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Service Tax - Invocation of extended period of limitation, Issue arising from Departmental audit objection - The show cause notice was issued consequent to a Central Excise Revenue Audit (CERA) objection which was raised and disputed by the department itself, with the matter being kept in the call book - Whether the extended period of limitation can be invoked to issue a show cause notice when the underlying issue arises from a CERA audit objection that was itself disputed and not agreed with by the Department, thereby raising a question of suppression of facts by the assessee – HELD – The limitation is a jurisdictiona... [Read more]

Service Tax - Invocation of extended period of limitation, Issue arising from Departmental audit objection - The show cause notice was issued consequent to a Central Excise Revenue Audit (CERA) objection which was raised and disputed by the department itself, with the matter being kept in the call book - Whether the extended period of limitation can be invoked to issue a show cause notice when the underlying issue arises from a CERA audit objection that was itself disputed and not agreed with by the Department, thereby raising a question of suppression of facts by the assessee – HELD – The limitation is a jurisdictional issue which goes to the root of the matter and must be examined at the threshold - When a CERA objection is raised and the Department itself disputes and does not agree with such objection, the issue becomes one of interpretation between the revenue authority and the assessee, not suppression of facts by the assessee. The concept of suppression requires deliberate withholding of material facts, which cannot be attributed to the assessee when the department was equally uncertain of the CERA audit objection - Furthermore, the original authority failed to provide adequate reasoning on how suppression was established. The impugned order's finding of suppression was opaque and reduced to a single line without discussing how the charge of suppression could be alleged when the issue itself was raised by the audit body and was initially not agreed with by the department - The show cause notice is set aside as time-barred and the appeal is allowed [Read less]

Service Tax - Works Contract Service – Taxability of Construction of Educational Institutions - The Adjudicating Authority confirmed the demand for construction services to private educational institutions but dropped the demand for construction services provided to a deemed-to-be university and a private teacher training institute, treating them as Government educational institutions - Revenue appeals against the dropping of demand contending they are private institutions and therefore taxable - Whether works contract services provided for construction of buildings of a deemed-to-be university and a private teacher trai... [Read more]

Service Tax - Works Contract Service – Taxability of Construction of Educational Institutions - The Adjudicating Authority confirmed the demand for construction services to private educational institutions but dropped the demand for construction services provided to a deemed-to-be university and a private teacher training institute, treating them as Government educational institutions - Revenue appeals against the dropping of demand contending they are private institutions and therefore taxable - Whether works contract services provided for construction of buildings of a deemed-to-be university and a private teacher training institute are liable to service tax or are exempt as construction services for educational institutions. HELD - In a prior appeal by the same appellant against the confirmation of demand for private educational institutions, Tribunal had already allowed the appeal on the ground that the Board's Circular No. 80/10/2004 clarifies that constructions for educational institutions not for profit are non-commercial in nature and therefore not taxable - The Department has not established that the institutions in question are not used principally or solely for providing education. The substance of the Department's grievance is merely to treat these institutions as private institutions and thereby taxable, which contradicts the settled principle established by the Tribunal in the appellant's own earlier case - The demand of service tax on works contract services rendered to educational institutions up to July 1, 2012 cannot be sustained. The non-commercial nature of educational services, the bonafide belief of the service provider, the absence of positive suppression, and the interpretational nature of the issue militate against invoking extended period of limitation - The appeal preferred by the Department is rejected [Read less]

Service Tax - Reversal of cenvat credit, Eligibility for service tax refund under exemption notification – Export of IT-enabled services, Refund claims for service tax paid on input services - Assessee had initially availed cenvat credit on input services but subsequently reversed the same, communicating the reversal to the Department and reflecting it in the statutory tax Audit Report – Rejection of refund on the grounds that cenvat credit was availed in contravention of the exemption notification clause and that declaration was not filed prior to export of services for one period - Whether denial of refund claims on ... [Read more]

Service Tax - Reversal of cenvat credit, Eligibility for service tax refund under exemption notification – Export of IT-enabled services, Refund claims for service tax paid on input services - Assessee had initially availed cenvat credit on input services but subsequently reversed the same, communicating the reversal to the Department and reflecting it in the statutory tax Audit Report – Rejection of refund on the grounds that cenvat credit was availed in contravention of the exemption notification clause and that declaration was not filed prior to export of services for one period - Whether denial of refund claims on the grounds of non-compliance with the condition that no cenvat credit should be availed on inputs and input services where the assessee had availed credit but subsequently reversed it, and non-filing of declaration in one instance prior to export of services, is legally sustainable - HELD - Where cenvat credit has been availed but subsequently reversed by the assessee with the reversal communicated to the department and certified in the mandated tax audit report as nil, such reversal amounts to not having taken the cenvat credit at all - The Tribunal decisions establish the principle that reversal of cenvat credit is tantamount to non-availment of credit - Regarding the non-filing of declaration for one period, the declaration requirement serves to furnish details of inputs and input services used in export services, which are verifiable from the assessee's own records. The assessee admittedly engaged in export of services, paid service tax on inputs and input services, and used these for providing export services. Applying the principle that substantial justice cannot be denied for technical lapses, the absence of filing a declaration in a single instance does not warrant denial of the entire refund claim - The assessee is given an opportunity to file the declaration if not already filed, and all refund claims are to be processed without further delay - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of Goods Transportation services – Distinction between Goods Transport Operator and Goods Transportation Agency - Activity of transportation of goods by road - Adjudicating authority confirmed the demand, holding the service provider to be a Goods Transportation Agency (GTA) – Appellant contend that it is merely a Goods Transport Operator (GTO) engaged in the activity of transporting goods by road, which falls under the negative list of services - Whether the appellant's activity of transporting goods by road constitutes a taxable service as a Goods Transportation Agency or falls within the exe... [Read more]

Service Tax - Taxability of Goods Transportation services – Distinction between Goods Transport Operator and Goods Transportation Agency - Activity of transportation of goods by road - Adjudicating authority confirmed the demand, holding the service provider to be a Goods Transportation Agency (GTA) – Appellant contend that it is merely a Goods Transport Operator (GTO) engaged in the activity of transporting goods by road, which falls under the negative list of services - Whether the appellant's activity of transporting goods by road constitutes a taxable service as a Goods Transportation Agency or falls within the exemption under the negative list as a Goods Transport Operator – HELD - The definition of Goods Transportation Agency under Section 65(50b) of the Finance Act requires two essential conditions- providing service in relation to transport of goods by road, and issuing a consignment note. A Goods Transport Operator, on the other hand, is merely a commercial concern engaged in transportation of goods without issuing a consignment note - The GTA service is a composite service which may include intermediary and ancillary services such as loading, unloading, packing, unpacking, and temporary warehousing provided in relation to transportation. However, a GTO provides the activity of transport simpliciter without such related services - The appellant is not registered under the Carriage by Road Act, 2007; charges only freight as agreed without charging gross freight; does not provide services in relation to transport; does not issue consignment notes; and does not undertake loading, unloading, or ancillary services. The regulation under Rule 4B of the Service Tax Rules clearly mandates that a GTA must issue a consignment note, which the appellant does not do. Since the appellant's activity constitutes mere transport of goods by road without providing services in relation thereto, it falls squarely within the exemption provided under Section 66D(p) of the Finance Act - The order confirming the demand for service tax is set aside. The activity of the appellant is held to be mere transport of goods by road, which is covered under the negative list and therefore not subject to service tax - The appeal is allowed [Read less]

Customs - Imposition of Penalty under Section 112(a) of the Customs Act, 1962 when goods are not liable to confiscation – Commissioner (Appeals) dropped proceedings initiated against respondents-importer imposing penalty under section 112(a) of the Customs Act on the ground that the imported goods were held not liable for confiscation as their value was at arm's length and correctly declared, and therefore did not violate section 111(m) of the Customs Act - Whether penalty under section 112(a) of the Customs Act can be imposed when the goods in question are held not liable to confiscation – HELD - The penalty under sec... [Read more]

Customs - Imposition of Penalty under Section 112(a) of the Customs Act, 1962 when goods are not liable to confiscation – Commissioner (Appeals) dropped proceedings initiated against respondents-importer imposing penalty under section 112(a) of the Customs Act on the ground that the imported goods were held not liable for confiscation as their value was at arm's length and correctly declared, and therefore did not violate section 111(m) of the Customs Act - Whether penalty under section 112(a) of the Customs Act can be imposed when the goods in question are held not liable to confiscation – HELD - The penalty under section 112(a) of the Customs Act can be imposed only if the goods are held liable to confiscation. The goods which are neither prohibited nor have any duty implications cannot be confiscated under section 111(m) of the Customs Act for misdeclaration of value. As the charges of over-invoicing of import goods were held as not maintainable and the value of imported goods was determined to be at arm's length without any duty implications, the goods were not liable for confiscation. Consequently, since the foundational requirement for imposing penalty under Section 112(a) was absent, the imposition of such penalty is not permissible. There was no error in the order dropping the proceedings against the respondents as the condition precedent for the penalty did not exist. - The appeals filed by the department are dismissed [Read less]

Customs – Eligibility to benefit of exemption under Notification No. 24/2005-Cus - Non-fulfillment of Conditions – Appellant imported printed circuit board assemblies under Customs Tariff Item 8517 79 10 claiming exemption under Notification No. 24/2005-Cus, Entry 13S - Denial the exemption alleging non-compliance with the prescribed procedure under the Customs (Imports of Goods at Concessional Rate of Duty) Rules, 2017, which requires the importer to furnish an undertaking to the Deputy Commissioner or Assistant Commissioner of Customs that the goods shall not be used in manufacturing specified products and to follow ... [Read more]

Customs – Eligibility to benefit of exemption under Notification No. 24/2005-Cus - Non-fulfillment of Conditions – Appellant imported printed circuit board assemblies under Customs Tariff Item 8517 79 10 claiming exemption under Notification No. 24/2005-Cus, Entry 13S - Denial the exemption alleging non-compliance with the prescribed procedure under the Customs (Imports of Goods at Concessional Rate of Duty) Rules, 2017, which requires the importer to furnish an undertaking to the Deputy Commissioner or Assistant Commissioner of Customs that the goods shall not be used in manufacturing specified products and to follow the requisite documentation and bond procedures – HELD - Appellant contends that although the procedural conditions were not met due to a publisher's error in their reference material, the substantive purpose of the condition was achieved as they were only a trader who sold the goods without using them for manufacturing the excluded items - The exemption Notification No. 24/2005-Cus is a bit unusual as the exemption is available not on the condition that they will be used in a particular fashion but on the condition that they will not be used in a particular fashion viz., in the manufacture of the goods mentioned in clauses (b) to (i) of the entry - While the appellant failed to follow the prescribed procedure and did not furnish the mandatory undertaking, the fundamental purpose underlying the condition—ensuring that the goods were not used to manufacture the excluded products—was actually satisfied in the particular facts of the case as the appellant was merely a trader and had only sold the imported goods without any manufacturing activity - The IGCR Rules scheme is designed to monitor actual use of exempted goods, and when evidence conclusively demonstrates that the goods were not put to prohibited use regardless of procedural non-compliance, the substantive object of the exemption condition stands fulfilled - The demand of duty denying the benefit of the Notification No. 24/2005-Cus cannot be sustained and set aside. Consequently, the demand of interest and the penalties imposed on the appellant also cannot be sustained - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Lapsing of CENVAT credit balance under Rule 11(3) of CENVAT Credit Rules, 2004 – Respondent-assessee produced both dutiable and exempted final products from common inputs and had a credit balance as on the date when one product became exempted - Whether the CENVAT credit balance lying as on the date of exemption lapses under Rule 11(3) of the CENVAT Credit Rules, 2004 when more than one final product is manufactured from common inputs and only some products become exempted while others remain dutiable – HELD - The Rule 11(3) applies only when all final products manufactured from the credited inputs bec... [Read more]

Central Excise - Lapsing of CENVAT credit balance under Rule 11(3) of CENVAT Credit Rules, 2004 – Respondent-assessee produced both dutiable and exempted final products from common inputs and had a credit balance as on the date when one product became exempted - Whether the CENVAT credit balance lying as on the date of exemption lapses under Rule 11(3) of the CENVAT Credit Rules, 2004 when more than one final product is manufactured from common inputs and only some products become exempted while others remain dutiable – HELD - The Rule 11(3) applies only when all final products manufactured from the credited inputs become fully exempted from duty. When multiple final products are manufactured from common credited inputs and some become exempted while others remain dutiable, Rule 11(3) does not apply because the credit can still be utilized for payment of duty on the dutiable products in terms of Rule 3(4) of the CENVAT Credit Rules, 2004. The Rule 3(4) of the CCR, 2004 provides that CENVAT credit may be utilised for payment of any duty of excise product. This means that if out of the same CENVAT credit availed inputs, more than one final product is manufactured and out of those final products, one is exempted from duty, CENVAT credit can be utilised for payment of duty for the other final products which are dutiable - The credit balance does not lapse merely because one product becomes exempted. Thus, the CENVAT credit balance as on 01.03.2008 shall not lapse under Rule 11(3) of the CCR, 2004. The Principal Commissioner did not commit any illegality in dropping the demand - The demand for recovery of credit balance as on the exemption date is not sustainable. The Revenue appeal is dismissedrnrn^Recovery of amount equal to percentage of value of exempted goods cleared for domestic market under Rule 6(3) of CENVAT Credit Rules, 2004 - Whether the department can demand recovery of an amount equal to ten percent to five percent of the value of exempted final products cleared for domestic consumption under Rule 6(3) of CENVAT Credit Rules, 2004 when the manufacturer has not exercised such an option and has maintained separate accounts without wrongly availing credit on inputs used for exempted goods – HELD – The Rule 6(3) merely offers options to manufacturers who do not maintain separate accounts for inputs used in manufacture of dutiable and exempted goods. When a manufacturer maintains proper separate accounts and has not taken credit on inputs used for exempted goods, the Department cannot demand the percentage amount under Rule 6(3) as the manufacturer has not exercised any such option. The statutory scheme does not vest the department with power to choose an option on behalf of the manufacturer - Further, the Department's acceptance in permitting re-credit of amounts mistakenly paid for a few months estops it from contending that an option was exercised for the entire year. Merely depositing the percentage amount out of abundance of caution for certain months cannot be construed as exercise of an option binding for the entire financial year - The demand for recovery under Rule 6(3) for domestic clearances is not sustainable.rnrn^Recovery of CENVAT credit for inputs used in manufacture of exempted goods exported under bond under Rule 6(3) of CENVAT Credit Rules, 2004 - Whether the department can demand recovery of CENVAT credit or amount equal to percentage of value of exempted final products that have been exported under bond when such exports were properly authorized and Rule 6(6)(v) of CENVAT Credit Rules, 2004 provides exemption from the bar on credit for exported goods – HELD - The Rule 6(6)(v) of the CCR, 2004 creates an exemption from the bar on CENVAT credit imposed by Rule 6(1) to 6(4) specifically in respect of excisable goods removed without payment of duty for export under bond. The non-allowability of input credit under Rules 6(1) to 6(4) applies only when inputs used in manufacture of exempted final products are cleared for home consumption, not when exempted final products are cleared for export under bond – Further, the SCN failed to allege that specific notifications prohibited export of exempted goods under bond, making it improper to raise this contention in appeal. All exports were properly authorized through ARE certificates countersigned by proper officers and accepted by the department without challenge. The Department's acceptance in approving exports under bond precludes it from subsequently demanding credit reversal - The demand for recovery of credit for exempted goods exported under bond is set aside. [Read less]

GST – Eligibility of Input Tax Credit to Bonafide Purchaser, Failure of selling dealer to deposit tax - Denial of ITC alleging that the purchaser had wrongly availed and utilized the input tax credit in violation of Section 16(2)(a)(b) of the CGST Act, 2017 for failure of the suppliers to discharge their tax liability - Whether a bona fide purchasing dealer can be denied ITC merely because the selling dealer failed to deposit the tax collected from the purchaser – HELD - A bona fide purchasing dealer who has entered into purchase transactions with validly registered selling dealers, complied with all statutory requirem... [Read more]

GST – Eligibility of Input Tax Credit to Bonafide Purchaser, Failure of selling dealer to deposit tax - Denial of ITC alleging that the purchaser had wrongly availed and utilized the input tax credit in violation of Section 16(2)(a)(b) of the CGST Act, 2017 for failure of the suppliers to discharge their tax liability - Whether a bona fide purchasing dealer can be denied ITC merely because the selling dealer failed to deposit the tax collected from the purchaser – HELD - A bona fide purchasing dealer who has entered into purchase transactions with validly registered selling dealers, complied with all statutory requirements, verified tax invoices, received goods and made payment through proper banking channels cannot be denied input tax credit solely on account of failure of the selling dealer to deposit tax with the Government. The remedy of the Department in such circumstances lies against the defaulting selling dealer and not against a bona fide purchaser - The purchasing dealers cannot be asked to do the impossible, i.e., to anticipate or ensure that selling dealers deposit the tax collected, placing such burden on a bona fide purchasing dealer would be violative of Article 14 of the Constitution. However, where materials exist to indicate collusion or lack of bona fides in the transactions, the Department remains free to proceed in accordance with law. The orders are set aside and quashed - Writ petition accordingly stands disposed of [Read less]

GST - Intermediary Services or Import of Service, Procurement Hub Services - Appellant-company entered into a procurement agreement with Foreign Company to provide comprehensive procurement services including identification, selection, and approval of suppliers, negotiation of terms, and facilitation of supply from selected suppliers - Appellant initially pays IGST under reverse charge treating it as import of services, subsequently seeks refund claiming the services constitute intermediary services with place of supply outside India - Whether services provided by a foreign entity comprising supplier identification, selec... [Read more]

GST - Intermediary Services or Import of Service, Procurement Hub Services - Appellant-company entered into a procurement agreement with Foreign Company to provide comprehensive procurement services including identification, selection, and approval of suppliers, negotiation of terms, and facilitation of supply from selected suppliers - Appellant initially pays IGST under reverse charge treating it as import of services, subsequently seeks refund claiming the services constitute intermediary services with place of supply outside India - Whether services provided by a foreign entity comprising supplier identification, selection, approval, negotiation of procurement terms, and facilitation of supply between the recipient and third-party suppliers constitute intermediary services under section 2(13) of the IGST Act, 2017, or constitute import of services – HELD - The CBIC Circular 159/15/2021-GST establishes that intermediary services require four essential prerequisites: minimum of three parties in the transaction, two distinct supplies with ancillary supply being merely facilitative, the service provider maintaining character of agent or broker with only supportive role, and crucially, the service provider must not supply goods or services on principal-to-principal basis on its own account - In the present case, although three parties exist in form, the foreign entity renders comprehensive procurement services on its own account as an independent contractor functioning as centralized procurement hub for the entire multinational group, providing core services to the group rather than merely arranging or facilitating supplies between two independent principals. The relationship constitutes principal-to-principal service provision on own account rendering the definition's exclusionary clause applicable, distinguishing it from true intermediary arrangements where the facilitator merely connects unrelated parties without providing substantive services independently - The outsourcing or sub-contracting of services on principal-to-principal basis does not constitute intermediary services – The services received by the appellant are in the nature of an import of service and the place of supply shall be in India. Thus, it will not come within the purview of Section 13(8)(b) of the IGST Act, and definition provided in Section 2(13) of the Act - The orders of first appellate authority is confirmed and the appeal is dismissed [Read less]

Central Excise - Duty liability under Notification No. 43/2001-CE(NT) for supply of packing materials to exporters - Revenue raised a demand on the supplier, contending that since the exports by the buyers were not cleared under Bond or were exempted or subjected to Nil rate, the procurement of packing material by such exporters without payment of duty was impermissible - Whether the supplier of packing materials is liable to pay duty when the buyer/procurer has failed to comply with the conditions prescribed under Notification No. 43/2001-CE(NT) where the goods have been cleared against a valid CT-1 certificate – HELD -... [Read more]

Central Excise - Duty liability under Notification No. 43/2001-CE(NT) for supply of packing materials to exporters - Revenue raised a demand on the supplier, contending that since the exports by the buyers were not cleared under Bond or were exempted or subjected to Nil rate, the procurement of packing material by such exporters without payment of duty was impermissible - Whether the supplier of packing materials is liable to pay duty when the buyer/procurer has failed to comply with the conditions prescribed under Notification No. 43/2001-CE(NT) where the goods have been cleared against a valid CT-1 certificate – HELD - The liability for payment of duty arises on the procurer and not on the supplier. The notification, being issued under Rule 19 of the Central Excise Rules, 2001, prescribes a specific procedure whereby manufacturers intending to export can procure raw materials and inputs duty-free subject to conditions - The procedure requires the buyer to obtain a CT-1 certificate from the jurisdictional Assistant Commissioner after execution of a Bond. Once the supplier has cleared goods against a valid CT-1 certificate, the supplier's obligation ceases. If the procurer fails to comply with any conditions prescribed under the notification, it is the procurer who bears the liability to pay duty under Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, and not the supplier who supplied the goods in compliance with the prescribed procedure - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Cenvat credit on returned goods under Rule 16(2) of Central Excise Rules, 2002 - Remanufactured machine sold to different buyer – Demand of recovery of Cenvat credit, contending that the same machine was not returned to the same customer - Whether the appellant is entitled to claim cenvat credit under Rule 16(2) of the Central Excise Rules, 2002, when goods returned for remanufacturing are not returned to the original buyer but are instead remanufactured into a different product and sold to another buyer – HELD - Under Rule 16(2) of the Central Excise Rules, 2002, the determining factor for claiming ce... [Read more]

Central Excise - Cenvat credit on returned goods under Rule 16(2) of Central Excise Rules, 2002 - Remanufactured machine sold to different buyer – Demand of recovery of Cenvat credit, contending that the same machine was not returned to the same customer - Whether the appellant is entitled to claim cenvat credit under Rule 16(2) of the Central Excise Rules, 2002, when goods returned for remanufacturing are not returned to the original buyer but are instead remanufactured into a different product and sold to another buyer – HELD - Under Rule 16(2) of the Central Excise Rules, 2002, the determining factor for claiming cenvat credit is the date of removal (clearance). The rule does not mandate that the remanufactured goods must be returned to the original buyer who returned the goods. The provision uses language such as "re-made, refined, re-conditioned or for any other reason" which does not specify that the resultant outcome should be identical to the original product or that it must be returned to the same sender - The CBEC circular F.No. 354/66/2001-TRU dated 21.06.2001 cited by the department applies specifically to Rule 16(1) regarding return of goods, not to Rule 16(2) which governs remanufacturing cases. The provision does not require that remake or reconditioning result in goods of the same shape and size – Further, the Commissioner's finding that the appellant failed to prove use of all old machine parts travelled beyond the grounds stated in the SCN and amounted to an impermissible expansion of the department's original position - The manufacturer is entitled to avail cenvat credit as the conditions precedent for credit under Rule 16(2) were satisfied. The appeal is allowed [Read less]

Service Tax - Classification of service - Support Service vs. Renting of Immovable Property Service - Service Tax liability on licensing of Railway Space for advertisement – Respondent is engaged in providing advertisement services through hoardings and billboards obtained space from railways under license agreements by tender process and paid license fees for the right to display advertisements at railway stations – Demand of service tax under Reverse Charge contending that railways were providing Business Support Services - The adjudicating authority dropped the proceedings holding that the activity does not constitu... [Read more]

Service Tax - Classification of service - Support Service vs. Renting of Immovable Property Service - Service Tax liability on licensing of Railway Space for advertisement – Respondent is engaged in providing advertisement services through hoardings and billboards obtained space from railways under license agreements by tender process and paid license fees for the right to display advertisements at railway stations – Demand of service tax under Reverse Charge contending that railways were providing Business Support Services - The adjudicating authority dropped the proceedings holding that the activity does not constitute support service but falls under renting of immovable property service – HELD - The definition of support service under section 65B(49) contemplates outsourcing of functions that entities ordinarily carry out themselves. For an activity to qualify as support service including advertisement and promotion, the service provider must be ordinarily engaged in such activity but may obtain it through outsourcing - In the present factual matrix, there is no evidence that railways were engaged in carrying out advertisement or promotion activities that they subsequently outsourced to the respondent. The agreements do not categorically state that railways would provide support services; rather, they clearly indicate the letting out of specified demarcated space for installation of hoardings and display of advertisements - Once it is established that railways as service provider are not providing support services, the service tax, if any, would be payable on forward charge basis and not under RCM - The alternative classification of the activity as renting of immovable property service is correct, as railways provided specified demarcated space to the respondent for putting up hoardings and billboards against payment of license fee, which falls squarely within the definition of renting of immovable property service – Further, invocation of extended period was not tenable as there was no statutory requirement to declare services received not under RCM in service tax returns, and therefore non-declaration of license fees would not constitute suppression of material facts - The demand of service tax is not sustainable as the activity does not constitute support service but falls under renting of immovable property service which is payable on forward charge basis. The proceedings initiated are rightly dropped – The Revenue appeal is dismissed [Read less]

Customs - Certificate of Origin under Indo-Thailand Free Trade Agreement - Rejection and Recomputation of Local Value-Added Content – Appellant-importer imported gold jewellery studded with diamonds/ruby from Thailand and claimed exemption under Notification No. 85/2004-Cus based on CoO certifying 22% local value-added content - Department initiated investigation alleging that the declared value addition was incorrect and actual value addition was only 6.5% based on its own computation considering only labour and handling charges -Whether the Department is justified in rejecting the Certificate of Origin issued by the de... [Read more]

Customs - Certificate of Origin under Indo-Thailand Free Trade Agreement - Rejection and Recomputation of Local Value-Added Content – Appellant-importer imported gold jewellery studded with diamonds/ruby from Thailand and claimed exemption under Notification No. 85/2004-Cus based on CoO certifying 22% local value-added content - Department initiated investigation alleging that the declared value addition was incorrect and actual value addition was only 6.5% based on its own computation considering only labour and handling charges -Whether the Department is justified in rejecting the Certificate of Origin issued by the designated authority of the exporting country and recomputing Local Value-Added Content through an alternate methodology contrary to the Interim Rules of Origin, and whether such verification burden lies on the importer – HELD - The rejection of the Certificate of Origin and recomputation of LVAC by the Department is contrary to the Interim Rules of Origin. Rule 6(d) of the Interim Rules of Origin prescribes a specific statutory formula requiring computation of LVAC as the difference between the FOB value of the export product and the CIF value of non-originating materials, divided by the FOB value, which includes manufacturing, processing, overheads and profit components and is not restricted to labour and handling charges alone. By reducing value addition solely to labour and handling charges, the Department has impermissibly substituted the statutory formula with an artificial and truncated computation - The Interim Rules of Origin constitute a complete and self-contained code governing determination of origin and the Department cannot deviate from or substitute the statutory mechanism by adopting alternate methodologies. The importer, who does not have access to the cost structure of the foreign supplier, is required only to produce the Certificate of Origin. Unilateral rejection of the Certificate of Origin based on departmental computation, without invoking the statutory verification mechanism prescribed under Rule 15, strikes at the root of the statutory scheme – The Customs authorities cannot substitute the statutory formula by adopting alternate methodologies nor can they assume the role of the issuing authority in determining origin - The impugned Order-in-Appeal is set aside and the appeal is allowed [Read less]

Service Tax Exemption on Government Fees and Levies - Appellant engaged in iron products manufacturing pays various fees to Governmental authorities including factory license renewal fees, environmental board consent fees, electricity generation duty, mining permission fees, and ISI licence fees – Demand of service tax on Government Fees and Levies under Reverse Charge Mechanism - Whether payments made for licenses, permits, and certifications required by law are exempt from service tax under Notification No. 25/2012 as amended by Notification No. 22/2016 – HELD - The requirement under law must be considered in the con... [Read more]

Service Tax Exemption on Government Fees and Levies - Appellant engaged in iron products manufacturing pays various fees to Governmental authorities including factory license renewal fees, environmental board consent fees, electricity generation duty, mining permission fees, and ISI licence fees – Demand of service tax on Government Fees and Levies under Reverse Charge Mechanism - Whether payments made for licenses, permits, and certifications required by law are exempt from service tax under Notification No. 25/2012 as amended by Notification No. 22/2016 – HELD - The requirement under law must be considered in the context of whether the appellant could have carried on its business without obtaining the aforementioned licenses and permits. Since the answer is clearly in the negative and the Department placed no evidence on record suggesting that the business could have continued without making these payments to various Governmental authorities, the services were clearly covered under the exemption provided by Notification No. 25/2012-ST – Further, the demand cannot sustain even on the ground of limitation as it pertains to RCM where any amount of service tax paid would be immediately available to the appellant as CENVAT credit. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Classification and Taxability of Transportation of goods by road by non-GTA entity -Appellant charged lumpsum amounts for transportation of equipment and materials from vendors' locations to customer sites as part of project execution contracts for power transmission infrastructure – Taxability of charges recovered for arranging transportation of equipment/material from vendor's location to customer's site constitute taxable service tax - Whether such service can be classified as Business Support Service instead of Transportation service – HELD - Service tax is a contract-based levy that must be levied ... [Read more]

Service Tax – Classification and Taxability of Transportation of goods by road by non-GTA entity -Appellant charged lumpsum amounts for transportation of equipment and materials from vendors' locations to customer sites as part of project execution contracts for power transmission infrastructure – Taxability of charges recovered for arranging transportation of equipment/material from vendor's location to customer's site constitute taxable service tax - Whether such service can be classified as Business Support Service instead of Transportation service – HELD - Service tax is a contract-based levy that must be levied in accordance with the underlying contract between parties; therefore, the intent of the parties must be ascertained from the contract as a whole. The evidence clearly demonstrates that the intention was for the company to carry out the activity of transportation irrespective of whether it was done by the company itself or through engagement of others. Since transportation of goods by road by non-GTA entities was not subjected to service tax during the pre-negative list period and was explicitly excluded in the negative list introduced post-June 2012, the service provided remains non-taxable regardless of whether it was personally provided or provided through intermediaries - The allegation that such service constitutes BSS is unjustified as outsourcing contemplates activity normally undertaken by the recipient itself, which transportation is not. The classification cannot be altered merely because one category attracts taxation while another does not - The demand for service tax on charges for transportation of goods by road is set aside.rnrn^Service tax liability on accounting services provided to branch office located outside India – Appellant’s branch office established in Ethiopia engaged a local accounting firm in Ethiopia for complying with local accounting and statutory requirements of that country; the services were rendered and received entirely in Ethiopia - Whether service tax is leviable under reverse charge mechanism on services received by a branch in a foreign country when both the service provider and service recipient are located outside India and services are provided entirely outside Indian territory – HELD - Where the service provider, service recipient, and provision of services are all located and rendered outside India, no question of service tax levy can arise under either the pre-negative list or post-negative list regime. Section 66A of the Finance Act creates a legal fiction treating branch offices as separate permanent establishments; therefore, services availed by a branch office in Ethiopia cannot be deemed services availed by the company in India. The fact that such expenses form part of the consolidated balance sheet prepared as per accounting standards does not change the territorial location of the transaction. The impugned order's reliance on place of provision of service rules applicable to pre-negative list regime for the post-July 2012 period demonstrates lack of application of mind - The demand for service tax on accounting services provided to the foreign branch office is set aside.rnrn^Extended period of limitation based on suppression of facts - Whether extended period of limitation under the proviso to section 73(1) of the Finance Act can be invoked when the demand is based on facts appearing in the audited balance sheets and financial records – HELD - No finding on invocation of extended period of limitation has been recorded in the impugned order. Further, suppression of facts cannot be alleged when the entire demand is raised on the basis of information appearing in balance sheet as these are public documents. In the case where the assessee is a listed public company bound by statutory disclosures to the public, the facts underlying the demand were already in the public domain. Since the ingredients for invocation of extended period of limitation under section 73(1) and imposition of penalty under section 78 are identical, and the extended period cannot be invoked in the absence of proven suppression, the penalty under section 78 also cannot stand - The invocation of extended period of limitation is set aside, and the penalty imposed under section 78 is set aside accordingly. [Read less]

Customs – Penalty under Sections 112 (a) and 114AA on custom brokers for alleged misclassification of imported goods - Revenue alleged that the brokers knowingly overlooked the details regarding the nature of goods and customs tariff classification of the wheel loaders to enable the importer to claim concessional rate of duty - Whether the imposition of penalty under Sections 112(a) and 114AA of the Customs Act, 1962 on custom brokers is justified when the importer has been exonerated on the ground that the issue involved a matter of classification which is interpretational in nature and does not involve mala fides – H... [Read more]

Customs – Penalty under Sections 112 (a) and 114AA on custom brokers for alleged misclassification of imported goods - Revenue alleged that the brokers knowingly overlooked the details regarding the nature of goods and customs tariff classification of the wheel loaders to enable the importer to claim concessional rate of duty - Whether the imposition of penalty under Sections 112(a) and 114AA of the Customs Act, 1962 on custom brokers is justified when the importer has been exonerated on the ground that the issue involved a matter of classification which is interpretational in nature and does not involve mala fides – HELD - In a parallel case concerning the importer, this bench has confirmed the proposed classification but held that the demand should be restricted to the normal period of limitation as the show cause notice was issued beyond the normal period. Since the issue involved classification which is an interpretational matter, no mala fide intentions can be attributed to the importer. Extending this rationale, a custom broker who merely files Bills of Entry at the instructions of the importer cannot be found fault with for abetment when the underlying classification issue is interpretational in nature and the importer itself stands exonerated. Additionally, the same principle regarding the issuance of show cause notice beyond the normal period of limitation applies equally to the custom brokers - The order imposing penalties under Sections 112(a) and 114AA of the Customs Act, 1962 on the custom brokers stands set aside in its entirety. The appeal is allowed [Read less]

Customs - Abetment in smuggling - Applicability of Section 112(a) of the Customs Act, 1962 when actual importer is not identified or prosecuted - Show cause notice proposing confiscation of smuggled goods and imposition of penalties against the appellants alleging involvement in attempted smuggling of foreign cigarettes concealed in declared cargo - Whether penalty for abetment under Section 112(a) of the Customs Act, 1962 can be imposed against persons when the actual importer of the goods is neither identified nor prosecuted, and when the evidence against them consists only of uncorroborated and subsequently retracted st... [Read more]

Customs - Abetment in smuggling - Applicability of Section 112(a) of the Customs Act, 1962 when actual importer is not identified or prosecuted - Show cause notice proposing confiscation of smuggled goods and imposition of penalties against the appellants alleging involvement in attempted smuggling of foreign cigarettes concealed in declared cargo - Whether penalty for abetment under Section 112(a) of the Customs Act, 1962 can be imposed against persons when the actual importer of the goods is neither identified nor prosecuted, and when the evidence against them consists only of uncorroborated and subsequently retracted statements without proper investigation – HELD - The penalty under Section 112(a) cannot be sustained when the actual committer i.e. the actual importer is not found or charges against him for improper importation are not established. The legal definition of abetment requires the existence of at least two persons involved - one committer and one abetter. Abetment occurs only when there is active assistance, encouragement, command or procurement by one person to another for commission of an offence. An abetter cannot conspire with himself to commit a crime - In customs smuggling cases, the alleged crime is the improper importation and the importer is the committer. In the absence of the identification and prosecution of the actual importer, there cannot be any penal action for abetment merely on other persons who are otherwise least interested in the act of import. The court further observes that uncorroborated statements which are subsequently retracted, coupled with half-hearted investigation that fails to pursue crucial leads such as verification of call history and interrogation through cross-examination, cannot form the basis for imposing penalty on appellants - The investigative process in the instant case appeared to be carried out as a formality to exonerate the person whose phone number was mentioned while targeting other parties, which does not constitute fair and lawful investigation. The adjudicating authority's failure to consider the detailed replies and explanations filed by the appellants and the omission to mention the actual importer further demonstrates procedural irregularity and absence of proper evidence - The impugned order levying penalty under Section 112(a) against the appellants is set aside – The appeal is allowed [Read less]

GST - Levy of late fee under Section 47(2) along with General penalty under Section 125 of the CGST Act, 2017 for failure to file Annual return - The petitioner contends that the late fee may be levied only in respect of belated filing and not for non-filing of the return - Whether late fee under Section 47(2) and penalty under Section 125 can be imposed, in addition to the late fee, for failure to furnish the annual return – HELD - The late fee is leviable on any registered person who fails to furnish the return required under Section 44 by the due date. The plain text of Section 47(2) provides that late fee is leviabl... [Read more]

GST - Levy of late fee under Section 47(2) along with General penalty under Section 125 of the CGST Act, 2017 for failure to file Annual return - The petitioner contends that the late fee may be levied only in respect of belated filing and not for non-filing of the return - Whether late fee under Section 47(2) and penalty under Section 125 can be imposed, in addition to the late fee, for failure to furnish the annual return – HELD - The late fee is leviable on any registered person who fails to furnish the return required under Section 44 by the due date. The plain text of Section 47(2) provides that late fee is leviable for failure to file the return by the due date. This provision applies to both belated filing and non-filing of returns - Further, since no separate penalty is prescribed under the applicable GST statutes in respect of failure to file the Annual Return, the imposition of penalty under Section 125 is permissible and does not violate the principle against double punishment. The statutory language clearly establishes that the levy of late fee is contingent upon failure to furnish the return by the stipulated due date, regardless of whether the return is never filed or filed after the due date - The impugned order imposing late fee and penalty is upheld. The writ petition is dismissed [Read less]

GST - Departmental Appeals to Appellate Tribunal - Delegation of Authority – Appeal filed by Assistant Commissioner before the Appellate Tribunal without proper authorization from the Commissioner as mandated under Section 112 of the CGST act, 2017, and subsequently delegates the matter to his Superintendent – HELD - The officer-in-charge of filing has not been authorized by the Commissioner as mandated under Sub-Section (3) of Section 112 of the CGST Act, 2017. Further, a delegated power cannot be further delegated - Registry, GSTAT is directed that let the issue be communicated to the Pr. Commissioner, Delhi South in... [Read more]

GST - Departmental Appeals to Appellate Tribunal - Delegation of Authority – Appeal filed by Assistant Commissioner before the Appellate Tribunal without proper authorization from the Commissioner as mandated under Section 112 of the CGST act, 2017, and subsequently delegates the matter to his Superintendent – HELD - The officer-in-charge of filing has not been authorized by the Commissioner as mandated under Sub-Section (3) of Section 112 of the CGST Act, 2017. Further, a delegated power cannot be further delegated - Registry, GSTAT is directed that let the issue be communicated to the Pr. Commissioner, Delhi South intimating that a delegated power cannot be further delegated - The appeal is transferred to the appropriate bench of the Tribunal [Read less]

Service Tax - Liability of cable operators to pay service tax independent of Multi-System Operators MSOs - Whether a cable operator, who receives signals from a multi-system operator and re-transmits them to subscribers, is liable to pay service tax independently or whether the payment of service tax by the MSO exempts the cable operator from such liability – HELD - The definition of cable operator under Section 2(aa) of the Cable Television Networks (Regulation) Act, 1995, includes any person who provides cable service through a cable television network and controls or is responsible for its management and operation. Th... [Read more]

Service Tax - Liability of cable operators to pay service tax independent of Multi-System Operators MSOs - Whether a cable operator, who receives signals from a multi-system operator and re-transmits them to subscribers, is liable to pay service tax independently or whether the payment of service tax by the MSO exempts the cable operator from such liability – HELD - The definition of cable operator under Section 2(aa) of the Cable Television Networks (Regulation) Act, 1995, includes any person who provides cable service through a cable television network and controls or is responsible for its management and operation. The re-transmission of broadcast television signals by a cable operator to multiple subscribers through its own closed transmission paths constitutes provision of cable service, making the cable operator a taxable service provider. The service tax chain extends from the customer to the broadcaster, and both the multi-system operator and the cable operator are liable to pay service tax on their respective services - The contention that double taxation occurs is without merit as the CENVAT Credit Rules, 2004, provide mechanism for credit of service tax paid on input services against output service tax liability. The contention that service tax is paid twice on the same service is rejected as the statutory definition of "taxable service" clearly includes services provided by both MSOs and cable operators to "any person" - The appellant's liability to pay service tax on services rendered to subscribers stands confirmed - The appeal is disposed of with adjustment of excess payment of tax made during the preceding financial year against the current period's liability – The appeal is disposed ofrnrn^Branded Service Exemption - Whether a cable operator providing unbranded cable services is entitled to exemption under Notification No. 33/2012-ST dated 20.06.2012, which provides threshold exemption of ten lakh rupees for taxable services of aggregate value not exceeding that amount – HELD - A cable operator providing unbranded cable services is entitled to claim exemption under Notification No. 33/2012-ST, subject to fulfillment of the conditions specified therein. The exemption applies to services where there is no brand name relation to ultimate customers and the service provider is merely transmitting signals received from upstream service providers. However, the threshold exemption is not available to the cable operator when the aggregate value of taxable services rendered exceeds ten lakh rupees in the preceding financial year - The threshold is determined on a yearly basis with reference to the preceding financial year's turnover, and once exceeded, the exemption does not apply for that year – The appellant is not entitled to avail the threshold exemption under Notification No. 33/2012-ST for the relevant period as the turnover exceeded the prescribed limit.rnrn^CENVAT Credit Eligibility - Whether service tax paid by a multi-system operator on input services provided to a cable operator is available as CENVAT credit to the cable operator without compliance with procedural requirements of registration and filing of statutory returns – HELD - The CENVAT credit on service tax paid on input services is admissible to a service provider only upon strict compliance with the provisions of the CENVAT Credit Rules, 2004. The credit must be claimed and crystallized by filing statutory ST-3 returns within the prescribed time limit and maintaining proper CENVAT credit records. The non-filing of statutory returns within the prescribed period does not preserve the right to claim credit indefinitely - The appellant is not eligible for CENVAT credit due to non-compliance with procedural requirements of registration, timely filing of statutory returns, and maintenance of CENVAT records as mandated under the CENVAT Credit Rules, 2004. [Read less]

Central Excise - Quashing of criminal complaint in Central Excise matter where civil adjudication has been decided in favor of assessee - Criminal complaint was filed under Sections 9 and 9AA of the Central Excise Act against a manufacturing company and its officials - The Appellate Tribunal decided the appeal on merits in favor of the assessee, setting aside the entire demand and holding that the assessee has not contravened the relevant provisions - Whether criminal proceedings initiated under the Central Excise Act can continue simultaneously with civil adjudication proceedings, and if so, whether such proceedings must ... [Read more]

Central Excise - Quashing of criminal complaint in Central Excise matter where civil adjudication has been decided in favor of assessee - Criminal complaint was filed under Sections 9 and 9AA of the Central Excise Act against a manufacturing company and its officials - The Appellate Tribunal decided the appeal on merits in favor of the assessee, setting aside the entire demand and holding that the assessee has not contravened the relevant provisions - Whether criminal proceedings initiated under the Central Excise Act can continue simultaneously with civil adjudication proceedings, and if so, whether such proceedings must be quashed after the competent appellate authority decides the matter on merits in favor of the assessee – HELD - While adjudication proceedings and criminal prosecution may theoretically continue simultaneously, criminal prosecution cannot be permitted to continue once the competent appellate authority decides the matter on merits in favor of the assessee - When the CESTAT adjudicated the matter on merits and categorically holds that the assessee has not contravened the relevant provisions, the very substratum and basis of the criminal prosecution disappears - Once the competent appellate authority decides the matter on merits in favor of the assessee, continuation of criminal proceedings amounts to abuse of process of law - The criminal complaint and the summoning order, along with all consequential proceedings arising therefrom, are quashed – The petition is allowed [Read less]

Central Excise - Health Security and National Security Cess Act - Jurisdiction of CGST Authority under Health Security and National Security Cess Act – Show-cause notice issued by the Assistant Commissioner, Central GST for alleged violation of the Health Security and National Security Cess Rules - Petitioner challenge the jurisdiction of the CGST authority, contending that jurisdiction vested only in authorities appointed under the Health Security and National Security Cess Act read with the Orders issued by the CBIC, and not in CGST authorities – Whether the Assistant Commissioner under the Central GST Act possesses ... [Read more]

Central Excise - Health Security and National Security Cess Act - Jurisdiction of CGST Authority under Health Security and National Security Cess Act – Show-cause notice issued by the Assistant Commissioner, Central GST for alleged violation of the Health Security and National Security Cess Rules - Petitioner challenge the jurisdiction of the CGST authority, contending that jurisdiction vested only in authorities appointed under the Health Security and National Security Cess Act read with the Orders issued by the CBIC, and not in CGST authorities – Whether the Assistant Commissioner under the Central GST Act possesses jurisdiction to issue SCN and pass orders under the Health Security and National Security Cess Rules, or whether such jurisdiction vests only in separately appointed authorities under the aforementioned Act – HELD - As per Order No. 01/2026 read in conjunction with Order No. 02/2026, the Assistant Commissioner or Deputy Commissioner under the Central GST Act is vested with jurisdiction under Rule 11 of the Health Security se National Security Cess Rules, 2026. The mere fact that the authority may have affixed an incorrect or different rubber stamp description below the signature does not vitiate the jurisdiction or create a material deficiency in the authority's power to issue the show-cause notice. The substance of authority vesting in the signatory remains unaffected by the cosmetic nature of the stamp impression. The objection on jurisdictional grounds is therefore unfounded – The petitioner is permitted to file appropriate objections and further replies to the show-cause notice. The writ petition is dismissed [Read less]

Kerala Value Added Tax Act, 2003 - Limitation Period for Assessment – Retrospective Application of Amendment – Whether the assessment proceedings initiated by notice issued on 25.01.2018 for the assessment year 2011-12 are barred by limitation under the unamended provisions of Section 25(1) of the KVAT Act - Whether the amendment introduced by the Kerala Finance Act, 2017 has retrospective effect to extend the limitation period for assessments where the original period had already expired – HELD - The amendment made to Section 25(1) of the KVAT Act by the Kerala Finance Act, 2017 does not have retrospective operation... [Read more]

Kerala Value Added Tax Act, 2003 - Limitation Period for Assessment – Retrospective Application of Amendment – Whether the assessment proceedings initiated by notice issued on 25.01.2018 for the assessment year 2011-12 are barred by limitation under the unamended provisions of Section 25(1) of the KVAT Act - Whether the amendment introduced by the Kerala Finance Act, 2017 has retrospective effect to extend the limitation period for assessments where the original period had already expired – HELD - The amendment made to Section 25(1) of the KVAT Act by the Kerala Finance Act, 2017 does not have retrospective operation and applies only prospectively with effect from 01.04.2017. The substitution of the expression "proceed to determine" in place of "complete the assessment" in the third proviso indicates the clear legislative intent to mandate assessing authorities to complete proceedings initiated under Section 25(1) within the stipulated time frame. For the assessment year 2011-12, the original limitation period of five years expired on 31.03.2017. The third proviso extended this period only up to 31.03.2018 for assessments where the original period had expired by 31.03.2017. Since the notice was issued only on 25.01.2018, which is after the expiry of the prescribed period of five years from the end of the relevant assessment year, the assessment proceedings are time barred - The decision in Assistant Commissioner (Asst) v. Cholayil Pvt. Ltd. and other precedents have settled that the law operates prospectively and does not permit reopening of assessments beyond the prescribed limitation period – The assessment order issued beyond the limitation period is rendered invalid and without jurisdiction - Writ petition is disposed of [Read less]

Customs - Classification of gold neck chains in running length as articles of jewellery – Importer imports gold neck chains in running lengths ranging from 2.8 feet to 206 feet from Indonesia, classifying them under Customs Tariff Heading 7113 (articles of jewellery) with nil basic customs duty under Notification No. 46/2011-Cus. dated 01.06.2011 - Customs authorities reclassify the goods under Customs Tariff Heading 7108 (gold in semi-manufactured forms) proposing confiscation and penalty – Whether gold neck chains in running length, which require only cutting to customer-specified length and attachment of hooks to be... [Read more]

Customs - Classification of gold neck chains in running length as articles of jewellery – Importer imports gold neck chains in running lengths ranging from 2.8 feet to 206 feet from Indonesia, classifying them under Customs Tariff Heading 7113 (articles of jewellery) with nil basic customs duty under Notification No. 46/2011-Cus. dated 01.06.2011 - Customs authorities reclassify the goods under Customs Tariff Heading 7108 (gold in semi-manufactured forms) proposing confiscation and penalty – Whether gold neck chains in running length, which require only cutting to customer-specified length and attachment of hooks to become finished wearable articles, are classifiable as articles of jewellery under Customs Tariff Heading 7113 or as semi-manufactured gold under Customs Tariff Heading 7108 – HELD - The Chapter Note 9(a) to Chapter 71 explicitly includes necklaces as articles of jewellery, and the impugned goods are gold neck chains intended for personal adornment. The Rule 2(a) of the General Rules of Interpretation provides that incomplete or unfinished articles attaining the essential character of a complete finished article shall be classified under the heading of the finished article – From the photographs of the goods it is seen that gold neck chains in running length have substantially attained the form of finished articles requiring only minor finishing operations of cutting and hook attachment, which do not alter the essential character of the goods as neck chains. The mere cutting or slitting of a product without change in its name, character or end-use does not constitute manufacture and does not warrant reclassification to a different commodity head. Consequently, the goods are not liable for confiscation under Section 111(d) and 111(m) of the Customs Act, 1962, and the imposition of redemption fine and penalty becomes untenable – The impugned order is set aside to the extent of imposition of redemption fine and penalty, and the appeal is disposed of [Read less]

Service tax on commission earned by franchisee – Appellant-franchisee operating as a commission-based distributor of SIM cards on behalf of a telecom service provider receives a show cause notice demanding service tax on commission earned from such sales, contending that service tax is already collected and remitted on the full face value of SIM cards by the service provider and that double taxation should not be imposed on the commission component - Whether a franchisee who merely purchases and sells SIM cards on commission basis, where the service provider has already discharged service tax on the gross amount of SIM c... [Read more]

Service tax on commission earned by franchisee – Appellant-franchisee operating as a commission-based distributor of SIM cards on behalf of a telecom service provider receives a show cause notice demanding service tax on commission earned from such sales, contending that service tax is already collected and remitted on the full face value of SIM cards by the service provider and that double taxation should not be imposed on the commission component - Whether a franchisee who merely purchases and sells SIM cards on commission basis, where the service provider has already discharged service tax on the gross amount of SIM cards, is liable to pay service tax on the commission earned – HELD - The activities of purchase and sale of SIM cards where the service provider has discharged service tax on the full value of the SIM cards does not amount to providing business auxiliary service, and imposing service tax on the commission would result in impermissible double taxation As the issue is no longer res integra, there is no necessity to remand the matter back to the appellate authority for reconsideration - The order passed by the CESTAT is set aside and the appeal is allowed [Read less]

GST - Interpretation of enabling provisions in GST waiver Notification - Taxable and exempted supplies - Restriction of input tax credit under Section 17(2) of the CGST Act, 2017 - Petitioner agreed with the audit observations and paid the common Input Tax Credit - Demand of interest under Section 50(1) of the CGST Act – On the basis of GST Council recommendation for waiver of interest or penalty relating to demands under Section 73 for financial years 2017-18, 2018-19 and 2019-20, the assessee filed a waiver application, which was rejected as belated - Whether the rejection of a waiver application filed after the three-... [Read more]

GST - Interpretation of enabling provisions in GST waiver Notification - Taxable and exempted supplies - Restriction of input tax credit under Section 17(2) of the CGST Act, 2017 - Petitioner agreed with the audit observations and paid the common Input Tax Credit - Demand of interest under Section 50(1) of the CGST Act – On the basis of GST Council recommendation for waiver of interest or penalty relating to demands under Section 73 for financial years 2017-18, 2018-19 and 2019-20, the assessee filed a waiver application, which was rejected as belated - Whether the rejection of a waiver application filed after the three-month period prescribed in the notification is legally valid when the Notification No.21/2024-Central tax dated 08.10.2024 uses the word 'may' instead of 'shall' – HELD - The provision in question employs the word 'may', which is enabling and directory in nature rather than mandatory 'shall'. The tax authorities erred in law by interpreting this discretionary provision as a strict time-bound obligation. The use of 'may' indicates that the provision grants discretion to the assessee and does not impose a mandatory, non-extendable deadline for filing the application. By rigidly adhering to the three-month period and rejecting the application solely on this ground, the Department has misinterpreted the legal nature of the provision and acted unreasonably - The rejection order is quashed and the Respondent is directed to consider the waiver application in accordance with law. Pending such consideration, the show cause notice, the summary thereof, and the Order-in-Original are kept in abeyance – The petition is disposed of [Read less]

GST - Registration - Denial of Registration in another State on Account of Non-Compliance in previous State - Whether a assessee-Company can be denied GST registration in one State merely on the ground that it failed to file returns in another State where it was previously registered – HELD - The GST Act operates as both State-centric and Central-centric legislation, creating a unified GST framework across States. A company that is registered in a particular State and fails to comply with statutory provisions becomes a defaulter under the GST regime and such a defaulting entity cannot be permitted to circumvent its oblig... [Read more]

GST - Registration - Denial of Registration in another State on Account of Non-Compliance in previous State - Whether a assessee-Company can be denied GST registration in one State merely on the ground that it failed to file returns in another State where it was previously registered – HELD - The GST Act operates as both State-centric and Central-centric legislation, creating a unified GST framework across States. A company that is registered in a particular State and fails to comply with statutory provisions becomes a defaulter under the GST regime and such a defaulting entity cannot be permitted to circumvent its obligations by merely shifting to another State and filing a fresh application for Registration instead of complying with the provisions of the Act in the State where it was originally registered – If a Company does not follow the provisions of law after having been registered in particular State, the Company cannot be allowed to move an application for getting registration in another State - The denial of GST registration is upheld and the writ petition is dismissed [Read less]