot of uncertainty as to Service Tax liability and also for its quantification by a developer in respect of joint venture agreements. As such, attributing any malafide to Appellant that there is suppression or intention to evade tax is not justified. Though it is held that Appellant is liable to pay service tax on owner’s share of flats constructed, imposing penalty is not justified. Impugned Order-in-Appeal passed by Commissioner (Appeals) is modified to extent of setting aside penalty imposed, but upholding demand of service tax along with interest due thereon. [Read less]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursement of expenditure – Tax liability – During audit of Appellant, department noticed that Appellant have received an amount towards Consulting Engineer Service from their clients by way of income receipts, but have not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether reimbursement of expenditure incurred towards experts advice and legal c... [Read more]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursement of expenditure – Tax liability – During audit of Appellant, department noticed that Appellant have received an amount towards Consulting Engineer Service from their clients by way of income receipts, but have not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether reimbursement of expenditure incurred towards experts advice and legal charges will form part of taxable value under Section 67 of the Act – HELD – Appellant had paid for Advocates on request of its clients (Dyeing factory owners) on premise of an agent, as they are located at Tirupur and Appellant stationed in Chennai was requested to co-ordinate with different agencies like High Court, Anna University and IIT Chennai. Amount was recovered by Appellant from Dyeing Factory owners. Expenditure incurred is not part of Consulting Engineering Services. No service element or profit margin was involved in reimbursements and these were bona fide expenses incurred on behalf of clients which is beyond scope of project management (contracts) and therefore, reimbursements will not form part of gross value of service under Section 67 of the Act. Impugned order passed by Commissioner (Appeals) is set aside – Appeal allowed [Read less]

Customs - Re-export of goods, Conversion of free Shipping Bill to Drawback shipping bill, Compliance with Drawback Rules - Appellant did not mention in the Shipping bill that the goods were being re-exported under the Duty Drawback scheme - Appellant requested the Commissioner to modify the free shipping bill into a Drawback shipping bill and grant the drawback - Whether the appellant has fulfilled the condition specified under Rule 4(a) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 – HELD – The appellant has not fulfilled the condition specified under Rule 4(a) of the Drawback Rules. In t... [Read more]

Customs - Re-export of goods, Conversion of free Shipping Bill to Drawback shipping bill, Compliance with Drawback Rules - Appellant did not mention in the Shipping bill that the goods were being re-exported under the Duty Drawback scheme - Appellant requested the Commissioner to modify the free shipping bill into a Drawback shipping bill and grant the drawback - Whether the appellant has fulfilled the condition specified under Rule 4(a) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 – HELD – The appellant has not fulfilled the condition specified under Rule 4(a) of the Drawback Rules. In the normal course, the goods would have been physically examined at the time of re-export, which was not done in this case – Further, in terms of Rule 5 of the Drawback Rules, the appellant was required to file the drawback claim within three months from the date on which the order permitting the clearance and loading of goods for exportation was passed. This three-month period was extendable by another twelve months, whereas by the time the appellant filed the drawback claim, more than thirteen months had already elapsed. There is no provision under the Drawback Rules to condone the delay in filing the drawback claim beyond the twelve-month period - In view of the non-fulfilment of the conditions specified under Rule 4(a) and Rule 5 of the Drawback Rules, the appeal filed by the appellant is rejected [Read less]