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Central Excise – Rule 6(3) of Cenvat Credit Rules, 2004 – Manufacture of goods – Demand of amount – Appellant is engaged in manufacture of PVC pipes, HDPE Coil and sprinkling systems – During audit, department noticed that Appellant was manufacturing both dutiable and exempted goods, but were not maintaining separate accounts for inputs/input services so used in final products – Department issued show cause notice proposing demand of amount equal to 10% of value of exempted goods in terms of Rule 6(3) of the Rules – Commissioner confirmed demand as proposed in show cause notice – Whether demand as confirmed... [Read more]

Central Excise – Rule 6(3) of Cenvat Credit Rules, 2004 – Manufacture of goods – Demand of amount – Appellant is engaged in manufacture of PVC pipes, HDPE Coil and sprinkling systems – During audit, department noticed that Appellant was manufacturing both dutiable and exempted goods, but were not maintaining separate accounts for inputs/input services so used in final products – Department issued show cause notice proposing demand of amount equal to 10% of value of exempted goods in terms of Rule 6(3) of the Rules – Commissioner confirmed demand as proposed in show cause notice – Whether demand as confirmed in impugned order is sustainable – HELD – Appellant had maintained separate records for inputs used for manufacture of dutiable and exempted goods. Only common input service which was used was the service tax paid on insurance services. Such service cannot be vivisected into insurance towards exempted goods and insurance towards dutiable goods. Demand of amount equal to 10% of value of exempted goods under Rule 6(3) of the Rules cannot be sustained. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Central Excise – Demand of credit – Appellants are engaged in manufacture of control panels – On scrutiny of input credit records, department viewed that Appellants had availed ineligible Cenvat credit – Department issued show cause notice to Appellant by proposing recovery of wrongly availed Cenvat credit – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) rejected appeal filed by Appellants – Whether Appellants have correctly availed Cenvat credit on inputs – HELD – During hearing and in submissions, Appellants consistently maintained that they were not af... [Read more]

Central Excise – Demand of credit – Appellants are engaged in manufacture of control panels – On scrutiny of input credit records, department viewed that Appellants had availed ineligible Cenvat credit – Department issued show cause notice to Appellant by proposing recovery of wrongly availed Cenvat credit – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) rejected appeal filed by Appellants – Whether Appellants have correctly availed Cenvat credit on inputs – HELD – During hearing and in submissions, Appellants consistently maintained that they were not afforded an adequate opportunity to verify records or submit documents to substantiate their claim that credit availed was eligible and appropriate duty had been paid. Principles of natural justice mandate that Appellants should be given full access to all relied upon records. On taking note of factual situation as narrated by Appellants, matter is remanded to Original Authority, who shall accord sufficient time and opportunity to Appellants to verify and submit documents to substantiate their contentions. Adjudicating Authority must give copies of documents relied upon or seized from Appellants premises at request of Appellants – Appeal disposed off [Read less]

Customs – Regulation 10 of Customs Broker Licensing Regulations, 2018 – Revocation of licence – Forfeiture of security deposit – Appellant challenged impugned order passed by Commissioner revoking its Customs Broker licence and directing forfeiture of its security deposit and also imposing penalty – Whether Appellant has violated provisions of Regulations 10(a), 10(d), 10(e) & 10(n) of the Regulations – HELD – Regulation 10(a) of the Regulations requires Customs Broker to obtain an authorization from each of firms or individuals, by whom, he is for the time being, employed as a Customs Broker. Importer appoin... [Read more]

Customs – Regulation 10 of Customs Broker Licensing Regulations, 2018 – Revocation of licence – Forfeiture of security deposit – Appellant challenged impugned order passed by Commissioner revoking its Customs Broker licence and directing forfeiture of its security deposit and also imposing penalty – Whether Appellant has violated provisions of Regulations 10(a), 10(d), 10(e) & 10(n) of the Regulations – HELD – Regulation 10(a) of the Regulations requires Customs Broker to obtain an authorization from each of firms or individuals, by whom, he is for the time being, employed as a Customs Broker. Importer appoints Appellant as its Customs Broker to file Bill of Entry on its behalf and represent it before Customs to complete all documentation formalities upto delivery of import consignment. Regulation 10(d) of the Regulations requires Customs Broker to advise his client to comply with relevant provisions. Nothing in finding of Commissioner establishes that Appellant had not advised importer to comply with provisions or Appellant was aware that importer was violating any provision or Acts. Regulation 10(e) of the Regulations requires Customs Broker to ensure that it provides only correct information to client. There is nothing on record to show that Appellant had provided any incorrect information to importer. Regulation 10(n) of the Regulations requires customs broker to verify identity of his client and functioning of his client at declared address. Appellant had verified existence of importer through KYC documents. Findings in impugned order that Appellant had violated Regulations 10(a), 10(d), 10(e) and 10(n) of the Regulations is not correct. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Customs – Import of construction materials – Payment of duty – Filing of refund claim – Appellant filed refund claim in terms of Notification No.102/2007-Customs for refund of 4% Additional Duty of Customs paid on import of Construction Materials vide 11 bills of entry – Adjudicating authority rejected refund claim for non-fulfillment of condition in para 2(e)(iii) of Notification No.102/2007 – Lower Appellate Authority (LAA) upheld order passed by Adjudicating authority – Whether Appellant has fulfilled the condition in para 2(e)(iii) of Notification No.102/2007 read with Circular No.16/2008 – HELD – App... [Read more]

Customs – Import of construction materials – Payment of duty – Filing of refund claim – Appellant filed refund claim in terms of Notification No.102/2007-Customs for refund of 4% Additional Duty of Customs paid on import of Construction Materials vide 11 bills of entry – Adjudicating authority rejected refund claim for non-fulfillment of condition in para 2(e)(iii) of Notification No.102/2007 – Lower Appellate Authority (LAA) upheld order passed by Adjudicating authority – Whether Appellant has fulfilled the condition in para 2(e)(iii) of Notification No.102/2007 read with Circular No.16/2008 – HELD – Appellant’s refund claim had been rejected by original adjudicating authority for non-fulfillment of condition in para 2(e)(iii) of Notification No.102/2007 read with Para 2(vi) of Circular No.16/2008. Since Appellant have produced copies of documents evidencing payment of VAT/CST, Appellant should be considered to have fulfilled condition in para 2(e)(iii) of Notification No.102/2007 read with Circular No.16/2008 – Appeal partly allowed - Rejection of certificate – Sustainability – Whether rejection of Chartered Accountant Certificate by Adjudicating authority as well as LAA on ground that same is not in proper format as per Public Notice No.39/2011 is correct or not – HELD – LAA had rejected appeal of Appellant on ground that Chartered Accountant Certificate submitted by Appellant evidencing payment of appropriate sales tax/value added tax is not in proper format as per Public Notice No.39/2011. Format of Chartered Accountant Certificate as per Public Notice No.39/2011 is only suggested/indicative format and not a mandatory format prescribed for claiming refund under Notification No.102/2007. Even the Notification No.102/2007 does not prescribe any format for Chartered Accountant Certificate. Rejection of Chartered Accountant Certificate by Adjudicating authority as well as LAA on ground that same is not in proper format as per Public Notice No.39/2011 is not correct - Filing of refund claim – Bar of limitation – Whether refund claim of Appellant in respect of four Bills of Entry is time barred – HELD – In terms of amendment made to Notification No.102/2007, Appellant is required to file claim for refund of 4% additional duty of customs before expiry of one year from date of payment of said additional duty of customs. Refund claim of Appellant in respect of four bills of entry is time barred, as refund claim had been filed beyond period of one year from date of payment of additional duty of customs. Impugned order is set aside in respect of seven bills of entry, but it is upheld in respect of remaining four bills of entry. [Read less]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in manufacture of compressors and parts thereof – After thorough verification of records, department issued show cause notice to Appellant by proposing demand of Service Tax under category of Technical Testing and Analysis Service (TTAS) – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether services provided by Appellant would fall under category of Consultant Engineer Services (CES) or it would fall under category of TTAS – HELD – From perusal of limited information furnished by Appellant, they have no... [Read more]

Service Tax – Providing of services – Demand of tax – Appellant is engaged in manufacture of compressors and parts thereof – After thorough verification of records, department issued show cause notice to Appellant by proposing demand of Service Tax under category of Technical Testing and Analysis Service (TTAS) – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether services provided by Appellant would fall under category of Consultant Engineer Services (CES) or it would fall under category of TTAS – HELD – From perusal of limited information furnished by Appellant, they have not been able to establish that their services were more in nature of CES and not in nature of TTAS. Adjudicating authority will take into account the argument of Appellant that even in case of TTAS, it would still be covered within scope of export of service, as it is not disputed that recipients of service are located abroad and remittances have been received in foreign exchange. With these observations, impugned order is set aside. Matter is remanded back to original authority to re-determine classification and consequential demand, keeping in view of above observations subject to submission of necessary documents by Appellant in their support – Appeal allowed [Read less]

GST - Penalty under 129(1)(b) of the CGST Act, 2017 – Correctness of imposition of the penalty under Section 129(1)(b) of the Act instead of Section 129(1)(a) when the petitioner claimed to be the owner of the goods – Whether the goods and conveyance should be released in favor of the petitioner upon payment of penalty under Section 129(1)(a) of the Act - HELD - The order passed by the authorities contained detailed factual findings questioning the genuineness of the transaction and the veracity of the documents like invoices and e-way bills relied upon by the petitioner. It would require a comprehensive factual exerci... [Read more]

GST - Penalty under 129(1)(b) of the CGST Act, 2017 – Correctness of imposition of the penalty under Section 129(1)(b) of the Act instead of Section 129(1)(a) when the petitioner claimed to be the owner of the goods – Whether the goods and conveyance should be released in favor of the petitioner upon payment of penalty under Section 129(1)(a) of the Act - HELD - The order passed by the authorities contained detailed factual findings questioning the genuineness of the transaction and the veracity of the documents like invoices and e-way bills relied upon by the petitioner. It would require a comprehensive factual exercise to assess the worth of the order, which is not possible in the writ jurisdiction based on affidavit evidence. The petitioner is left free to approach the appellate authority under Section 107 of the Act to challenge the order - The CBIC Circular dated 31.12.2018, which the petitioner relied upon to contend that it should be deemed the owner of the goods, would be binding on the Department. However, the Circular should be applied only in cases where the documents, such as invoices and e-way bills, are in order. In the present case, the authorities have raised serious questions regarding the veracity of the documents relied upon by the petitioner. Therefore, the circular cannot be relied upon to grant the benefit of Section 129(1)(a) to the petitioner - If the petitioner pays an amount equivalent to the penalty that would have been payable under Section 129(1)(a) of the Act and secures the balance amount by furnishing a bank guarantee, the authorities shall release the goods and conveyance in favor of the petitioner. The authorities are directed to provide the petitioner with the necessary GST ID and password to enable it to file an appeal under Section 107 of the Act, if so required - If an appeal is filed by the petitioner, the appellate authority shall dispose of the same within a period of four weeks from the date of filing of the appeal – The petition is disposed of [Read less]

GST - Detention, seizure and confiscation of goods under Sections 129 and 130 of the CGST Act, 2017, Amendment to Sections 129 and 130 of the CGST Act, made effective from 01.01.2022 by virtue of the Finance Act, 2021 - The petitioners challenged the action of the respondent-authorities for confiscation of goods seized during transit under Section 129 of the CGST Act – Petitioners contend that confiscation of goods cannot be resorted to by invoking Section 130 of the CGST Act without completing the entire procedure contemplated under Section 129 of the CGST Act - Whether the respondent-authority/Proper Officer, who seize... [Read more]

GST - Detention, seizure and confiscation of goods under Sections 129 and 130 of the CGST Act, 2017, Amendment to Sections 129 and 130 of the CGST Act, made effective from 01.01.2022 by virtue of the Finance Act, 2021 - The petitioners challenged the action of the respondent-authorities for confiscation of goods seized during transit under Section 129 of the CGST Act – Petitioners contend that confiscation of goods cannot be resorted to by invoking Section 130 of the CGST Act without completing the entire procedure contemplated under Section 129 of the CGST Act - Whether the respondent-authority/Proper Officer, who seizes and detains goods and conveyance in transit by exercising powers under Section 129 of the CGST Act, is required to complete the entire procedure prescribed under Section 129 before invoking Section 130 of the CGST Act for confiscation of the goods or conveyance – HELD - On the deletion of the sub-section (2) of Section 129, vide Finance Act, 2021, the provisional release of goods as provided under Section 67(6) for the goods seized and detained under Section 129 will no longer will be available - The legislative intent behind the amendments to Sections 129 and 130 of the CGST Act was to delink the transit-related proceedings under Section 129 from the proceedings of confiscation under Section 130. There is no statutory bar on the authorities from invoking Section 130 of the CGST Act for confiscation of goods that were initially seized and detained under Section 129 of the CGST Act. The 129 and 130 are independent and mutually exclusive provisions, and the authorities can resort to Section 130 even if the goods or conveyance is released upon payment of tax and penalty under Section 129 - The retention of the non-obstante clause in Section 129 only means that the entire procedure prescribed under Section 129 has to be followed, and the action of seizure of goods and conveyance is required to be brought to its logical end as per the provisions of Section 129. However, the goods and conveyance which are seized can still be confiscated under Section 130 of the CGST Act, if they involve an element of "intention to evade payment of tax". The deletion of the non-obstante clause from Section 130 does not create any conflict between the two sections, as they operate in different spheres – While upholding the independent and mutually exclusive nature of Sections 129 and 130 of the CGST Act, the respondent-authorities are directed to re-examine the notices issued for confiscation under Form MOV-10 or orders under Form MOV-11 – The petition is disposed of - Effect of deletion of non-obstante clause from Section 130 of the CGST Act – HELD - Albeit the non-obstante clause has been retained in Section 129 of the Act, and will have an overriding effect on other provisions of the Act including Section 130, however, it will have no impediment on the operation of the Section 130 of the Act. On an overall analysis of the scope and sphere of operation of both the Section, it is evident that there is no conflict in both the Sections. The quintessential feature which distinguishes and enlarges the scope of Section 130 from Section 129 of the Act is the “intent to evade the payment of tax”. There is no conflict between the sections as far as the forming an opinion on intention of evasion of tax. The provisions of Section 129 are stand alone provisions as far as no element of intention of evasion of tax is involved - As held by this Court in case of Synergy Fertichem Private Ltd, there is no bar in invoking the provision of Section 130 of the act for confiscation at threshold, if on the seizure of goods and conveyance it is found that the entire transaction reveals the intention to evade the tax. We are not convinced to take a different view as expressed by the coordinate bench, merely because the provisions have been amended, by deleting the non-obstante clause from Section 130 of the Act, while retaining it in Section 129 - Limitations for examining evasion of tax for goods and conveyance seized during transit – HELD - The proper officer, at the time of seizure and detention of the goods under Section 129 of the Act has to form an opinion regarding “intention” to evade payment of tax, and such intention can be gathered from the attendant circumstances. Since the action of confiscation is the last resort, and invites serious consequences, the same cannot be resorted to only on suspicion, bereft of any concrete material, and on ipse dixit. The proper officer has to examine the genuineness of the documents, invoices, e-way bills, consignment note, registration particulars produced at the time of interception. The formation of opinion of ‘intent to evade tax’, on the act or omission of a person, who is not proximately or directly linked to such activity with the dealer cannot be made the foundation for confiscation of goods – Further, the proper officer cannot venture into the assessment and valuation of goods at the time of interception of vehicle, and resort to seizure and confiscation of goods and conveyance by resorting to the entries in portal, and digging out the evasion of tax, etc of third parties - Time line for forming the opinion of evasion of tax for the goods in transit – HELD - the limitation of preparing the final report FORM- MOV-04, after inspection and verification of the conveyance and goods cannot be extended beyond the period of six days. In case, it is found that there is blatant evasion of tax, then the goods and conveyance can be seized, and FORM MOV-10 can be issued. Hence, for the goods which are in intercepted and are in transit, the opinion of “intention to evade the payment of tax’, has to be confined within the aforesaid period for confiscation, and if no opinion is formed, the goods and conveyance are required to be released by resorting to the provisions of Section 129 of the CGST Act. [Read less]

GST - Applicability of GST on interest and penalty on delayed payment recovered by chit fund company - The petitioner is a chit fund company engaged in the business of running chit schemes. The petitioner had approached the Authority for Advance Ruling to seek clarity on whether any GST is payable on the interest/penalty charged for delay in payment of subscription amounts by the chit subscribers. The Authority for Advance Ruling and the Appellate Authority for Advance Ruling held that the interest/penalty charged on delayed payments would be subject to GST - Whether the interest and penalty recovered by the chit fund comp... [Read more]

GST - Applicability of GST on interest and penalty on delayed payment recovered by chit fund company - The petitioner is a chit fund company engaged in the business of running chit schemes. The petitioner had approached the Authority for Advance Ruling to seek clarity on whether any GST is payable on the interest/penalty charged for delay in payment of subscription amounts by the chit subscribers. The Authority for Advance Ruling and the Appellate Authority for Advance Ruling held that the interest/penalty charged on delayed payments would be subject to GST - Whether the interest and penalty recovered by the chit fund company from defaulting subscribers are liable to GST – HELD - Under the Chit Funds Act, 1982, the foreman (chit fund company) is entitled to interest and penalty on any default in payment of installments by the subscribers, in addition to the commission/remuneration. This interest and penalty cannot be treated as a service fee or other charges, as the Act caps the commission/remuneration of the foreman at 7% of the chit value - The relationship between the foreman and the subscribers is in the nature of a debt, and the foreman is entitled to recover the entire balance amount in case of default. The interest and penalty charged on such defaults would be covered by the exemption provided under Entry 27 of Notification No. 12/2017-CT (Rate), which exempts services by way of extending deposits, loans or advances, to the extent the consideration is represented by way of interest or discount – The findings of the Authority for Advance Ruling and the Appellate Authority for Advance Ruling are set aside and it is held that the interest and penalty, recovered by a foreman, in relation to default in payment of installments would not be exigible to tax under the GST Act – The Writ Petition is allowed [Read less]

Service Tax - Short payment of service tax, Wrong categorization of services in ST-3 return – Appellant had booked expenditure towards bank guarantee commission, technical assistance, legal and professional fees, and communication charges under the heading 'Business Auxiliary Services' (BAS) instead of 'Management and Business Consultation Services' (MBC) in its ST-3 returns, thereby not appropriately depositing the service tax under the Reverse Charge Mechanism - Whether the payment of service tax under a wrong heading can be considered as discharge of the liability, even though the description of service was not accura... [Read more]

Service Tax - Short payment of service tax, Wrong categorization of services in ST-3 return – Appellant had booked expenditure towards bank guarantee commission, technical assistance, legal and professional fees, and communication charges under the heading 'Business Auxiliary Services' (BAS) instead of 'Management and Business Consultation Services' (MBC) in its ST-3 returns, thereby not appropriately depositing the service tax under the Reverse Charge Mechanism - Whether the payment of service tax under a wrong heading can be considered as discharge of the liability, even though the description of service was not accurate – HELD - Description of service has become redundant with effect from 1.07.2012 after introduction of Negative list as Section 65A(3) of the Finance Act, 1994 says that those provisions shall not apply with effect from 1.07.2012 and therefore, merely because a column is available to put description of service in ST-3 Return, in which a wrong service description is entered by the appellant, it would never mean that the entire payment made by the appellant would not get credited to the account of the Government and it would be required to pay the same tax once again - The tax already paid under a wrong category can always be considered towards the discharge of liability under another category/new category – Further, the extended period of limitation cannot be invoked as there was no suppression of facts, and the entire data was taken by the audit team to prepare its report – The impugned order is set aside and the appeal is allowed [Read less]

GST – West Bengal AAR - Supply of operation and maintenance services provided to Municipalities and Municipal Corporations - Whether the operation and maintenance services provided to Municipalities and Municipal Corporations are exempt from GST under Notification No. 12/2017 – Central Tax (Rate) vide Entry no. 3 or 3A – HELD - Supply of unskilled labour and driver for special cleanliness drive, supply of manpower for cleaning & maintenance of municipality office and supply of manpower for regular sweeping, cutting of grass, cleaning of wedges with equipments in municipality parks being pure services will fall under ... [Read more]

GST – West Bengal AAR - Supply of operation and maintenance services provided to Municipalities and Municipal Corporations - Whether the operation and maintenance services provided to Municipalities and Municipal Corporations are exempt from GST under Notification No. 12/2017 – Central Tax (Rate) vide Entry no. 3 or 3A – HELD - Supply of unskilled labour and driver for special cleanliness drive, supply of manpower for cleaning & maintenance of municipality office and supply of manpower for regular sweeping, cutting of grass, cleaning of wedges with equipments in municipality parks being pure services will fall under serial no. 3 of the table in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended - If the value of supply of goods in respect of the rest of the works being composite supplies is not more than 25% of the total value of such supply, such services will fall under serial no. 3A of the table in Notification No. 02/2018–Central Tax (Rate) dated 25.01.2018, as amended - If the value of supply of goods in respect of the above works being composite supplies is more than 25% of the total value of such supply, such services having SAC 9987 will fall under serial no. 25 of Notification No. 11/2017 – Central Tax (Rate) Dated 28.06.2017, as amended and liable to be taxed at 18% GST – Ordered accordingly [Read less]

GST – West Bengal AAR - GST on Supply of security personnel to Government hospitals - Whether the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals is exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – HELD - A hospital cannot function effectively in the absence of security services and scavenging services, both of which are essential support services to the activity of providing public health services - Both security services and scavenging services are activities in relation to both ‘Health and sanitation, includin... [Read more]

GST – West Bengal AAR - GST on Supply of security personnel to Government hospitals - Whether the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals is exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – HELD - A hospital cannot function effectively in the absence of security services and scavenging services, both of which are essential support services to the activity of providing public health services - Both security services and scavenging services are activities in relation to both ‘Health and sanitation, including hospitals, primary health centres and dispensaries’ and ‘Public health, sanitation conservancy and solid waste management’ - the security and scavenging services provided by the applicant to various Medical Colleges and Government hospitals are exempted from GST under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 – Ordered accordingly [Read less]

Customs - Import of Distillate Oil, Seizure of cargo by customs authorities based on laboratory test report - Petitioner is involved in trading of industrial oil and other allied pursuits and is engaged in importing bulk liquid cargo of Distillate Fuel Oil SRFO - The test report indicated that the samples do not meet the requirements of Distillate Oil as per IS 16731:2019, particularly with respect to the Cloud Point parameter, and have the characteristics of Automotive Diesel Fuel as per IS 1460:2025. Based on this report, the Customs authorities seized the imported cargo - Whether the impugned Seizure Memo can be quashed... [Read more]

Customs - Import of Distillate Oil, Seizure of cargo by customs authorities based on laboratory test report - Petitioner is involved in trading of industrial oil and other allied pursuits and is engaged in importing bulk liquid cargo of Distillate Fuel Oil SRFO - The test report indicated that the samples do not meet the requirements of Distillate Oil as per IS 16731:2019, particularly with respect to the Cloud Point parameter, and have the characteristics of Automotive Diesel Fuel as per IS 1460:2025. Based on this report, the Customs authorities seized the imported cargo - Whether the impugned Seizure Memo can be quashed and set aside and seized cargo of the petitioner can be released - HELD - The seized cargo of the petitioner cannot be ordered to be seized solely on the basis of the parameter of cloud point, as it will be relevant only at the place, vessel, and time of use, and will depend on the end user - the petitioner cannot be discriminated, since the authorities have no definite opinions and the opinions vary so far as the parameter of Cloud Point is concerned. In view of the ambiguity and lack of clarity in the test report, it would not be correct to draw the inference that the cargo does not conform to the standards of Distillate Oil - The impugned seizure memo is quashed and the authorities are directed to release the bulk liquid cargo of Distillate Oil imported by the petitioner. The petitioner is, however, directed to file an end-use certificate before the Customs authority and fully participate in the investigation – The writ petition is allowed [Read less]

Central Excise – Confiscation of goods – Demand of duty – Officers conducted search at factory premises which was used for manufacturing and sale of Gutkha under names of non-existent units – Case of revenue is that Appellant is the owner of factory and goods found there – After investigation, department issued show cause notice proposing confiscation of goods along with currency seized from residence of Appellant and demand of duty – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Appellant has any conne... [Read more]

Central Excise – Confiscation of goods – Demand of duty – Officers conducted search at factory premises which was used for manufacturing and sale of Gutkha under names of non-existent units – Case of revenue is that Appellant is the owner of factory and goods found there – After investigation, department issued show cause notice proposing confiscation of goods along with currency seized from residence of Appellant and demand of duty – Adjudicating authority confirmed proposals made in show cause notice – Commissioner (Appeals) affirmed order passed by Adjudicating authority – Whether Appellant has any connection with alleged factory premises – HELD – Case of revenue is that Appellant is the owner of alleged factory premises and therefore, he is liable to pay duty on clandestinely cleared Gutkha from said factory premises. Revenue had relied on statement of Appellant’s wife. Specific case of Appellant is that his wife’s statement was recorded under pressure and coercion. Adjudicating Authority was required to examine as to either statements were voluntary or not before relying upon the statements. Adjudication order does not show that this exercise had been conducted by Adjudicating Authority. Statements relied upon by revenue are not admissible evidence and same are required to be eschewed from consideration. Apart from statements, there is no evidence to link goods found at Appellant’s residence with raw material found at alleged factory premises. No adverse inference can be drawn against Appellant merely because some goods were found at residence of Appellant. Appellant had no connection with alleged factory premises. Confiscation of goods and currency seized from Appellant’s residence cannot be upheld. Demand of duty and imposition of penalty on Appellant is also set aside – Appeals allowed [Read less]

GST - Taxation on Confectionery Products - Dept raised demand for short payment of GST on the petitioner's confectionery products. The petitioner had filed a reply to the Show Cause Notice, which was ignored by the adjudicating authority - Whether the petitioner's confectionery products are liable for GST at 12% or 18% - HELD - In the impugned order, the adjudicating authority had incorrectly interpreted the CRCL, Delhi report, which had opined that the petitioner's products meet the requirements of 'sugar boiled confectionery'. The adjudicating authority had wrongly held that the CRCL report did not confirm that the petit... [Read more]

GST - Taxation on Confectionery Products - Dept raised demand for short payment of GST on the petitioner's confectionery products. The petitioner had filed a reply to the Show Cause Notice, which was ignored by the adjudicating authority - Whether the petitioner's confectionery products are liable for GST at 12% or 18% - HELD - In the impugned order, the adjudicating authority had incorrectly interpreted the CRCL, Delhi report, which had opined that the petitioner's products meet the requirements of 'sugar boiled confectionery'. The adjudicating authority had wrongly held that the CRCL report did not confirm that the petitioner's products were sugar boiled confectionery. This is a glaring error in the impugned order - The Department is directed to file an affidavit explaining how the CRCL report had been misinterpreted, and if the department is unable to justify the interpretation, the petitioner would be entitled to the relief sought. However, at this stage, no coercive measures shall be taken against the Petitioner in respect of the impugned order – Ordered accordingly [Read less]

GST – West Bengal AAR - Transfer of business as a going concern - Applicant is an entity newly incorporated to take over the business assets along with the liabilities of M/s. Horizen, a proprietorship concern - Whether the transfer of business assets and liabilities amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply under GST – HELD - As per the facts, all the business assets (except personal assets) and liabilities of transferor-M/s. Horizen are being transferred to the applicant, and the applicant will carry on the business as a going co... [Read more]

GST – West Bengal AAR - Transfer of business as a going concern - Applicant is an entity newly incorporated to take over the business assets along with the liabilities of M/s. Horizen, a proprietorship concern - Whether the transfer of business assets and liabilities amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply under GST – HELD - As per the facts, all the business assets (except personal assets) and liabilities of transferor-M/s. Horizen are being transferred to the applicant, and the applicant will carry on the business as a going concern. The financial statements of M/s. Horizen indicate that the company is a going concern. The Schedule II of the CGST Act provides that the transfer of a business as a going concern shall be treated as a supply of service, and Notification No. 12/2017-Central Tax (Rate) exempts such supply from GST. Therefore, the transfer of business from transferor company to the applicant as a going concern is an exempt supply - The transfer of assets and liabilities forming part of the business amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply as classified under Sl. No. 2 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly - Taxability of services provided by the applicant - The applicant will carry out certain works and issue invoices in furtherance of or as an extension of the original work orders commenced under the name of the transferor, M/s. Horizen - Whether the supplies and/or invoices to be issued by the applicant in furtherance of or as an extension of the original work orders commenced under the name of M/s. Horizen shall be deemed to possess the identical taxability as if such transactions had remained with M/s. Horizen or new tax treatment would apply due to the business transfer - HELD - It is clear from the statutory provisions that the questions on which this authority has already pronounced ruling is binding only on the concerned applicant and the concerned jurisdictional officer and none else. On the other hand, the facts and circumstances supporting the earlier ruling have changed due to transfer of business of M/S Horizen. So the advance ruling dated 11.12.2024 in the case of M/s Horizen is not applicable for the present applicant - The work orders are of pure services, without any works contract service or other composite supply involving supply of goods, and are provided to the Government of West Bengal represented by the PHED. These services are in relation to the functions entrusted to panchayats under Article 243G and municipalities under Article 243W of the Constitution of India, and hence qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. [Read less]

GST – West Bengal AAR - Exemption for Pure Services under Notification No. 12/2017-Central Tax (Rate) – Applicant is engaged in providing various services to the Public Health Engineering Department (PHED) of the Government of West Bengal - Whether the services of field level data validation of FHTC and organizing orientation programs are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - The services provided by the applicant are "pure services" as they do not involve any supply of goods and are provided to the Government of West Bengal represented by the PHED. Further, these servic... [Read more]

GST – West Bengal AAR - Exemption for Pure Services under Notification No. 12/2017-Central Tax (Rate) – Applicant is engaged in providing various services to the Public Health Engineering Department (PHED) of the Government of West Bengal - Whether the services of field level data validation of FHTC and organizing orientation programs are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - The services provided by the applicant are "pure services" as they do not involve any supply of goods and are provided to the Government of West Bengal represented by the PHED. Further, these services are in relation to the functions entrusted to Panchayats under Article 243G and Municipalities under Article 243W of the Constitution, specifically the function of "drinking water" as mentioned in the Eleventh and Twelfth Schedules. Therefore, the services satisfy all the conditions required for exemption under Sl. No. 3 of the Notification – Ordered accordingly - Whether the potential services of collecting different components of Piped Water Supply Schemes (PWSS) and land information are classifiable under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) – HELD - Similar to the other services, the potential services of collecting PWSS components and land information are also "pure services" provided to the Government of West Bengal represented by the PHED, and are in relation to the function of "drinking water" entrusted to Panchayats and Municipalities under the Constitution. Hence, these services also qualify for exemption under Sl. No. 3 of the Notification. [Read less]

Central Excise – Manufacture of goods – Demand of duty – Appellant manufactures a range of polypropylene products by using imported and domestic raw materials obtained duty free under Customs Notification 52/2003-Cus – During audit, Internal Audit Party found that quantity of raw materials were consumed over and above Standard Input Output Norms (SION) fixed by DGFT – Department issued show cause notice to Appellant by proposing demand of duty for non-compliance to SION norms – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant's consumption of inputs is in compliance with SION... [Read more]

Central Excise – Manufacture of goods – Demand of duty – Appellant manufactures a range of polypropylene products by using imported and domestic raw materials obtained duty free under Customs Notification 52/2003-Cus – During audit, Internal Audit Party found that quantity of raw materials were consumed over and above Standard Input Output Norms (SION) fixed by DGFT – Department issued show cause notice to Appellant by proposing demand of duty for non-compliance to SION norms – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant's consumption of inputs is in compliance with SION as prescribed in Notification No.52/2003-Cus – HELD – Main allegation against Appellant is that master batches and other raw materials were used in excess as compared to admissible SION. No presumption can be drawn from SION norms alone that materials procured were in excess of requirement. There was no specific evidence to indicate that materials procured vis-à-vis final products were not accounted for nor unsubstantiated to indicate any excess materials have been imported or procured locally. Various contentions raised by Appellant have not been considered nor any findings rendered thereon in impugned Order-in-Original. Matter requires to be remanded for de novo proceedings. Matter is remanded back to Original Adjudicating Authority to consider submissions of Appellant and Department afresh and pass a well-reasoned speaking order in strict compliance to principles of natural justice – Appeals disposed off [Read less]

Customs - Customs Broker, Penalty, Verification of KYC - Whether the penalty imposed under Section 114(i) for failure to verify KYC and antecedents of the exporter is sustainable – HELD - In a separate proceeding under the Customs Broker Licensing Regulations, 2013, the charges of not verifying KYC and antecedents were dropped against the appellant. The penalty cannot be imposed on a Customs Broker when the allegation of mis-declaration has not been established against them. Thus, the penalty under Section 114(i) was set aside – As for penalty under Section 114AA for using forged/fabricated documents, the containers ex... [Read more]

Customs - Customs Broker, Penalty, Verification of KYC - Whether the penalty imposed under Section 114(i) for failure to verify KYC and antecedents of the exporter is sustainable – HELD - In a separate proceeding under the Customs Broker Licensing Regulations, 2013, the charges of not verifying KYC and antecedents were dropped against the appellant. The penalty cannot be imposed on a Customs Broker when the allegation of mis-declaration has not been established against them. Thus, the penalty under Section 114(i) was set aside – As for penalty under Section 114AA for using forged/fabricated documents, the containers exported under the two shipping bills filed by the appellant were checked and cleared by Customs without any objection. There was no evidence to substantiate the allegation that the appellant submitted any forged or fabricated documents. As a Customs Broker, the appellant had no authority or scope to examine the contents of the sealed containers. The entire case against the appellant was based on conjectures and surmises without any concrete evidence. Accordingly, the penalty under Section 114AA as well is set aside - The penalties imposed under Sections 114(i) and 114AA of the Customs Act, 1962 are set aside and the appeal is allowed [Read less]

Service Tax – Promotion of goods – Receipt of commission – Demand of tax – Appellant is engaged in providing services of sales promotion and marketing of goods of various foreign companies in India and were getting commission from them for these services – Department issued show cause notice to Appellant by proposing demand of Service Tax on commission received by Appellant from foreign companies – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay service tax on commission amount received from foreign clients for sales promotion of their goods in Indian Territ... [Read more]

Service Tax – Promotion of goods – Receipt of commission – Demand of tax – Appellant is engaged in providing services of sales promotion and marketing of goods of various foreign companies in India and were getting commission from them for these services – Department issued show cause notice to Appellant by proposing demand of Service Tax on commission received by Appellant from foreign companies – Commissioner confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay service tax on commission amount received from foreign clients for sales promotion of their goods in Indian Territory – HELD – W.e.f. 1-10-2014, definition of Intermediary also covered broker, an agent or any other person who arranges or facilitates a provision of a service or supply of goods between two or more persons. Since Appellant was engaged in promotion of sale of goods of their foreign clients in India, they fall within definition of intermediary w.e.f. 1-10-2014 and therefore, they are liable to pay service tax only after this date. Appellant claimed to have paid service tax on amount of commission received after this date. Matter is remitted to Adjudicating authority to verify correctness of payment of service tax and pass order for recovery of service tax in case of any short payment or recovery of interest in case of delayed payment of service tax – Appeals disposed of [Read less]

Service Tax – Denial of exemption – Demand of tax – Appellants are engaged in manufacture and sale of various fast moving consumer goods – Vide licensing agreements, licensors granted Appellants the non-exclusive right to use Intellectual Property Rights (IPR) in connection with design, production, marketing and sale of products – Appellant classified services under category of IPR and claimed benefit of Exemption Notification – Department issued show cause notice alleging that services received by Appellant were classifiable under category of Franchise Service and therefore, Appellant was not eligible to avail... [Read more]

Service Tax – Denial of exemption – Demand of tax – Appellants are engaged in manufacture and sale of various fast moving consumer goods – Vide licensing agreements, licensors granted Appellants the non-exclusive right to use Intellectual Property Rights (IPR) in connection with design, production, marketing and sale of products – Appellant classified services under category of IPR and claimed benefit of Exemption Notification – Department issued show cause notice alleging that services received by Appellant were classifiable under category of Franchise Service and therefore, Appellant was not eligible to avail benefit of Exemption Notification – Commissioner confirmed demand of Service Tax – Whether services received by Appellant from their overseas companies are services related to IPR or Franchise Service – HELD – According to Appellant, services received by Appellant would fall under category of IPR service, while according to Department, services received by Appellant would fall under category of franchise service. Agreement between Appellant and licensors is only in relation to grant of license with respect to IPR in connection with design, production, distribution, marketing and sale of products. Arrangement between Appellant and licensors will not constitute a franchisee agreement, since licensor does not have any significant control over operations of Appellant. Services are rightly classified by Appellant under IPR Service and same are not classifiable as Franchise Service and therefore, Appellant is eligible to avail benefit of Exemption Notification. Impugned order passed by Commissioner is set aside – Appeal allowed [Read less]

Service Tax – Rule 6(3)(II) of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in executing various works contracts and employed in taxable and exempted services – Appellant had reversed proportionate CENVAT Credit in terms of formula provided under Rule 6(3)(II) of the Rules – While considering the reversible CENVAT Credit, Appellant had taken into account only common input service credit and not total CENVAT Credit – Revenue issued show cause notice alleging that Appellant was required to take into account the total input credit, by invoking ex... [Read more]

Service Tax – Rule 6(3)(II) of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is engaged in executing various works contracts and employed in taxable and exempted services – Appellant had reversed proportionate CENVAT Credit in terms of formula provided under Rule 6(3)(II) of the Rules – While considering the reversible CENVAT Credit, Appellant had taken into account only common input service credit and not total CENVAT Credit – Revenue issued show cause notice alleging that Appellant was required to take into account the total input credit, by invoking extended period of limitation – Commissioner confirmed demand as proposed in show cause notice – Whether Revenue had established its case for invoking extended period of limitation – HELD – Mens rea is central to all grounds for invoking extended period. To establish mens rea, assessee must have actively concealed, misrepresented, or taken affirmative steps to hide facts, rather than just failing to declare something they might have genuinely overlooked or misunderstood. When Appellant have been filing returns showing amount reversed by them, veracity of calculation could have been verified by department. Revenue missed that opportunity by not scrutinizing returns filed by Appellants. Extended period cannot be invoked in absence of any positive act with intention to evade payment of duty on part of Appellant. Revenue had not made any case for invoking extended period. On this count alone, impugned order is liable to be set aside – Appeal allowed [Read less]

Customs – Sections 108, 112(b)(i) and 138B of Customs Act, 1962 – Imposition of penalty – Sustainability – Officials of Directorate of Revenue Intelligence intercepted Appellants at Railway Station and recovered gold bars and Indian currency from them – After investigation, department issued show cause notice to 10 noticees including Appellants – Commissioner confirmed demand of penalty on Appellants under Section 112(b)(i) of the Act – Whether Commissioner is justified in imposing penalties upon Appellants under Section 112(b)(i) of the Act – HELD – Appellants, in their replies to show cause notice, have... [Read more]

Customs – Sections 108, 112(b)(i) and 138B of Customs Act, 1962 – Imposition of penalty – Sustainability – Officials of Directorate of Revenue Intelligence intercepted Appellants at Railway Station and recovered gold bars and Indian currency from them – After investigation, department issued show cause notice to 10 noticees including Appellants – Commissioner confirmed demand of penalty on Appellants under Section 112(b)(i) of the Act – Whether Commissioner is justified in imposing penalties upon Appellants under Section 112(b)(i) of the Act – HELD – Appellants, in their replies to show cause notice, have clearly stated that Mahesh Soni had given gold bars along with currency to Prem Singh on job work basis, however, as Mahesh Soni was not keeping well, he executed a will naming his brother Mukesh Soni as the inheritor of his properties including gold bars. After death of Mahesh Soni, Prem Singh had called Appellants to deliver gold bars and cash to Mukesh Soni. Appellants have clearly explained possession of gold bars and cash amount. Case of department is based on statements made under Section 108 of the Act. Said statements cannot be considered as relevant, as procedure contemplated under Section 138B of the Act had not been followed. There is nothing on record to establish that Appellants had smuggled the gold bars. Impugned order passed by Commissioner to extent it imposes penalties upon Appellants under Section 112(b)(i) of the Act cannot be sustained and is set aside – Appeals allowed [Read less]

Customs – Revocation of customs broker licence – Forfeiture of security deposit – Appellant is a licenced Customs Broker had filed shipping bills on behalf of Exporter for export of readymade garments to UAE – On examination by officers of Customs Preventive, it was found that goods were mis-declared by exporter – Department issued show cause notice alleging that Appellant had violated Regulation 10(a), 10(d) and 10(n) of the Regulations – Commissioner revoked Customs Broker licence of Appellant, forfeited entire amount of security deposit furnished by Appellant and imposed penalty on Appellant – Whether Appe... [Read more]

Customs – Revocation of customs broker licence – Forfeiture of security deposit – Appellant is a licenced Customs Broker had filed shipping bills on behalf of Exporter for export of readymade garments to UAE – On examination by officers of Customs Preventive, it was found that goods were mis-declared by exporter – Department issued show cause notice alleging that Appellant had violated Regulation 10(a), 10(d) and 10(n) of the Regulations – Commissioner revoked Customs Broker licence of Appellant, forfeited entire amount of security deposit furnished by Appellant and imposed penalty on Appellant – Whether Appellant had violated provisions of Regulations 10(a), 10(d) and 10(n) of the Regulations – HELD – Appellant had obtained an authorization from exporter before filing shipping bills along with all KYC documents. Failure of SIIB officers to find authorization does not prove that it did not exist on that date. Case of department is that since exporter had mis-declared the description and value of goods, it proves that Appellant had not advised exporter to follow relevant provisions. It is perfectly possible that Appellant had advised exporter to follow the Rules, but exporter still mis-declared the goods. Customs Broker is a processor of documents and he had no right to either examine goods or determine their value. All that can be expected from Customs Broker is that he files Shipping Bills or Bills of Entry correctly as per documents which have been made available to him. There is no recording whatsoever as to what incorrect information was provided by Appellant to its client. Appellant had not violated Regulations 10(a), 10(d) and 10(n) of the Regulations. Consequently, revocation of Customs Broker’s licence of Appellant, forfeiture of security deposit and imposition of penalty cannot be sustained. Order under challenge is set aside – Appeal allowed [Read less]

Customs - Jurisdiction of DRI Officials under Customs Act, 1962 - Petitioner's challenge the jurisdiction of DRI Officials as 'proper officers' to conduct proceedings under Section 28 of the Customs Act, 1962 - Whether the alleged demand under Sections 28(4) and 28AAA of the Customs Act, 1962 has fructified against the Petitioner - HELD - The Supreme Court in the review petition in Canon case has held that the officers of the Directorate of Revenue Intelligence, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence and Commissionerates of Central Excise and other similarly situated of... [Read more]

Customs - Jurisdiction of DRI Officials under Customs Act, 1962 - Petitioner's challenge the jurisdiction of DRI Officials as 'proper officers' to conduct proceedings under Section 28 of the Customs Act, 1962 - Whether the alleged demand under Sections 28(4) and 28AAA of the Customs Act, 1962 has fructified against the Petitioner - HELD - The Supreme Court in the review petition in Canon case has held that the officers of the Directorate of Revenue Intelligence, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence and Commissionerates of Central Excise and other similarly situated officers are 'proper officers' for the purposes of Section 28 and are competent to issue show cause notices thereunder. Therefore, the challenge in the present petition regarding the jurisdiction of the DRI Officials to issue summons can no longer sustain - The alleged demand under Sections 28(4) and 28AAA is in the nature of an advisement to the Petitioner to pay the amount, failing which a Show Cause Notice would be issued. The matter is still at the stage of investigation and the demand has not yet fructified against the Petitioner in accordance with law. The Department has clarified that it does not intend to take any coercive steps at this stage and only seeks to record the Petitioner's statement during business hours - the petitioner is directed to cooperate with the Department for recording the statement, subject to which no coercive steps of arrest shall be taken against the proprietor of the Petitioner – The petition is disposed of [Read less]

Service Tax - Export of Services - Refund claim on the ground that the service provided under the category of "consulting Engineers Services" was an export of services and not leviable to service tax under the Finance Act, 1994 as the services were consumed outside India - The Assistant Commissioner directed the appellant to file the refund claim duly completed in all respects. On appeal, the Commissioner (Appeals) rejected the appeal on the ground that the Assistant Commissioner's communication was only an interim and administrative communication and not an order - Dept case that since payment for said services has not be... [Read more]

Service Tax - Export of Services - Refund claim on the ground that the service provided under the category of "consulting Engineers Services" was an export of services and not leviable to service tax under the Finance Act, 1994 as the services were consumed outside India - The Assistant Commissioner directed the appellant to file the refund claim duly completed in all respects. On appeal, the Commissioner (Appeals) rejected the appeal on the ground that the Assistant Commissioner's communication was only an interim and administrative communication and not an order - Dept case that since payment for said services has not been received in convertible foreign exchange as stipulated in Rule 3(2)(b) of Export of Services Rules, 2005, the condition required to be fulfilled for treating as export of services had not been fulfilled – HELD - The CESTAT held that since the services were rendered and consumed outside India, the service was beyond the taxable territory of India under the Finance Act, 1994. The Tribunal relied on the principles laid down by the Supreme Court in the case of Ishikawa-Ima- Harima Heavy Industries Ltd. that for offshore services, there should be a sufficient nexus between the rendition of services and the territorial limits of India. Thus, so far as the territorial jurisdiction is concerned, in wake of the fact that the appellant has provided services outside India, and which is not disputed, and his claim on service being outside taxable territory of India, coupled with the fact that the transaction in question was outside taxable territory of India, no substantial question of law worth the name emanates from the present Tax Appeal – The tax appeal stands rejected [Read less]

Central Excise – Cross-Utilization of CENVAT Credit for discharging its Service Tax liability – SCN issued alleging that the credit involved in the input services received for use in or in relation to the final products cannot be utilized by the appellant for discharging its Service Tax liability on account of the output service rendered by it, as there was no nexus or integral connection between the input services and the output service - Whether the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service – HELD - The Cenvat Credit ... [Read more]

Central Excise – Cross-Utilization of CENVAT Credit for discharging its Service Tax liability – SCN issued alleging that the credit involved in the input services received for use in or in relation to the final products cannot be utilized by the appellant for discharging its Service Tax liability on account of the output service rendered by it, as there was no nexus or integral connection between the input services and the output service - Whether the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service – HELD - The Cenvat Credit Rules provide that the manufacturer or producer of the final product or a provider of output service shall be allowed to take credit on various duties, including Service Tax. The cross-utilization of credit on goods and services is not covered by any restrictive provision, prohibition, or embargo under the Cenvat Credit Rules - the appellant is eligible to utilize the CENVAT Credit availed on input services for discharging its Service Tax liability on the output service - the impugned order is set aside and the appeal is allowed [Read less]

In terms of Sec.10(1)(a) of IGST Act, the place of supply involving movement of goods shall be the location where the movement of goods terminates for delivery to the recipient and not the place where the goods are handed over to the common carrier.

Central Excise – Rule 9(1) of CENVAT Credit Rules, 2004 – Transportation of goods – Eligibility to avail credit – Appellant is engaged in manufacture of various types of paper – Department issued show cause notice alleging that input service credit availed by Appellant on transportation of goods on basis of railway receipts and Service Tax Certificate for Transportation of Goods (STTG Certificates) issued by Indian Railways for period prior to 27-8-2014 is inadmissible – Principal Commissioner disallowed CENVAT Credit availed by Appellant – Whether disallowance of credit ordered in impugned order is sustainab... [Read more]

Central Excise – Rule 9(1) of CENVAT Credit Rules, 2004 – Transportation of goods – Eligibility to avail credit – Appellant is engaged in manufacture of various types of paper – Department issued show cause notice alleging that input service credit availed by Appellant on transportation of goods on basis of railway receipts and Service Tax Certificate for Transportation of Goods (STTG Certificates) issued by Indian Railways for period prior to 27-8-2014 is inadmissible – Principal Commissioner disallowed CENVAT Credit availed by Appellant – Whether disallowance of credit ordered in impugned order is sustainable – HELD – Appellant had been availing CENVAT Credit in respect of transportation of goods in accordance with Rule 9 of the Rules on basis of railway receipts and STTG certificates issued by Indian Railways. STTG Certificates issued by Railways have been prescribed as a valid document for availing credit with effect from 27-8-2014 vide amendment brought out in Rule 9(1) of the Rules. STTG Certificate issued prior to 27-8-2014 was also a valid document for availing CENVAT Credit, as same contains all details as prescribed under Rule 9(1) of the Rules. Appellant is eligible for availing credit on basis of railway receipts and STTG Certificates issued by Indian Railways for period prior to 27-8-2014. Disallowance of credit ordered in impugned order is set aside – Appeal allowed [Read less]

Customs – Import of goods – Demand of safeguard duty – Sustainability – Appellant imported Solar Photovoltaic Cells from Taiwan vide four bills of entry and claimed exemption of Safeguard Duty in terms of Notification No.19/2016-Customs – Proper officer granted exemption claimed by Appellant – Subsequently, Appellant imported 30 more consignments without payment of Safeguard Duty – Department issued show cause notice alleging that Appellant is not eligible for exemption claimed towards Safeguard Duty – Adjudicating authority confirmed demand of Safeguard Duty – Whether impugned order confirming demand of ... [Read more]

Customs – Import of goods – Demand of safeguard duty – Sustainability – Appellant imported Solar Photovoltaic Cells from Taiwan vide four bills of entry and claimed exemption of Safeguard Duty in terms of Notification No.19/2016-Customs – Proper officer granted exemption claimed by Appellant – Subsequently, Appellant imported 30 more consignments without payment of Safeguard Duty – Department issued show cause notice alleging that Appellant is not eligible for exemption claimed towards Safeguard Duty – Adjudicating authority confirmed demand of Safeguard Duty – Whether impugned order confirming demand of Safeguard Duty is sustainable – HELD – After reassessment of four bills of entry filed by Appellant, consignments were allowed to be cleared without payment of any Safeguard Duty. In respect of subsequent 30 consignments imported by Appellant, Customs electronics system accepted self-assessment and did not raise any query about applicability of Safeguard Duty for such imports. If Revenue had any grievance in respect of re-assessed Bills of Entry or non-flagging of issue thereof in subsequent imports, it was for Revenue to file an appeal before Commissioner (Appeals) to overturn the decision of lower authorities, but this was not done by them. Even on this ground alone, confirmed demand is not legally sustainable. Order under challenge is set aside – Appeal allowed [Read less]

Service Tax – Sections 65(108) and 73(1) of Finance Act, 1994 – Payment of technical meeting charges – Demand of tax – Appellant is engaged in printing and packaging business – Appellant made outward remittances in foreign currency towards annual membership fees to International Packaging Group (IPG) & International Packaging Forum Network (IPFN) and pre-shipment inspection fees to Intertek – Department issued show cause notices proposing recovery of service tax by alleging that above payments constituted taxable imported services – Adjudicating Authority confirmed demands as proposed in show cause notice –... [Read more]

Service Tax – Sections 65(108) and 73(1) of Finance Act, 1994 – Payment of technical meeting charges – Demand of tax – Appellant is engaged in printing and packaging business – Appellant made outward remittances in foreign currency towards annual membership fees to International Packaging Group (IPG) & International Packaging Forum Network (IPFN) and pre-shipment inspection fees to Intertek – Department issued show cause notices proposing recovery of service tax by alleging that above payments constituted taxable imported services – Adjudicating Authority confirmed demands as proposed in show cause notice – Whether annual membership/participation fees paid in foreign currency to IPG and IFPN are exigible to service tax – HELD – Appellant had paid participation fees and technical meeting charges to IPG/IFPN for attending periodic technical meetings held outside India. There was no evidence that IPG/IFPN have rendered any services to Appellant and condition of relationship of service recipient with service provider is absent. Services provided by a club or association to its own members remain outside ambit of service tax. Demand confirmed in respect of payments made by Appellant to IPG/IFPN is set aside – Appeals partly allowed - Payment of participation fees – Tax liability – Whether participation fees paid to British Safety Council for participating in sword of honour contest held abroad are exigible to service tax under the Act – HELD – Sword of Honour is an award scheme available to organisations that have achieved a five-star rating in their Five Star Occupational Health and Safety Audit. There is no evidence on record that during years of participation in contest, either Appellant have been awarded the honour in contest to show that services were imported into India. Transaction is an overseas contest/award adjudication performed outside India and does not fall within any taxable entry. Demand on this score is unsustainable and is set aside - Pre-shipment inspection charges – Demand of tax – Whether pre-shipment inspection charges paid to Intertek International Ltd. U.K. are exigible to service tax – HELD – Engagement between Appellant and Intertek emanates from a commercial contract, under which, Appellant obtained certification for its import consignments in order to facilitate acceptance of goods in importing country. Inspection and certification were performed by a private agency for a consideration. Activity bears the essential character of a technical inspection and certification service as understood in Section 65(108) of the Act. Payments made to Intertek attract service tax under category of Technical Inspection and Certification Service on a reverse charge basis. Demand confirmed in respect of pre-shipment inspection charges paid to Intertek is upheld - Invoking of extended period of limitation – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – Proviso to Section 73(1) of the Act substitutes ordinary one year limitation by a longer period, where short-payment arises by reason of fraud, collusion or any wilful mis-statement or suppression of facts with intent to evade payment of tax. Alleged non-payment came to light only pursuant to departmental audit and investigation. Appellant did not voluntarily disclose the disputed transactions nor did it place the relevant facts before Department at any earlier point. Appellant had not pleaded a bona fide legal doubt on taxability of transactions. Invocation of extended period of limitation is legally tenable. Appellant will be liable to pay tax for extended period together with interest. [Read less]

Service Tax – Export of Services or Intermediary Services - The Respondent-assessee is engaged in providing support services in India to foreign universities and institutions by arranging and facilitating student recruitment services - Whether the Respondent's services constitute "intermediary services" under Rule 2(f) of the Place of Provision of Services Rules, 2012 (POPS Rules) and the place of provision of service is in India, or whether the services constitute "export of services" under Rule 6A of the Service Tax Rules, 1994 and the place of provision is outside India – HELD - The Respondent directly provides serv... [Read more]

Service Tax – Export of Services or Intermediary Services - The Respondent-assessee is engaged in providing support services in India to foreign universities and institutions by arranging and facilitating student recruitment services - Whether the Respondent's services constitute "intermediary services" under Rule 2(f) of the Place of Provision of Services Rules, 2012 (POPS Rules) and the place of provision of service is in India, or whether the services constitute "export of services" under Rule 6A of the Service Tax Rules, 1994 and the place of provision is outside India – HELD - The Respondent directly provides services to the foreign universities, with whom it has agreements, and does not merely arrange or facilitate the supply of services between two or more persons. The services rendered by the respondent constitute "export of services" under Rule 6A of the Service Tax Rules, 1994, as the place of provision of service is outside India, the recipient of the service is located outside India, and the payment is received in convertible foreign exchange - The High Court relied on the decisions in Ernst & Young Ltd. v. Add. Commr. CGST Appeals-II, Delhi, K.C. Overseas Education Pvt. Ltd. v. Union of India, and Verizon Communication India Pvt. Ltd. v. Asstt. Commr., S.T., Delhi-III, which held that a person who directly provides services is not an "intermediary" under the definition, and that the destination of services is determined by the location of the service recipient, not the service provider - The respondent's services do not qualify as "intermediary services" under Rule 2(f) of the POPS Rules. The CESTAT's order holding that the respondent's services constitute "export of services" is upheld - The Revenue appeal is dismissed [Read less]

Andhra Pradesh Value Added Tax Act, 2005 - Statutory Interpretation of "Actual Refund" – Petitioner seeking direction to the respondent authorities to pay interest on the belated refund amount - Whether the petitioner is entitled to interest on the refund amount for the delay beyond the statutory period of 90 days, as per Section 38 of the APVAT Act and Rule 35(8) of the APVAT Rules, 2005 - HELD - The plain language of Rule 35(8)(c) of the APVAT Rules, 2005 clearly provides for payment of interest if the refund amount is not actually refunded within 90 days from the date of the claim. The liability for payment of interes... [Read more]

Andhra Pradesh Value Added Tax Act, 2005 - Statutory Interpretation of "Actual Refund" – Petitioner seeking direction to the respondent authorities to pay interest on the belated refund amount - Whether the petitioner is entitled to interest on the refund amount for the delay beyond the statutory period of 90 days, as per Section 38 of the APVAT Act and Rule 35(8) of the APVAT Rules, 2005 - HELD - The plain language of Rule 35(8)(c) of the APVAT Rules, 2005 clearly provides for payment of interest if the refund amount is not actually refunded within 90 days from the date of the claim. The liability for payment of interest arises from the date after the expiry of 90 days till the date of actual refund, and not merely on the date of passing the order for refund - The principles of statutory interpretation laid down by the Supreme Court is that in interpreting a taxing statute, the plain and unambiguous language of the provision has to be preferred, and no words can be read into the statute which the legislature has deliberately not incorporated - The liability for interest arises from the date of actual refund, which was beyond the statutory period and the extension of limitation due to COVID-19 would not be applicable to the present case - The statute does not permit any reason as an excuse, for non-payment, within the statutory period. Such period is also not subject to extension on any ground. Once time has been prescribed by the statute for doing an act, it has to done within the period prescribed and if not so done, the consequences provided under the statute shall necessarily follow - the respondents are directed to pay the interest on the belated refund amount as per the statutory provisions – The writ petition is allowed [Read less]

GST - Non-filling of vehicle registration number in Part-B of e-way bill - The goods were intercepted and penalty was levied as the Part-B of the e-way bill did not contain the vehicle registration number - Whether non-filling of vehicle registration number in Part-B of the e-way bill can attract a penalty under Section 129 of the CGST/KGST Act or only a general penalty under Section 125 can be levied – HELD - The non-filling of the vehicle registration number in Part-B of the e-way bill is a curable defect and does not invalidate the e-way bill, especially when all other documents match the goods and vehicle - In the ab... [Read more]

GST - Non-filling of vehicle registration number in Part-B of e-way bill - The goods were intercepted and penalty was levied as the Part-B of the e-way bill did not contain the vehicle registration number - Whether non-filling of vehicle registration number in Part-B of the e-way bill can attract a penalty under Section 129 of the CGST/KGST Act or only a general penalty under Section 125 can be levied – HELD - The non-filling of the vehicle registration number in Part-B of the e-way bill is a curable defect and does not invalidate the e-way bill, especially when all other documents match the goods and vehicle - In the absence of any material to show malafide intention or an intent to evade tax, such non-filling of the vehicle number cannot attract a penalty under Section 129. Instead, at most, a general penalty under Section 125 can be levied. The first appellate authority had correctly appreciated the facts and law in reducing the penalty, and the revisional authority erred in restoring the original penalty order - The order passed by the revisional authority is set aside and the appellate order is restored. The respondents are directed to refund the excess amount paid by the petitioner, except the general penalty of Rs. 25,000 - The petition is allowed [Read less]

GST - Adjustment of pre-deposit against payment made under protest - The petitioner made payment under protest during the course of the assessment proceedings. The Appellate Authority rejected the petitioner's appeal on the ground that the mandatory 10% pre-deposit under Section 107(6) of the CGST Act, 2017 had not been made – HELD - The Supreme Court in VVF (India) Ltd. v. State of Maharashtra case held that any amount deposited under protest prior to an order of assessment/adjudication can be adjusted against the mandatory pre-deposit required for filing an appeal under Section 107(6) of the CGST Act. The Respondent er... [Read more]

GST - Adjustment of pre-deposit against payment made under protest - The petitioner made payment under protest during the course of the assessment proceedings. The Appellate Authority rejected the petitioner's appeal on the ground that the mandatory 10% pre-deposit under Section 107(6) of the CGST Act, 2017 had not been made – HELD - The Supreme Court in VVF (India) Ltd. v. State of Maharashtra case held that any amount deposited under protest prior to an order of assessment/adjudication can be adjusted against the mandatory pre-deposit required for filing an appeal under Section 107(6) of the CGST Act. The Respondent erred in not considering the pre-deposit made by the petitioner during the adjudication proceedings. Further, the additional payment made by the petitioner towards mandatory pre-deposit by utilising the balance available in the Electronic Credit Ledger is also permissible and the same would constitute a valid pre-deposit. Accordingly, the impugned order is set aside and the matter is remitted back to the Respondent to reconsider the appeal on merits without insisting on any additional pre-deposit – The writ petition is allowed [Read less]

Central Sales Tax Act, 1956 - Contravention of Rules 12(1) and 12(10)(b) of the Central Sales Tax (Registration & Turnover) Rules, 1957 - Validity of 'H' Form covering transactions of more than one quarter – HELD – The Rule 12(10)(b) of the Central Sales Tax (R&T) Rules adopts the provisions applicable to the 'C' Form mutatis mutandis to the 'H' Form. The second proviso to Rule 12(1) allows a single declaration in the 'C' Form to cover all transactions of sale taking place in a quarter of a financial year between the same two dealers. By virtue of Rule 12(10)(b), this provision applies to the 'H' Form as well. The Circ... [Read more]

Central Sales Tax Act, 1956 - Contravention of Rules 12(1) and 12(10)(b) of the Central Sales Tax (Registration & Turnover) Rules, 1957 - Validity of 'H' Form covering transactions of more than one quarter – HELD – The Rule 12(10)(b) of the Central Sales Tax (R&T) Rules adopts the provisions applicable to the 'C' Form mutatis mutandis to the 'H' Form. The second proviso to Rule 12(1) allows a single declaration in the 'C' Form to cover all transactions of sale taking place in a quarter of a financial year between the same two dealers. By virtue of Rule 12(10)(b), this provision applies to the 'H' Form as well. The Circular dated 11.04.2014, which relaxes the requirement of the second proviso to Rule 12(1) and allows declarations in the 'C' Form covering transactions beyond a single quarter, would equally govern the 'H' Form under Rule 12(10). Therefore, the 'H' Form covering transactions of more than one quarter cannot be held invalid – The Rule 12(10) does not mandate that the ‘H’ Form record transactions of sale for a single quarter of a financial year only – Further, The Circular dated 11.04.2014, in relaxation of the requirement of the second proviso to Rule 12(1), allows declarations covering transactions of sale that take place over more than one quarter of a financial year. Although the Circular refers specifically to the ‘C’ Form, a conjoint reading of Rule 12(1) and Rule 12(10) indicates that the circular issued regarding the ‘C’ Form applies mutatis mutandis to the ‘H’ Form. Hence, the Circular dated 11.04.2014 equally governs the ‘H’ Form under Rule 12(10) - The view taken by the Appellate Authority is one of the possible views, and the exercise of revisional jurisdiction is not warranted merely on the ground that an alternative view is available - The order of the revisional authority is set aside, and the order in appeal passed by the Joint Commissioner of Commercial Taxes (Appeals) is restored - The appeal is allowed [Read less]