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Central Excise - Eligibility of Cenvat Credit on various input services - The appellant availed Cenvat Credit on various input services like house-keeping/gardening, vehicle repair, transportation/tour & travel, outward courier, interior decoration, construction, surface colouring/coating, fabrication and insurance services. The department denied the Cenvat Credit on these services on the ground that they do not have any nexus with the manufacturing process - HELD - All the input services availed by the appellant during the relevant period are eligible for Cenvat Credit. The definition of 'input service' under the Cenvat C... [Read more]

Central Excise - Eligibility of Cenvat Credit on various input services - The appellant availed Cenvat Credit on various input services like house-keeping/gardening, vehicle repair, transportation/tour & travel, outward courier, interior decoration, construction, surface colouring/coating, fabrication and insurance services. The department denied the Cenvat Credit on these services on the ground that they do not have any nexus with the manufacturing process - HELD - All the input services availed by the appellant during the relevant period are eligible for Cenvat Credit. The definition of 'input service' under the Cenvat Credit Rules has 'means clause' covering services used directly or indirectly in relation to the manufacture of final products, and an 'inclusion clause' specifically covering certain services. The impugned services fall within the ambit of 'input service' as they have a direct nexus with the manufacturing activity. The services like house-keeping/gardening, vehicle repair, transportation, outward courier, interior decoration, construction, surface colouring/coating, fabrication and insurance services are eligible for Cenvat Credit. Further, the extended period of limitation cannot be invoked in the present case as the department was already aware of the availment of credit by the appellant. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Admissibility of CENVAT credit of Additional Duty of Customs (CVD) paid at concessional rate - The appellant, engaged in manufacture of iron and steel products, imported steam coal and paid Additional Duty of Customs (CVD) at the concessional rate of 2% under Notification No. 12/2012-Cus and availed CENVAT credit of the same under Rule 3 of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty applicable to indigenous coal under Notification No. 1/2011-CE and Notification No. 12/2012-CE, being subject to the condition of non-availment of credit, would equ... [Read more]

Central Excise - Admissibility of CENVAT credit of Additional Duty of Customs (CVD) paid at concessional rate - The appellant, engaged in manufacture of iron and steel products, imported steam coal and paid Additional Duty of Customs (CVD) at the concessional rate of 2% under Notification No. 12/2012-Cus and availed CENVAT credit of the same under Rule 3 of the CENVAT Credit Rules, 2004 – Denial of CENVAT credit on the ground that the concessional excise duty applicable to indigenous coal under Notification No. 1/2011-CE and Notification No. 12/2012-CE, being subject to the condition of non-availment of credit, would equally apply to imported goods – HELD - The Rule 3(1)(vii) of the CCR, 2004 specifically permits availment of credit of additional duty of customs and that there is no statutory restriction denying such credit when the duty is paid at concessional rate under a customs notification. The Department's attempt to import conditions from Central Excise notifications into the scheme governing CVD is contrary to settled principles of strict interpretation of taxing statutes. CENVAT credit of Additional Duty of Customs paid at concessional rates under Notification No. 12/2012-Cus is admissible and that conditions prescribed under Central Excise exemption notifications cannot be imported into Customs notifications - The appellant is entitled to avail CENVAT credit of the additional duty of customs paid at concessional rate under Notification No. 12/2012-Cus and that the denial of such credit is not sustainable in law - The impugned order is set aside and the appeal is allowed [Read less]

Central Excise – Refund of Differential Duty paid on notional and unrealised value basis supplementary invoices - Appellant sought to revise the price and issued supplementary invoice, discharging differential duty but the buyer refused to accept the revised price and declined payment of the differential amount - The appellant filed a refund claim on the ground that the enhanced price was never realized and therefore duty paid on such differential value is not legally payable – Whether the differential duty paid on supplementary invoices, arising from unilateral price revision, forms part of the assessable value under ... [Read more]

Central Excise – Refund of Differential Duty paid on notional and unrealised value basis supplementary invoices - Appellant sought to revise the price and issued supplementary invoice, discharging differential duty but the buyer refused to accept the revised price and declined payment of the differential amount - The appellant filed a refund claim on the ground that the enhanced price was never realized and therefore duty paid on such differential value is not legally payable – Whether the differential duty paid on supplementary invoices, arising from unilateral price revision, forms part of the assessable value under Section 4 of the CEA, 1944 when such price revision was not accepted and paid by the buyer - HELD - The differential duty paid by the appellant on the basis of supplementary invoices, arising out of unilateral price revision not accepted by the buyer, is not in accordance with the law and is refundable. The expression "price actually paid or payable" under Section 4 assumes significance and it must denote a legally enforceable obligation. In the absence of any contractual provision enabling upward price revision, the subsequent issuance of supplementary invoices remains a unilateral act on the part of the appellant without binding effect on the buyer. This reinforces the position that the revised price never attained the character of “price payable” under Section 4 - The supplementary invoice does not represent a valid transaction value. The duty paid on such notional and unrealized value cannot be sustained - The principle laid down in Commissioner of Central Excise v. Amul Industries Pvt. Ltd. is applicable that where efforts to realize enhanced consideration fail, the same cannot form part of assessable value. The retention of such duty by the Revenue would amount to collection of tax without authority of law - The differential duty paid by the appellant on the basis of supplementary invoices, arising out of unilateral price revision not accepted by the buyer, does not form part of the assessable value under Section 4 of the Central Excise Act, 1944 and is therefore it is refundable – The impugned order is set aside and the appeal is allowed - Unjust Enrichment - The contemporaneous evidence clearly establishes that the differential amount has not been realized by the appellant and that the incidence of duty has not been passed on to the buyer in any manner whatsoever. In the absence of any contrary material, it is held that the incidence of duty has not been passed on and the bar of unjust enrichment under Section 11B is not attracted. The doctrine of unjust enrichment as elaborately considered by the Hon'ble Supreme Court in CCE v. Allied Photographics India Ltd. requires the Department to establish based on evidence that the incidence of duty has been passed on, which is absent in the present case - The bar of unjust enrichment under Section 11B is not attracted. [Read less]

GST - Levy of GST on Affiliation Fees collected by University – Petitioner argued that the collection of affiliation fees was a statutory function and not a commercial activity, and hence, not amenable to GST - Whether the collection of affiliation fees by the statutory University would attract the levy of GST – HELD – Considering the nature of the statutory activities being undertaken by the University and in relation thereto, collecting of the affiliation fees cannot be held to be a form of supply of any service of the nature as contemplated in clause (a) of Section 7(1) of the CGST Act, 2017 - The collection of af... [Read more]

GST - Levy of GST on Affiliation Fees collected by University – Petitioner argued that the collection of affiliation fees was a statutory function and not a commercial activity, and hence, not amenable to GST - Whether the collection of affiliation fees by the statutory University would attract the levy of GST – HELD – Considering the nature of the statutory activities being undertaken by the University and in relation thereto, collecting of the affiliation fees cannot be held to be a form of supply of any service of the nature as contemplated in clause (a) of Section 7(1) of the CGST Act, 2017 - The collection of affiliation fees by the University is a statutory and regulatory function, and not a commercial activity falling within the purview of the term "supply" under Section 7 of the CGST Act, 2017. The University is established under a State legislation with the primary objective of disseminating education and not engaging in any business activities. The settled principles of law is, wide meaning needs to be attributed to the term "education" and that the activities of a Statutory University cannot be categorized as "business activities" for the purpose of GST. Once such activity itself is not ‘supply’ and/or it is not business within the meaning and purview of sub-section 1(a) of Section 7, there is no question of the charging provision being applicable. As a sequel thereto, once Sections 7 and 9 itself are not applicable, the proper officer would not have jurisdiction to issue show cause notice under section 74 of CGST Act – Further, the fees collected by the University, such as affiliation fees, are not in the nature of "consideration" as envisaged under the CGST Act, as there is no element of contractual relationship or quid pro quo involved - The Court relied on the decisions of the High Courts of Karnataka, Goa and Rajasthan, which have held that the collection of affiliation fees by universities is a statutory and regulatory function, and not a taxable activity under the GST laws. The proper officer acted without jurisdiction in issuing the show cause notice and passing the order-in-original demanding GST on the affiliation fees collected by the University - The impugned order-in-original and the rectification order are set aside and the writ petition is allowed [Read less]

GST – Taxability of Affiliation fees and NOC fees collected by public Universities – Petitioners-universities established under various State Acts challenge the assessment orders demanding GST on the Affiliation fees and No objection certificate (NOC) fees collected by the universities from affiliated colleges - Whether the activities of the public universities in granting affiliation and issuing NOC certificates can be considered as "supply of service" in the course or furtherance of "business" under the GST Act, thereby making them liable to GST - HELD - The Central, State and Local Governments have been put under a ... [Read more]

GST – Taxability of Affiliation fees and NOC fees collected by public Universities – Petitioners-universities established under various State Acts challenge the assessment orders demanding GST on the Affiliation fees and No objection certificate (NOC) fees collected by the universities from affiliated colleges - Whether the activities of the public universities in granting affiliation and issuing NOC certificates can be considered as "supply of service" in the course or furtherance of "business" under the GST Act, thereby making them liable to GST - HELD - The Central, State and Local Governments have been put under a separate category where questions of whether supply of services is in pursuance of business or not, is irrelevant and all supplies of services, irrespective of whether it is in the course of business or not, are taxable, unless they are included in Schedule-III or by way of a specific notification - The petitioners-Universities are all universities which are separate entities, created and established under the Acts of the State Legislature and they are not part of the State Government or Local Authority, neither they are part of the Central Government. In such circumstances, the provisions of Section 7(2) or Section 2(17)(i) of the CGST Act would not be applicable to the petitioners - The activities of the public universities in granting affiliation and issuing NOC certificates are not in the course or furtherance of "business" as defined under Section 2(17) of the CGST Act, 2017. Consequently, the activities of the petitioner universities do not constitute supply of service as provided in Section 7 of the GST Act. Consequently, these services would not be exigible to tax - The question of the universities being eligible for exemption under the relevant notifications does not arise since the activities themselves are not taxable in the first place. Accordingly, the assessment orders demanding GST on the affiliation fees and NOC fees collected by the public universities are set aside – The writ petitions are allowed [Read less]

The mere deposit of cash into the Electronic Credit Ledger would not amount to payment of tax under the provisions of GST Act. The payment of tax would occur only when the necessary amount is appropriated to the Govt exchequer through debit entries.

Service Tax - Taxability of participation fee and recruitment fee collected by an educational institute from companies visiting the campus for recruitment - Whether the participation fees and recruitment fees collected by the appellant are liable to service tax under the category of 'Manpower Recruitment or Supply Agency' service - HELD - The amount collected as recruitment fees from the companies visiting the campus for recruitment of the management graduates is leviable to service tax under the category of 'Manpower Recruitment or Supply Agency' service as per the clarification provided in the CBEC Circular. However, the... [Read more]

Service Tax - Taxability of participation fee and recruitment fee collected by an educational institute from companies visiting the campus for recruitment - Whether the participation fees and recruitment fees collected by the appellant are liable to service tax under the category of 'Manpower Recruitment or Supply Agency' service - HELD - The amount collected as recruitment fees from the companies visiting the campus for recruitment of the management graduates is leviable to service tax under the category of 'Manpower Recruitment or Supply Agency' service as per the clarification provided in the CBEC Circular. However, the participation fees charged by the appellant from all the corporate houses for using the institute's infrastructure facilities and for the selection process cannot be subjected to service tax under this category, as the participation fees has no direct nexus with the actual recruitment - The demand for the earlier period cannot be sustained by invoking the extended period of limitation, as the Department was aware of the collection of such fees based on the previous show-cause notices issued, and the appellant's records were periodically audited. Therefore, the allegation of suppression of facts is unsustainable - The impugned order is modified to confirm the demand only to the extent of recruitment fees collected with interest for the normal period of limitation. The demand on participation fees is set aside. The appellant was also allowed the benefit of cum-tax value in computing the demand - The appeals are partly allowed [Read less]

Customs – Imposition of Anti-dumping duty on “semi-finished ophthalmic lenses” originating in or exported from China PR by treating the appellant to be non-cooperative - The designated authority treated Essilor Group as non-cooperative based on the finding that the related party to the appellant did not participate in the subject investigation - The designated authority relied on an Equity Pledge Agreement between Shanghai Essilor Optical Co. Ltd. (a group company) and Danyang Shoushi Glasses Co. Ltd. (the purchaser of Danyang ILT shares) to conclude that Essilor Group continued to control Danyang ILT indirectly - Wh... [Read more]

Customs – Imposition of Anti-dumping duty on “semi-finished ophthalmic lenses” originating in or exported from China PR by treating the appellant to be non-cooperative - The designated authority treated Essilor Group as non-cooperative based on the finding that the related party to the appellant did not participate in the subject investigation - The designated authority relied on an Equity Pledge Agreement between Shanghai Essilor Optical Co. Ltd. (a group company) and Danyang Shoushi Glasses Co. Ltd. (the purchaser of Danyang ILT shares) to conclude that Essilor Group continued to control Danyang ILT indirectly - Whether the existence of the Equity Pledge Agreement resulted in Essilor Group maintaining control over Danyang ILT, and whether Danyang ILT should be considered a related party to Essilor Group - HELD - The existence of the Pledge Agreement is not a relevant factor for determining the relationship between Essilor Group and Danyang ILT, as a pledge does not create any ownership or control rights by virtue of the pledged shares or equity. A pledge is a bailment of property as security for a debt, and the pledgee (Essilor Group) does not acquire ownership rights over the property which is pledged - The sale of shares by Essilor Group to Danyang Shoushi Glasses Co. Ltd. in November 2018 resulted in cessation of control by Essilor Group over Danyang ILT. Accordingly, Danyang ILT cannot be considered a related party to Essilor Group under the relevant rules - The designated authority could not have drawn an adverse inference against Essilor Group for not providing the Annual Reports of Danyang ILT, as these documents were not within the possession and control of Essilor Group - The recommendation of the Designated Authority for imposing anti-dumping duty on the appellant by treating it as non-cooperative is set aside and the DA is directed to consider the case of appellant afresh without treating it as non-cooperative – The appeals are allowed - Information regarding non-exporting related entities - Whether information regarding non-exporting related entities was relevant for the purpose of determining the dumping margin for Essilor Group - HELD - The filing of information by non-exporting producers is not necessary for determination of normal value, as it does not affect the normal value calculation. According to the relevant rules and trade notices, only those related producers whose product was exported to India were required to participate and file the questionnaire response. Since Essilor Group had disclosed that these three entities did not export the subject goods to India during the period of investigation, information relating to these non-exporting entities was irrelevant for the purpose of determining the dumping margin for Essilor Group. The DA was not justified in holding Essilor Group as non-cooperative on this ground. [Read less]

Customs – Validity of Certificate of Origin, sample testing – Revenue of the view that the SAFTA Certificates of Origin provided by the Bangladesh exporters, and the Bangladesh Authorities certifying in the Certificate of Origin that the Rapeseed oil is wholly manufactured in Bangladesh cannot be taken as correct - Whether the Revenue can question the veracity of the COO issued by the Bangladesh authorities and use limited sample testing results to determine duty liability across all consignments – HELD - The Certificate of Origin, sent by Indian officials for verification to the Bangladesh Officials, have been certi... [Read more]

Customs – Validity of Certificate of Origin, sample testing – Revenue of the view that the SAFTA Certificates of Origin provided by the Bangladesh exporters, and the Bangladesh Authorities certifying in the Certificate of Origin that the Rapeseed oil is wholly manufactured in Bangladesh cannot be taken as correct - Whether the Revenue can question the veracity of the COO issued by the Bangladesh authorities and use limited sample testing results to determine duty liability across all consignments – HELD - The Certificate of Origin, sent by Indian officials for verification to the Bangladesh Officials, have been certified by Bangladesh officials to be correct towards the contents therein. The DRI has no authority to question the COOs issued and duly affirmed by Bangladesh - Revenue cannot take the stand that since Erucic Acid content was not tested/verified, that by itself would prove their origin to be other than from Bangladesh, negating the assertion of the Bangladesh authorities – Further, in the present case all the imports were prior to the Section 28DA coming into force. Therefore, the appellants herein are not burdened with the additional requirement given so as to know the veracity of the overseas exporter as given in the Certificate of Origin - Revenue’s case doubting the veracity of the Certificate of Origin has no legs to stand on. Therefore, the impugned orders are set aside on this ground itself – The demand of duty, interest and penalties imposed are set aside and the appeals are allowed - Limited Sample testing, Extended period - The act of a few samples being tested for the second time, without giving any further opportunity to the appellants to get them re-tested is a case of gross error on the part of the Revenue. In many cases CRCL found the Erucic Acid value to be more than 2%. Therefore, the Revenue’s attempt to apply the lab result of the second sample taken for a few consignments to all the consignments, cannot be legally sustained - All documents for claiming the Duty exemption have been provided by the appellants at the time of imports. The goods were lab tested by CRCCL and the results were reflected in the website even before the Out of Charge was issued. No link of the appellants has been established by the Revenue with the purported non-fulfilment of SAFTA conditions in the COOs issued. Hence, the confirmed demand for the extended period stand set aside - In the absence of any evidence of collusion or fraud by the appellants, the demands confirmed for the extended period are set aside on grounds of time-bar as well - Duty re-assessment under Section 17(5) and appeal against self-assessment - Whether the Revenue was required to file an appeal against the self-assessed Bills of Entry before proceeding under Section 28 – HELD - The re-assessment under Section 17(5) and demand under Section 28 are distinct actions available to the Revenue. While the Supreme Court ruling in ITC Ltd. case requires the Revenue to file an appeal against self-assessment, in the present case, the Revenue's resort to Section 28 proceedings would not be vitiated since no case of suppression has been made out against the appellants. The Tribunal has not found any error in the Revenue's approach of proceeding under Section 28 in the present case. [Read less]

Customs – Interest on refund of amount deposit pursuant to Supreme Court order - Applicable interest - The appellant had deposited an amount with the Department pursuant to the directions contained in the interim order of the Supreme Court subject to the condition that it will be refunded to the appellant with applicable interest in the event the appeal filed by the appellant was allowed. The Supreme Court subsequently allowed the appeal filed by the appellant – Appellant seeking interest at the rate of 6% per annum on the amount deposited pursuant to the directions issued by the Supreme Court - Whether the refund of a... [Read more]

Customs – Interest on refund of amount deposit pursuant to Supreme Court order - Applicable interest - The appellant had deposited an amount with the Department pursuant to the directions contained in the interim order of the Supreme Court subject to the condition that it will be refunded to the appellant with applicable interest in the event the appeal filed by the appellant was allowed. The Supreme Court subsequently allowed the appeal filed by the appellant – Appellant seeking interest at the rate of 6% per annum on the amount deposited pursuant to the directions issued by the Supreme Court - Whether the refund of amount deposited pursuant to Supreme Court order and the interest thereon would be governed by the provisions of the Customs Act, particularly Sections 27 and 27A, or whether the refund and interest would be in accordance with the directions contained in the interim order of the Supreme Court – HELD - The appellant was permitted to deposit the amount subject to the condition that the said amount will be refunded to the appellant forthwith with applicable interest in the event of the appeal being allowed. The appellant was, therefore, not required to file any application under section 27 of the Customs Act for refund of the amount and interest - The refund of the amount and the interest thereon would not be governed by the provisions of the Customs Act, particularly Sections 27 and 27A - Any deposit made pursuant to the directions of a Court order would be governed by the conditions imposed in that order and not by the provisions of the statute - The Supreme Court's interim order clearly directed that the amount deposited by the appellant shall be refunded forthwith with applicable interest in the event the appeal is allowed. The Department was bound to comply with this direction of the Supreme Court and the provisions of the Customs Act were not applicable – Further, the amount deposited by the appellant pursuant to the Supreme Court's order could not be treated as 'duty' under the Customs Act, and thus the provisions of Sections 27 and 27A would not apply - The Department is directed to forthwith pay interest to the appellant at the rate of 6% per annum from the date of deposit till the date of payment – The appeal is allowed [Read less]

Service Tax - Liability on Works Contract Service - Appellant executed a project for the Delhi PWD in connection with the Commonwealth Games, 2010. The Department alleged that the appellant had paid service tax at the rate of 2% under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, when the applicable rate should have been 4% - Whether the appellant is required to pay the differential service tax of 2% of the gross taxable value considering the services rendered as Works Contract Service - HELD – The appellant had paid service tax on the value of the service portion at the applicable rate ... [Read more]

Service Tax - Liability on Works Contract Service - Appellant executed a project for the Delhi PWD in connection with the Commonwealth Games, 2010. The Department alleged that the appellant had paid service tax at the rate of 2% under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, when the applicable rate should have been 4% - Whether the appellant is required to pay the differential service tax of 2% of the gross taxable value considering the services rendered as Works Contract Service - HELD – The appellant had paid service tax on the value of the service portion at the applicable rate of 10.30% after availing the benefit of exemption under Notification No.12/2003-ST dated 20.06.2003 on the value of materials supplied. The Department did not dispute the admissibility of the benefit under the said notification. In these circumstances, the demand for differential service tax of 2% under the Works Contract Service is not sustainable - The demand for differential service tax is set aside and the appeal is allowed [Read less]

Service Tax - Taxability of alumni fee collected along with tuition fee - Department alleged that the alumni fee collected by appellant along with the tuition fee is liable to service tax in the hands of the appellant - Whether the alumni fee is includible in the taxable value for the services rendered by the appellant - HELD - The alumni fee collected by the University cannot be considered as consideration for the services rendered by the appellant. When no service is provided, the applicability of service tax is not in question. The services rendered by the appellant does not relates to Alumni services to the ex-students... [Read more]

Service Tax - Taxability of alumni fee collected along with tuition fee - Department alleged that the alumni fee collected by appellant along with the tuition fee is liable to service tax in the hands of the appellant - Whether the alumni fee is includible in the taxable value for the services rendered by the appellant - HELD - The alumni fee collected by the University cannot be considered as consideration for the services rendered by the appellant. When no service is provided, the applicability of service tax is not in question. The services rendered by the appellant does not relates to Alumni services to the ex-students, if any, provided by the Sikkim Manipal University against the alumni fees collected by the University along with Tuition Fees. Therefore, alleging that the Alumni Fee which has been collected along with the tuition fees should be included in the gross taxable value, in the absence of any service by the appellant, cannot be sustained – Further, the demand was confirmed by invoking the extended period of limitation, which cannot be sustained as all the facts were within the knowledge of the department and the appellant had been regularly filing the service tax returns and subjected to periodic audits. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax – Export of Services - Refund claim under Notification No.41/2012-ST dt. 29.06.2012 as amended by Notification No.1/2016 dt. 03.02.2016 – Refund of the service tax paid in respect of certain services viz. Currency Conversion charges, Bank charges and Terminal Handling charges which were utilised for the export of goods for the period 01.07.2012 to 12.06.2015 – Revenue of the view that to avail the benefit of Notification No.1/2016-ST there should be an earlier claim for refund which stood rejected, but in this case, the appellant’s present claim being made for the first time, the refund is not entertain... [Read more]

Service Tax – Export of Services - Refund claim under Notification No.41/2012-ST dt. 29.06.2012 as amended by Notification No.1/2016 dt. 03.02.2016 – Refund of the service tax paid in respect of certain services viz. Currency Conversion charges, Bank charges and Terminal Handling charges which were utilised for the export of goods for the period 01.07.2012 to 12.06.2015 – Revenue of the view that to avail the benefit of Notification No.1/2016-ST there should be an earlier claim for refund which stood rejected, but in this case, the appellant’s present claim being made for the first time, the refund is not entertainable - Whether the refund claim is admissible under Notification No.1/2016 even though there was no earlier rejected claim - HELD - The denial of refund is contrary to the spirit of Notification No.1/2016 which gives retrospective effect - Section 160 (2) of the Finance Act, 2016 mandates that rebate of all such service tax shall be granted which has been denied, but it should not have been so denied had the amendment made by sub-section (1) been in force at all in material times. Here, in the case on hand, there was no scope for the Revenue authorities to reject the Appellant’s claim since there was no refund claim made in the first place, hence, the word ‘denied’ has been equated with the word ‘rejected’ - Further, when the Notification itself does not discriminate between claimants and the non-claimants of refund, the artificial discrimination adopted by the authorities below therefore appears to be far-fetched. Accordingly, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Renting of Immovable Property Services - The appellant had entered into a tripartite MoU with companies like BIGTEC and Micro Labs along with Indian Institute of Science for collaborating R&D programmes and implemented technologies using cross disciplinary expertise. The appellant rented out their buildings with the infrastructure to the participating companies and collected licence fees – Demand of service tax under 'Renting of Immovable Property Services' – HELD - The tripartite agreement cannot be considered as renting of immovable property against the appellant as the amounts collected are towards lic... [Read more]

Service Tax - Renting of Immovable Property Services - The appellant had entered into a tripartite MoU with companies like BIGTEC and Micro Labs along with Indian Institute of Science for collaborating R&D programmes and implemented technologies using cross disciplinary expertise. The appellant rented out their buildings with the infrastructure to the participating companies and collected licence fees – Demand of service tax under 'Renting of Immovable Property Services' – HELD - The tripartite agreement cannot be considered as renting of immovable property against the appellant as the amounts collected are towards licence fees and vary for each month depending upon the extent of research projects undertaken, unlike in a case of renting where a fixed amount is paid for renting of immovable property. Therefore, these amounts cannot be considered as payments towards renting of the infrastructure that belongs to IISC. The demand under this category is set aside - The appeal is partially allowed and remanded only for the purpose of calculation of interest for the amount confirmed and paid - Event Management Services - The appellant provided logistic support for conducting symposium and assistance discussions for the management for eradication of tropical diseases. The Revenue alleged that this service amounted to 'Event Management Services' – HELD - Since the services are for preventing certain tropical diseases, they do not fall under the definition of 'Event Management Services'. Accordingly, the demand against this is set aside - Scientific or Technical Consultancy Services - The appellant received amounts from various clients for conducting certain research on scientific and technical aspects through tripartite agreements between IISC, the appellant and various other organisations - HELD - Since these amounts are towards such research-oriented programmes, they are rightly classifiable 'Scientific or Technical Consultancy Services' and the demand on this account is upheld. The audit was conducted from September 2008 and the show-cause notice was issued invoking extended period of limitation demanding service tax for the period from 2004 to 2008. The fact that the appellant was into rendering Scientific or Technical Consultancy Services came to the knowledge of the department only after perusal of various documents, therefore, they are justified in invoking the extended period of limitation. The appellant has paid the tax and the 25% penalty towards the above demand but no interest payment has been brought to the notice. The matter is remanded for quantification of interest - The appeal is partially allowed and remanded only for the purpose of calculation of interest for the amount confirmed and paid. [Read less]

Service Tax - Secondment of employees by an overseas entity under Secondment of employee agreement - Appellant paid the entire salary of such seconded employees with other benefits while the foreign entity dispersed the other part of the salary - Whether the appellant is liable to pay service tax under the category of 'Manpower Recruitment or Supply Agency Service' under reverse charge mechanism for the manpower services received from their parent-company – HELD - The Supreme Court in the case of Northern Operating System Pvt. Ltd. held that in a typical secondment arrangement, where employees of an overseas entity are d... [Read more]

Service Tax - Secondment of employees by an overseas entity under Secondment of employee agreement - Appellant paid the entire salary of such seconded employees with other benefits while the foreign entity dispersed the other part of the salary - Whether the appellant is liable to pay service tax under the category of 'Manpower Recruitment or Supply Agency Service' under reverse charge mechanism for the manpower services received from their parent-company – HELD - The Supreme Court in the case of Northern Operating System Pvt. Ltd. held that in a typical secondment arrangement, where employees of an overseas entity are deputed to the host entity (Indian associate) on the latter's request to meet its specific needs, the payment made by the Indian company to the overseas employer would be treated as service by the overseas entity and taxed, even though the Indian company has operational or functional control over the seconded employees during the period of secondment - In the present case, the terms of the agreement between the appellant and its parent company clearly establish that the employees belong to the parent company and are sent on secondment to facilitate the operations of the appellant. The fact that the employees are under the control of the appellant during the secondment period does not change the nature of the relationship, as they continue to be on the payroll of the parent company under its international assignment policy - The impugned order is upheld to the extent of confirming the demand for the normal period, as no mala fide intention can be alleged against the appellant since any tax payment would be eligible for cenvat credit. The penalties imposed were set aside - The appeal is partially allowed [Read less]

Customs - Classification of 'Extraneal Peritoneal Dialysis Solution with 7.5% Icodestrin' under Customs Tariff Heading (CTH) 9018 or 3004 - Appellant imported goods described as "Extraneal Peritoneal Dialysis Solution with 7.5% Icodestrin" and sought classification under CTH 9018, which pertains to instruments and appliances used in medical, surgical, dental, or veterinary sciences – Dept reclassified the goods under CTH 3004, which covers medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, resulting in the denial of the benefit of exemption – HELD - The Tribunal, following its own... [Read more]

Customs - Classification of 'Extraneal Peritoneal Dialysis Solution with 7.5% Icodestrin' under Customs Tariff Heading (CTH) 9018 or 3004 - Appellant imported goods described as "Extraneal Peritoneal Dialysis Solution with 7.5% Icodestrin" and sought classification under CTH 9018, which pertains to instruments and appliances used in medical, surgical, dental, or veterinary sciences – Dept reclassified the goods under CTH 3004, which covers medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, resulting in the denial of the benefit of exemption – HELD - The Tribunal, following its own earlier order and the decision of the Supreme Court in the appellant's case, held that the classification of the goods under CTH 9018 stands settled. The Commissioner (Appeals) had already considered the facts and given a clear finding justifying the classification under CTH 9018, and similar views were also expressed by the Delhi and Kolkata Benches - the issue insofar as the classification of the goods in question is concerned, is no more res integra and hence, the impugned order is set aside – The appeal is allowed [Read less]

Customs - Determination of assessable value in ex-works price – Appellant declared the ex-works price as FOB value in the B/E and added the cost of local transport up to the port of export as well as the cost of transport up to the place of port of import and transit insurance - Department contended that the freight should have been calculated as 20% of the FOB value instead of 20% of the ex-works value, leading to short payment of duty – HELD - The contention of the importer that the value cannot be determined from ex-works price under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is inc... [Read more]

Customs - Determination of assessable value in ex-works price – Appellant declared the ex-works price as FOB value in the B/E and added the cost of local transport up to the port of export as well as the cost of transport up to the place of port of import and transit insurance - Department contended that the freight should have been calculated as 20% of the FOB value instead of 20% of the ex-works value, leading to short payment of duty – HELD - The contention of the importer that the value cannot be determined from ex-works price under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is incorrect. In this case, invoices were not issued on CIF or FOB basis but were issued on ex-works basis. As per Rule 10(2) of the Valuation Rules, the cost of transportation up to the place of import has to be included in the assessable value, which includes not only the cost of transport from the port of export but also the cost of transport up to the port of export. The FOB value includes all costs up to placing the goods on board the vessel/aircraft, i.e., the costs of transport from the factory have to be included to arrive at the FOB value. The method used by the importer to calculate the assessable value from the ex-works price is incorrect. The Revenue is correct in asserting that the cost of air freight that was to be included in the assessable value should have been 20% of the FOB value and not 20% of the ex-works price - It is certainly an oversight on the part of the appellant in not adding the cost of local transport upto the port of export to the ex-works price and declaring it as the FOB value. If there was an oversight by the importer, there was also an oversight by the officers who did not correct the declaration and assess the B/E correctly during this period. There is nothing on record to show that either the importer or the officers or the customs broker had any intention to evade duty or reduce the liability of duty. Since the entire period of demand was within the extended period of limitation, the same is set aside. Consequently, the penalty also needs to be set aside - The impugned orders are set aside and the appeal is allowed [Read less]

Central Excise – Eligibility to interest on refund on amount deposited pursuant to proceedings, which ultimately concluded in appellant’s favour - The Commissioner (Appeals) permitted the refund but restricted the grant of interest, treating only the amount being 7.5% of the confirmed demand as a pre-deposit and allowing interest only on this limited amount - Whether the appellant is entitled to interest on the entire refunded amount from the date of deposit till the date of refund, and whether the appellant is entitled to "interest on interest" - HELD - Based on the consistent legal approach of the High Courts and Sup... [Read more]

Central Excise – Eligibility to interest on refund on amount deposited pursuant to proceedings, which ultimately concluded in appellant’s favour - The Commissioner (Appeals) permitted the refund but restricted the grant of interest, treating only the amount being 7.5% of the confirmed demand as a pre-deposit and allowing interest only on this limited amount - Whether the appellant is entitled to interest on the entire refunded amount from the date of deposit till the date of refund, and whether the appellant is entitled to "interest on interest" - HELD - Based on the consistent legal approach of the High Courts and Supreme Court allowing interest even in the absence of statutory provisions, as compensation for the deprivation of funds, the appellant is entitled to interest on the entire deposited amount from the date of deposit till the date of actual refund, at the rate of 12% per annum. However, the refund shall be reduced to the extent of interest, if any, already paid. Further, no interest on interest shall be admissible. The original adjudicating authority is directed to compute and grant interest at the rate of 12% per annum from the date of deposit made during the course of investigation till the date of actual refund of the said amount - The appeal is allowed [Read less]

Central Excise - Determination of assessable value of excisable goods for captive consumption based on cost of production - The assessee, a manufacturer of automotive batteries, had stock-transferred lead oxide to its other unit for captive consumption - Revenue alleged that the assessee had wilfully suppressed the cost of production and adopted its own costing method instead of the mandated CAS-4 method, thereby short-paying the duty. The assessee contended that the cost certificates provided were for the relevant period and not based on previous periods, and that the cost of lead, being the major raw material, was determ... [Read more]

Central Excise - Determination of assessable value of excisable goods for captive consumption based on cost of production - The assessee, a manufacturer of automotive batteries, had stock-transferred lead oxide to its other unit for captive consumption - Revenue alleged that the assessee had wilfully suppressed the cost of production and adopted its own costing method instead of the mandated CAS-4 method, thereby short-paying the duty. The assessee contended that the cost certificates provided were for the relevant period and not based on previous periods, and that the cost of lead, being the major raw material, was determined based on the moving average price of the leading domestic producer – HELD – It is the case of the Revenue is that the Appellant did follow the costing method in terms of CAS-4; the Cost Statement prepared by the Appellant was not in conformity with the general principles of costing in CAS-4 and that the cost certificates furnished by the Appellant relate to the past periods and hence, same are not reliable. Whereas it is the case of the appellant that all the CAS-4 certificates were furnished for the relevant period as certified by Cost Accountant and that none of the CAS-4 certificates stated that the same were prepared based on the costing of any previous period/s - In the backdrop of the above arguments, the matter is remitted back to the Adjudicating Authority to verify the CAS-4 certificates submitted by the assessee and determine the assessable value accordingly. If the Cost Statements relate to the period in question, then perhaps the assertion of the appellant may have to be accepted. The demand could only be for the normal period and not the extended period, as there was no evidence of wilful suppression of facts – The Appeal stands disposed of [Read less]

Central Excise - Concrete Mix or Ready-Mix Concrete - Whether the appellant is eligible for the benefit of exemption notification No. 12/2012-CE dated 17.03.2012 in respect of the concrete mix claimed to be manufactured by them - Revenue's claim that appellant have manufactured Ready-Mix Concrete (RMC) at the site, hence, not eligible to the benefit of the said notification – HELD - The difference between the concrete mix and Ready-Mix Concrete mainly rests on the machinery used, the process of manufacture and use of retarders and plasticizers which enhances the setting time of Ready-Mix Concrete. The appellant had not a... [Read more]

Central Excise - Concrete Mix or Ready-Mix Concrete - Whether the appellant is eligible for the benefit of exemption notification No. 12/2012-CE dated 17.03.2012 in respect of the concrete mix claimed to be manufactured by them - Revenue's claim that appellant have manufactured Ready-Mix Concrete (RMC) at the site, hence, not eligible to the benefit of the said notification – HELD - The difference between the concrete mix and Ready-Mix Concrete mainly rests on the machinery used, the process of manufacture and use of retarders and plasticizers which enhances the setting time of Ready-Mix Concrete. The appellant had not added any retarders and plasticizers, which is quite essential in the case of Ready-Mix Concrete to increase the shelf life. Besides, it is the claim of the appellant that concrete mix manufactured by the appellant are as per IS 456: 2000; whereas for Ready-Mix Concrete is IS 4926:2003 - The Tribunal relied on the judgment of the Supreme Court in the case of Larsen and Toubro Ltd. v. CCE, Hyderabad and the CBEC Circular No. 368/19/98-CX dated 06.01.1998, and concluded that the product manufactured by the appellant at the site which is 2 km away is Concrete Mix and not Ready-Mix Concrete, and therefore, the appellant is eligible for the benefit of the exemption notification - Further, the demand is unsustainable in law as the Department issued the show-cause notice after 3.5 years of receiving the information from the appellant. When all the information was available with the department in the year 2015 itself, demanding differential duty after receiving the information for the subsequent period invoking suppression of facts, is unsustainable in law - The impugned order is set aside and the appeal is allowed [Read less]

GST - Refund of Input Tax Credit due to Inverted Duty Structure - Construction of metro rail works - Petitioner procured inputs and input services taxed at higher GST rates (18% and 28%) compared to the 12% GST rate applicable on its outward supply of works contract services, resulting in accumulation of ITC - Refund claims under Section 54(3)(ii) of the CGST Act, 2017 - Refund claims were rejected by the Original Authority and Appellate Authority without considering the effect of Notification No.14/2022, dated 5th July 2022 – HELD - The amendment made by Notification No.14/2022 dated 5th July 2022 to Rule 89(5) of the C... [Read more]

GST - Refund of Input Tax Credit due to Inverted Duty Structure - Construction of metro rail works - Petitioner procured inputs and input services taxed at higher GST rates (18% and 28%) compared to the 12% GST rate applicable on its outward supply of works contract services, resulting in accumulation of ITC - Refund claims under Section 54(3)(ii) of the CGST Act, 2017 - Refund claims were rejected by the Original Authority and Appellate Authority without considering the effect of Notification No.14/2022, dated 5th July 2022 – HELD - The amendment made by Notification No.14/2022 dated 5th July 2022 to Rule 89(5) of the CGST Rules, which modified the formula for calculation of refund of ITC on account of inverted duty structure, is clarificatory and retrospective in nature - The circular issued by the CBIC (Circular No.181/2022 dated 10th November 2022) providing that the amended formula would apply only prospectively from 5th July 2022 is contrary to the purport of the amendment and the intent behind it - The Petitioner's refund claims, which were filed within the prescribed time limit of two years under Section 54(1) of the CGST Act, are required to be considered as per the amended formula under Rule 89(5) as it existed after the amendment made by Notification No.14/2022 dated 5th July 2022 - The impugned orders rejecting the Petitioner's refund claims are quashed, and the Respondents are directed to grant the refund to the Petitioner as per the amended formula under Rule 89(5) – The petition is allowed [Read less]

GST - Alternate Remedy - Petitioner challenged an Order-In-Original issued under Section 74 of the CGST Act - Petitioner argued that the Order was without jurisdiction and violated principles of natural justice – HELD - The petitioner has an efficacious statutory remedy of appeal against the impugned Order, which it ought to have availed. This is not an exceptional case warranting the exercise of the Court's writ jurisdiction under Article 226 to bypass the alternate remedy - The alleged jurisdictional issues and violations of natural justice raised by the petitioner involved evaluation of factual aspects, which could be... [Read more]

GST - Alternate Remedy - Petitioner challenged an Order-In-Original issued under Section 74 of the CGST Act - Petitioner argued that the Order was without jurisdiction and violated principles of natural justice – HELD - The petitioner has an efficacious statutory remedy of appeal against the impugned Order, which it ought to have availed. This is not an exceptional case warranting the exercise of the Court's writ jurisdiction under Article 226 to bypass the alternate remedy - The alleged jurisdictional issues and violations of natural justice raised by the petitioner involved evaluation of factual aspects, which could be adequately addressed in the statutory appeal - The impugned Order could not be said to be wholly without jurisdiction or involving a patent breach of natural justice, which are the well-recognized exceptions to the rule of exhaustion of alternate remedies - The writ petition is dismissed granting the petitioner liberty to file the appeal within four weeks, with a direction to the Appellate Authority to consider the appeal on merits without adverting to the issue of limitation – The petition is dismissed [Read less]

Service Tax - Rejection of appeal on technical grounds without considering merits - Whether the Commissioner (Appeals) was justified in rejecting the appeal on technical grounds without providing an opportunity to rectify the defects – HELD - The defects pointed out by the Commissioner (Appeals) were curable in nature and the appellant should have been provided an opportunity to rectify them. The rejection of the appeal on technical grounds without hearing the appellant was not desirable - The fact show that three opportunities of personal hearings have been granted within a time gap of just 7 days, which is also against... [Read more]

Service Tax - Rejection of appeal on technical grounds without considering merits - Whether the Commissioner (Appeals) was justified in rejecting the appeal on technical grounds without providing an opportunity to rectify the defects – HELD - The defects pointed out by the Commissioner (Appeals) were curable in nature and the appellant should have been provided an opportunity to rectify them. The rejection of the appeal on technical grounds without hearing the appellant was not desirable - The fact show that three opportunities of personal hearings have been granted within a time gap of just 7 days, which is also against the principles of natural justice – The matter is remanded to learned Commissioner (appeals) to give opportunity to the party to rectify defects in their appeal and thereafter, the matter may be decided afresh by following the principles of natural justice - The appeal is allowed by way of remand [Read less]

Customs - Classification of Cold Rolled Stainless Steel Coils Grade J3 - Eligibility for exemption under Notification No. 50/2018-Cus – HELD - As per the precedent in M/s Shah Foils Ltd case, the goods in the instant case with Nickel content as low as 0.2% can be classified under CTH 7220 90 22 as Nickel Chromium Austenitic Type and the appellant is eligible for the exemption benefit under Notification No. 50/2018-Cus. However, the Tribunal in Gulshan Exim Pvt Ltd case had remanded the matter on classification aspect for a closer examination of the various processes undergone by the goods and their impact on the classifi... [Read more]

Customs - Classification of Cold Rolled Stainless Steel Coils Grade J3 - Eligibility for exemption under Notification No. 50/2018-Cus – HELD - As per the precedent in M/s Shah Foils Ltd case, the goods in the instant case with Nickel content as low as 0.2% can be classified under CTH 7220 90 22 as Nickel Chromium Austenitic Type and the appellant is eligible for the exemption benefit under Notification No. 50/2018-Cus. However, the Tribunal in Gulshan Exim Pvt Ltd case had remanded the matter on classification aspect for a closer examination of the various processes undergone by the goods and their impact on the classification. Therefore, issue of classification can only be decided after looking into various aspects as were directed to be looked into in Gulshan Exim Pvt Ltd case. The form in which goods are imported i.e. coils or otherwise as well as various surface treatments etc., are also relevant factors for looking into the details of tariff headings. In that matter, some portion of the demand was surviving otherwise also and was not hit by limitation and accordingly, interest and penal possibilities could not be ruled out, which is not the case in the present case as whole of the duty demand is barred by limitation and therefore, demand will get extinguished in total and issue of classification will get reduced to academic interest only - The appeal is allowed on limitation and valuation. The point of classification is left open to be decided in terms of our earlier order in Gulshan Exim Pvt Ltd – The appeal is allowed - Undervaluation of the Imported Goods - The department failed to establish the case of undervaluation as the conditions under Section 138C of the Customs Act for admission of the electronic evidence were not complied with. Further, the Department could not establish the goods imported by the appellant as comparable or similar to the goods imported by other parties as required under the Customs Valuation Rules. Accordingly, the Tribunal accepted the transaction value declared by the appellant - Invocation of Extended Period under Section 28(4) of the Customs Act - The extended period under Section 28(4) is not invokable in the present case as there was no suppression or collusion on the part of the appellant. The entire case of Dept was based on the Mill Test Certificates provided by the appellant itself, and hence, there was no suppression of any material information. The demand of duty is time-barred as the normal period of two years under Section 28(1) has lapsed. [Read less]

GST - Input Tax Credit – Denial of claim of ITC as being ineligible under Section 16(4) of the CGST Act, 2017 - Whether the petitioner is entitled to claim ITC even though the claim was made belatedly, in light of the insertion of Section 16(5) of the CGST Act through the Finance (No.2) Act, 2024 – HELD - The petitioner would be entitled to claim ITC as per the amended Section 16(5) of the CGST Act, which was inserted retrospectively with effect from 01.07.2017. The new sub-section (5) overrides the earlier time restriction prescribed under sub-section (4) and allows the registered person to claim ITC in any return fil... [Read more]

GST - Input Tax Credit – Denial of claim of ITC as being ineligible under Section 16(4) of the CGST Act, 2017 - Whether the petitioner is entitled to claim ITC even though the claim was made belatedly, in light of the insertion of Section 16(5) of the CGST Act through the Finance (No.2) Act, 2024 – HELD - The petitioner would be entitled to claim ITC as per the amended Section 16(5) of the CGST Act, which was inserted retrospectively with effect from 01.07.2017. The new sub-section (5) overrides the earlier time restriction prescribed under sub-section (4) and allows the registered person to claim ITC in any return filed up to 30.11.2021 in respect of invoices or debit notes pertaining to the financial years 2017-18 to 2020-21 - The returns having been filed by the petitioner within the cut-off date as stipulated under sub-clause (5) to Section 16 and relates to the period as mentioned therein, the petitioner would be entitled for such claim. The respondent is directed to reconsider the matter and re-look into the claim of ITC and to re-adjudicate the matter – The petition is disposed of [Read less]

Sec.54(1) does not bar a party from filing of more than one refund applications for the same tax period. When the basic condition of prescribed time limit is met, the technicalities cannot defeat the right to maintain the second refund application.

Tamil Nadu General Sales Tax Act, 1959 - Transit Sales and High Sea Sales with Hire Purchase Transactions - The assessee claimed exemption under Section 6(2) of the Central Sales Tax Act, 1956 for transit sales and under Section 5(2) for high sea sales – Department’s case that the assessee had camouflaged inter-state sales as transit sales and high sea sales to claim exemption, when the transactions were actually local sales under hire purchase agreements – Whether the transactions were in the nature of hire purchase agreements and therefore taxable under the Tamil Nadu General Sales Tax Act – HELD - The assessee's... [Read more]

Tamil Nadu General Sales Tax Act, 1959 - Transit Sales and High Sea Sales with Hire Purchase Transactions - The assessee claimed exemption under Section 6(2) of the Central Sales Tax Act, 1956 for transit sales and under Section 5(2) for high sea sales – Department’s case that the assessee had camouflaged inter-state sales as transit sales and high sea sales to claim exemption, when the transactions were actually local sales under hire purchase agreements – Whether the transactions were in the nature of hire purchase agreements and therefore taxable under the Tamil Nadu General Sales Tax Act – HELD - The assessee's documents showed that the transactions were not outright sales by transfer of documents of title, but were in the nature of hire purchase agreements where the goods remained the property of the seller. The assessee had raised two sale bills for the same transaction - one at the time of original sale under Section 6(2)(b) of the CST Act as a transit sale, and another at the termination of the hire purchase period as a local sale. This showed an attempt to camouflage the interstate sales as transit sales to claim exemption under Section 6(2) - Similarly, in the case of high seas sales, the Customs duty had been paid only on the import value and not on the high seas sale value, indicating that the high seas sale was a separate transaction from the import. The total amount financed by the assessee included the value of import, charges paid for clearance of the goods from customs, import duty paid and the assessee's profit margin. This showed that the import was a separate transaction and the hire purchase sale was a separate transaction - The movement of goods was not pursuant to any written contract, but the invoices to the customers were subsequent to the hire purchase agreement and included duty, interest and other charges. Therefore, the transactions were rightly held to be the first sale, taxable under the Tamil Nadu General Sales Tax Act. The penalty imposed for wilful suppression of facts is also upheld - The Tribunal's order disallowing the assessee's claims of transit sales and high sea sales exemptions, and imposing penalty for wilful suppression of facts, is upheld – The Tax Case (Revision) are dismissed [Read less]

Tamil Nadu Value Added Tax, 2006 - Secured creditor status of tax authorities under Insolvency and Bankruptcy Code (IBC) - Statutory charge over the properties of the corporate debtor for unpaid tax dues - Whether the statutory charge created in favor of the tax authorities under the TNVAT Act can qualify them as 'secured creditors' under the definition provided in Section 3(30) of the IBC - HELD - The statutory charge created in favor of the tax authorities under the TNVAT Act does not make them 'secured creditors' under the IBC. The clarificatory amendment brought to the IBC in 2026, expressly states that a security inte... [Read more]

Tamil Nadu Value Added Tax, 2006 - Secured creditor status of tax authorities under Insolvency and Bankruptcy Code (IBC) - Statutory charge over the properties of the corporate debtor for unpaid tax dues - Whether the statutory charge created in favor of the tax authorities under the TNVAT Act can qualify them as 'secured creditors' under the definition provided in Section 3(30) of the IBC - HELD - The statutory charge created in favor of the tax authorities under the TNVAT Act does not make them 'secured creditors' under the IBC. The clarificatory amendment brought to the IBC in 2026, expressly states that a security interest shall exist only if it is created pursuant to an agreement or arrangement between parties, and not merely by operation of law - The Supreme Court's in State Tax Officer vs. Rainbow Papers Ltd., which had accorded the status of secured creditor to tax authorities, has been effectively overruled by the amendment - The tax authorities had failed to file their claim within the prescribed time limit during the liquidation proceedings, and therefore, their claim could not be revived based on the earlier attachment order. Accordingly, the attachment order passed by the tax authorities cannot be enforced against the property purchased by the appellant through the IBC liquidation process - The Writ Appeal filed is allowed [Read less]

Customs - Import of self-adhesive tapes, Undervaluation - Rejection of declared value – Vide the impugned order the Tribunal held that Department has to prove undervaluation by evidence or information about comparable imports and casting suspicion on invoice produced by importer is not sufficient to reject it as evidence of value of imported goods. If charge of undervaluation cannot be supported either by evidence or information about comparable imports, benefit of doubt must go to importer – Revenue in appeal – SC HELD - Not inclined to interfere with the judgment and order of the Tribunal, hence, the Revenue appeal... [Read more]

Customs - Import of self-adhesive tapes, Undervaluation - Rejection of declared value – Vide the impugned order the Tribunal held that Department has to prove undervaluation by evidence or information about comparable imports and casting suspicion on invoice produced by importer is not sufficient to reject it as evidence of value of imported goods. If charge of undervaluation cannot be supported either by evidence or information about comparable imports, benefit of doubt must go to importer – Revenue in appeal – SC HELD - Not inclined to interfere with the judgment and order of the Tribunal, hence, the Revenue appeals are dismissed [Read less]

GST – Invoking of proceedings under Rule 86A of CGST Rules, 2017 based on information received from authorities outside the State - Petitioners' Electronic Credit Ledgers (ECrL) were blocked by invoking powers under Rule 86A of the CGST Rules based on information received from authorities outside the State that the suppliers of the petitioners were found to be non-existent or their registrations had been cancelled - Whether the proceedings initiated under Rule 86A were legally sustainable in the absence of the concerned officer's independent satisfaction about the genuineness of the transactions entered into by the petit... [Read more]

GST – Invoking of proceedings under Rule 86A of CGST Rules, 2017 based on information received from authorities outside the State - Petitioners' Electronic Credit Ledgers (ECrL) were blocked by invoking powers under Rule 86A of the CGST Rules based on information received from authorities outside the State that the suppliers of the petitioners were found to be non-existent or their registrations had been cancelled - Whether the proceedings initiated under Rule 86A were legally sustainable in the absence of the concerned officer's independent satisfaction about the genuineness of the transactions entered into by the petitioners – HELD - The Rule 86A contemplates invocation of the provision only in cases where the officer has reasons to believe that the credit of input tax has been fraudulently availed or is ineligible. Merely relying on information received from authorities outside the State regarding non-existence of suppliers or cancellation of their registrations is not sufficient to invoke the drastic measure under Rule 86A, without the officer's own satisfaction about the genuineness of the transactions entered into by the taxpayers. The officer concerned must have independent satisfaction about the existence of "reasons to believe" before invoking Rule 86A, and that such satisfaction cannot be based on borrowed satisfaction of another officer - The petitioners has produced relevant documents like invoices, e-way bills, and GSTR-2B entries to substantiate the genuineness of the transactions, which the respondents had not examined. In the absence of the officer's independent satisfaction about the transactions being bogus, the proceedings under Rule 86A are not legally sustainable. Further, the proceedings under Rule 86A cannot be a substitute for the proper recovery proceedings under Sections 73 and 74 of the CGST Act - The impugned orders blocking the petitioners' ECrL are set aside and the Respondents are directed to make the credit ledgers operative forthwith. However, this would not preclude the respondent authorities from initiating fresh proceedings under Rule 86A or Sections 73 and 74 of the CGST Act, if there are proper materials to show that the specific transactions entered into by the petitioners were bogus - Blocking of credit ledger with negative balance Fact - In one of the writ petitions (W.P.C. No.12186 of 2026), the petitioner contended that the credit ledger which was blocked had a negative balance - Whether blocking of the credit ledger with negative balance is legally valid – HELD - The blocking of the credit ledger with negative balance is not legally valid, following the principles laid down in the judgments relied upon by the petitioner. The decision of the Delhi High Court in Karuna Rajendra Ringshia case was also upheld by the Supreme Court. The respondents to make the electronic credit ledgers of the petitioners operative forthwith, including the credit ledger with negative balance. [Read less]