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Service Tax - Event management service, Services of Booking agents, Demand under Reverse charge mechanism - Appellant engaged booking agents to book speakers for the event – Demand of service tax on the fees paid to the speakers through the booking agents under the category of "Event Management Service" – Vide the impugned order the Tribunal, set aside the invocation of the extended period of limitation but affirmed the demand under the normal period of limitation under the category of "Event Management Service" - Whether the fee paid by the appellant to the personalities/speakers, through their booking agents, is liab... [Read more]

Service Tax - Event management service, Services of Booking agents, Demand under Reverse charge mechanism - Appellant engaged booking agents to book speakers for the event – Demand of service tax on the fees paid to the speakers through the booking agents under the category of "Event Management Service" – Vide the impugned order the Tribunal, set aside the invocation of the extended period of limitation but affirmed the demand under the normal period of limitation under the category of "Event Management Service" - Whether the fee paid by the appellant to the personalities/speakers, through their booking agents, is liable to Service Tax under the reverse charge mechanism under the taxable category of “Event Management Service” under Sections 65(40) and 65(41) read with Section 65(105)(zu) respectively of Chapter V of the Finance Act, 1994 – HELD - The agreements between the appellant and the booking agents were in the nature of booking particular speakers for the Summit. The services rendered by the agents were in the capacity of booking agents and not event managers - The services rendered by such agents to the assessee were in the nature of booking the speakers for the event to be organized by the assessee. The contracts were entered into with the agents qua each speaker laying down the modalities of his/her visit and consideration for the same. Such services cannot be equated with “event management service” - The agents were not engaged in managing the venue, decoration, sound, light, security, communication, sale of tickets, or publicity of the event, nor were they involved in the planning, promotion, organization, or presentation of the Summit – In view of principle of strict interpretation of taxing statutes, the service in question does not fall within the definition of "Event Management Service" as provided under the Finance Act – Further, applying the common parlance understanding of “event management”, the expressions ‘event management’ and ‘event managers’ is commonly understood in the sense of appointing someone to manage or organize the event. Individual contract for booking of persons required for participation in the event are not commonly understood as “event management” contracts - The fee paid by the appellant to the personalities/speakers, through their booking agents, is not liable to Service Tax under the category of "Event Management Service" under the Finance Act – The impugned order is set aside and the appeal is allowed - The argument of the revenue that, without the speaker the event would be devoid of any significance and therefore, the service in question is an “Event Management Service”, also deserves to be rejected. That the presence of the speaker is essential for the event cannot be disputed. However, whether the service of the speaker or the agent on behalf of the speaker can be considered to be “event management service” is altogether a different issue. The speaker does not plan, promote, organize or present the event. Thus, the speaker, is neither an “event manager” nor does he provide an “event management service”. Similarly, the booking agent who merely books the speaker also acts in the capacity of an agent or representative for agreeing to the terms of the speakers’ presence at the event. Participation in the event cannot be considered as management of the event. This precisely is the fundamental error committed by the revenue as well as by the Tribunal while imposing Service Tax on the service in question under the category of “event management service”. [para 39, 40, 41] [Read less]

Central Excise - Refund of excise duty paid on fly ash, limitation period for filing refund claim - Appellant filed a refund application under Section 11B of the Central Excise Act, 1944 seeking refund of excise duty paid under protest on clearance of fly ash. The refund claim was made after the dismissal of the department's appeal by the Supreme Court against the Madras High Court judgment holding that fly ash is not an excisable good - Whether the refund claim filed by the appellant is hit by the one-year limitation period under Section 11B of the CEA, 1944 – HELD - The refund claim was not hit by the limitation period... [Read more]

Central Excise - Refund of excise duty paid on fly ash, limitation period for filing refund claim - Appellant filed a refund application under Section 11B of the Central Excise Act, 1944 seeking refund of excise duty paid under protest on clearance of fly ash. The refund claim was made after the dismissal of the department's appeal by the Supreme Court against the Madras High Court judgment holding that fly ash is not an excisable good - Whether the refund claim filed by the appellant is hit by the one-year limitation period under Section 11B of the CEA, 1944 – HELD - The refund claim was not hit by the limitation period as the appellant had paid the duty under protest. When duty is paid under protest, the relevant date for the purpose of limitation under Section 11B(1) would be the date of the judgment or order that determines the duty to be refundable, as per clause (ec) of the Explanation to Section 11B. In the present case, the relevant date would be March 8, 2019, when the Supreme Court dismissed the department's appeal against the Madras High Court judgment. The protest made by the appellant was never decided by the revenue authorities. The dismissal of the Department's appeal in another case would not amount to disposal of the appellant's protest. The finality of the proceedings in the appellant's own case cannot be ignored, and the refund claim has to be considered in accordance with Section 11B of the Act - The Revenue authorities to examine the refund claim of the appellant in accordance with the law - The impugned order and the appeal is allowed [Read less]

Central Excise - Reversal of CENVAT credit on electricity sold to State Electricity Board, Penalty under CENVAT Credit Rules - Appellant availed CENVAT credit on inputs and input services used in its Captive Power Plant for generating power, which was partly consumed in the factory, partly transferred to its sister concerns, and partly sold to the State Electricity Board - Department objected to the appellant's CENVAT credit claim on the portion of electricity wheeled out to the sister concerns and sold to the State Electricity Board - Whether the appellant was justified in availing CENVAT credit on inputs and input servic... [Read more]

Central Excise - Reversal of CENVAT credit on electricity sold to State Electricity Board, Penalty under CENVAT Credit Rules - Appellant availed CENVAT credit on inputs and input services used in its Captive Power Plant for generating power, which was partly consumed in the factory, partly transferred to its sister concerns, and partly sold to the State Electricity Board - Department objected to the appellant's CENVAT credit claim on the portion of electricity wheeled out to the sister concerns and sold to the State Electricity Board - Whether the appellant was justified in availing CENVAT credit on inputs and input services used for generating electricity that was sold to the State Electricity Board – HELD - As evidenced by the details provided in the replies to the SCNs and the corresponding ER-1 returns, the appellant had reversed the CENVAT credit attributable to the electricity sold to the State Electricity Board. Once the CENVAT credit availed on inputs and input services attributable to electricity sold to the State Electricity Board is reversed, it would tantamount to not availing the credit at all. The demand raised in the impugned order with respect to the inputs and input services attributable to the electricity sold to the State Electricity Board is set aside - Since the appellant had reversed the CENVAT credit attributable to the electricity sold to the State Electricity Board, it amounted to not availing the credit at all, and therefore, the penalty could not be imposed – The impugned order is set aside and the appeal is allowed [Read less]

GST - Deviation from notice to show cause, Opportunity of hearing, Access to information in GST portal – Petitioner, a road transport carrier company, was served with show cause notices alleging that the turnover of outward supplies declared by the petitioner in GSTR 3B was less than the actual supplies - The adjudication order, however, held the petitioner liable on a different ground, that the petitioner had opted to pay tax under the Forward Charge Mechanism and therefore the supplies made under the Reverse Charge Mechanism should be treated as taxable under the Forward Charge Mechanism - Whether the adjudication orde... [Read more]

GST - Deviation from notice to show cause, Opportunity of hearing, Access to information in GST portal – Petitioner, a road transport carrier company, was served with show cause notices alleging that the turnover of outward supplies declared by the petitioner in GSTR 3B was less than the actual supplies - The adjudication order, however, held the petitioner liable on a different ground, that the petitioner had opted to pay tax under the Forward Charge Mechanism and therefore the supplies made under the Reverse Charge Mechanism should be treated as taxable under the Forward Charge Mechanism - Whether the adjudication order, which was based on a ground different from the one mentioned in SCN, is valid - HELD – The adjudication order is not valid as it had deviated from the grounds mentioned in the show cause notice. The adjudication order is in violation of Section 75(7) of the CGST Act, 2017 which prohibits confirmation of demand on grounds other than those specified in the notice. In the case at hand the adjudicating authority has done exactly that which has been prohibited - It is now very well settled that an order cannot travel beyond the confines of the preceding notice to show-cause and a person who has been issued a notice to show cause on a particular point cannot be blindsided by passing an order on an entirely different point - the appellate authority has trivialised the error by stating that it was a “technical issue” as it pertained to mere quantification. The appellate authority should also not have made light of such statutory violation by a statutory authority by calling it a mere technicality, as it involved the interpretation of the applicability of the notification to the petitioner's supplies under the RCM - Further, since the SCN was based on data from the GST portal, which may not be accessible to the petitioner, the petitioner should have been provided the relevant information to effectively reply to the notice - The appellate order and the adjudication order are set aside and the matter is remanded back to the Proper Officer for reconsideration after providing the petitioner an opportunity of hearing and access to the relevant information – The petition is disposed of [Read less]

Service Tax - Blasting service for preparation of agricultural land or digging of wells, agricultural activities or not, negative list - Appellant was engaged in providing 'blasting service' by using explosive materials for boring, digging tube well, bore well and wells - Service tax demand on the blasting services provided for the preparation of agricultural land or digging of wells, as these services are not covered under the negative list nor exempted under any notification. The appellant contended that the blasting service is not a separate activity but forms part of the main activity of digging bore wells/tube wells, ... [Read more]

Service Tax - Blasting service for preparation of agricultural land or digging of wells, agricultural activities or not, negative list - Appellant was engaged in providing 'blasting service' by using explosive materials for boring, digging tube well, bore well and wells - Service tax demand on the blasting services provided for the preparation of agricultural land or digging of wells, as these services are not covered under the negative list nor exempted under any notification. The appellant contended that the blasting service is not a separate activity but forms part of the main activity of digging bore wells/tube wells, and no separate payment was received for the blasting service, so the levy of service tax is unsustainable - Whether the blasting service provided for digging of wells for agricultural purposes is covered under the negative list of services under Section 66D(d)(i) of the Act or is exempt under Notification No.25/2012-ST – HELD - The blasting services provided for digging of wells for agricultural purposes are covered under the negative list of services under Section 66D(d)(i) of the Act, as these services are 'relating to agriculture or agricultural produce' and are 'directly related to the production of any agricultural produce' - Where a definition uses the word "includes", the word defined not only bears its ordinary, popular and natural meaning but also the extended statutory meaning. The term 'including' used in the provision indicates that the agricultural activities covered are not restricted to the ones specified, but the list is non-exhaustive. The activity of facilitating water for agriculture by means of blasting for the purpose of tube-wells, bore-wells for fields, are in fact services relating to agriculture by way of agricultural operations - Further, the appellant had contended that no separate payment was received for the blasting service, and in the absence of consideration, which is a fundamental requirement for the levy of service tax, the demand is unsustainable - The impugned order is set aside and the matter is remanded back to the Original Authority to consider the documents, which may be placed by the appellant. The appeal is allowed by way of remand [Read less]

GST - Enhancement of tax liability without prior opportunity to the taxpayer – The appellate authority imposed additional tax on the petitioner on the ground that the petitioner had claimed excess zero-rated supply, which ground was not raised in the show cause notice - Whether the appellate authority was justified in enhancing the petitioner's tax liability on the ground of excess zero-rated supply without giving the petitioner an opportunity to be heard on this issue – HELD - The issue of the petitioner's turnover of taxable supply was not part of the adjudication order and was not impugned before the appellate autho... [Read more]

GST - Enhancement of tax liability without prior opportunity to the taxpayer – The appellate authority imposed additional tax on the petitioner on the ground that the petitioner had claimed excess zero-rated supply, which ground was not raised in the show cause notice - Whether the appellate authority was justified in enhancing the petitioner's tax liability on the ground of excess zero-rated supply without giving the petitioner an opportunity to be heard on this issue – HELD - The issue of the petitioner's turnover of taxable supply was not part of the adjudication order and was not impugned before the appellate authority. The appellate authority, however, considered this issue suo motu and enhanced the petitioner's tax liability on this ground. This was in violation of the provisions of Section 107(11) of the WBGST Act, 2017/CGST Act, 2017, which requires the appellate authority to give the taxpayer an opportunity to be heard if it is contemplating an enhancement of the tax imposition - The Appellate authority had not applied its mind and had picked up a figure mentioned in the Form GSTR-3B, without considering the petitioner's contention that the said figure was corrected in the subsequent Forms GSTR-9 and GSTR-9C – The order passed by Appellate authority is set aside to the extent they held the petitioner liable for tax and other consequences flowing therefrom - The matter was remanded to the appellate authority for reconsideration of this aspect, after giving the petitioner an opportunity to file an additional reply dealing with the appellate authority's contention regarding the increase in the petitioner's turnover of taxable supply – The petition is disposed of [Read less]

Central Excise - Availment of CENVAT Credit by a 100% EOU on finished goods at the time of debonding – Appellant was a 100% EOU that obtained in-principle exit and finally debonded from the EOU scheme. At the time of debonding, the appellant paid central excise duty on its capital goods, finished goods (pig iron and slag), and inputs lying in stock. The appellant then availed CENVAT Credit on the duty paid on the finished goods, treating them as 'inputs' for the DTA unit - Whether the appellant was entitled to avail CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme – ... [Read more]

Central Excise - Availment of CENVAT Credit by a 100% EOU on finished goods at the time of debonding – Appellant was a 100% EOU that obtained in-principle exit and finally debonded from the EOU scheme. At the time of debonding, the appellant paid central excise duty on its capital goods, finished goods (pig iron and slag), and inputs lying in stock. The appellant then availed CENVAT Credit on the duty paid on the finished goods, treating them as 'inputs' for the DTA unit - Whether the appellant was entitled to avail CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme – HELD - The appellant was entitled to avail CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme. The Revenue could not cite any specific provision in the CENVAT Credit Rules that disallowed such credit - Upon debonding, the finished goods and inputs become inputs in the DTA unit, and the appellant is entitled to avail CENVAT Credit on the duty paid on such goods at the time of debonding. Since the appellant had paid the appropriate duty on the finished goods at the time of debonding, it is entitled to avail the CENVAT Credit on the same - Further, demand raised by invoking the extended period of limitation is not valid, as the appellant had not suppressed any information from the Department, and the debonding and duty payment were within the knowledge of the Department - The appellant had rightly availed the CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme – The appeal is allowed [Read less]

Service Tax - Cenvat credit fraud, fictitious firms, time-barred demand – Respondents availed Cenvat credit on input service invoices issued by companies that were found to be fictitious entities - The Income Tax department's investigation revealed that these companies were used to generate bogus invoices with fictitious bank accounts and employees acting as proxies. The respondent was unable to prove the genuineness of the input services or the payment of service tax to the government. A demand was raised for recovery of the Cenvat credit along with interest and penalties - Whether the demand relating to the period from... [Read more]

Service Tax - Cenvat credit fraud, fictitious firms, time-barred demand – Respondents availed Cenvat credit on input service invoices issued by companies that were found to be fictitious entities - The Income Tax department's investigation revealed that these companies were used to generate bogus invoices with fictitious bank accounts and employees acting as proxies. The respondent was unable to prove the genuineness of the input services or the payment of service tax to the government. A demand was raised for recovery of the Cenvat credit along with interest and penalties - Whether the demand relating to the period from 01.04.2006 to 30.09.2006 was time-barred - HELD - The Commissioner (Appeals) erred in holding the demand for the period from 01.04.2006 to 30.09.2006 as time-barred. The respondent had recovered service tax from its clients but failed to deposit the same with the Government, which was recoverable under Section 73A of the Finance Act, 1994. The burden of proof regarding the admissibility of the Cenvat credit was on the respondent, which it had failed to discharge. The fictitious nature of the input service providers had been conclusively established - The Cenvat credit availed by the respondent on the invoices issued by the fictitious firms are not admissible. The respondent has failed to discharge burden by providing any proof of payment of service tax or receipt of the input services. The demand for the period from 01.04.2006 to 30.09.2006 is recoverable from the respondent – The Revenue appeal is allowed [Read less]

GST – Service of Notice, Denial of natural justice, Unreasoned order - The notice of show cause was served by way of uploading on the GST e-portal under the "Additional Notices and Orders" tab, depriving the petitioner of an opportunity to respond - Whether the dismissal of the petitioner's appeal by the Appellate Authority on the ground of delay was justified, given the fact that the petitioner had missed the notice of the adjudication order - HELD - The Appellate Authority had not conclusively established that the notification of the adjudication order was sent to the petitioner through SMS and email, as claimed. The m... [Read more]

GST – Service of Notice, Denial of natural justice, Unreasoned order - The notice of show cause was served by way of uploading on the GST e-portal under the "Additional Notices and Orders" tab, depriving the petitioner of an opportunity to respond - Whether the dismissal of the petitioner's appeal by the Appellate Authority on the ground of delay was justified, given the fact that the petitioner had missed the notice of the adjudication order - HELD - The Appellate Authority had not conclusively established that the notification of the adjudication order was sent to the petitioner through SMS and email, as claimed. The mere assumption made by the Appellate Authority was not sufficient when the petitioner had provided a screenshot of his email account to demonstrate that no such notification was ever sent. Therefore, the appellate order is set aside on the ground that the petitioner was not properly served with the notice of the adjudication order – Further, the adjudication order was passed without affording the petitioner an opportunity of personal hearing, despite the statutory mandate that an opportunity of hearing shall be granted to the person chargeable with tax or penalty in the event of an adverse order. The denial of the opportunity of hearing to the petitioner was a violation of the principles of natural justice – Moreover, the lack of reasons in the adjudication order rendered it unreasoned and unsustainable - Both the appellate order and the adjudication order are set aside and matter is remanded to the adjudicating authority for fresh adjudication, directing the petitioner to file a reply to the show cause notice within and providing the petitioner an opportunity of personal hearing – The petition is disposed of [Read less]

GST – Availment of excess ITC on import of goods, Liability of the petitioners to reverse ITC for the failure of the petitioners’ suppliers to file returns – HELD - The petitioners were not liable for excess ITC availment on import of goods, as the non-reflection of IGST in the GST portal was not due to non-payment by the petitioners, but due to a procedural limitation arising from manual filing and processing of the bills of entry and the absence of system-recorded "Out of Charge" in ICES – Matter is remanded back to the appellate authority to reconsider the issue in light of the reports filed by the Customs autho... [Read more]

GST – Availment of excess ITC on import of goods, Liability of the petitioners to reverse ITC for the failure of the petitioners’ suppliers to file returns – HELD - The petitioners were not liable for excess ITC availment on import of goods, as the non-reflection of IGST in the GST portal was not due to non-payment by the petitioners, but due to a procedural limitation arising from manual filing and processing of the bills of entry and the absence of system-recorded "Out of Charge" in ICES – Matter is remanded back to the appellate authority to reconsider the issue in light of the reports filed by the Customs authorities. The reports submitted by the Customs authorities provides sufficient information to address the concerns raised by the adjudicating and appellate authorities - On the issue of reversal of ITC due to supplier's failure to file returns, although the petitioners could have been granted an opportunity to present their case before the appellate authority, the petitioners failed to satisfactorily explain why they missed the opportunity. The appellate authority to reconsider the reversal of ITC issue, subject to petitioners paying a cost of Rs. 15,000 to the High Court Legal Services Committee – The petition is disposed of [Read less]

Central Excise - Supply and installation of Retail Visual Identity (RVI) Elements at retail outlets - Aluminium doors/frames/shutter/lockers, Marketability – Appellant is engaged in fabrication and installation of RVI Elements for IOCL at their retail outlets. The Appellant also manufactured aluminium doors, windows, frames for various customers. The Department issued a show cause notice alleging that the Appellant was not paying the full excise duty on the entire contract value of the RVI Elements and aluminium products supplied - Whether the RVI Elements and aluminium doors/frames/shutter/lockers installed by the Appel... [Read more]

Central Excise - Supply and installation of Retail Visual Identity (RVI) Elements at retail outlets - Aluminium doors/frames/shutter/lockers, Marketability – Appellant is engaged in fabrication and installation of RVI Elements for IOCL at their retail outlets. The Appellant also manufactured aluminium doors, windows, frames for various customers. The Department issued a show cause notice alleging that the Appellant was not paying the full excise duty on the entire contract value of the RVI Elements and aluminium products supplied - Whether the RVI Elements and aluminium doors/frames/shutter/lockers installed by the Appellant at the sites of its vendors are liable to central excise duty – HELD - The RVI Elements are not cleared from the factory in fully manufactured condition, rather they come into existence as a part of permanent structure at the retail outlets of IOCL. Once installed, the RVI Elements cannot be dismantled or re-installed at alternate locations. Further, the RVI Elements are not resold/marketed by IOCL, and the parts in the form cleared from the factory are not capable of being used for any other purpose - In the case of RVI Elements, the Test of Marketability has also not been satisfied because these parts, in the form that they are cleared, are not capable of being used for any other purpose than the fabrication and installation of RVI Elements at the retail outlets of IOCL only. The parts of the RVI Elements are not capable of being bought and sold for a consideration in the form that they exist when they are cleared from the factory, and thus they cannot be deemed to be marketable. Therefore, the test of marketability is not satisfied, and the RVI Elements cannot be considered as "excisable goods" liable to excise duty - Similarly, for the aluminium doors, windows, frames, etc., the issue was already settled in favour of the Appellant in a previous order, which attained finality as it was not challenged by the Department. The final products are "immovable property" and hence not chargeable to excise duty - The impugned order is set aside and the appeal is allowed - Whether the extended period of limitation is justified in this case – HELD - The Appellant has been regularly filing returns and paying excise duty on the goods manufactured, without any suppression of facts, fraud or misstatement. The Appellant was under a bona fide belief that the RVI Elements are "immovable property" and not subject to excise duty. Further, the issue was settled in favour of assessees in similar cases. Therefore, the invocation of extended period of limitation is not justified, and the entire demand is barred by limitation. [Read less]

Service Tax – Section 26 of Special Economic Zones Act, 2005 – Payment of tax – Eligibility for refund – Appellant had filed refund claims under Notification No.9/2009-ST by claiming refund of service tax paid on services utilized by them – Adjudicating Authority rejected part of refund claim – Commissioner (Appeals) rejected appeal filed by Appellant – Whether denial of partial refund claim by Adjudicating Authority as upheld in impugned order, is in order – HELD – SEZ Act is a special legislation provides for exemption and manner of claiming refund. Section 26 of the Act is the governing provision which... [Read more]

Service Tax – Section 26 of Special Economic Zones Act, 2005 – Payment of tax – Eligibility for refund – Appellant had filed refund claims under Notification No.9/2009-ST by claiming refund of service tax paid on services utilized by them – Adjudicating Authority rejected part of refund claim – Commissioner (Appeals) rejected appeal filed by Appellant – Whether denial of partial refund claim by Adjudicating Authority as upheld in impugned order, is in order – HELD – SEZ Act is a special legislation provides for exemption and manner of claiming refund. Section 26 of the Act is the governing provision which prescribes the modalities insofar as exemptions are concerned. Said exemptions are specific to units operating in a SEZ. Admittedly, grant of exemptions flows from Notification No.9/2009-Service Tax. Appellant had consistently claimed that it had paid service tax, which is one of condition precedents for claiming exemption. Appellant was eligible for refund of Service Tax paid on input services wholly consumed within SEZ. Time limit prescribed under Notification cannot be pressed into service to deny substantive benefit of exemption flowing from Section 26 of the Act. Impugned orders are set aside – Appeals allowed [Read less]

GST - Cancellation of Bail – Dept appeal against the order granting bail to respondent - Whether the bail order should be recalled on the grounds that the offence is serious economic offence involving clandestine manufacture and sale of banned gutka with alleged GST evasion - HELD - The distinction between challenging the bail order on merits and cancellation of bail is significant. While recall can be made only if it is established that bail has been granted by not considering the relevant facts on merits, cancellation is prompted by subsequent events and violation of terms of bail by the respondent. An order granting b... [Read more]

GST - Cancellation of Bail – Dept appeal against the order granting bail to respondent - Whether the bail order should be recalled on the grounds that the offence is serious economic offence involving clandestine manufacture and sale of banned gutka with alleged GST evasion - HELD - The distinction between challenging the bail order on merits and cancellation of bail is significant. While recall can be made only if it is established that bail has been granted by not considering the relevant facts on merits, cancellation is prompted by subsequent events and violation of terms of bail by the respondent. An order granting bail can be tested on illegality, perversity, arbitrariness and being based on unjustified material. However, the court cannot delve into the violation of bail conditions or supervening circumstances at this stage - The impugned bail order shows that the ld. CMM has taken note of the relevant factors and exercised the discretion judiciously. There is no ground to show that the discretion has not been exercised properly or that there is any misuse or abuse of liberty granted to the respondent. There is also nothing on record to show that the trial has been hampered on account of grant of Bail - The petition is dismissed [Read less]

GST – Bail in connection with the offence punishable under Section 132(l)(b) of the CGST Act, 2017 – HELD - Without undermine the gravity of the alleged offence, we should not overlook the fact that the petitioner is in judicial custody as an under-trial prisoner past 8 months. The Trial Court is yet to commence. Charge is yet to be framed. Even if the trial commences in near future, it would not conclude within next one year. The offences are triable by Magistrate. The maximum punishment that the trial court may be in a position to impose upon the petitioner if held guilty would be upto 5 years - In such circumstances... [Read more]

GST – Bail in connection with the offence punishable under Section 132(l)(b) of the CGST Act, 2017 – HELD - Without undermine the gravity of the alleged offence, we should not overlook the fact that the petitioner is in judicial custody as an under-trial prisoner past 8 months. The Trial Court is yet to commence. Charge is yet to be framed. Even if the trial commences in near future, it would not conclude within next one year. The offences are triable by Magistrate. The maximum punishment that the trial court may be in a position to impose upon the petitioner if held guilty would be upto 5 years - In such circumstances, the petitioner is ordered to be released on bail, subject to terms and conditions that the Trial Court may deem fit to impose - If the department wants a particular condition to be imposed upon the petitioner to safeguard its interest, it may make a request to the Trial Court. If any such request is made by the department, the Trial Court shall consider it in accordance with law - The Special Leave Petition is disposed of [Read less]

Central Excise - Clandestine transportation - Levy of penalty under Rule 29 of the Central Excise Rules, 2017 read with Section 11AC of the Central Excise Act, 1944 for alleged clandestine transportation of Pan Masala/Zafrani Zarda - Whether the penalty imposed on the appellant and its operator can be sustained when the demand and penalties against the manufacturer have been set aside – HELD - As the allegation of clandestine removal of goods has been set aside, the imposition of penalty upon the appellant and the Operator has to be set aside for this reason alone. The case against the appellant and the Operator was base... [Read more]

Central Excise - Clandestine transportation - Levy of penalty under Rule 29 of the Central Excise Rules, 2017 read with Section 11AC of the Central Excise Act, 1944 for alleged clandestine transportation of Pan Masala/Zafrani Zarda - Whether the penalty imposed on the appellant and its operator can be sustained when the demand and penalties against the manufacturer have been set aside – HELD - As the allegation of clandestine removal of goods has been set aside, the imposition of penalty upon the appellant and the Operator has to be set aside for this reason alone. The case against the appellant and the Operator was based on the private documents seized from the premises, which did not link them to the clandestine activities of manufacturer. Therefore, the penalty under Rule 29 of the 2017 Rules read with Section 11AC of the Central Excise Act cannot be sustained and is set aside – Further, the penalty under Section 11AC of the Central Excise Act can be imposed only on the person who is liable to pay duty, and in the present case no duty demand has been confirmed against the appellant. Therefore, the penalty imposed on the appellant under Section 11AC cannot be sustained - The impugned order imposing penalties is set aside and the appeal is allowed [Read less]

The sufficiency of the material on which the belief is formed by the officer is not a matter of judicial review. Frequent or casual interference by the Courts in the functioning of the authorized officers may embolden the unscrupulous elements.

Central Excise – Larger Bench - Classification of the product 'Kopiko' - ‘Sugar Boiled Confectionary’ or ‘preparations with basis of coffee’ - Resspondent-assessee is engaged in the manufacture and distribution of product 'Kopiko'. The assessee has been classifying the product under Chapter Heading 1704 9090, an entry specific to 'Sugar Boiled Confectionery' and availed the benefit of 6% ad valorem duty - Revenue authorities alleged that 'Kopiko' is classifiable under CH 2101 1200, as preparations with basis of extracts, essences, concentrates, or with the basis of coffee, attracting 12% ad valorem duty - Whether... [Read more]

Central Excise – Larger Bench - Classification of the product 'Kopiko' - ‘Sugar Boiled Confectionary’ or ‘preparations with basis of coffee’ - Resspondent-assessee is engaged in the manufacture and distribution of product 'Kopiko'. The assessee has been classifying the product under Chapter Heading 1704 9090, an entry specific to 'Sugar Boiled Confectionery' and availed the benefit of 6% ad valorem duty - Revenue authorities alleged that 'Kopiko' is classifiable under CH 2101 1200, as preparations with basis of extracts, essences, concentrates, or with the basis of coffee, attracting 12% ad valorem duty - Whether the product 'Kopiko' is rightly classifiable under Heading 1704 9090 or under Heading 2101 1200 – HELD – The Heading 1704 specifically covers 'Sugar Confectionery' whereas Heading 2101 is a more general description covering 'preparations with basis of extracts, essences, concentrates, or with the basis of coffee'. Applying the principle of Rule 1 and Rule 3(a) of the General Rules of Interpretation (GRI), the specific description under Heading 1704 should prevail over the general description under Heading 2101 - The product 'Kopiko' is essentially a sugar confectionery/candy, with sugar and glucose constituting 74% of the composition, while the coffee extract is only 2.5% to 4.5%. The presence of a small amount of coffee extract as a flavouring agent would not alter the essential character of the product as a sugar confectionery - The evidence provided by the assessee, such as the classification of the same product under Heading 1704 9090 by the Customs authorities, both in India and other countries, as well as the FSSAI license granted to the assessee for manufacturing 'sugar boiled confectionery' - Applying the principle of common trade parlance in the present context, the product ‘Kopiko’ is known in the trade world as a sweet candy/sugar confectionary and not preparation of coffee extracts and is not known to be consumed as a substitute for coffee - The decision of Ahmedabad Bench of the Tribunal is affirmed and it is held that the product 'Kopiko' is rightly classifiable under Heading 1704 9090 as 'Sugar Confectionary' and not under Heading 2101 1200 as 'preparations with basis of extracts, essences, concentrates, or with the basis of coffee' – Ordered accordingly [Read less]

Customs - Mis-declaration of goods, Rejection of declared value and re-determination of value, Confiscation of goods -Appellant filed a B/E declaring the goods as Plain PU Coated Fabric of 0.62 mm thickness. However, on physical examination, the goods were found to be of 0.74 mm to 0.81 mm thickness - Appellant admitted the mistake and agreed to pay the differential duty. Accordingly, the Commissioner rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007 and re-determined the value under Rule 4 based on contemporaneous imports - Whether the proper officer was justified in rejecting the declared val... [Read more]

Customs - Mis-declaration of goods, Rejection of declared value and re-determination of value, Confiscation of goods -Appellant filed a B/E declaring the goods as Plain PU Coated Fabric of 0.62 mm thickness. However, on physical examination, the goods were found to be of 0.74 mm to 0.81 mm thickness - Appellant admitted the mistake and agreed to pay the differential duty. Accordingly, the Commissioner rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007 and re-determined the value under Rule 4 based on contemporaneous imports - Whether the proper officer was justified in rejecting the declared value and re-determining the value under Rule 4 of the Customs Valuation Rules - HELD - The proper officer was justified in rejecting the declared value under Rule 12 as there was a clear mis-declaration of the thickness of the fabric, which gave the proper officer a reasonable doubt about the accuracy of the declared value. Once the declared value was rejected, the proper officer was correct in re-determining the value under Rule 4 based on the contemporaneous imports of identical goods - As the goods imported did not correspond with the description provided in the B/E, the confiscation of the goods under Section 111(m) is upheld - As per Rule 4, the transaction value of identical goods shall be the assessable value and not the value re-determined by the officer for the contemporaneous Bills of Entry. To this extent, the re-determination of value is not correct. The assessable value and the differential customs duty and the equivalent amount of penalty under section 114A on the appellant need to be re-determined - the Commissioner is directed to re-determine the assessable value by considering the lower transaction value of the contemporaneous imports under Rule 4, instead of the enhanced value. Accordingly, the duty payable and the penalty under Section 114A on the appellant are also to be re-determined – the appeal is partly allowed by remand [Read less]

Service Tax - Refund orders sanctioned, Show cause notices issued subsequently - Appellant filed refund claims under Rule 5 of the CCR read with Notification No. 27/2012, which were sanctioned by the Revenue. Subsequently, the Revenue issued show cause notices invoking the extended period of limitation, alleging that the services rendered by the appellant were in the nature of intermediary services and therefore, cannot be considered as 'export' - Whether the Revenue can question the CENVAT credit availed by the appellant without challenging the refund orders that were already sanctioned in favor of the appellant - HELD - ... [Read more]

Service Tax - Refund orders sanctioned, Show cause notices issued subsequently - Appellant filed refund claims under Rule 5 of the CCR read with Notification No. 27/2012, which were sanctioned by the Revenue. Subsequently, the Revenue issued show cause notices invoking the extended period of limitation, alleging that the services rendered by the appellant were in the nature of intermediary services and therefore, cannot be considered as 'export' - Whether the Revenue can question the CENVAT credit availed by the appellant without challenging the refund orders that were already sanctioned in favor of the appellant - HELD - Once the refund orders were sanctioned in favor of the appellant, the Revenue cannot be allowed to say in a collateral proceeding that the refund was erroneous. Relying on the judgments of the Madras High Court in Eveready Industries India Ltd. and the Supreme Court in ITC Ltd., the Tribunal observed that the Revenue cannot be permitted to take an inconsistent stand after sanctioning the refunds. The Revenue cannot question the CENVAT credit availed by the appellant without challenging the refund orders – Further, the Revenue has been aware of the nature of services rendered by the appellant and the fact of availment of CENVAT credit. No suppression, mis-statement, mis-representation, fraud, collusion etc. has been established by the Revenue with cogent evidence. In the absence of any such evidence, the Revenue has not made out a case for invoking the extended period of limitation - The impugned orders are set aside and the appeals are allowed [Read less]

Central Excise – Manufacture of pan masala – Allegation of clandestine clearance – Demand of duty – Appellant is engaged in business of manufacture and sale of Pan Masala – Department received intelligence to effect that Appellant had clandestinely removed manufactured goods without cover of invoice and without payment of appropriate duty – After investigation, department issued show cause notice to Appellant by proposing demand of central excise duty – Principal Commissioner confirmed demand proposed in show cause notice – Whether department has established charge of clandestine clearance of goods against ... [Read more]

Central Excise – Manufacture of pan masala – Allegation of clandestine clearance – Demand of duty – Appellant is engaged in business of manufacture and sale of Pan Masala – Department received intelligence to effect that Appellant had clandestinely removed manufactured goods without cover of invoice and without payment of appropriate duty – After investigation, department issued show cause notice to Appellant by proposing demand of central excise duty – Principal Commissioner confirmed demand proposed in show cause notice – Whether department has established charge of clandestine clearance of goods against Appellant with sufficient evidence – HELD – Findings have been recorded against Appellant on basis of diaries recovered from premises of third parties and oral statements of witnesses. Demand cannot be sustained merely on basis of third party documents and statements in absence of any tangible or corroborative evidence. There is nothing on record which may establish procurement of raw materials for manufacture of goods in factory of Appellant. There is also no proof of receipt of consideration against alleged illicit clearance by Appellant. Even in respect of transportation, no incriminating evidence was found in premises of Appellant. Documents recovered from transporters do not establish any case of clandestine removal of goods by Appellant. It clearly transpires from aforesaid discussion that charge of clandestine removal of goods by Appellant had not been substantiated by department. Principal Commissioner committed an error in holding that charge of clandestine removal of goods by Appellant stood proved. Impugned order passed by Principal Commissioner is set aside – Appeal allowed [Read less]

GST – Seizure of consignment of areca nuts, perishable goods, ownership dispute - Appellant is the owner of the consignment of areca nuts which were being transported. The goods were intercepted and seized by the respondent authorities. The appellant claimed ownership of the seized goods and was issued a show-cause notice assessing the penalty liability of the owner of the goods. The appellant filed a writ petition challenging the seizure and sought the release of the perishable goods - Whether the appellant is the rightful owner of the seized consignment of goods - HELD - There is no material to suggest that the claim o... [Read more]

GST – Seizure of consignment of areca nuts, perishable goods, ownership dispute - Appellant is the owner of the consignment of areca nuts which were being transported. The goods were intercepted and seized by the respondent authorities. The appellant claimed ownership of the seized goods and was issued a show-cause notice assessing the penalty liability of the owner of the goods. The appellant filed a writ petition challenging the seizure and sought the release of the perishable goods - Whether the appellant is the rightful owner of the seized consignment of goods - HELD - There is no material to suggest that the claim of ownership of the appellant over the seized consignment is incorrect. The relevant Circular dated 31.12.2018 provides that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner. In the present case, the documents of title to the consignment were seized along with the goods, which suggested the ownership of the appellant over the seized consignment. There was also no contrary claim by any other party regarding the ownership of the goods. Therefore, the appellant should be treated as the rightful owner of the seized consignment – The petition is disposed of - Whether the seized perishable goods should be released to the appellant upon furnishing the assessed penalty amount - HELD - Considering the perishable nature of the seized consignment and the fact that the appellant has been recognized as the owner of the goods, the appellant to deposit the assessed penalty amount with the respondent authorities within 7 days. Upon such deposit, the respondent authorities were directed to release the seized consignment in favour of the appellant. [Read less]

Haryana General Sales Tax Act, 1973 - Tax concessions, Rule 28C of Haryana General Sales Tax Rules, 1975, “units in pipeline” – Challenge to denial of tax concessions under Rule 28C of the Haryana General Sales Tax Rules, 1975 - The petitioners had expanded or diversified their existing industrial units and applied for the tax concessions, but their applications were rejected on the ground that they did not fulfill the eligibility conditions, particularly the requirement of having the IEM registration on or before the cut-off date of 30.04.2000 - Whether the petitioners were entitled to the tax concessions under Rule... [Read more]

Haryana General Sales Tax Act, 1973 - Tax concessions, Rule 28C of Haryana General Sales Tax Rules, 1975, “units in pipeline” – Challenge to denial of tax concessions under Rule 28C of the Haryana General Sales Tax Rules, 1975 - The petitioners had expanded or diversified their existing industrial units and applied for the tax concessions, but their applications were rejected on the ground that they did not fulfill the eligibility conditions, particularly the requirement of having the IEM registration on or before the cut-off date of 30.04.2000 - Whether the petitioners were entitled to the tax concessions under Rule 28C of the Haryana General Sales Tax Rules, 1975 as "units in pipeline" - HELD - The petitioners were not entitled to the tax concessions under Rule 28C as they did not fulfill the eligibility criteria to be considered "units in pipeline". As per the Rules, the "eligible industrial unit" for availing the tax concessions had to have the IEM registration on or before the cut-off date of 30.04.2000. However, in all the cases, the petitioners had obtained the IEM registrations for their expanded/diversified units either after the cut-off date or did not have the required IEM registration on the cut-off date. The subsequent IEM registrations cannot be deemed to relate back to petitioner’s earlier IEM registrations for the original units. Since the tax concessions were sought specifically for the expanded/diversified capacities, the requirement of having the IEM registration for the expanded/diversified unit on the cut-off date cannot be waived. The other eligibility conditions like having land/premises arranged, having applied for finances, and commencing production within 2 years were also not fulfilled by the petitioners - The respondents had correctly denied the tax concessions to the petitioners as they did not meet the eligibility criteria prescribed under Rule 28C of the Haryana General Sales Tax Rules, 1975 for being considered "units in pipeline" – The petitions are dismissed [Read less]

Service Tax – Renting of immovable property service – Invoking of extended period of limitation – Demand of tax – On basis of audit conducted on books of accounts of Appellant, department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Commissioner confirmed demands proposed in show cause notice – Whether demand of service tax confirmed under category of Renting of Immovable Property Service is sustainable – HELD – Demand had been raised by invoking extended period of limitation. Since there is no suppression of fact with intention to evade tax, demand con... [Read more]

Service Tax – Renting of immovable property service – Invoking of extended period of limitation – Demand of tax – On basis of audit conducted on books of accounts of Appellant, department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Commissioner confirmed demands proposed in show cause notice – Whether demand of service tax confirmed under category of Renting of Immovable Property Service is sustainable – HELD – Demand had been raised by invoking extended period of limitation. Since there is no suppression of fact with intention to evade tax, demand confirmed for extended period of limitation cannot be sustained. Balance demand falling within normal period of limitation is confirmed – Appeal disposed of - Foreign currency expenses – Tax liability – Whether foreign currency expenses are liable for Service Tax under Reverse Charge Mechanism (RCM) – HELD – Demand had been confirmed under RCM on basis of difference in foreign currency expenses as shown in books of accounts vis-à-vis Service Tax Returns. Department had not brought in any evidence to substantiate allegation that said foreign currency expenses were incurred in relation to any taxable service, therefore, said expenses were not liable for Service Tax under RCM. Demand confirmed on foreign expenses is not sustainable - Payment of commission – Sustainability of demand – Whether Appellant is liable to pay Service Tax on commission expenses paid for selling tea outside India – HELD – Services towards selling tea (being agricultural produce) is wholly exempted from payment of service tax under Notification No.13/2003. Commissioner had confirmed demand on ground that aforesaid notification exempting services for selling on tea is applicable only in India and not in respect of import of services. Commissioner did not dispute the nature of services received by Appellant from outside India. Notification exempts services pertaining to sale of tea either provided within India or outside India, inasmuch as, no exclusion has been carved out to restrict exemption benefit for services rendered in India. Demand confirmed in impugned order on this count is set aside. [Read less]

GST - Limitation period for provisional attachment and seizure of goods - During the search, gold, silver and cash were seized, and the petitioner's bank accounts were provisionally attached. After more than 20 months, the petitioner requested the authorities to release the seized goods and cash, and lift the provisional attachment, as the limitation period of one year under Section 83(2) of the CGST Act had expired - Whether the authorities were justified in not releasing the seized goods and cash, and not lifting the provisional attachment, despite the expiry of the limitation period of one year under Section 83(2) of th... [Read more]

GST - Limitation period for provisional attachment and seizure of goods - During the search, gold, silver and cash were seized, and the petitioner's bank accounts were provisionally attached. After more than 20 months, the petitioner requested the authorities to release the seized goods and cash, and lift the provisional attachment, as the limitation period of one year under Section 83(2) of the CGST Act had expired - Whether the authorities were justified in not releasing the seized goods and cash, and not lifting the provisional attachment, despite the expiry of the limitation period of one year under Section 83(2) of the CGST Act – HELD - The authorities had failed to adhere to the statutory provisions - they did not issue a notice within six months of the seizure of the goods as required under Section 67(7) of the CGST Act, nor did they extend the time limit by invoking the proviso to that sub-section. Additionally, the provisional attachment of the bank accounts was not renewed after the expiry of one year, as mandated under Section 83(2) of the CGST Act - The authorities' approach in handling the matter appeared to be intentional, as they were aware of the statutory provisions and the limitation period, yet they sat idle and did not take the required actions. The Chief Commissioner of State Tax is directed to conduct an appropriate inquiry against the officers involved in leaving these loopholes, which ultimately aided the petitioner - The authorities are directed to release the seized goods and cash, and lift the provisional attachment of the bank accounts, within 10 days – The petition is allowed [Read less]

GST - Applicability of Section 54 of the CGST Act, 2017 to refund of pre-deposit made for maintaining an appeal – HELD - The refund in relation to the statutory pre-deposit made by it for maintaining the appeal, in which the assessee succeeded thereafter, would be governed by the provisions of Section 107(6) read with Section 115 of the CGST/JGST Act, 2017 and not under Section 54 of the Act. The High Court erred in interpreting Section 54 thereof in that context - The subject refund was relatable to Section 107(6) read with Section 115 of the Act, and to that extent, the exercise undertaken by the High Court with regard... [Read more]

GST - Applicability of Section 54 of the CGST Act, 2017 to refund of pre-deposit made for maintaining an appeal – HELD - The refund in relation to the statutory pre-deposit made by it for maintaining the appeal, in which the assessee succeeded thereafter, would be governed by the provisions of Section 107(6) read with Section 115 of the CGST/JGST Act, 2017 and not under Section 54 of the Act. The High Court erred in interpreting Section 54 thereof in that context - The subject refund was relatable to Section 107(6) read with Section 115 of the Act, and to that extent, the exercise undertaken by the High Court with regard to Section 54 thereof was unnecessary – By setting aside the exercise of interpretation of Section 54 of the Act undertaken in that context, the appeal stands disposed of [Read less]

Central Excise – Deman of duty on waste mud, spent earth - During the bleaching operation using bleaching earth (fuller earth), the appellant generates a 'waste mud' or 'spent earth' as a by-product. The department sought to levy excise duty on the sale of this waste mud, relying on a Circular dated 28.10.2009 which had treated such waste/by-products as excisable goods - Whether the waste mud (spent earth) generated during the bleaching process is chargeable to excise duty – HELD - Department has mainly relied on the circular dated 28.10.2009 to treat the waste mud as excisable goods, whereas the Board itself had later... [Read more]

Central Excise – Deman of duty on waste mud, spent earth - During the bleaching operation using bleaching earth (fuller earth), the appellant generates a 'waste mud' or 'spent earth' as a by-product. The department sought to levy excise duty on the sale of this waste mud, relying on a Circular dated 28.10.2009 which had treated such waste/by-products as excisable goods - Whether the waste mud (spent earth) generated during the bleaching process is chargeable to excise duty – HELD - Department has mainly relied on the circular dated 28.10.2009 to treat the waste mud as excisable goods, whereas the Board itself had later withdrawn and rescinded the directions contained in that Circular through a subsequent circular dated 25.04.2016. The spent fuller earth had emerged involuntarily in the process of bleaching the crude palm oil, and not as a result of any conscious effort - Furthermore, the spent fuller earth was specifically exempted under Notification No.89/1995-CE dated 18.05.1995, which exempts all waste, parings and scrap arising in the course of manufacture of exempted goods. Therefore, the waste mud (spent earth) was not chargeable to excise duty - The impugned order is set aside and the appeal is allowed [Read less]

Customs – Import of goods – Rejection of declared classification – Demand of differential duty – Appellant had imported goods by classifying them as parts of Lifts/Escalators under CTH 8431 – Pursuant to an audit conducted, Department issued show cause notice proposing rejection of classification adopted by Appellant, reclassification under respective headings and demand of differential duty by invoking extended period of limitation – Adjudicating Authority confirmed proposals made in show cause notice – Whether Adjudicating Authority is justified in rejection of classification of imported goods as adopted by... [Read more]

Customs – Import of goods – Rejection of declared classification – Demand of differential duty – Appellant had imported goods by classifying them as parts of Lifts/Escalators under CTH 8431 – Pursuant to an audit conducted, Department issued show cause notice proposing rejection of classification adopted by Appellant, reclassification under respective headings and demand of differential duty by invoking extended period of limitation – Adjudicating Authority confirmed proposals made in show cause notice – Whether Adjudicating Authority is justified in rejection of classification of imported goods as adopted by Appellant, its consequent reclassification and demand of differential duty – HELD – When Revenue challenges the classification made by assessee, onus is on Revenue to establish that item in question falls in taxing category as claimed by them. There is no evidence placed on record which is being relied upon by Adjudicating Authority to establish that goods in question fall under tariff item as has been redetermined. As per Rule 1 of General Rules for Interpretation of Schedule itself in terms of heading 8431, imported goods except door locks are entitled to classification as claimed by Appellant. When it comes to classification of door locks, Explanatory notes to Heading 8431 clearly excludes door locks for passenger and goods lifts from classification under CTH 8431. Since no malafide can be attributed to Appellant, invocation of extended period is untenable. Impugned order to extent of reclassification of door locks and consequent demand of differential duty only for normal period is held to be tenable and is therefore upheld to this limited extent. Rest of impugned order in so far as it confirms demand on remaining imported goods does not stand to scrutiny and is therefore quashed and set aside to that extent – Appeal disposed of [Read less]

GST – Taxability of Transfer of Leasehold Rights – Petitioner held a 95-year leasehold right over a plot of land allotted by MIDC. The petitioner assigned these leasehold rights to a third party – Demand of GST treating Leasehold Rights transfer as a "supply of services" under Section 7(1) of the CGST Act, 2017 read with clause 2(b) of Schedule II - Whether the assignment/transfer of leasehold rights over an immovable property by the petitioner to a third party would constitute a "supply of services" under the GST law, and hence be subject to GST – HELD - The High Court relied on the judgment of the Gujarat High Co... [Read more]

GST – Taxability of Transfer of Leasehold Rights – Petitioner held a 95-year leasehold right over a plot of land allotted by MIDC. The petitioner assigned these leasehold rights to a third party – Demand of GST treating Leasehold Rights transfer as a "supply of services" under Section 7(1) of the CGST Act, 2017 read with clause 2(b) of Schedule II - Whether the assignment/transfer of leasehold rights over an immovable property by the petitioner to a third party would constitute a "supply of services" under the GST law, and hence be subject to GST – HELD - The High Court relied on the judgment of the Gujarat High Court in the case of Gujarat Chamber of Commerce and Industry v. Union of India, which held that the assignment/transfer of leasehold rights over an immovable property does not constitute a "supply of services" under the GST law. The High Court agreed with the Gujarat High Court's reasoning that such a transaction is merely a transfer of benefits arising out of an immovable property, and does not have any nexus with the business of the petitioner company. Hence, the essential element of "supply of service in the course of business or in furtherance of business" is absent – The impugned show cause notice demanding GST on the assignment of leasehold rights is quashed and set aside – The writ petition is allowed [Read less]

Service Tax – Construction of hospital – Tax liability – Appellant is engaged in laying of roads and construction of public buildings – Appellant undertook construction works in capacity of contractor for Tirumala Tirupati Devasthanam (TTD) – Department issued show cause notice demanding payment of Service Tax under category of Works Contract Services – Adjudicating Authority confirmed demands under categories of Works Contract Service and Site Formation and Clearance service – Whether Appellant is liable to pay Service Tax on construction of hospital for TTD – HELD – Hospital building is not constructed ... [Read more]

Service Tax – Construction of hospital – Tax liability – Appellant is engaged in laying of roads and construction of public buildings – Appellant undertook construction works in capacity of contractor for Tirumala Tirupati Devasthanam (TTD) – Department issued show cause notice demanding payment of Service Tax under category of Works Contract Services – Adjudicating Authority confirmed demands under categories of Works Contract Service and Site Formation and Clearance service – Whether Appellant is liable to pay Service Tax on construction of hospital for TTD – HELD – Hospital building is not constructed for any commercial purpose and no consultant fee is charged from patients. Hospital building is constructed for a charitable organization. Health institution which is not for commercial purpose would not be taxable. Demand regarding construction of second floor over Ayurvedic Hospital for TTD is not sustainable – Appeal allowed - Demand of tax – Sustainability – Whether demand confirmed under category of ‘Site Formation and Clearance, excavation and earth moving and demolition service’ is sustainable – HELD – Demand was made under category of Works Contract Services in show cause notice, but confirmed in above mentioned service. Scope of work encompasses the removal of overburden on land and improvement of land for agricultural purpose. Activities undertaken by Appellant for agriculture purposes are clearly excluded from levy of Service Tax. Confirmed demand is not sustainable in law. Impugned order is liable to be set aside. [Read less]

Central Excise - CENVAT credit on outward transportation, Free on Road (FOR) destination basis, Place of removal - The goods were sold on a Free on Road (FOR) destination basis and the cost of transportation was included in the assessable value on which duty was paid. The Principal Commissioner upheld the respondent's claim for CENVAT credit, relying on the inclusion of transportation cost in the assessable value and a Board Circular dated 08.06.2018 - Whether the respondent is entitled to CENVAT credit of service tax paid on outward transportation of goods when the sales are on an FOR destination basis and the transportat... [Read more]

Central Excise - CENVAT credit on outward transportation, Free on Road (FOR) destination basis, Place of removal - The goods were sold on a Free on Road (FOR) destination basis and the cost of transportation was included in the assessable value on which duty was paid. The Principal Commissioner upheld the respondent's claim for CENVAT credit, relying on the inclusion of transportation cost in the assessable value and a Board Circular dated 08.06.2018 - Whether the respondent is entitled to CENVAT credit of service tax paid on outward transportation of goods when the sales are on an FOR destination basis and the transportation cost is included in the assessable value – HELD - Where goods are sold on an FOR destination basis, the place of removal is considered to be the buyer's doorstep, as the seller remains responsible for delivery and bears the risk until the goods reach the customer, and property in the goods passes at the customer's location. The inclusion of transportation costs in the assessable value, upon which duty was paid, further supports the contention that the transfer of goods effectively occurs at the buyer's premises. CENVAT credit on service tax paid for goods transport agency services for outward transportation of finished goods up to the buyer's place is admissible under Rule 2(l) of the CENVAT Credit Rules, 2004. The similar matters involving the same principle had previously been decided in favor of assessees and even upheld by High Courts – The Respondent is entitlement to CENVAT credit of the service tax paid on the outward transportation of goods - The Department's appeal is dismissed [Read less]

Customs - Classification of “Actuator Assy. Clutch” and “Tube Connector Assy.-Clutch”, Clutch assembly and parts, Accessories vs. Parts - Appellant imported goods declared as "Actuator Assy. Clutch" and "Tube Connector Assy.-Clutch" - Department contended that these items are classifiable under CTI 8708 9300 as "Clutch and parts thereof", while the Assessee argued that they are not "parts of clutch" but rather "accessories to the clutch assembly system" - Whether the subject items - Actuator Assembly and Tube Connector Assembly - are classifiable under CTI 8708 9300 as "Clutch and parts thereof" or under the residu... [Read more]

Customs - Classification of “Actuator Assy. Clutch” and “Tube Connector Assy.-Clutch”, Clutch assembly and parts, Accessories vs. Parts - Appellant imported goods declared as "Actuator Assy. Clutch" and "Tube Connector Assy.-Clutch" - Department contended that these items are classifiable under CTI 8708 9300 as "Clutch and parts thereof", while the Assessee argued that they are not "parts of clutch" but rather "accessories to the clutch assembly system" - Whether the subject items - Actuator Assembly and Tube Connector Assembly - are classifiable under CTI 8708 9300 as "Clutch and parts thereof" or under the residual entry 8708 9900 as "other parts and accessories" – HELD - The Actuator Assembly and Tube Connector Assembly, though helping in the engagement and disengagement of the clutch plate, cannot be considered as "parts of clutch" as they only enhance the function and ease the effort of the driver in shifting the gear. The term "Clutch and parts thereof" under CTI 8708 9300 covers only the clutch itself, its casing, levers and mounted linings, and does not extend to accessories like the Actuator and Tube Connector - The Heading 8708 differentiates between "parts" and "accessories", and where the legislature intended to cover accessories, it has expressly used the term "accessories" in the Tariff, as in the case of 8708 7000 "Road wheels and parts and accessories". Since the entry 8708 9300 does not use the term "accessories", it cannot be interpreted to cover the subject items, which are accessories to the clutch assembly system – Further, the principle of res-judicata and estoppel do not apply in taxation matters, and the classification has to be determined based on the merit of the case, irrespective of any previous classification adopted by the Assessee - An ‘accessory of a clutch’ cannot be classified as ‘part of clutch’ under CTI 8708 9300. Subject items being ‘accessory of clutch’ and ‘gear shifting mechanism’ are not at all classifiable under CTI 8708 9300. Accordingly, the Actuator Assembly and Tube Connector Assembly are rightly classifiable under the residual entry 8708 9900 as "other parts and accessories" of motor vehicles, and not under 8708 9300 "Clutch and parts thereof" - When the goods are rightly classifiable under CTI 8708 9900 as ordered in the respective original order, the consequent issues of confiscation, fine and penalty cannot stand. The appeal of the Department is rejected, and the appeal of the assessee is allowed [Read less]

Service Tax - Intermediary Services or Export of Services - Mismatch between the income declared in the Income Tax Returns – The Respondent undertook activities of finding the potential students willing to study abroad and provided services to their client i.e. universities / colleges who paid commission to them - The ld. Adjudicating Authority held that the services rendered by the respondents are not export of services and are “Intermediary Services” as per Rule 2(f) read with 9(c) of Place of Provision of Service Rules, 2012 - the ld. Commissioner (Appeals) vide Orders-in-Appeal held that services rendered by the ... [Read more]

Service Tax - Intermediary Services or Export of Services - Mismatch between the income declared in the Income Tax Returns – The Respondent undertook activities of finding the potential students willing to study abroad and provided services to their client i.e. universities / colleges who paid commission to them - The ld. Adjudicating Authority held that the services rendered by the respondents are not export of services and are “Intermediary Services” as per Rule 2(f) read with 9(c) of Place of Provision of Service Rules, 2012 - the ld. Commissioner (Appeals) vide Orders-in-Appeal held that services rendered by the respondent, are export of service as per Rule 6A of Service Tax Rules, 1994 - Whether the services provided by the respondents are "Intermediary Services" under the Place of Provision of Service Rules, 2012, and hence liable to service tax – HELD - For a person to be considered an "intermediary", there must be a tripartite agreement and the person must not actually perform the main service intended to be received by the service recipient. In the present case, the respondents were providing services directly to their clients, i.e., the universities and colleges located outside India, and there was no tripartite agreement. The respondents were not acting as an intermediary but rather as a sub-contractor or sub-agent of the foreign universities - The respondent provided services to their client ie. universities / colleges who paid commission to them. The main service is the education that starts after completion of services rendered by the respondents. Therefore, the services provided by the respondents cannot be considered as "Intermediary Services" - The orders of the Commissioner (Appeals) is upheld and the appeal filed by Revenue is dismissed [Read less]

Service Tax - Transmission of electricity, Exemption to various charges - Appellant had collected various charges such as estimated cost of materials, erection charges, contingency charges, supervision charges, development charges, pro-rata charges, revenue loss charges and other charges, on which they were not paying service tax - Whether the various charges collected by the appellant are exempt from service tax – HELD - The material cost, which is the reimbursement of actual cost of materials, is not liable to service tax. Regarding contingency charges, these charges are collected from consumers considering future vari... [Read more]

Service Tax - Transmission of electricity, Exemption to various charges - Appellant had collected various charges such as estimated cost of materials, erection charges, contingency charges, supervision charges, development charges, pro-rata charges, revenue loss charges and other charges, on which they were not paying service tax - Whether the various charges collected by the appellant are exempt from service tax – HELD - The material cost, which is the reimbursement of actual cost of materials, is not liable to service tax. Regarding contingency charges, these charges are collected from consumers considering future variations in the cost of labour and material, and if there is no fluctuation, the charges are paid back to the consumers. Therefore, the Adjudicating Authority is directed to re-compute the service tax liability after getting the requisite details/data from the appellant on material cost and contingency charges - The pro-rata charges and development charges are collected by the appellant for the development of an efficient, coordinated, and economical system of intra-state transmission lines, which is its responsibility as a transmission utility. Considering the exemptions and Circulars issued by the CBIC, these charges are not liable to service tax - Regarding the erection charges, these are recovered from the consumers for shifting of overhead cables/wires, which is exempt from service tax as per the CBIC Circular No.123/5/2010-TRU dated 24.05.2010 - The pro-rata charges, development charges, and erection charges are not liable to service tax, and the demand, if any, shall be limited to the normal period of limitation - The appeal is allowed by way of remand - Whether the demand of service tax is barred by limitation – HELD - The entire facts were in the knowledge of the department, as it had issued similar show cause notices to other units of the appellant. Therefore, invoking the extended period of limitation is not justified, and the demand, if any, arising out of re-computation, shall be limited to the normal period. [Read less]

Central Excise – Rules 4, 8 and 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Determination of value – Demand of differential duty – Appellant is engaged in manufacture of iron ore pellets – With regard to clearances made to its own units for captive consumption, Appellant had paid excise duty on value determined in terms of Rule 8 of the Rules – Department issued show cause notice alleging that Appellant’s clearances to its own units tantamount to sales to a related party, hence, value should be determined in terms of Rule 4 of the Rules – A... [Read more]

Central Excise – Rules 4, 8 and 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Determination of value – Demand of differential duty – Appellant is engaged in manufacture of iron ore pellets – With regard to clearances made to its own units for captive consumption, Appellant had paid excise duty on value determined in terms of Rule 8 of the Rules – Department issued show cause notice alleging that Appellant’s clearances to its own units tantamount to sales to a related party, hence, value should be determined in terms of Rule 4 of the Rules – Adjudicating Authority confirmed demand of differential duty – Whether Appellant is correct in following Rule 8 of the Rules for arriving at value in respect of clearances of goods to their own units – HELD – Appellant had cleared goods to its own unit for captive consumption, which had erroneously been presumed, both in show cause notice and impugned order, as clearances to related party. Since clearance is to another unit of same legal entity for captive consumption, same cannot by any stretch of imagination be treated as clearance to related party. Clearances made by Appellant to its own units for captive consumption should be valued in terms of Rule 8 of the Rules and not in terms of Rule 4 of the Rules. Appellant had correctly valued their goods in terms of Rule 8 of the Rules and therefore, demand of central excise duty by adopting Rules 4 and 11 of the Rules is not sustainable. Order under challenge is set aside – Appeal allowed - Revenue neutrality – Whether it is a case of revenue neutrality or not – HELD – Appellant had been clearing goods to their own units for further manufacture. Duty paid by Appellant is available as CENVAT Credit to their own unit which is using these goods for further manufacture and clearing on payment of duty. In these circumstances, it is a revenue neutral situation. [Read less]

Customs – Section 114(i) of Customs Act, 1962 – Imposition of penalty – Sustainability – On basis of intelligence received, department launched investigation into exports purportedly made by certain exporters – Investigation revealed that there existed no firms in name of said exporters and exports were handled by Appellant/Custom House Agent (CHA) – After due process of law, Commissioner demanded erroneously sanctioned drawback amount from multiple individuals and imposed penalty on Appellant under Section 114(i) of the Act – Whether penalty imposed upon Appellant under Section 114(i) of the Act is sustainab... [Read more]

Customs – Section 114(i) of Customs Act, 1962 – Imposition of penalty – Sustainability – On basis of intelligence received, department launched investigation into exports purportedly made by certain exporters – Investigation revealed that there existed no firms in name of said exporters and exports were handled by Appellant/Custom House Agent (CHA) – After due process of law, Commissioner demanded erroneously sanctioned drawback amount from multiple individuals and imposed penalty on Appellant under Section 114(i) of the Act – Whether penalty imposed upon Appellant under Section 114(i) of the Act is sustainable – HELD – There is nothing in this case to show that Appellant knowingly did or omitted to do an act or abetted an act which rendered the export goods liable for confiscation. Even if there was a failure on part of Appellant in fulfilling actions required of him as a CHA, it cannot be construed as abetment of offence. Impugned order clearly indicate that wrongful acts were done by employees of Appellant. Acts of employee done in excess of his authority, which clearly depart from scope of his employment will not make his employer liable for his wrongful acts. Employees acted in their individual capacity and hence, Appellant cannot be blamed for their acts. Department had not succeeded in establishing an offence committed by Appellant under the Act. Penalty imposed on Appellant under Section 114(i) of the Act as per impugned orders cannot sustain and is set aside – Appeals disposed of [Read less]

Customs - Import of 'Fire Extinguishers and their parts', Aircraft parts - Appellant availed the benefit of Sr.No.545 of Notification No.50/2017-Cus dated 30.06.2017 on the import of 'Fire Extinguishers and their parts', by claiming them as "parts of aircraft" – Revenue of the view that 'Fire Extinguishers' are not parts of aircraft and appellant has short-paid the duty including IGST - Whether the imported fire extinguishers and their parts are eligible for the concessional rate of customs duty under Sr.No.545 of Notification No.50/2017-Cus as "parts of aircraft" – HELD - The declarations issued by the Ministry of Def... [Read more]

Customs - Import of 'Fire Extinguishers and their parts', Aircraft parts - Appellant availed the benefit of Sr.No.545 of Notification No.50/2017-Cus dated 30.06.2017 on the import of 'Fire Extinguishers and their parts', by claiming them as "parts of aircraft" – Revenue of the view that 'Fire Extinguishers' are not parts of aircraft and appellant has short-paid the duty including IGST - Whether the imported fire extinguishers and their parts are eligible for the concessional rate of customs duty under Sr.No.545 of Notification No.50/2017-Cus as "parts of aircraft" – HELD - The declarations issued by the Ministry of Defence clearly state that the fire extinguishers are mandatory for the issuance of certificate of safety of flight and that they are specifically designed for aircrafts, which shows that the fire extinguisher is an integral part of the aircraft without which the aircraft will not be able to be airborne. A component or sub-system that is specifically designed and exclusively used in the aircraft, and without which the aircraft cannot function, should be considered as a "part of aircraft" for the purpose of customs duty exemption. Once the relevant Ministry has clarified that the goods are parts of a particular machine, the Customs authorities cannot negate this - The Adjudicating Authority should consider the declarations and other documents provided by the Appellant and decide the issue afresh in light of the cited judicial precedents - The appeal is allowed by way of remand [Read less]

Customs - Related party transaction, Payment of differential duty before issue of SCN - Appellant imported goods from its parent company. The appellant paid customs duty and SVB charges based on the invoice value excluding the C&F charges. However, the appellant later realized that the full value of the imported goods was not declared in the B/E. The appellant immediately deposited the differential duty along with interest before the issuance of the Show Cause Notice. The Department initiated investigation and imposed demands, penalties and confiscation of goods on the appellants - Whether the demand, confiscation and pena... [Read more]

Customs - Related party transaction, Payment of differential duty before issue of SCN - Appellant imported goods from its parent company. The appellant paid customs duty and SVB charges based on the invoice value excluding the C&F charges. However, the appellant later realized that the full value of the imported goods was not declared in the B/E. The appellant immediately deposited the differential duty along with interest before the issuance of the Show Cause Notice. The Department initiated investigation and imposed demands, penalties and confiscation of goods on the appellants - Whether the demand, confiscation and penalties are sustainable against the appellants when the differential duty was paid before the issuance of the SCN – HELD - Since the appellants had deposited the differential duty along with interest even before the issuance of the show cause notice, the demand, confiscation and penalties are not sustainable. Once the differential duty is paid before the issuance of the show cause notice, no show cause notice can be issued. The appellants had voluntarily disclosed the short payment of duty and there was no malafide intention on their part. The information regarding non-payment of duty on two invoices was provided by the appellants himself and if there had been any malafide intention, he would not have disclosed this information - In such fact & circumstances, the demand, confiscation and penalties is not sustainable. The impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Providing of services for Lump-sum work, Demand under Manpower Recruitment or Supply Agency Service - Appellants were providing "quality works" such as washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area, godowns and surroundings in the manufacturing unit – Dept viewed the services rendered by the appellants as supply of manpower service - Whether the services rendered by the appellants are classifiable under the "Manpower Recruitment and Supply Agency" category – HELD - The activity agreed under the contract was for providing 'quality work' using the manpower... [Read more]

Service Tax – Providing of services for Lump-sum work, Demand under Manpower Recruitment or Supply Agency Service - Appellants were providing "quality works" such as washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area, godowns and surroundings in the manufacturing unit – Dept viewed the services rendered by the appellants as supply of manpower service - Whether the services rendered by the appellants are classifiable under the "Manpower Recruitment and Supply Agency" category – HELD - The activity agreed under the contract was for providing 'quality work' using the manpower of the contractor employed by the appellants, and not for supply of manpower as such. The payment was based on the work carried out by the contractor and not on the number of persons employed, which was a clear indication that the activity under the contract was not for 'supply of manpower' at all. The Tribunal in S.S. Associates, Bhagyashree Enterprises, and Shivshakti Enterprises, cases has held that such lump-sum work contracts cannot be considered as contracts for supply of manpower and are not covered under the 'Manpower Recruitment or Supply Agency Services'. Therefore, the demand based on the classification of the services provided by the appellants as supply of manpower service is not sustainable as per law. Accordingly, the impugned orders are set aside and the appeals are allowed [Read less]

Service Tax - Exclusion of value of goods deemed to be sold from taxable service value, Eligibility for Notification No. 12/2003-ST - Appellant claimed the benefit of Notification No. 12/2003-ST, dated 20.06.2003 and reflected the same in the invoices raised during the disputed period. The appellant filed ST-3 Returns, disclosing the total value of Service Tax payable and paid by claiming the benefit of Notification 12/2003-ST. The value of goods sold or deemed to have been sold was required to be excluded for the purpose of computing the value of service rendered by the appellant - Whether the appellant is entitled to cla... [Read more]

Service Tax - Exclusion of value of goods deemed to be sold from taxable service value, Eligibility for Notification No. 12/2003-ST - Appellant claimed the benefit of Notification No. 12/2003-ST, dated 20.06.2003 and reflected the same in the invoices raised during the disputed period. The appellant filed ST-3 Returns, disclosing the total value of Service Tax payable and paid by claiming the benefit of Notification 12/2003-ST. The value of goods sold or deemed to have been sold was required to be excluded for the purpose of computing the value of service rendered by the appellant - Whether the appellant is entitled to claim exclusion of the value of the goods and raw materials claimed to have been sold to the recipient of the service as part of their repair and maintenance service – HELD - The appellant is entitled to claim exclusion of the value of the goods and raw materials claimed to have been sold to the recipient of the service as part of the repair and maintenance service. The Tribunal in G.D. Builders & Others Vs Union of India, has held that wherever there are complex transactions including components of service and sale of goods (actual or deemed), the taxable value for levy of Service Tax would be only the component of service but excluding the component of sale of goods. The provisions of Notification No. 12/2003 merely explicate the inherent intent of Section 67 of the Act - The reversal of Cenvat credit amounts to non-taking of credit on inputs, and the benefit of exemption notification cannot be denied - The reversal of Cenvat credit is sufficient compliance with the condition of non-availment of Cenvat credit for the purpose of availing the exemption notification - The appeal is allowed by way of remand only for the limited purpose of recalculating the demand accordingly for the normal period - Whether the Adjudicating Authority has gone beyond the scope of the remand order by the Tribunal – HELD - The Adjudicating Authority has gone beyond the scope of the remand order by the Tribunal. It was not open for the Adjudicating Authority to pass an order ignoring the remand direction and confirm the demand on the same grounds as taken in the first Order-in-Original, which was set aside by the Tribunal - Whether the extended period of limitation can be invoked in the present case – HELD - The extended period of limitation cannot be invoked in the present case, as the claim of benefit of exemption notification cannot be considered as suppression of fact with intent to evade payment of Tax. [Read less]

Central Excise – Rule 2(l) of CENVAT Credit Rules, 2004 – Recovery of credit – Appellant is engaged in manufacture of cement – Appellant availed CENVAT credit of service tax paid under reverse charge on GTA services used for outward transportation of cement from factory/depots to buyers’ premises – Department issued show cause notice proposing recovery of credit on ground that outward transportation beyond place of removal did not qualify as input service under Rule 2(l) of the Rules – Commissioner confirmed recovery of credit along with interest and penalty – Whether GTA services used for outward transport... [Read more]

Central Excise – Rule 2(l) of CENVAT Credit Rules, 2004 – Recovery of credit – Appellant is engaged in manufacture of cement – Appellant availed CENVAT credit of service tax paid under reverse charge on GTA services used for outward transportation of cement from factory/depots to buyers’ premises – Department issued show cause notice proposing recovery of credit on ground that outward transportation beyond place of removal did not qualify as input service under Rule 2(l) of the Rules – Commissioner confirmed recovery of credit along with interest and penalty – Whether GTA services used for outward transportation are eligible for CENVAT credit – HELD – Eligibility of CENVAT credit on GTA services for outward transportation is inseparably linked to determination of “place of removal”. Determination of place of removal is a fact based exercise and cannot be mechanically fixed at factory gate. In cases where sales are established to be on FOR destination basis and ownership and risk pass only upon delivery, buyer’s premises constitute the place of removal. Impugned Order-in-Original having been passed without undertaking the mandatory factual examination is unsustainable in law and hence, it is set aside. Matter is remanded to Adjudicating authority for limited purpose of examining sale contracts, purchase orders, invoices, transport documents and allied records to determine either disputed clearances were effected on FOR destination basis and either buyer’s premises constitute place of removal. Upon such verification, Adjudicating authority shall re-determine the admissibility of CENVAT credit on GTA services – Appeal allowed [Read less]

Customs – Import of manganese ores – Denial of exemption – Demand of duty – Appellants imported Manganese ores and claimed exemption from payment of Countervailing Duty in terms of S.No.4 of Notification No.04/2006-CE – Original Adjudicating Authorities confirmed demand of duty by denying exemption claimed by Appellants – Commissioners (Appeals) upheld orders passed by Original Adjudicating Authorities – Whether Appellants are entitled to benefit of exemption from payment of duty in terms of S.No.4 of Notification No.04/2006 – HELD – It is not in dispute that exemption notification specifically exempts �... [Read more]

Customs – Import of manganese ores – Denial of exemption – Demand of duty – Appellants imported Manganese ores and claimed exemption from payment of Countervailing Duty in terms of S.No.4 of Notification No.04/2006-CE – Original Adjudicating Authorities confirmed demand of duty by denying exemption claimed by Appellants – Commissioners (Appeals) upheld orders passed by Original Adjudicating Authorities – Whether Appellants are entitled to benefit of exemption from payment of duty in terms of S.No.4 of Notification No.04/2006 – HELD – It is not in dispute that exemption notification specifically exempts ‘ore’. Admittedly, certain processes were undertaken on ore as excavated in mines abroad before being exported to Appellants. Imported goods have undergone several processes like washing, removal of waste, sizing, etc. Subject processes undertaken on ore have resulted into emergence of concentrate, which is distinct excisable goods in view of deeming provisions. Since Notification No.04/2006 exempts only ores, concentrate automatically falls outside purview of said notification. Orders under challenge are sustained – Appeals dismissed [Read less]

Customs – Re-import of goods – Eligibility for exemption – Appeal is filed against Order-in-Original, whereby Commissioner had confirmed demand of Customs duty comprising of Basic Customs Duty and Integrated Goods and Services Tax (IGST) in respect of re-import of certain goods – Whether re-import of goods is eligible for exemption under Notification No.45/2017 – HELD – Notification No.45/2017-Customs grants exemption from different components of Customs Duty. Controversy in this appeal primarily requires this Tribunal to examine statutory scheme governing levy of IGST on re-import of goods. Goods were moved by... [Read more]

Customs – Re-import of goods – Eligibility for exemption – Appeal is filed against Order-in-Original, whereby Commissioner had confirmed demand of Customs duty comprising of Basic Customs Duty and Integrated Goods and Services Tax (IGST) in respect of re-import of certain goods – Whether re-import of goods is eligible for exemption under Notification No.45/2017 – HELD – Notification No.45/2017-Customs grants exemption from different components of Customs Duty. Controversy in this appeal primarily requires this Tribunal to examine statutory scheme governing levy of IGST on re-import of goods. Goods were moved by Appellant to Sri Lanka on its own account, for its own use, without consideration, without transfer of ownership and without supply to any overseas entity. Mere movement of goods from India to Sri Lanka did not constitute a ‘supply’. In absence of any supply, there would be no levy under IGST. Impugned order deserves to be set aside – Appeal allowed [Read less]

GST - Petitioner filed replies to the show cause notices issued by the respondent, but failed to appear for the personal hearings provided. The respondent then passed the impugned assessment orders rejecting the petitioner's replies as insufficient – HELD - The respondent had provided sufficient opportunities to the petitioner to file replies and appear for personal hearings, but the petitioner had failed to avail the same. The impugned assessment orders, passed after rejecting the petitioner's insufficient replies, did not warrant interference. The petitioner has the recourse of filing appeals before the Appellate Autho... [Read more]

GST - Petitioner filed replies to the show cause notices issued by the respondent, but failed to appear for the personal hearings provided. The respondent then passed the impugned assessment orders rejecting the petitioner's replies as insufficient – HELD - The respondent had provided sufficient opportunities to the petitioner to file replies and appear for personal hearings, but the petitioner had failed to avail the same. The impugned assessment orders, passed after rejecting the petitioner's insufficient replies, did not warrant interference. The petitioner has the recourse of filing appeals before the Appellate Authority, which will have the power to adjudicate the matter on its own merits and in accordance with law, after providing the petitioner sufficient opportunity - The writ petitions challenging the assessment orders are dismissed [Read less]

GST - Refund of IGST on zero-rated supply – Rejection of refund application on technical grounds as the shipping bills could not be uploaded on the GST portal due to size constraints on the portal. The petitioner was unable to file a fresh refund application due to system constraints on the GST portal - Whether the petitioner is entitled to the refund of IGST on zero-rated supply despite the technical issues faced in filing the refund application – HELD - The benefit which a person is otherwise entitled to cannot be denied due to a technical error or lacuna in the electronic system that too when the substantive conditi... [Read more]

GST - Refund of IGST on zero-rated supply – Rejection of refund application on technical grounds as the shipping bills could not be uploaded on the GST portal due to size constraints on the portal. The petitioner was unable to file a fresh refund application due to system constraints on the GST portal - Whether the petitioner is entitled to the refund of IGST on zero-rated supply despite the technical issues faced in filing the refund application – HELD - The benefit which a person is otherwise entitled to cannot be denied due to a technical error or lacuna in the electronic system that too when the substantive conditions are satisfied - The petitioner shall file a fresh application either in manual or electronic mode and the Respondent are directed to undertake the necessary exercise and pass an appropriate order on the petitioner's refund claim within six weeks, without raising any objection on the ground of limitation – The petition is disposed of [Read less]

GST - Rectification of GSTR-1 and GSTR-3B after due date - The petitioners claimed input tax credit on invoices issued by the vendor. The vendor later issued credit notes for discounts, and the petitioners correspondingly issued debit notes and admitted tax liability. However, the GST portal did not account for the debit notes issued by the petitioners, leading to a mismatch in ITC. The petitioners were compelled to reverse the available credit balance and file Form DRC-03. They filed a writ petition seeking permission to rectify the GSTR-1 and GSTR-3B returns - Whether the petitioners should be allowed to rectify the GSTR... [Read more]

GST - Rectification of GSTR-1 and GSTR-3B after due date - The petitioners claimed input tax credit on invoices issued by the vendor. The vendor later issued credit notes for discounts, and the petitioners correspondingly issued debit notes and admitted tax liability. However, the GST portal did not account for the debit notes issued by the petitioners, leading to a mismatch in ITC. The petitioners were compelled to reverse the available credit balance and file Form DRC-03. They filed a writ petition seeking permission to rectify the GSTR-1 and GSTR-3B returns - Whether the petitioners should be allowed to rectify the GSTR-1 and GSTR-3B returns after the due date – HELD - The petitioners should be allowed to rectify the GSTR-1 and GSTR-3B returns, despite the technical prohibition under the GST law. The Court relied on the judgments of the Bombay High Court in Star Engineers (I) Pvt. Ltd. and Aberdare Technologies Pvt. Ltd., as well as the judgments of the Madras High Court, Orissa High Court, and Jharkhand High Court, which had taken a similar view that an inadvertent and bona fide error in filing GST returns should be permitted to be rectified, especially when there is no loss of revenue to the government - The GST regime is largely based on the electronic domain, and there are likely to be inadvertent and bona fide human errors in the process. Such errors should be recognized and permitted to be corrected by the department, as long as there is no loss of revenue - The Respondents are directed to open the portal within four weeks to enable the petitioners to amend/rectify the GSTR-1 and GSTR-3B forms within ten days thereafter. In case the portal is not opened, the petitioners were granted liberty to file an application for manual rectification, which the respondents were directed to accept and process in accordance with law – The petitions are allowed [Read less]

GST – Uploading of Notices and orders under "Additional Notices/Orders" Tab – Respondents issued a Demand-cum-Show Cause Notice alleging discrepancy between the tax liability reported in the GSTR-3B returns and the E-Way Bill report. The petitioner was not served the notice and order, as they were uploaded under the "Additional Notices/Orders" tab on the portal. Consequently, the petitioner could not participate in the proceedings and an ex parte order was passed - Whether uploading of notices and orders under the "Additional Notices/Orders" tab and thereby denying the petitioner a reasonable opportunity to participate... [Read more]

GST – Uploading of Notices and orders under "Additional Notices/Orders" Tab – Respondents issued a Demand-cum-Show Cause Notice alleging discrepancy between the tax liability reported in the GSTR-3B returns and the E-Way Bill report. The petitioner was not served the notice and order, as they were uploaded under the "Additional Notices/Orders" tab on the portal. Consequently, the petitioner could not participate in the proceedings and an ex parte order was passed - Whether uploading of notices and orders under the "Additional Notices/Orders" tab and thereby denying the petitioner a reasonable opportunity to participate in the proceedings, is a violation of the principles of natural justice – HELD - Mere uploading the notice under heading “Additional Notices/Orders” is not sufficient service in accordance with the law. The tab “Additional notices/orders” is easily accessible and located with ordinary prudence - The action of the adjudicating authority in uploading the notices and orders under the "Additional Notices/Orders" tab, which was not easily accessible, is a violation of the principles of natural justice. The consistent view of various High Courts is that uploading of notices and orders under the "Additional Notices/Orders" tab does not amount to valid service under Section 169 of the CGST Act, 2017 - The petitioner remained unaware of the notices and orders, and consequently could not respond to the show cause notice or participate in the proceedings. Mere non-appearance would not entail passing of adverse orders by the Assessing Officer, rather the statutory authority should have examined the material and data available in the portal which were uploaded by the petitioner. Since the impugned order rejecting the application under Section 161 of the CGST Act is not a speaking order, said order cannot be held to be tenable - The ex parte order and the order rejecting the application for rectification are held to be vitiated for non-compliance with the principles of natural justice and set aside – The matter is remanded back to the State Tax Officer with a direction to provide the petitioner an opportunity to be heard and consider the petitioner's explanation along with the records available on the portal – The writ petition stands disposed of [Read less]

The exemption benefit of individual insurance policies is not applicable to petitioners as the policy availed has all the characteristics of a group policy, as it covers large number of persons and benefits obtained through collective bargain.

Gujarat Motor Vehicles Tax Act, 1958 – Taxability of Heavy Earth Moving Machinery or Special Service Vehicles as "Motor Vehicles" under Motor Vehicles Act, 1988 - Appellant used various heavy earth moving machinery and special service vehicles such as Dumpers, Loaders, Excavators, Surface Miners, Dozers, Drills, Rock Breakers etc. for its manufacturing activities at its cement plants. The Transport Officer directed the appellant to get these vehicles registered and pay road tax under the Gujarat Motor Vehicles Tax Act, 1958 - The appellant contended that these vehicles were not "motor vehicles" within the meaning of Sect... [Read more]

Gujarat Motor Vehicles Tax Act, 1958 – Taxability of Heavy Earth Moving Machinery or Special Service Vehicles as "Motor Vehicles" under Motor Vehicles Act, 1988 - Appellant used various heavy earth moving machinery and special service vehicles such as Dumpers, Loaders, Excavators, Surface Miners, Dozers, Drills, Rock Breakers etc. for its manufacturing activities at its cement plants. The Transport Officer directed the appellant to get these vehicles registered and pay road tax under the Gujarat Motor Vehicles Tax Act, 1958 - The appellant contended that these vehicles were not "motor vehicles" within the meaning of Section 2(28) of the Motor Vehicles Act, 1988 as they were off-road equipment meant for use only within the factory premises and not on public roads - Whether the heavy earth moving machinery or special service vehicles used by the appellant are "motor vehicles" within the meaning of Section 2(28) of the Motor Vehicles Act, 1988 and are liable to be taxed under the Gujarat Motor Vehicles Tax Act, 1958 – HELD - The vehicles used by the appellant are "special type of vehicles" or "construction equipment vehicles" which are adapted for use only within the factory or enclosed premises and not on public roads. Therefore, they are excluded from the definition of "motor vehicles" under the second part of Section 2(28) of the Motor Vehicles Act, 1988 - The first part of Section 2(28) defines "motor vehicle" in a broad manner, but the second part specifically excludes "a vehicle of a special type adapted for use only in a factory or in any other enclosed premises" from the definition. The various certificates from the manufacturers and experts stating that the vehicles are meant for off-road use substantiated the appellant's contention - Additionally, the charging provision under Section 3 of the Gujarat Motor Vehicles Tax Act, 1958 does not prescribe any rate of tax for "construction equipment vehicles", further indicating that such vehicles are not intended to be taxed under the Act. The Entry 57 of List II of the Seventh Schedule, permits taxation of vehicles "suitable for use on roads" and the vehicles in question, being off-road equipment, are not chargeable to tax - The heavy earth moving machinery and special service vehicles used by the appellant are not "motor vehicles" under the Motor Vehicles Act, 1988 and are not liable to be tax under Gujarat Motor Vehicles Tax Act, 1958 – The appeal is allowed [Read less]

Customs – Sections 77, 111(d)(i) and 129A(1) of Customs Act, 1962 – Absolute confiscation of gold chain – Filing of appeal – Maintainability – Appellant arrived at Delhi from Bangkok by flight – Appellant was intercepted by officers after passing through the green channel and on examination, an unfinished gold chain was found in his bag – Assistant Commissioner ordered for absolute confiscation of gold chain under Section 111(d)(i) of the Act – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether appeal filed by Appellant before this Tribunal against order passed by Commissioner (Appeals) ... [Read more]

Customs – Sections 77, 111(d)(i) and 129A(1) of Customs Act, 1962 – Absolute confiscation of gold chain – Filing of appeal – Maintainability – Appellant arrived at Delhi from Bangkok by flight – Appellant was intercepted by officers after passing through the green channel and on examination, an unfinished gold chain was found in his bag – Assistant Commissioner ordered for absolute confiscation of gold chain under Section 111(d)(i) of the Act – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether appeal filed by Appellant before this Tribunal against order passed by Commissioner (Appeals) is maintainable – HELD – Revenue raised a preliminary objection that this appeal is not maintainable before this Tribunal, as it is an appeal against an order passed by Commissioner (Appeals) in a matter related to baggage. Section 129A of the Act deals with appeals before this Tribunal. What is evident from Section 129A of the Act is that if an order is passed by Commissioner (Appeals) and it relates to any goods imported or exported as baggage, no appeal would lie before this Tribunal against such an order. Undoubtedly, impugned order was passed by Commissioner (Appeals) upholding order of Assistant Commissioner confiscating the gold chain for not filing a baggage declaration under Section 77 of the Act. Impugned order pertains to goods imported as baggage, therefore, no appeal would lie against impugned order before this Tribunal as per proviso to Section 129A(1) of the Act. Appeal filed by Appellant is held to be not maintainable – Appeal dismissed [Read less]

Service Tax – Warehouse related services – Demand of tax – Appellant is engaged in manufacture of automative fasteners – During scrutiny of records, department found that Appellant had incurred expenses towards warehouse related services in USA and have also realized lease income for renting out their windmills to their group company – Department issued show cause notices proposing demand of Service Tax under various categories – Adjudicating Authority confirmed demands proposed in show cause notice – Appellate Authority upheld order passed by Adjudicating Authority – Whether demand of tax for services rend... [Read more]

Service Tax – Warehouse related services – Demand of tax – Appellant is engaged in manufacture of automative fasteners – During scrutiny of records, department found that Appellant had incurred expenses towards warehouse related services in USA and have also realized lease income for renting out their windmills to their group company – Department issued show cause notices proposing demand of Service Tax under various categories – Adjudicating Authority confirmed demands proposed in show cause notice – Appellate Authority upheld order passed by Adjudicating Authority – Whether demand of tax for services rendered by service providers in USA are exigible to tax at hands of Appellant under reverse charge mechanism – HELD – It is an admitted position that services provided to Appellant are rendered by service providers in USA and are received and consumed in said country. Proposal is to classify such services as Business Support Services. Logistics services are more appropriately classifiable under clearing and forwarding agency services. Orders impugned in appeals, which sustain the demand of service tax under Business Support Service on Appellant, are untenable and are liable to be set aside – Appeals allowed - Letting out of windmills – Tax liability – Whether income earned by letting out the windmills by Appellant is exigible to tax as renting of immovable property – HELD – Proposal in show cause notice itself is to treat windmills as a ‘factory’, since Appellant had considered these as assets in their books of accounts. Show cause notice is vague and had not put Appellant to notice as to why mere treatment of windmills as assets would warrant such windmills to be treated as a ‘factory’ and that it would tantamount to renting of immovable property. Surmise of Appellate authority that windmills are permanently embedded is without any evidence, especially when all along the Appellant’s contention has been that these are excisable goods which can be removed and re-erected at any other place, which is not seen disproved. Demand made on leasing of windmills, treating it as renting of immovable property, is untenable. [Read less]

Central Excise – Rule 2(l) of CENVAT Credit Rules, 2004 – Windmill related services – Eligibility of cenvat credit – Respondent is engaged in manufacture of cement and had availed CENVAT credit of service tax paid on maintenance and repair services of windmills located outside factory premises – Department issued show cause notice proposing recovery of credit along with interest and penalty – Commissioner dropped proceedings initiated against Respondent – Whether CENVAT credit of service tax paid on maintenance and repair services of windmills located outside factory premises is admissible under Rule 2(l) of ... [Read more]

Central Excise – Rule 2(l) of CENVAT Credit Rules, 2004 – Windmill related services – Eligibility of cenvat credit – Respondent is engaged in manufacture of cement and had availed CENVAT credit of service tax paid on maintenance and repair services of windmills located outside factory premises – Department issued show cause notice proposing recovery of credit along with interest and penalty – Commissioner dropped proceedings initiated against Respondent – Whether CENVAT credit of service tax paid on maintenance and repair services of windmills located outside factory premises is admissible under Rule 2(l) of the Rules – HELD – Main contention of department is that windmills are geographically located far away from factory premises and hence, services used for their maintenance cannot be considered as having nexus with manufacture of cement. Rule 2(l) of the Rules defines input service expansively and includes services used directly or indirectly in or in relation to manufacture. There is no statutory requirement under Rule 2(l) of the Rules that input service must be received within factory premises. Input service need not be used within factory premises so long as they are integrally connected with manufacturing activity. Denial of credit merely on ground of geographical distance would defeat the objective of CENVAT scheme. CENVAT credit of service tax paid on maintenance and repair of windmills located outside factory premises is admissible under Rule 2(l) of the Rules. Adjudicating authority was fully justified in dropping the proceedings. Impugned Order-in-Original is upheld – Appeal dismissed [Read less]

Service Tax - Construction of residential complex, management and maintenance services, Renting of immovable property, interest and penalties – HELD - The demand of service tax on 'Construction of Residential Complex Service' is upheld as the appellant had rendered such service. The obligation to pay service tax arises irrespective of whether the assessee had collected it from the clients, and interest must be paid for the delayed payment - The demand of service tax on 'Management, Maintenance and Repair Services' is set aside as the appellant had not received any consideration for such services. The appellant had collec... [Read more]

Service Tax - Construction of residential complex, management and maintenance services, Renting of immovable property, interest and penalties – HELD - The demand of service tax on 'Construction of Residential Complex Service' is upheld as the appellant had rendered such service. The obligation to pay service tax arises irrespective of whether the assessee had collected it from the clients, and interest must be paid for the delayed payment - The demand of service tax on 'Management, Maintenance and Repair Services' is set aside as the appellant had not received any consideration for such services. The appellant had collected the maintenance charges from the house buyers and handed them over to the Resident Welfare Association (RWA), and had not retained any amount for itself - The demand of service tax on 'Renting of Immovable Property Service' is also set aside as the appellant, being a Government organization, had not leased out any immovable property to the house owners. The appellant had collected the lease rent from the house owners and paid it to the Government of Madhya Pradesh, as the land on which the houses were built was on a leasehold basis - The demand of service tax on 'Construction of Residential Complex Service' is upheld along with the applicable interest. The demands under 'Management, Maintenance and Repair Services' and 'Renting of Immovable Property Service' are set aside. The penalties imposed on the appellant are also set aside, considering that the appellant, being a Government entity, could have reasonably assumed that the service tax had to be paid only when collected from the clients - The appeal is partly allowed [Read less]

Service Tax – Rule 6A of Service Tax Rules, 1994 – Providing of services – Classification – Appellant is engaged in specialised post-production film activities such as Computer Graphics and Digital Restoration, which involve processing of digitised image data received from customers – Appellant provides these services to domestic customers and customers located outside India – In respect of services rendered to foreign customers, Appellant did not discharge service tax on ground that such transactions constituted export of services – Department issued show cause notices proposing demand of Service Tax under c... [Read more]

Service Tax – Rule 6A of Service Tax Rules, 1994 – Providing of services – Classification – Appellant is engaged in specialised post-production film activities such as Computer Graphics and Digital Restoration, which involve processing of digitised image data received from customers – Appellant provides these services to domestic customers and customers located outside India – In respect of services rendered to foreign customers, Appellant did not discharge service tax on ground that such transactions constituted export of services – Department issued show cause notices proposing demand of Service Tax under category of Video Tape Production Service – Commissioner confirmed demand proposed in show cause notice – Whether services rendered by Appellant are classifiable as Video Tape Production Service – HELD – It is an undisputed fact that Appellant does not undertake recording. Services are rendered on already recorded footage and the activity is purely post-production digital manipulation of data received from clients. Tribunal, in Appellant’s own earlier cases, had consistently held that post production digital services cannot be equated with video tape production service. Services rendered by Appellant do not fall under Video Tape Production Service – Appeals allowed - Export of service – Whether services rendered by Appellant to foreign clients qualify as “export of service” under Rule 6A of the Rules – HELD – It is an undisputed fact that service recipients are located outside India and consideration is received in convertible foreign exchange. Benefit of service accrues to foreign clients and the services are integrally used in their commercial activities abroad. Once place of provision is held to be outside India, all conditions of Rule 6A of the Rules stand fulfilled. Services rendered by Appellant being satisfied all conditions prescribed under Rule 6A of the Rules qualify as export of service. Consequently, no service tax is leviable on such services under the Finance Act. Demands confirmed against Appellant are wholly unsustainable in law. Impugned orders-in-original are set aside. [Read less]

Service Tax – Sections 65(27), 65(105)(zzc), 75, 76 and 77 of Finance Act, 1994 – Imparting of training – Demand of tax – Appellant is an administrative unit of Society for Social Education & Research – Department viewed that first year foundation course conducted by Appellant did not lead to an educational qualification recognized by law in India and hence fell under Commercial Training or Coaching Service – Department issued show cause notices proposing demand of service tax along with interest and penalties – Adjudicating Authority confirmed demands proposed in show cause notice – Commissioner (Appeals) ... [Read more]

Service Tax – Sections 65(27), 65(105)(zzc), 75, 76 and 77 of Finance Act, 1994 – Imparting of training – Demand of tax – Appellant is an administrative unit of Society for Social Education & Research – Department viewed that first year foundation course conducted by Appellant did not lead to an educational qualification recognized by law in India and hence fell under Commercial Training or Coaching Service – Department issued show cause notices proposing demand of service tax along with interest and penalties – Adjudicating Authority confirmed demands proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is liable to pay service tax under category of Commercial Training or Coaching Service – HELD – Section 65(27) of the Act define Commercial Training or Coaching Centre. Exclusion under Section 65(27) of the Act applies only to institutes which issue certificates, diplomas or degrees recognized by law. Certificate offered by Appellant does not confer MBA degree. Degree is awarded only by Missouri State University upon completion of second year abroad. Exclusion under Section 65(27) of the Act is not available to Appellant. Appellant’s reliance on charitable status and lack of profit motive is rendered untenable in view of retrospective Explanation inserted under Section 65(105)(zzc) of the Act, which expressly provides that any centre imparting training for consideration is taxable, irrespective of profit motive or charitable character. Services rendered by Appellant are classifiable under Commercial Training or Coaching Service and are liable to service tax. Demands confirmed in impugned orders are upheld along with interest payable under Section 75 of the Act – Appeals partly allowed - Imposition of penalties – Sustainability – Whether penalties imposed under Sections 76 and 77 of the Act upon Appellant are sustainable – HELD – Issue involved in present appeals has been the subject matter of prolonged litigation with divergent judicial views prevailing during relevant period on taxability of educational institutions imparting management education. Records clearly show that Appellant had disclosed all material facts relating to nature of course, fee structure and arrangement with foreign university. Dispute essentially arises from interpretation of statutory provisions. It is well settled that when the issue is interpretational and has given rise to conflicting views, invocation of penal provisions is not justified. Penalties imposed under Sections 76 and 77 of the Act are set aside. [Read less]

Central Excise – Denial of cenvat credit – Sustainability – Department issued show cause notice to Appellants for denial of Cenvat Credit on certain quantities of raw materials on assumption that Appellants have availed and utilized Cenvat Credit on basis of paper transactions without receiving goods in factory of production – Adjudicating authority confirmed demand of credit – Whether department has established charge of non-receipt of raw materials against Appellants with sufficient evidence – HELD – Merely on basis of enquiries conducted on basis of VAHAN portal and statement of vehicles owners cannot cons... [Read more]

Central Excise – Denial of cenvat credit – Sustainability – Department issued show cause notice to Appellants for denial of Cenvat Credit on certain quantities of raw materials on assumption that Appellants have availed and utilized Cenvat Credit on basis of paper transactions without receiving goods in factory of production – Adjudicating authority confirmed demand of credit – Whether department has established charge of non-receipt of raw materials against Appellants with sufficient evidence – HELD – Merely on basis of enquiries conducted on basis of VAHAN portal and statement of vehicles owners cannot constitute a conclusive inference to allege non-receipt of goods. Transactions are substantiated through bank transactions and not an iota of doubt is cast upon their veracity. Revenue had not disputed receipt of payment by suppliers for raw-material allegedly supplied and also the transportation charges made by recipient of raw material. Assumption cannot be the underlying basis to sustain a grievous charge of non-receipt of raw material, on which Cenvat Credit had been availed. Claims of revenue are completely unfounded and baseless and therefore fail on touchstone of legality of evidence relied upon. There is lack of legal merit in order of lower authority denying the cenvat credit availed and same is therefore set aside – Appeals allowed [Read less]

Central Excise – Section 11B(2)(c) of Central Excise Act, 1944 – Rule 5 of Cenvat Credit Rules, 2004 – Unutilized credit – Rejection of refund claim – Appellants manufactured diapers on behalf of Kimberly Clark Lever Ltd by installing a separate machinery – On expiry of contract, Appellants have discontinued the manufacturing activity and filed an application for refund of Cenvat Credit lying as balance in their books – Original authority rejected refund claim on ground that there was no provision available for such refund – First appellate authority upheld such rejection – Whether Appellants are entitled... [Read more]

Central Excise – Section 11B(2)(c) of Central Excise Act, 1944 – Rule 5 of Cenvat Credit Rules, 2004 – Unutilized credit – Rejection of refund claim – Appellants manufactured diapers on behalf of Kimberly Clark Lever Ltd by installing a separate machinery – On expiry of contract, Appellants have discontinued the manufacturing activity and filed an application for refund of Cenvat Credit lying as balance in their books – Original authority rejected refund claim on ground that there was no provision available for such refund – First appellate authority upheld such rejection – Whether Appellants are entitled to receive refund of unutilized credit on account of closure of manufacturing unit – HELD – Appellants rely on provisions of Section 11B(2)(c) of the Act. Said provision prescribes that refund shall be subjected to the Rules and Notifications issued there under. Rule governing refund of CENVAT credit is Rule 5 of the Rules. Refund of Cenvat credit is admissible under Rule 5 of the Rules, if the factory is closed, however, this rule has been amended w.e.f. 1-4-2012. After amendment, there is no provision for refund of Cenvat credit which has not been utilized at time of closure of factory. Appellants are not eligible for refund of CENVAT credit on account of closure of factory. Order under challenge is affirmed – Appeal dismissed [Read less]

GST – Anti-Profiteering, Commensurate Reduction in Prices - DGAP report alleged that Respondents contravened Section 171 of the CGST Act by not passing on the benefit of reduction in GST rates on cinema tickets from 01.01.2019 - Whether the Respondent profiteered by not reducing ticket prices commensurately after the GST rate cut – HELD - The Respondent increased or maintained the base prices instead of reducing the gross ticket prices, thereby retaining the tax benefit - The Respondent's arguments that ticket prices were regulated under the Telangana Cinemas Act and Government Orders, and that the profiteering should ... [Read more]

GST – Anti-Profiteering, Commensurate Reduction in Prices - DGAP report alleged that Respondents contravened Section 171 of the CGST Act by not passing on the benefit of reduction in GST rates on cinema tickets from 01.01.2019 - Whether the Respondent profiteered by not reducing ticket prices commensurately after the GST rate cut – HELD - The Respondent increased or maintained the base prices instead of reducing the gross ticket prices, thereby retaining the tax benefit - The Respondent's arguments that ticket prices were regulated under the Telangana Cinemas Act and Government Orders, and that the profiteering should be computed movie-wise, and GST component should be excluded as it was remitted to the Government, are rejected - The DGAP's methodology of comparing the pre-reduction all-inclusive price with the post-reduction base price to be rational and workable - the Respondent had the statutory option under Section 34 of CGST Act to issue credit notes for retrospective price adjustment and pass-through the benefit, but failed to do so; mere remittance of GST does not extinguish the supplier's liability to disgorge the total excess collection to identifiable recipients or, in their absence, the Consumer Welfare Fund - The Respondent is directed to deposit the profiteered amount in the Central and State Consumer Welfare Funds within 30 days. No interest was payable for the period prior to 28.06.2019 when the interest provision was introduced prospectively. No penalty under Section 171(3A) was applicable as it post-dated the contravention period – Ordered accordingly [Read less]

GST - Prohibition on parallel proceedings under Section 6(2)(b) of CGST Act, 2017 – Issue of summons and show cause notices by the Central GST (CGST) and State GST authorities on the same subject matter. The petitioner contended that the initiation of parallel proceedings by the CGST and State GST authorities on the same subject matter is barred under Section 6(2)(b) of the CGST Act - Whether the summons and show cause notices issued by the CGST and State GST authorities are overlapping the same subject matter, thereby initiating 'parallel proceedings' which are barred by Section 6(2)(b) of the CGST Act – HELD - Applyi... [Read more]

GST - Prohibition on parallel proceedings under Section 6(2)(b) of CGST Act, 2017 – Issue of summons and show cause notices by the Central GST (CGST) and State GST authorities on the same subject matter. The petitioner contended that the initiation of parallel proceedings by the CGST and State GST authorities on the same subject matter is barred under Section 6(2)(b) of the CGST Act - Whether the summons and show cause notices issued by the CGST and State GST authorities are overlapping the same subject matter, thereby initiating 'parallel proceedings' which are barred by Section 6(2)(b) of the CGST Act – HELD - Applying the principles laid down by the Supreme Court in the Armour Security (India) Ltd. case, once one authority (Central or State) has initiated proceedings first in point of time, the other authority is barred from commencing parallel adjudicatory proceedings on the same subject matter under Section 6(2)(b) of the CGST Act. However, bona fide steps for investigation, such as issuance of summons under Section 70, are permissible unless they amount to initiation of a parallel proceeding - The petitioner is directed to appear before the Central Authority, file the response to the show cause notice, and raise the contentions along with relevant documents. The State Authority is directed to communicate with the Central Authority to verify the claim of the petitioner and coordinate to ensure that the petitioner is not subjected to multiple adjudicatory processes on the same subject matter - The petition is disposed of [Read less]

Customs – Import of gold dore bars – Demand of duty – Sustainability – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner c... [Read more]

Customs – Import of gold dore bars – Demand of duty – Sustainability – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner confirmed demand of duty – Whether Appellant could claim benefit of 2008 Exemption Notification for import of gold dore bars when Import License issued to Appellant mentioned that import of gold bars is subject to 2012 Notification – HELD – Gold dore bars are restricted items under Foreign Trade Policy and can be imported under a License issued by DGFT. Appellant was issued a License by DGFT permitting Appellant to import gold dore bars. License contained a condition that import of gold dore bars is subject to 2012 Notification. Appellant was required to pay concessional basic customs duty under 2012 Notification, but under 2008 Exemption Notification, Appellant was required to pay NIL basic customs duty. 2012 Notification does not provide that benefit of any other Notification, which otherwise would be available to Appellant, cannot be availed of by Appellant. Appellant may have had to discharge customs duty provided under 2012 Notification, but if there is a Notification which exempts payment of customs duty, then there is no bar in Appellant availing benefit of said Notification. Finding recorded by Principal Commissioner that the Conditions of License can be fulfilled only if customs duty is paid in terms of 2012 Notification is, not borne out from Conditions of License. In this view of matter, demand of customs duty from Appellant cannot be sustained. Impugned order is set aside – Appeal allowed [Read less]

Customs – Import of chilly seeds – Classification – Appellant had imported 32 consignments of Chilly Seeds through various Bills of Entry by classifying them under CTI 1209 99 90 and availed exemption from payment of Special Additional Duty under Exemption Notification – Department issued show cause notice proposing classification of goods imported by Appellant under CTI 0904 22 12 and demand of duty – Additional Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Chilly Seeds imported by Appellant merit classification under CTI 12... [Read more]

Customs – Import of chilly seeds – Classification – Appellant had imported 32 consignments of Chilly Seeds through various Bills of Entry by classifying them under CTI 1209 99 90 and availed exemption from payment of Special Additional Duty under Exemption Notification – Department issued show cause notice proposing classification of goods imported by Appellant under CTI 0904 22 12 and demand of duty – Additional Commissioner confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Chilly Seeds imported by Appellant merit classification under CTI 1209 99 90 as claimed by Appellant or under CTI 0904 20 12 as claimed by department – HELD – Scope of CTI 0904 20 is limited to fruits of genus Capsicum. Chilly Seeds are not ‘fruits’, but rather ‘seeds’ of genus Capsicum. Chilly Seeds are not mainly used as a condiment in contrast with mustard seeds or pepper seeds. Subject goods are neither edible nor fit for human consumption. CTH 1204 covers all seeds, fruits, spores for sowing purposes. Subject goods are solely used for sowing purposes. Board Circular dated 8-1-2002 clarifies that Chilly Seeds that are seeds of fruits of genus Capsicum are classified under CTH 1209 and are not covered under CTI 0904. Chilly Seeds imported by Appellant are covered under Heading 1209 99 90 as claimed by Appellant. Impugned order passed by Commissioner (Appeals) cannot be sustained and is set aside – Appeal allowed [Read less]

Customs – Import of rough marble – Order of confiscation – Sustainability – Directorate of Revenue Intelligence (DRI) started an investigation into imports of rough marble by Appellant – Investigation revealed that licences issued by DGFT did not cover rough marble imported – DRI issued show cause notice proposing to confiscate imported goods and impose penalties – Adjudicating authority confirmed proposals made in show cause notice – Whether order of confiscation of imported goods is sustainable – HELD – It is an undisputed fact that Appellant had imported rough marble, a good whose import was restrict... [Read more]

Customs – Import of rough marble – Order of confiscation – Sustainability – Directorate of Revenue Intelligence (DRI) started an investigation into imports of rough marble by Appellant – Investigation revealed that licences issued by DGFT did not cover rough marble imported – DRI issued show cause notice proposing to confiscate imported goods and impose penalties – Adjudicating authority confirmed proposals made in show cause notice – Whether order of confiscation of imported goods is sustainable – HELD – It is an undisputed fact that Appellant had imported rough marble, a good whose import was restricted and which could be imported only on a licence issued by DGFT. Before the goods are given by custodian to importer, Customs officer must give ‘out of charge’ on Bill of Entry and this process will involve at least five officers. In every case, matter was adjudicated and thereafter out of charge was given on payment of fine and penalties. If that is the case, DRI cannot start another proceeding with respect to same goods again proposing confiscation, fine and penalty. Commissioner should have considered the basic facts before passing order. Impugned orders deserve to be set aside – Appeals allowed [Read less]

Customs – Import of gold dore bars – Demand of duty – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner confirmed demand of ... [Read more]

Customs – Import of gold dore bars – Demand of duty – DGFT issued Import License to Appellant permitting Appellant to import gold dore bars with purity upto 95% – Appellant filed Bills of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under 2008 Exemption Notification – After investigation, department issued show cause notice alleging that Appellant had wrongly claimed exemption under 2008 Exemption Notification, since Condition of Import License issued by DGFT specifically mentioned that goods shall be cleared under 2012 Notification – Principal Commissioner confirmed demand of duty – Whether Appellant could claim benefit of 2008 Exemption Notification for import of gold dore bars when Import License issued to Appellant mentioned that import of gold bars is subject to 2012 Notification – HELD – Gold dore bars are restricted items under Foreign Trade Policy and can be imported under a License issued by DGFT. Appellant was issued a License by DGFT permitting Appellant to import gold dore bars. License contained a condition that import of gold dore bars is subject to 2012 Notification. Appellant was required to pay concessional basic customs duty under 2012 Notification, but under 2008 Exemption Notification, Appellant was required to pay NIL basic customs duty. 2012 Notification does not provide that benefit of any other Notification, which otherwise would be available to Appellant, cannot be availed of by Appellant. Appellant may have had to discharge customs duty provided under 2012 Notification, but if there is a Notification which exempts payment of customs duty, then there is no bar in Appellant availing benefit of said Notification. Finding recorded by Principal Commissioner that the Conditions of License can be fulfilled only if customs duty is paid in terms of 2012 Notification is, not borne out from Conditions of License. Demand of customs duty from Appellant cannot be sustained. Impugned order is set aside – Appeal allowed [Read less]

Service Tax – Sections 75, 77, 78 and 80 of Finance Act, 1994 – Providing of services – Demand of tax – Appellant is engaged in providing training services and consulting engineer services, however, it did not pay service tax – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Commissioner confirmed demands proposed in show cause notice along with interest and penalty – Whether demand confirmed under category of commercial training or coaching services is sustainable – HELD – Appellant provided commercial coaching/training of workmen under an ag... [Read more]

Service Tax – Sections 75, 77, 78 and 80 of Finance Act, 1994 – Providing of services – Demand of tax – Appellant is engaged in providing training services and consulting engineer services, however, it did not pay service tax – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Commissioner confirmed demands proposed in show cause notice along with interest and penalty – Whether demand confirmed under category of commercial training or coaching services is sustainable – HELD – Appellant provided commercial coaching/training of workmen under an agreement with CIDC, which is an agency recognized by government for testing and certification of skill of labour. Fees were collected by CIDC and reimbursed to Appellant. Training imparted by Appellant does not enable trainees to seek employment. Appellant only enhanced the qualities of skills among the workers who were already employed. Appellant did not provide any certificate that it was registered with Directorate General of Employment and Training under Skill Development Initiative Scheme. Appellant being not satisfy the conditions set out in Exemption Notifications is not entitled to benefit of Notifications. Findings recorded by Commissioner on this issue do not suffer from any infirmity – Appeals partly allowed - Providing of consultancy services – Tax liability – Whether Appellant is liable to pay Service Tax on amount received from CIDC towards consultancy services – HELD – Consultancy services were provided pursuant to an agreement between CIDC and ONGC. CIDC assigned this work to Appellant and 90% of fees received by CIDC from ONGC was paid to Appellant, which were shown under head ‘consultancy fees’. CIDC may have charged full service tax from ONGC, but that would not absolve Appellant from paying service tax on amount received from CIDC towards consultancy. There is no error in finding recorded by Commissioner on this issue - Renting of immovable property – Demand of tax – Whether Commissioner is justified in confirming demand of Service Tax on renting of immovable property services – HELD –Appellant had taken premises on rent for their own use, but later on sub-let the half portion to CIDC. Contention of Appellant is that he was not the owner of property and so any income received from renting of property would not amount to renting and therefore, no service tax would be leviable. It is not material as to either Appellant was owner of property or not and so long as it received rent towards letting of property to CIDC, it was liable to pay service tax on amount of rent received. As Appellant had not paid service tax, Commissioner was justified in ordering it to be recovered with interest under Section 75 of the Act - Imposition of penalty – Whether penalties imposed upon Appellant under Sections 77 and 78 of the Act are sustainable – HELD – Commissioner had merely observed that as Appellant has contravened the provisions of the Act, it would have to pay penalty under Section 77 of the Act. Section 78 of the Act deals with penalty for failure to pay service tax for reasons of fraud or collusion of wilful mis-statement. Appellant had contended that it was under a bonafide belief that it was not liable to pay service tax because of Exemption Notifications. Appellant also specifically referred to the Notifications. Appellant would be clearly entitled to benefit of Section 80 of the Act and no penalty can be imposed upon it. Order passed by Commissioner is maintained except to extent that penalties imposed under Sections 77 and 78 of the Act are set aside. [Read less]

Central Excise – Section 14 of Central Excise Act, 1944 – Clandestine clearance of goods – Demand of duty – Appellant is engaged in production of Unmanufactured Branded Chewing Tobacco – Investigation revealed that Appellant had manufactured goods without making entries in respect of same in their statutory records and clearing same without payment of duty – Department issued show cause notice to Appellant by proposing demand of Basic Excise Duty – Adjudicating Authority confirmed demand proposed in show cause notice – Whether demand of duty confirmed against Appellant is sustainable – HELD – Question o... [Read more]

Central Excise – Section 14 of Central Excise Act, 1944 – Clandestine clearance of goods – Demand of duty – Appellant is engaged in production of Unmanufactured Branded Chewing Tobacco – Investigation revealed that Appellant had manufactured goods without making entries in respect of same in their statutory records and clearing same without payment of duty – Department issued show cause notice to Appellant by proposing demand of Basic Excise Duty – Adjudicating Authority confirmed demand proposed in show cause notice – Whether demand of duty confirmed against Appellant is sustainable – HELD – Question of clandestine clearance is purely a question of fact and needs to be determined on basis of evidences recovered and marshaled in a particular proceedings. During course of enquiry made at time of search of premises of Appellant, a red diary containing details of goods manufactured and cleared by Appellant was recovered from premises of Appellant. Factum of recovery of diary had been recorded in Panchnama drawn on spot. Partner of Appellant in his statements recorded under Section 14 of the Act had admitted details found in diary and also fact of clandestine manufacture and clearance of excisable goods to various persons. Statements were given by partner of Appellant out of his own volition and there is no allegation of coercion, threat, force, duress or pressure being utilized by officers to extract the statements. Demand of duty confirmed against Appellant is sustainable. Order under challenge is sustained – Appeal dismissed [Read less]

Service Tax – Sections 75 and 78 of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in providing various taxable services – On basis of third party information received from Income Tax Department, Revenue issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – On perusal ... [Read more]

Service Tax – Sections 75 and 78 of Finance Act, 1994 – Invoking of extended period of limitation – Demand of tax – Appellant is engaged in providing various taxable services – On basis of third party information received from Income Tax Department, Revenue issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Adjudicating Authority confirmed demand proposed in show cause notice – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – On perusal of ledger, it is evident that Appellant was collecting service tax from service recipients. Appellant was well aware about their liability to pay service tax in respect of services rendered by them, but deliberately did not deposited service tax which was duly collected by them from their customers. Appellant had suppressed relevant facts with department by not depositing the service tax by due date and also not filing ST-3 returns for relevant period. Invocation of extended period of limitation for making this demand is justified. Demand confirmed against Appellant is upheld. Amounts deposited by Appellant against two services provided by them, i.e. Renting of Immovable property service & Clearing and Forwarding service, should be adjusted against demand confirmed against Appellant. Demand of interest on delayed payment of service tax under Section 75 of the Act is upheld. Penalty imposed under Section 78 of the Act is upheld, but reduced to some extent – Appeal partly allowed [Read less]

GST - Overlapping proceedings between State and Central Tax Authorities, Parallel proceedings - Whether the show cause notice issued by the Central Tax Authorities is violative of Section 16(2)(b) of the CGST Act, as the State Tax Authorities had already adjudicated the demand in respect of the same transaction by an order-in-original, against which the petitioner had preferred an appeal - HELD - Since the penalty proceedings by the State Tax Authorities had concluded and the petitioner had preferred an appeal, and the proceedings before the Central Tax Authorities were yet to be concluded, the show cause notice issued by ... [Read more]

GST - Overlapping proceedings between State and Central Tax Authorities, Parallel proceedings - Whether the show cause notice issued by the Central Tax Authorities is violative of Section 16(2)(b) of the CGST Act, as the State Tax Authorities had already adjudicated the demand in respect of the same transaction by an order-in-original, against which the petitioner had preferred an appeal - HELD - Since the penalty proceedings by the State Tax Authorities had concluded and the petitioner had preferred an appeal, and the proceedings before the Central Tax Authorities were yet to be concluded, the show cause notice issued by the Central Tax Authorities should be kept in abeyance until the appeal preferred by the petitioner is decided by the Appellate Authority of the State Tax Department - Once the appeal proceedings before the Appellate Authority of the State Tax Department are concluded, the Central Tax Authorities should proceed with the show cause notice, considering the petitioner's reply and the findings of the Appellate Authority. The petitioner is at liberty to raise all available points of law and fact, including the question of overlap and reference to the CBIC circular dated 06.07.2022, in its reply before the Central Tax Authorities – The writ petition is disposed of [Read less]

Kerala General Sales Tax Act, 1963 - Limitation Period for Assessments - The petitioner challenged various assessment orders passed against it under the KGST Act, 1963 on the ground of limitation – HELD - The original provisions of the Act did not provide any period of limitation, but the Finance Act, 1993 had introduced a limitation period of 4 years, later increased to 5 years. Applying this limitation period, the assessments in the present cases, where the pre-assessment notices were issued much beyond the 5-year period, were clearly time-barred - The State's arguments that the amendments made by the Finance Acts of 2... [Read more]

Kerala General Sales Tax Act, 1963 - Limitation Period for Assessments - The petitioner challenged various assessment orders passed against it under the KGST Act, 1963 on the ground of limitation – HELD - The original provisions of the Act did not provide any period of limitation, but the Finance Act, 1993 had introduced a limitation period of 4 years, later increased to 5 years. Applying this limitation period, the assessments in the present cases, where the pre-assessment notices were issued much beyond the 5-year period, were clearly time-barred - The State's arguments that the amendments made by the Finance Acts of 2009 and 2010 could save the limitation is not tenable as the assessments were not pending as on the dates specified in those amendments - The impugned assessment orders are set aside on the ground of limitation – The petitions are allowed [Read less]

Service Tax – Section 68(1) of Finance Act, 1994 – Providing of security services – Demand of tax – Sustainability – Appellant is engaged in providing security services to various entities including Delhi International Airport Limited (DIAL) – Department issued show cause notice to Appellant by proposing demand of Service Tax – Principal Commissioner confirmed demand proposed in show cause notice – Whether Appellant is liable to pay any service tax on services rendered to DIAL – HELD – As per Section 68(1) of the Act, service provider has to pay service tax, but if Central Government issues a notificati... [Read more]

Service Tax – Section 68(1) of Finance Act, 1994 – Providing of security services – Demand of tax – Sustainability – Appellant is engaged in providing security services to various entities including Delhi International Airport Limited (DIAL) – Department issued show cause notice to Appellant by proposing demand of Service Tax – Principal Commissioner confirmed demand proposed in show cause notice – Whether Appellant is liable to pay any service tax on services rendered to DIAL – HELD – As per Section 68(1) of the Act, service provider has to pay service tax, but if Central Government issues a notification shifting part or whole of liability to pay service tax to service recipient, liability shifts to that extent to service recipient. Service provided by Appellant to DIAL was clearly covered by S.No.6 of Notification No.30/2012-ST, according to which, 100% of service tax must be paid by service recipient and not by service provider, therefore, DIAL had to pay service tax. Appellant was not liable to pay any service tax at all on services which it had rendered to DIAL. Demand of service tax confirmed against Appellant cannot be sustained. Impugned order is set aside – Appeal allowed [Read less]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing various taxable services – Department issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Principal Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of tour operator service – HELD – Appellant operates stage carriage buses between various cities/town/villages, which service is not exigible to service tax. In addition to stage carriage buses, Appellant had entered into an agreement with Rajasthan To... [Read more]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in providing various taxable services – Department issued show cause notice proposing demand of Service Tax by invoking extended period of limitation – Principal Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of tour operator service – HELD – Appellant operates stage carriage buses between various cities/town/villages, which service is not exigible to service tax. In addition to stage carriage buses, Appellant had entered into an agreement with Rajasthan Tourism Development Corporation (RTDC), according to which, in order to promote tourism within Rajasthan, Appellant operates buses. If a vehicle merely transports passengers from one place to another and charges each passenger a fare, it is more akin to transportation of passengers than a tour operation. In view of above, demand of service tax under category of tour operator service cannot be sustained and is set aside – Appeal disposed of - Denial of credit – Whether denial of CENVAT credit on third party insurance on bus services is sustainable – HELD – Appellant runs stage carriage buses, which service is exempted from payment of service tax. Case of department is that Appellant was not entitled to CENVAT credit, as services rendered by Appellant were exempted. No CENVAT credit can be availed on inputs and input services used in manufacture of exempted goods. Service provided by buses is undisputedly not taxable, therefore, service tax paid on third party insurance of buses which are used for carrying passengers cannot be taken by Appellant. Denial of CENVAT credit on this count needs to be upheld - Invoking of extended period of limitation – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Appellant is a Governmental Organization and it could have entertained a belief that it was entitled to take CENVAT credit which it was not actually entitled to. Once ST-3 returns are filed, it is for Range officer to scrutinize return, call for any additional information or accounts required. Department cannot say that it was not aware about the activities of Appellant and claim suppression of facts or mis-statement to invoke extended period of limitation. Invoking of extended period of limitation is not justified. Denial of CENVAT credit with interest for extended period of limitation is set aside. Denial of CENVAT credit on third party insurance on bus services is upheld within normal period of limitation. Matter is remanded to Commissioner only for limited purpose of computation. [Read less]

Customs – Regulation 11 of Customs Broker Licensing Regulations, 2013 – Revocation of license – Forfeiture of security deposit – Imposition of penalty – On basis of offence report received from DRI, department issued show cause notice alleging that Appellants/Customs Broker (CB) have contravened provisions of Regulation 11(a), 11(d), 11(e), 11(m) and 11(n) of the Regulations – Upon completion of inquiry proceedings, Principal Commissioner revoked CB License of Appellants and forfeiture of entire amount of security deposit, besides imposition of penalty on Appellants – Whether Appellants have fulfilled all his... [Read more]

Customs – Regulation 11 of Customs Broker Licensing Regulations, 2013 – Revocation of license – Forfeiture of security deposit – Imposition of penalty – On basis of offence report received from DRI, department issued show cause notice alleging that Appellants/Customs Broker (CB) have contravened provisions of Regulation 11(a), 11(d), 11(e), 11(m) and 11(n) of the Regulations – Upon completion of inquiry proceedings, Principal Commissioner revoked CB License of Appellants and forfeiture of entire amount of security deposit, besides imposition of penalty on Appellants – Whether Appellants have fulfilled all his obligations as required under the Regulations or not – HELD – Mis-use of advance authorization by importer was found by department only on basis of specific investigation conducted by DRI subsequent to clearance of imported goods from customs control. When customs authorities themselves had cleared imported goods and were not aware of any future non-compliance or violation by importer, there is no possibility for Appellants to be aware of same and to bring it to notice of Deputy Commissioner or Assistant Commissioner. Customs Broker is not an officer of Customs who would have an expertise to identify mis-declaration of goods. Appellants had admitted that they had not obtained authorization from importer. Appellants could have been proactive in fulfilling their obligation as Customs Broker in obtaining proper authorization in representing them in clearance of imported goods before Customs authorities. In view of failure of Appellants to have acted in a proactive manner in fulfillment of obligation under Regulation 11(a) of the Regulations, it is justifiable to impose a penalty against Appellants, which would be reasonable. Since there is no violation of Regulations 11(d), 11(e), 11(m) and 11(n) of the Regulations, impugned order passed by Principal Commissioner revoking license of Appellants and forfeiture of security deposit is set aside. Impugned order is modified to above extent – Appeal partly allowed [Read less]

Service Tax - Forfeiture of security deposits/earnest money, Liquidated damages – Appellant invoked bank guarantees, forfeited earnest money/performance securities, and levied penalties against contractors who failed to perform their contractual obligations in time - Dept confirmed demands of service tax on the consideration for 'tolerating the act' of service providers/contractors under Section 66E(e) of the Finance Act, 1994 - Whether the amounts collected by the appellant in the nature of forfeiture of security deposits/earnest money and fines/penalties, liquidated damages against delayed completion of works are charg... [Read more]

Service Tax - Forfeiture of security deposits/earnest money, Liquidated damages – Appellant invoked bank guarantees, forfeited earnest money/performance securities, and levied penalties against contractors who failed to perform their contractual obligations in time - Dept confirmed demands of service tax on the consideration for 'tolerating the act' of service providers/contractors under Section 66E(e) of the Finance Act, 1994 - Whether the amounts collected by the appellant in the nature of forfeiture of security deposits/earnest money and fines/penalties, liquidated damages against delayed completion of works are chargeable to service tax under Section 66E(e) of the Finance Act, 1994 – HELD - The recovery of liquidated damages/penalty from the other party cannot be said to be towards any service, as neither the appellant is carrying on any activity to receive compensation nor can there be any intention of the other party to breach or violate the contract and suffer a loss. The purpose of imposing compensation or penalty is to ensure compliance with the contract terms, not to tolerate the defaulting act. For an activity to be covered as a declared service under Section 66E(e), there must be an independent agreement to refrain or tolerate or to do an act between the parties, along with a flow of consideration for this activity. In the present case, the amounts collected by the appellant have no nexus with the provision of any taxable service, and are in the nature of penal charges on account of breach or non-performance of contract, intended to make good for the losses and act as a deterrent. Thus, these amounts cannot be treated as 'consideration' for any service under Section 65B(44) of the Act - the amounts collected by the appellant in the nature of forfeiture of security deposits/earnest money and fines/penalties, liquidated damages are not chargeable to service tax under Section 66E(e) of the Finance Act, 1994 - The impugned order is set aside and the appeal is allowed [Read less]

GST - Quasi-Judicial Nature of Regulatory Functions – Petitioner is a statutory body constituted under the Electricity Regulatory Commissions Act, 1998 - Notice seeking to levy GST on the fees and charges collected by the petitioner-HPERC for discharging its regulatory and quasi-judicial functions under the Electricity Act, 2003 - Whether the regulatory and quasi-judicial functions of the HPERC, including issuing licenses, fixing tariffs, and processing annual revenue requirement, fell within the ambit of "supply of goods or services" under the CGST Act, 2017 – HELD - Relying on the judgments of the Delhi High Court an... [Read more]

GST - Quasi-Judicial Nature of Regulatory Functions – Petitioner is a statutory body constituted under the Electricity Regulatory Commissions Act, 1998 - Notice seeking to levy GST on the fees and charges collected by the petitioner-HPERC for discharging its regulatory and quasi-judicial functions under the Electricity Act, 2003 - Whether the regulatory and quasi-judicial functions of the HPERC, including issuing licenses, fixing tariffs, and processing annual revenue requirement, fell within the ambit of "supply of goods or services" under the CGST Act, 2017 – HELD - Relying on the judgments of the Delhi High Court and the Karnataka High Court, which were upheld by the Supreme Court, it is held that the regulatory and quasi-judicial functions performed by the HPERC are not amenable to GST. The HPERC, being a quasi-judicial body, is akin to a Court or Tribunal, and the services rendered by it are excluded from the definition of "supply of goods or services" under the CGST Act – The fees and charges collected by the HPERC are not in the course or furtherance of any business, as defined under the CGST Act, but are rather in the nature of regulatory and quasi-judicial functions - The show cause notice issued by the tax authorities are quashed and the petition is allowed [Read less]

GST - Legality of Show-Cause Notice, Amendment to Section 17(5)(d) of the OGST Act, 2017 - Petitioners argued that the SCN was not sustainable due to amendments made to Section 17(5)(d) of the OGST Act, 2017 which came into force after the issuance of the SCN. The Petitioners also contended that the SCN was issued based on an audit report submitted under Section 65 of the OGST Act, which was not completed within the stipulated time period of three months as per Section 65(4) - Retrospective application of amendments to Section 17(5)(d) of the OGST Act – HELD - The amendments to Section 17(5)(d) of the OGST Act were made ... [Read more]

GST - Legality of Show-Cause Notice, Amendment to Section 17(5)(d) of the OGST Act, 2017 - Petitioners argued that the SCN was not sustainable due to amendments made to Section 17(5)(d) of the OGST Act, 2017 which came into force after the issuance of the SCN. The Petitioners also contended that the SCN was issued based on an audit report submitted under Section 65 of the OGST Act, which was not completed within the stipulated time period of three months as per Section 65(4) - Retrospective application of amendments to Section 17(5)(d) of the OGST Act – HELD - The amendments to Section 17(5)(d) of the OGST Act were made by the Odisha Goods and Services Tax (Amendment) Act, 2025, which came into force after the issuance of the SCN. The transactions pertaining to April 2021 to March 2022 could not be questioned by issuing the SCN dated 8th August 2025 in order to apply the amendments, as the amendments were not in force at the time of issuance of the SCN. The issue of retrospectivity of the amendments raised by the Petitioners is a pertinent question that needs to be considered – The respondents are restrained from proceeding to recover the demand raised in the order passed under Section 73 of the OGST Act until the next date – Ordered accordingly - Compliance with time limit for completion of audit under Section 65 of the OGST Act – HELD - The audit was commenced on 27th January 2025 and completed on 2nd July 2025, which was beyond the stipulated period of three months from the date of commencement of the audit as per Section 65(4) of the OGST Act. This is a pertinent aspect to be considered, as the adjudication proceeding may be vitiated if the audit was not completed within the prescribed time limit. [Read less]

Andhra Pradesh VAT Act, 2005 – Levy of penalty under Section 55(2) of AP VAT Act for the period June 2014 to June 2016 on the ground of bill trading by producing false tax invoices and way bills – HELD - The authorities have thoroughly verified the transactions of the petitioner from the concerned territorial authorities and found that the petitioner is involved in bill trading by issuing false invoices to enable its purchasers to claim Input Tax Credit. The petitioner failed to offer any explanation regarding the use of the same vehicle by another firm for transportation of goods, which clearly indicates that there wa... [Read more]

Andhra Pradesh VAT Act, 2005 – Levy of penalty under Section 55(2) of AP VAT Act for the period June 2014 to June 2016 on the ground of bill trading by producing false tax invoices and way bills – HELD - The authorities have thoroughly verified the transactions of the petitioner from the concerned territorial authorities and found that the petitioner is involved in bill trading by issuing false invoices to enable its purchasers to claim Input Tax Credit. The petitioner failed to offer any explanation regarding the use of the same vehicle by another firm for transportation of goods, which clearly indicates that there was no actual movement of goods. Further, the petitioner camouflaged with the authorities by involving in bill trading, without actual movement of goods. The cross-verification reports sent by the respective territorial authorities also revealed that the transactions of the petitioner were bogus. Hence, the penalty order invoking Section 55(2) of APVAT Act is legal and valid - The writ petition is dismissed [Read less]

Central Excise - Cenvat credit on tippers, hydraulic cabs and hydraulic boomers; Service of site formation and clearance - Appellant availed Cenvat credit on tippers, hydraulic cabs and hydraulic boomers used for providing output service of "Site Formation & Clearance, Excavation and Earth Movers Service"- Department objected to the credit availed prior to 01.10.2010, as these items were not covered under the definition of "capital goods" until the amendment made by Notification No. 25/2010-C.E. (N.T.) dated 22.06.2010 - Department invoked the extended period of limitation on the ground that the irregularity would have rem... [Read more]

Central Excise - Cenvat credit on tippers, hydraulic cabs and hydraulic boomers; Service of site formation and clearance - Appellant availed Cenvat credit on tippers, hydraulic cabs and hydraulic boomers used for providing output service of "Site Formation & Clearance, Excavation and Earth Movers Service"- Department objected to the credit availed prior to 01.10.2010, as these items were not covered under the definition of "capital goods" until the amendment made by Notification No. 25/2010-C.E. (N.T.) dated 22.06.2010 - Department invoked the extended period of limitation on the ground that the irregularity would have remained undetected if the audit had not pointed it out – HELD - The extended period of limitation cannot be invoked merely because the audit pointed out the irregularity. The fact that the audit detected the wrong availment of Cenvat credit cannot be the ground to invoke the extended period of limitation – Further, the tippers, hydraulic cabs and hydraulic boomers were used for providing the output service of "Site Formation & Clearance, Excavation and Earth Movers Service" by the appellant. Even though the items were not covered in the specific output services till 22.06.2010, the benefit of bona fide belief should be provided - The matter is remanded to the extent of seeking reversal, if any, for the period that survives in the ordinary period of limitation. No penalty shall be imposed in view of the finding of bona fide belief. The demand of interest shall also be limited to the period that survives in the ordinary period of limitation – The appeal is allowed [Read less]