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Service Tax - Intellectual Property Rights Services – Taxation of Technical Know-how Payments – Appellant, engaged in bus body building, entered into a Technical License Contract Agreement with its parent company under which it received the right to use technical documentation and know-how paying royalties in consideration thereof - Whether royalty payments made by the appellant for technical know-how and technical documentation constitute Intellectual Property Rights (IPR) services liable to service tax under Section 65(55a) of the Finance Act, 1994 – HELD – The Royalty payments made for technical know-how do not ... [Read more]

Service Tax - Intellectual Property Rights Services – Taxation of Technical Know-how Payments – Appellant, engaged in bus body building, entered into a Technical License Contract Agreement with its parent company under which it received the right to use technical documentation and know-how paying royalties in consideration thereof - Whether royalty payments made by the appellant for technical know-how and technical documentation constitute Intellectual Property Rights (IPR) services liable to service tax under Section 65(55a) of the Finance Act, 1994 – HELD – The Royalty payments made for technical know-how do not constitute IPR services chargeable to service tax. The Technical License Contract Agreement clearly stipulates that the appellant receives no right or claim to trademarks, trade names, design rights, patents or copyrights, but only a non-exclusive and non-transferable right to use technical documentation and know-how for manufacturing, assembling and quality control purposes - Further, as per the Board's Circular No.B2/8/2004-TRU dated 10.09.2004, only IPRs covered under Indian law in force are chargeable to service tax, and since the technical know-how received by the appellant is not registered under any Indian law, the question of paying service tax on IPR services does not arise. The definition of IPR under Section 65(55a) specifically includes only trademarks, designs, patents or similar intangible property, but excludes technical know-how - The Tribunal in appellant own precedent in an identical set of facts held that where the Commissioner fails to establish the existence of any intellectual property right in the transaction, the demand cannot be sustained - The impugned order confirming the service tax demand is set aside and the appeal is allowed [Read less]

Customs - Inclusion of Royalty Payment paid to related supplier on net sales value – Demand of differential customs duties by addition of royalty payment - Appellant, an importer of raw materials from related foreign supplier, had declared transaction value of imported goods which was accepted by customs authority through multiple orders-in-original. Subsequently, a show cause notice was issued proposing to add royalty payment to the transaction value of imported raw materials for a thirteen-year period from 2001 to 2013, demanding differential duty with interest and penalty, which was confirmed by the adjudicating autho... [Read more]

Customs - Inclusion of Royalty Payment paid to related supplier on net sales value – Demand of differential customs duties by addition of royalty payment - Appellant, an importer of raw materials from related foreign supplier, had declared transaction value of imported goods which was accepted by customs authority through multiple orders-in-original. Subsequently, a show cause notice was issued proposing to add royalty payment to the transaction value of imported raw materials for a thirteen-year period from 2001 to 2013, demanding differential duty with interest and penalty, which was confirmed by the adjudicating authority - Whether the demand of differential customs duties by addition of royalty payment to the value of imported raw materials is justified – HELD - The issue regarding demand of differential duty by adding royalty has been considered, analysed and laid to rest by the demand in its earlier final order. The royalty payment is not entirely related to import of raw materials as there exists no condition of sale attached to the import of raw materials under the technology assistance agreement. The payment of royalty is linked to sale of manufactured goods using the brand name rather than being a pre-condition for import of goods - The Revenue has not demonstrated that there was any factual changes nor any new document has been referred to in the impugned order nor has the Revenue established that there was a change in law – The impugned order is set aside and the appeal is allowed [Read less]

Central Excise - Retrospective Application of Section 11D of Central Excise Act, 1944 - Appellant, engaged in steel fabrication, collected central excise duty from its customers (Indian Railways) but did not deposit the same to the Government exchequer – Notice issued demanding the duty on the allegation of violation of Section 11D of the Central Excise Act, 1944, for a period from January 29, 1990 to September 19, 1991, whereas Section 11D was introduced only with effect from September 20, 1991 - Whether Section 11D of the Central Excise Act, 1944 can be applied retrospectively to recover duty collected during the perio... [Read more]

Central Excise - Retrospective Application of Section 11D of Central Excise Act, 1944 - Appellant, engaged in steel fabrication, collected central excise duty from its customers (Indian Railways) but did not deposit the same to the Government exchequer – Notice issued demanding the duty on the allegation of violation of Section 11D of the Central Excise Act, 1944, for a period from January 29, 1990 to September 19, 1991, whereas Section 11D was introduced only with effect from September 20, 1991 - Whether Section 11D of the Central Excise Act, 1944 can be applied retrospectively to recover duty collected during the period prior to its insertion – HELD - Any statutory provision unless expressly stated in the enactment cannot be applied retrospectively. There is nothing on record to show that the amendment introducing Section 11D is retrospective in nature. The Section 11D would have prospective operation only and cannot be applied retrospectively. The revenue has not made out any case to recover the duty collected and retained by the appellant prior to the introduction of Section 11D. The impugned order confirming the demand is set aside and the appeal is allowed [Read less]

Service Tax Liability on Food and Beverages in Non-Air-Conditioned Restaurant in Same Establishment - Appellant paid service tax only on food and beverages served in the air-conditioned halls, claiming exemption for the non-air-conditioned portions. The Revenue demanded service tax on the non-air-conditioned portions alleging violation of Notification No. 03/2013-ST dated 01.03.2013 - Whether the Appellant is liable to pay service tax for providing services relating to supply of food and beverage in the non-air-conditioned portion of a restaurant which is located in the same establishment as the air-conditioned portion, wh... [Read more]

Service Tax Liability on Food and Beverages in Non-Air-Conditioned Restaurant in Same Establishment - Appellant paid service tax only on food and beverages served in the air-conditioned halls, claiming exemption for the non-air-conditioned portions. The Revenue demanded service tax on the non-air-conditioned portions alleging violation of Notification No. 03/2013-ST dated 01.03.2013 - Whether the Appellant is liable to pay service tax for providing services relating to supply of food and beverage in the non-air-conditioned portion of a restaurant which is located in the same establishment as the air-conditioned portion, where food is sourced from a common kitchen but the sections are physically demarcated, separately billed, and separately named – HELD - The statutory framework reveals that service tax was intended to apply only to air-conditioned restaurants. The Board's Circular dated 28-02-2011 clarified that the levy targets high-end air-conditioned restaurants where service may assume predominance over food. The Notification No. 25/2012-ST, as amended by Notification No. 03/2013-ST, carves out an exception for restaurants not having air-conditioning facilities - The Board's Circular No. 173/8/2013-ST dated 07-10-2013 clarifies that in a complex where air-conditioned and non-air-conditioned restaurants are operational with food sourced from a common kitchen, and where the restaurants are clearly demarcated and separately named, only the service provided in the air-conditioned restaurant attracts service tax, and service in non-air-conditioned portions remains exempt - The Appellant has demonstrated physical demarcation, separate billing with distinct serial numbers, separate pricing with significant price differentials, different service levels in air-conditioned portions and higher self-service component in non-air-conditioned areas, and separate staff management. These circumstances align with the Board's clarification and subsequent Revenue practice as evidenced by similar orders granting relief to similarly situated restaurants. The provision would become arbitrary and excessively broad if it extended to customers served in non-air-conditioned areas merely because the establishment contains an air-conditioned section elsewhere, as this would contradict the legislative intent to tax only air-conditioned restaurant services – The Tax laws must be interpreted reasonably and in consonance with justice adopting a purposive approach. The appellant is not liable to pay service tax for providing services relating to supply of food and beverage in the non-air-conditioned portion of the restaurant which is located in the same establishment during the period from April 2013 to March 2015 - The impugned order is set aside and the appeal is allowed [Read less]

GST – Gujarat AAR – Classification and applicable GST rate on Paper Bags - Whether paper bags made of paper or paperboard, classifiable under Heading 4819 and specifically under Tariff Item 48194000, attract GST at 18% or whether they fall under Entry No. 319 of Schedule I to Notification No. 09/2025-Central Tax (Rate) at 5% - HELD - The paper bags are specifically classifiable under Sub-heading 48194000 as they fall within the definition of packing containers. The minutes of the 54th GST Council meeting reveals that Entry No. 319 was newly inserted in Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.... [Read more]

GST – Gujarat AAR – Classification and applicable GST rate on Paper Bags - Whether paper bags made of paper or paperboard, classifiable under Heading 4819 and specifically under Tariff Item 48194000, attract GST at 18% or whether they fall under Entry No. 319 of Schedule I to Notification No. 09/2025-Central Tax (Rate) at 5% - HELD - The paper bags are specifically classifiable under Sub-heading 48194000 as they fall within the definition of packing containers. The minutes of the 54th GST Council meeting reveals that Entry No. 319 was newly inserted in Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 to promote eco-friendly alternatives to plastic bags, including both paper sacks/bags and biodegradable bags. The Government's clear intention was to encourage the production of paper bags as environmentally friendly alternatives by providing a reduced GST rate of 5% - The paper bags manufactured by the applicant classifiable under Sub-heading 48194000, are covered under Entry No. 319 of Schedule I to Notification No. 09/2025-Central Tax (Rate) and attract GST at the rate of 5% - Ordered accordingly [Read less]

Andhra Pradesh General Sales Tax Act, 1957 – Levy of tax on rental income received on renting of immovable property along with Furniture and Fixtures, Validity of bifurcation of service contract - Transfer of Right to Use Goods – Petitioners-developers entered into lease agreements with IT companies for renting immovable properties along with various facilities and amenities including generators, air conditioners, transformers, lifts, furniture, and cafeteria equipment - Authorities bifurcated the composite lease rentals and levied tax on the portion attributable to movable items and fixtures, treating such transaction... [Read more]

Andhra Pradesh General Sales Tax Act, 1957 – Levy of tax on rental income received on renting of immovable property along with Furniture and Fixtures, Validity of bifurcation of service contract - Transfer of Right to Use Goods – Petitioners-developers entered into lease agreements with IT companies for renting immovable properties along with various facilities and amenities including generators, air conditioners, transformers, lifts, furniture, and cafeteria equipment - Authorities bifurcated the composite lease rentals and levied tax on the portion attributable to movable items and fixtures, treating such transaction as a transfer of right to use goods under Section 5E of the APGST Act, 1957 - Whether rent received by the petitioners towards the supply of immovable property along with movable furniture, fixtures, and amenities constitutes a transfer of right to use goods liable to tax under the APGST Act, 1957 or whether it remains a service contract not amenable to such taxation – HELD – It is well settled that unless there is a transfer of the right to use goods from one person to another, the essential ingredients of a sale or purchase are not satisfied and, consequently, the transaction would not be liable to tax – In the present case, the petitioners have not parted with possession or control of the properties, except to the limited extent of permitting the tenants to use them as part of the common amenities and facilities provided under the lease. In several instances, such facilities are intended for the common use of more than one tenant. Further, the petitioners have challenged the levy of tax on lease rentals, which are charged on a per square foot basis and not separately in respect of furniture and fixtures. Therefore, the revisional authority could not have, merely on the basis of presumption, bifurcated the composite lease rentals into components attributable to movable and immovable properties - In Bharat Sanchar Nigam Limited case, the Hon’ble Supreme Court held that the goods involved in a transaction of transfer of the right to use must be in existence, deliverable, and actually delivered. However, in the present matters the facilities such as lifts, the sewage system, bathrooms, and the cafeteria are common facilities shared by more than one tenant. Consequently, they are incapable of being exclusively delivered or made deliverable to any particular tenant – The finding that the petitioners are liable to pay tax under Section 5E of the APGST Act, 1957 on the lease rentals realized in respect of interiors, furniture and fixtures, as well as movable items provided in the kitchen and cafeteria, cannot be sustained and set aside – The writ petitions are allowed [Read less]

Central Excise - Clandestine Removal of Excisable Goods - Whether the charge of clandestine removal and manufacture can be established on the basis of discrepancies in pen drive data, unofficial records, and statements of employees without corroborative evidence of actual transportation, receipt of sale proceeds, excess procurement of raw materials, or excess consumption of electricity – HELD - The charge of clandestine removal is a serious charge which must be proved by the revenue through tangible evidence and not merely on presumptions, assumptions, or inferences. Revenue has failed to establish the fundamental criter... [Read more]

Central Excise - Clandestine Removal of Excisable Goods - Whether the charge of clandestine removal and manufacture can be established on the basis of discrepancies in pen drive data, unofficial records, and statements of employees without corroborative evidence of actual transportation, receipt of sale proceeds, excess procurement of raw materials, or excess consumption of electricity – HELD - The charge of clandestine removal is a serious charge which must be proved by the revenue through tangible evidence and not merely on presumptions, assumptions, or inferences. Revenue has failed to establish the fundamental criteria required to establish clandestine manufacture and clearance, namely, evidence of raw materials in excess of statutory records, actual instances of removal of unaccounted finished goods not inferential or assumed, discovery of such goods outside the factory, instances of sale to identified parties with receipt of sale proceeds, use of electricity far in excess of normal consumption, statements of buyers with details of illicit manufacture, proof of actual transportation of goods cleared without payment of duty, and links between recovered documents and factory activities - The electricity consumption data produced by the appellant demonstrated that only 490 units were required to manufacture one metric ton of MS ingots, which was not possible under any circumstances, and the production capacity of the machinery installed in the factory had not been considered by the adjudicating authority. No statement of transporters of raw materials or finished goods had been recorded, and the statements of buyers and suppliers which were relied upon were identically worded, not tested through cross-examination, and lacked independent corroborative support from documentary evidence, cash transaction records, or third party affirmations - In cases of clandestine removal, mere recovery of data from pen drives and private records without independent verification and corroboration cannot form the basis for confirming demands - The demand for duty along with interest and the penalties imposed on the appellants for alleged clandestine removal of excisable goods are set aside – The appeals are allowed [Read less]

Service Tax – Extended Period of Limitation – Revenue Neutral Case - Whether demand of service tax can be raised under extended period of limitation when the transaction is revenue neutral as the assessee could have immediately taken CENVAT credit of the service tax paid and utilized it to pay its own service tax liability, thus showing no intention to evade – HELD - Extended period notice can be issued only when non-payment of service tax is by reason of fraud or collusion or wilful mis-statement or suppression of facts or violation of the Act or Rules with intent to evade payment of service tax. When demand is on r... [Read more]

Service Tax – Extended Period of Limitation – Revenue Neutral Case - Whether demand of service tax can be raised under extended period of limitation when the transaction is revenue neutral as the assessee could have immediately taken CENVAT credit of the service tax paid and utilized it to pay its own service tax liability, thus showing no intention to evade – HELD - Extended period notice can be issued only when non-payment of service tax is by reason of fraud or collusion or wilful mis-statement or suppression of facts or violation of the Act or Rules with intent to evade payment of service tax. When demand is on reverse charge and the assessee could have immediately taken CENVAT credit of the service tax paid, the entire demand becomes revenue neutral and it cannot be alleged that the assessee had any intention to evade. The impugned order confirms demand made under extended period which is fully beyond the normal period of limitation and hence cannot be sustained on this ground alone - The appeal is allowed and the order is set aside - Whether amounts paid by the assessee to petty contractors for execution of work constitute manpower supply service attracting service tax under reverse charge – HELD - The nature of service depends on what was the contract for. Amounts paid to contractors for executing any work cannot be called a contract for supply of manpower. The assessee is not paying the contractors for supplying manpower but for the work itself. There is no privity of contract between the assessee and the workers as the workers work for the contractor and get paid by him. The contractor completes the work and the assessee pays him for work completion. This cannot be characterized as manpower supply service - The demand on this count is dropped - Manpower Supply – Direct Employment of Labourers - Whether amounts paid by the assessee to its labourers, whether regular or adhoc, constitute manpower supply service attracting service tax under reverse charge – HELD - The amounts paid directly by the assessee to its labourers, whether regular or adhoc, cannot be called manpower supply service. However, the verification is required to determine if someone acted as a manpower supplier and if wages in names of several labourers were received by a single person indicating that person as the supplier. If manpower supply service is established, the Commissioner must determine the exact amount of service tax payable under reverse charge. Any service tax determined and paid will be refundable to the assessee as per section 142(7)(b) of the CGST Act, 2017 - Reverse Charge – Works Contract Service – CA Certificate Break-up - Whether service tax under reverse charge can be charged on repair and maintenance expenses without separately identifying actual works contract services from other expenses – HELD - The assessee was not required to pay service tax on purchase of items as they are not services. Service tax also does not apply to pure repairs as they do not constitute works contracts. Where services were received from corporate bodies, no reverse charge applies. The assessee has already paid service tax under reverse charge on works contract services received from non-corporate service providers. In view of the CA certificate's break-up and explanation provided, the demand under this head cannot be sustained - The demand for works contract service is dropped - GTA Service – Absence of Consignment Note - Whether service tax under reverse charge can be charged on transport related expenses in the absence of a consignment note or involvement of a goods transport agency - HELD - Unless a goods transport agency is involved and a consignment note is issued, no service tax can be charged under reverse charge on the assessee. General transport expenses without consignment notes do not constitute GTA services - The demand for GTA service is dropped. [Read less]

Service Tax – Discharge of service tax liability by utilizing CENVAT credit on capital goods instead of making cash payment - Department denied the CENVAT credit utilization and sought recovery of the service tax amount, invoking the extended period of limitation, contending that the appellant, being the recipient of services, could not avail CENVAT credit for discharging service tax under Reverse Charge Mechanism as per Rule 3(4) of the CENVAT Credit Rules, 2004 read with the explanation added vide Notification No. 28/2012 effective from 1st July 2012 - Whether the appellant can discharge service tax liability under RCM... [Read more]

Service Tax – Discharge of service tax liability by utilizing CENVAT credit on capital goods instead of making cash payment - Department denied the CENVAT credit utilization and sought recovery of the service tax amount, invoking the extended period of limitation, contending that the appellant, being the recipient of services, could not avail CENVAT credit for discharging service tax under Reverse Charge Mechanism as per Rule 3(4) of the CENVAT Credit Rules, 2004 read with the explanation added vide Notification No. 28/2012 effective from 1st July 2012 - Whether the appellant can discharge service tax liability under RCM in respect of services received from outside India during the period prior to July 2012 by utilizing CENVAT credit – HELD - Under Rule 2(r) of the CCR, 2004 read with Rule 2(1)(d) of the Service Tax Rules, 1994, the Indian recipient of taxable services provided by a service provider located outside India becomes the "provider of taxable service" and consequently becomes eligible to utilize CENVAT credit for payment of service tax on such "output services" as defined in Rule 2(p). The explanation to Rule 3(4) of the CCR, 2004, which creates a substantive prohibition on utilization of CENVAT credit for payment of service tax where the person liable to pay tax is the service recipient, being substantive in nature, cannot be applied retrospectively to the period prior to 1st July 2012 when it came into force, as substantive provisions creating liabilities cannot have retrospective application - Further, Rule 5 of the Taxation of Services Rules, 2006, restricts only the availment of CENVAT credit and not its utilization. Prior to 1st July 2012 there was no restriction on discharging reverse charge liability by utilizing CENVAT credit. Since the appellant paid the entire service tax liability by utilizing CENVAT credit availed for the period prior to July 2012, such utilization is justified. Consequently, the department cannot invoke the extended period of limitation as the show cause notice itself stands barred by limitation - The order under challenge is set aside and the appeal is allowed [Read less]

GST - Interest on Refund – Relevant date of reckoning for computing interest under Section 56 of CGST Act, 2017 – Pursuant to High Court order directing authorities to process the refund application in accordance with law, the petitioner filed a fresh refund application on 11.11.2025 – The Respondent authority sanctioned the refund amount but denied the interest by invoking the provisions of Section 56 of the CGST Act construing the date of subsequent filing of the refund application as the date of reckoning for computing interest - Whether the respondents were justified in denying interest by considering the date of... [Read more]

GST - Interest on Refund – Relevant date of reckoning for computing interest under Section 56 of CGST Act, 2017 – Pursuant to High Court order directing authorities to process the refund application in accordance with law, the petitioner filed a fresh refund application on 11.11.2025 – The Respondent authority sanctioned the refund amount but denied the interest by invoking the provisions of Section 56 of the CGST Act construing the date of subsequent filing of the refund application as the date of reckoning for computing interest - Whether the respondents were justified in denying interest by considering the date of the fresh refund application filed after the Court's order or whether the date of the initial refund application rejected by the respondent should be considered for computing interest on the refund – HELD - Since the initial action of the respondent in refusing to process the refund application dated 14.10.2023 was held to be illegal and was set aside by this Court, the authorities were required to consider the date of the initial refund application for calculating interest instead of the subsequent application filed after the Court's order - When the initial denial of refund is declared illegal and set aside, the fresh application filed thereafter satisfies the provisions of Section 56 of the CGST Act, and the interest claim must be processed by considering the date of the earlier application. The respondent's illegal action in denying the refund cannot be used to deprive the petitioner of interest that would have accrued from the original date of filing - The impugned orders are set aside to the extent of denial of interest, and the respondent is directed to pass necessary orders on the claim of interest on refund by the petitioner, considering the date of the initial refund application for calculating interest – The petition is allowed [Read less]

GST – Refund – Applicability of repealing of Rules 89(4B) and 96(10) of CGST Rules, 2017 to pending proceedings – Denial of refund claims based on Rule 89(4B) which was subsequently omitted vide Notification No.20/2024 dated 08.10.2024 without any saving clause – Whether the omission of Rule 89(4B) applies to pending proceedings and cases where final adjudication has not taken place – HELD - Following the common law principles of statutory interpretation, when a statute or Rule is repealed without a saving clause, it stands obliterated as if it had never existed, except for transactions that are past and closed. ... [Read more]

GST – Refund – Applicability of repealing of Rules 89(4B) and 96(10) of CGST Rules, 2017 to pending proceedings – Denial of refund claims based on Rule 89(4B) which was subsequently omitted vide Notification No.20/2024 dated 08.10.2024 without any saving clause – Whether the omission of Rule 89(4B) applies to pending proceedings and cases where final adjudication has not taken place – HELD - Following the common law principles of statutory interpretation, when a statute or Rule is repealed without a saving clause, it stands obliterated as if it had never existed, except for transactions that are past and closed. The Notification No.20/2024-CT repealing Rules 89(4B) and 96(10) renders these provisions redundant prospectively and applies to all pending proceedings, cases and petitions pending adjudication either before the Court or before the adjudicating authority, or even to orders made before 08.10.2024 but not yet finalized due to appeals or challenges - The impugned order-in-original and subsequent action stands quashed and set aside – The petition is allowed [Read less]

GST - Anti-Profiteering in Real Estate project - Failure to pass on Input Tax Credit Benefit - Whether the Respondent has contravened Section 171 of the CGST Act, 2017, by not reducing the flat prices commensurately with the ITC benefit availed – HELD - The appropriate methodology to determine profiteering in real estate is to calculate total savings on account of introduction of GST for the project and divide the same by total area to arrive at per square feet benefit, as opposed to the earlier flawed methodology based on turnover ratios - Since the Respondent has unconditionally accepted the investigation report and th... [Read more]

GST - Anti-Profiteering in Real Estate project - Failure to pass on Input Tax Credit Benefit - Whether the Respondent has contravened Section 171 of the CGST Act, 2017, by not reducing the flat prices commensurately with the ITC benefit availed – HELD - The appropriate methodology to determine profiteering in real estate is to calculate total savings on account of introduction of GST for the project and divide the same by total area to arrive at per square feet benefit, as opposed to the earlier flawed methodology based on turnover ratios - Since the Respondent has unconditionally accepted the investigation report and the computed profiteered amount without challenging the findings or raising any procedural objections, the Respondent stands liable for contravention of Section 171 of the CGST Act – Respondent is directed to refund the profiteered amount inclusive of GST to eligible homebuyers along with interest at the rate of 18% per annum computed from respective dates of collection until actual refund - No penalty is leviable under Section 171(3A) of the CGST Act since the entire period of contravention concluded before the said penalty provision came into force on 01.01.2020 – Ordered accordingly [Read less]

Central Excise - Jurisdiction of Adjudicating Authority in Remand Order - Appellant challenges the order passed by Commissioner of CGST & Central Excise, Durgapur on the ground that the Hon'ble High Court in its remand order specifically directed the Commissioner of Central Excise & Service Tax, Bolpur to adjudicate the matter as the two show-cause notices issued by two different jurisdictions had overlapping periods, but the matter was adjudicated by Commissioner of CGST & Central Excise, Durgapur instead - Whether the impugned order passed by a different authority than the one directed by the High Court is sustainable in... [Read more]

Central Excise - Jurisdiction of Adjudicating Authority in Remand Order - Appellant challenges the order passed by Commissioner of CGST & Central Excise, Durgapur on the ground that the Hon'ble High Court in its remand order specifically directed the Commissioner of Central Excise & Service Tax, Bolpur to adjudicate the matter as the two show-cause notices issued by two different jurisdictions had overlapping periods, but the matter was adjudicated by Commissioner of CGST & Central Excise, Durgapur instead - Whether the impugned order passed by a different authority than the one directed by the High Court is sustainable in law – HELD - The High Court had specifically directed the Commissioner of Central Excise & Service Tax, Bolpur to adjudicate the matter to avoid conflicting decisions arising from overlapping periods covered by two show-cause notices issued by different jurisdictions. Although restructuring of the department took place subsequently, if the Department intended to change the adjudicating authority from the one directed by the High Court, it ought to have obtained a fresh order from the High Court to that effect, which the Revenue failed to do. The with adjudication by a different authority without obtaining necessary modification of the High Court's direction amounts to non-compliance with the judicial directive. Therefore, the impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Suppression of income, Extended period of Limitation - Appellant filed ST-3 returns declaring lower gross receipts compared to income tax returns filed with income tax department for the same period - Whether demand for service tax can be raised on basis of discrepancy between ST-3 returns and Income tax returns and whether extended period of limitation is invokable – HELD - The statute prescribes a specific manner for filing ST-3 returns wherein the appellant is required to declare exact amount received towards provision of taxable services and then claim abatements. The appellant by not filing returns in ... [Read more]

Service Tax - Suppression of income, Extended period of Limitation - Appellant filed ST-3 returns declaring lower gross receipts compared to income tax returns filed with income tax department for the same period - Whether demand for service tax can be raised on basis of discrepancy between ST-3 returns and Income tax returns and whether extended period of limitation is invokable – HELD - The statute prescribes a specific manner for filing ST-3 returns wherein the appellant is required to declare exact amount received towards provision of taxable services and then claim abatements. The appellant by not filing returns in prescribed manner deliberately and knowingly suppressed gross amounts received with intention to evade payment of service tax; the data sharing between CBIC and CBDT is in terms of approved government policy to track tax evasion and it is on basis of such data that short payment of service tax came to notice of department; had it not been for receipt of such data, short payment would never have come to notice as appellant never intended to reveal the same on own accord, therefore ingredients to invoke extended period of limitation were intrinsically inherent in facts of case - once established that ingredients to attract operation of section 78 of Finance Act, 1994 are present in a case, discretion to quantify amount of penalty ends and equivalent penalty under section 78 is automatically attracted; demand is upheld along with interest and penalty - Appeal dismissed - Liability under Reverse charge mechanism - Appellant provided works contract services to electricity distribution company which was service recipient; appellant claimed that service tax was liability of main contractor and under RCM fifty percent tax liability was to be discharged by appellant and fifty percent by service recipient – HELD - The position of law is settled by Larger bench of Tribunal that a sub-contractor is essentially a taxable service provider and fact that services provided by sub-contractors are used by main service provider for completion of work does not alter the fact of provision of taxable service by sub-contractor; services provided by sub-contractors are in nature of input services and service tax is leviable on any taxable services provided whether or not services are provided by person in capacity as sub-contractor; while main contractor may have paid service tax on entire amount, this does not exempt sub-contractor from paying service tax as cenvat credit rules allow a provider of output service to take credit of service tax paid at preceding stage, thereby avoiding double taxation; this position has been affirmed by supreme court and all decisions taking contrary view stand overruled - Demand upheld - Penalty under section 78 - Where extended period of limitation is invoked on ground of suppression of facts with intent to evade payment of service tax, penalty equal to amount of tax determined is mandatory and authority has no discretion in quantifying amount of penalty – HELD - Once established that ingredients to attract operation of section 78 of finance act are present in a case, discretion to quantify amount of penalty ends - Penalty under section 78 is not applicable to every case of non-payment or short-payment of duty but conditions mentioned in section should exist for penalty thereunder. Once conditions are satisfied and extended period is rightly invoked, authorities have no discretion on quantum and penalty equal to duty must be imposed - In present case, appellant deliberately suppressed gross amounts received in ST-3 returns with intention to evade payment of service tax and all ingredients for imposing penalty exist – Penalty is upheld - Penalty under Section 77 - Appellant failed to furnish information and documents called for by Department and failed to file ST-3 returns with proper values as prescribed – HELD - Penalty under section 77 read with rule 7 of service tax rules is leviable where registered assessee fails to furnish details and information at prescribed frequency and fails to correctly assess tax liability and pay service tax by due date; appellant failed to respond to summons issued by department and did not provide requisite documents; such failure constitutes breach of statutory obligation; penalty is imposed to ensure compliance of law and does not require element of mens rea in civil tax matters – Penalty is upheld. [Read less]

Service Tax - Cenvat Credit on Input Services including insurance, rent a cab, air travel, hotel accommodation, restaurant, telecommunication, and business support services utilized in rendering export services – Disallowance of credit for certain input services on the ground that they were not related to output services, and further disallowed amounts on grounds of limitation - Whether input services such as insurance, rent a cab, air travel, hotel accommodation, restaurant, telecommunication, and business support services utilized for rendering export services are eligible for Cenvat credit refund under Rule 2(l) of th... [Read more]

Service Tax - Cenvat Credit on Input Services including insurance, rent a cab, air travel, hotel accommodation, restaurant, telecommunication, and business support services utilized in rendering export services – Disallowance of credit for certain input services on the ground that they were not related to output services, and further disallowed amounts on grounds of limitation - Whether input services such as insurance, rent a cab, air travel, hotel accommodation, restaurant, telecommunication, and business support services utilized for rendering export services are eligible for Cenvat credit refund under Rule 2(l) of the Cenvat Credit Rules 2004 – HELD - Under Rule 2(l) of the Cenvat Credit Rules 2004, an input service means any service used by a provider of output service for providing an output service, and excludes only those services specified in the exclusion clauses such as personal consumption of employees. The insurance services were procured for the company and employees at work and do not fall within exclusion clauses; rent a cab services were utilized for pick-up and drop of employees to workplace, which is a corporate requirement essential for business operations; air travel services were utilized for employee movement to other countries for rendering SAP implementation and support services, thereby generating convertible foreign exchange; hotel accommodation and restaurant services were provided to employees on official visits for business purposes; telecommunication services were utilized for official communication essential for delivery of output services; and business support services were directly linked to exports undertaken - As long as services were used directly or indirectly in or in relation to provisioning of output service and were not covered within the scope of exclusion, they constitute input services - The order of the lower authority is set aside and the appeal is allowed [Read less]

GST - Condonation of delay in approaching Statutory Appellate Forum – Violation of Natural Justice – Challenge to ex parte order - The learned Single Judge direction to avail statutory alternative remedy - The petitioner submits that it was deprived of an opportunity to place its case on merits and seeks setting aside of the ex parte order - Whether the High Court should entertain the writ petition notwithstanding the existence of a statutory alternative remedy when the original proceedings and subsequent writ petition were disposed of ex parte - HELD - When an order prejudicial to the writ petitioner has been passed i... [Read more]

GST - Condonation of delay in approaching Statutory Appellate Forum – Violation of Natural Justice – Challenge to ex parte order - The learned Single Judge direction to avail statutory alternative remedy - The petitioner submits that it was deprived of an opportunity to place its case on merits and seeks setting aside of the ex parte order - Whether the High Court should entertain the writ petition notwithstanding the existence of a statutory alternative remedy when the original proceedings and subsequent writ petition were disposed of ex parte - HELD - When an order prejudicial to the writ petitioner has been passed in total violation of the principles of natural justice and where there is no factual dispute but a pure question of law or interpretation is involved, the writ petition may be entertained as an exception to the rule of alternative remedy. In the instant case, from the very inception of the adjudication proceeding, the appellant does not have the opportunity to defend its case as all proceedings were held ex parte - Whether the appellant had any genuine reason for non-appearance ought to be looked into by the appellate forum for appropriate adjudication and an opportunity ought to be granted to the appellant for placing its case on merits. Since no factual dispute has arisen till date, the interests of justice warrant that the appellant be given a fair opportunity to present its case before the statutory appellate forum - The impugned ex parte order is set aside and the petitioner is relegated before the statutory appellate forum for adjudication on merits – The appeal is disposed of [Read less]

Central Excise - CENVAT Credit - Job Work Service - Demand under Rule 6(3) of CENVAT Credit Rules, 2004 - Appellant manufactured goods for principal as job worker and goods were cleared without payment of duty under Notification No. 214/86-CE – Whether demand of amount under Rule 6(3)(i) of CENVAT Credit Rules, 2004 on job work charges can be sustained – HELD - As far as the manufacture of the goods on job work basis is concerned, the department considered it as manufacture and allowed clearance of the goods under Notification No. 214/86-CE. The same activity which the department considered as manufacture and exempted ... [Read more]

Central Excise - CENVAT Credit - Job Work Service - Demand under Rule 6(3) of CENVAT Credit Rules, 2004 - Appellant manufactured goods for principal as job worker and goods were cleared without payment of duty under Notification No. 214/86-CE – Whether demand of amount under Rule 6(3)(i) of CENVAT Credit Rules, 2004 on job work charges can be sustained – HELD - As far as the manufacture of the goods on job work basis is concerned, the department considered it as manufacture and allowed clearance of the goods under Notification No. 214/86-CE. The same activity which the department considered as manufacture and exempted from duty cannot also be treated as exempted service to demand amount under Rule 6(3)(i) – Further, Department cannot demand an amount under Rule 6(3) when the appellant has already reversed an amount under Rule 6(3A), as such reversal constitutes compliance with Rule 6 obligations and it is a technical requirement that cannot override substantive compliance - The demand of an amount equal to 7% of the job charges under Rule 6(3) from the appellant cannot be sustained - The impugned order is set aside and the appeal is allowed - Waste and Scrap - Demand under Rule 6(3) of CENVAT Credit Rules, 2004 - Appellant cleared wooden pallets, PVC pipes, iron strips, HDPE sheets which were exempted from duty – Whether inputs used in manufacturing final products can attract demand under Rule 6(1) and Rule 6(3)(i) for waste and scrap – HELD – The waste and scrap do not constitute manufactured goods but merely arise incidentally in the course of manufacture of final products. Waste and scrap cannot be said to have been manufactured using inputs or input services. To fall within the purview of Rule 6(1), goods must be exempted or non-excisable and must have been manufactured. Since waste and scrap are not manufactured by the factory but arise as byproducts, Rule 6(1) does not apply to them and therefore demand under Rule 6(3)(i) cannot be sustained. [Read less]

GST - Best Judgment Assessment Order – Since the petitioner failed to file GSTR-3B returns for January 2024 and consequently, the Assistant Commissioner issued a best judgment assessment order under Section 62 of the CGST Act. The petitioner subsequently filed the return along with late fee and interest and challenged the assessment order contending that once the return is filed within sixty days of the assessment order, the assessment order stands deemed withdrawn under Section 62(2) of the GST Act – HELD – The Section 62(2) of the Act provides that if a registered person furnishes a valid return within sixty days o... [Read more]

GST - Best Judgment Assessment Order – Since the petitioner failed to file GSTR-3B returns for January 2024 and consequently, the Assistant Commissioner issued a best judgment assessment order under Section 62 of the CGST Act. The petitioner subsequently filed the return along with late fee and interest and challenged the assessment order contending that once the return is filed within sixty days of the assessment order, the assessment order stands deemed withdrawn under Section 62(2) of the GST Act – HELD – The Section 62(2) of the Act provides that if a registered person furnishes a valid return within sixty days of service of an assessment order, the said assessment order shall be deemed to have been withdrawn, though the liability for payment of interest and late fee shall continue. The High Court of Madras in a similar matter had held that in view of the amendment to Section 62(2), it is appropriate to condone the delay in filing GSTR-3B returns and consequently the assessment order is deemed to be withdrawn - Following the precedent set by the High Court of Madras the benefit of Section 62(2) is extended to the petitioner. Accordingly, the assessment order is deemed to have been withdrawn and set aside - The writ petition is allowed [Read less]

Service Tax - Cinema Exhibition on Revenue-Sharing Basis - Taxability under Service Tax – Appellant, a cinema theatre owner, enters into agreements with film distributors/sub-distributors to exhibit movies at its multiplexes on a revenue-sharing basis, wherein the appellant pays a pre-decided percentage of revenue earned to the distributors for obtaining exhibition rights, and records the entire revenue as its income under "Film Revenue" and the payments made to distributors as "Film Hire Charges" – Whether the appellant is liable to pay service tax on the amounts earned for providing Business Support Services to the d... [Read more]

Service Tax - Cinema Exhibition on Revenue-Sharing Basis - Taxability under Service Tax – Appellant, a cinema theatre owner, enters into agreements with film distributors/sub-distributors to exhibit movies at its multiplexes on a revenue-sharing basis, wherein the appellant pays a pre-decided percentage of revenue earned to the distributors for obtaining exhibition rights, and records the entire revenue as its income under "Film Revenue" and the payments made to distributors as "Film Hire Charges" – Whether the appellant is liable to pay service tax on the amounts earned for providing Business Support Services to the distributors/sub-distributors or whether the arrangement constitutes a principal-to-principal revenue-sharing model where no service is provided by the appellant to the distributors – HELD - The arrangement between the exhibitor and the distributor and producer is not a service relationship but a principal-to-principal revenue-sharing model where each party conducts its business in absolute and sole discretion without any interference from the other. The payment flows from the exhibitor to the distributor as consideration for obtaining the license to exploit theatrical rights, and not as consideration for any service rendered by the exhibitor. No service is provided by the appellant to the distributors, and therefore, the activity undertaken by the appellant cannot be classified under the service tax category of "Business Support Service" and is hence not taxable. This position is supported by consistent judicial precedents of the Division Bench of the Tribunal in Moti Talkies, PVS Multiplex India, and the coordinate benches, which have been upheld by the Supreme Court in its judgment in the case of CST vs Inox Leisure Ltd. - Since the issue is squarely covered in favour of the appellant by binding judicial precedents, the impugned orders are set aside and the appeals are allowed [Read less]

Service Tax - Export of Services or Intermediary – Appellant filed refund claims for accumulated Cenvat credit treating the services as export of services. The Refund Sanctioning Authority granted the refunds, but the Commissioner (Appeals) reversed the same by holding Appellant to be an 'intermediary' under Rule 2(f) of the POPS Rules, 2012, thereby denying the export benefit - Whether the Appellant qualifies as an 'intermediary' under Rule 2(f) read with Rule 9(c) of the Place of Provision of Services Rules, 2012 – HELD - An 'intermediary' is one who arranges or facilitates services for a third party, whereas in the ... [Read more]

Service Tax - Export of Services or Intermediary – Appellant filed refund claims for accumulated Cenvat credit treating the services as export of services. The Refund Sanctioning Authority granted the refunds, but the Commissioner (Appeals) reversed the same by holding Appellant to be an 'intermediary' under Rule 2(f) of the POPS Rules, 2012, thereby denying the export benefit - Whether the Appellant qualifies as an 'intermediary' under Rule 2(f) read with Rule 9(c) of the Place of Provision of Services Rules, 2012 – HELD - An 'intermediary' is one who arranges or facilitates services for a third party, whereas in the present case, the Appellant directly provides services to the overseas principal on a principal-to-principal basis without any contractual relationship with the end customers. The jurisdictional High Court in the case of Appellant's group company, which had entered into an identically worded agreement, concluded that such entity is not an 'intermediary'. The Revenue did not challenge that judgment before the Supreme Court and subsequently granted refunds. Additionally, the Department's Circular No. 159/15/2021 clarifies that the provisions relating to 'intermediary' are similar under both Service Tax and GST regimes, rendering the High Court's judgment applicable to the Service Tax regime as well - An entity performing services directly for an overseas principal does not fall within the definition of 'intermediary'. The appellant is entitled to refund of accumulated Cenvat credit as the services qualify as 'export of services' - The impugned order is set aside and the appeal is allowed [Read less]

Service Tax liability of Local Bodies for selling of space for advertisement - The Appellant contends that being a sovereign local body, it is not covered under the definition of "person" as per the General Clauses Act, 1897, and therefore, not liable to service tax - Whether a Municipal Corporation being a sovereign local body is covered under the definition of "person" for levying service tax on "Selling of Space for Advertisement" – HELD - During the relevant period from April 2005 to March 2010, the activity of selling space for advertisement was taxable only if a "person" provides service to another "person". Since ... [Read more]

Service Tax liability of Local Bodies for selling of space for advertisement - The Appellant contends that being a sovereign local body, it is not covered under the definition of "person" as per the General Clauses Act, 1897, and therefore, not liable to service tax - Whether a Municipal Corporation being a sovereign local body is covered under the definition of "person" for levying service tax on "Selling of Space for Advertisement" – HELD - During the relevant period from April 2005 to March 2010, the activity of selling space for advertisement was taxable only if a "person" provides service to another "person". Since a Municipal Corporation being a local body is not covered within the term "person" and consequently not covered under the definition of "taxable service", it does not fall under the ambit of service tax - The Tribunal decisions have clearly established that the Government and State bodies are not covered by the term "person" prior to 01.07.2012 - Further, the ld. Commissioner (Appeals) has wrongly held that the amount received by the appellant as ‘Licence fee’ cannot be equated with ‘advertisement tax’ leviable under Sections 90 and 122 of the Municipal Corporation Act. Additionally, the advertisement tax being a statutory levy collected under constitutional authority vested in local bodies cannot be chargeable to service tax - The extended period of limitation invoked by the Respondent is also not sustainable as the issue involves interpretation of law and public undertakings of the State cannot be alleged to have suppressed facts with intent to evade tax – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Imposition of Redemption Fine and Penalty for Excess Surface Area in Imported Marble Slabs - The Appellant imported marble slabs with excess surface area marginally exceeding the prescribed tolerance limit, following which Customs rejected the declared transaction value and re-determined it, demanding differential duty along with redemption fine and penalty under Sections 111(l), 111(m), and 114A of the Customs Act, 1962 - Whether redemption fine and penalty are legally sustainable when the excess surface area results from differing measurement methodologies of non-uniform marble slabs and the Appellant does not ... [Read more]

Customs - Imposition of Redemption Fine and Penalty for Excess Surface Area in Imported Marble Slabs - The Appellant imported marble slabs with excess surface area marginally exceeding the prescribed tolerance limit, following which Customs rejected the declared transaction value and re-determined it, demanding differential duty along with redemption fine and penalty under Sections 111(l), 111(m), and 114A of the Customs Act, 1962 - Whether redemption fine and penalty are legally sustainable when the excess surface area results from differing measurement methodologies of non-uniform marble slabs and the Appellant does not contest the differential duty liability – HELD - The imposition of redemption fine and penalty is not legally sustainable because the excess surface area of approximately 3% beyond the prescribed 10% tolerance limit is reasonably attributable to the measurement methodology adopted by Customs, which measures the maximum length and maximum breadth of each slab thereby overstating the actual surface area of non-rectangular or broken slabs. The marginal overage does not evidence wilful misstatement or fraudulent intent - Penal consequence like confiscation generally require deliberate defiance of law, conscious disregard of obligation or dishonest conduct. The Sections 111(l), 111(m), and 114A are not strict liability provisions and require an element of mens rea, deliberate defiance of law, conscious disregard of obligation, or dishonest conduct. The fact that the Appellant was ready and willing to pay the differential duty from inception, accepted the measurement report without protest, and made no attempt to evade duty demonstrates the absence of mis-declaration or suppression - The orders-in-appeal confirming the redemption fine and penalty are set aside, with the Appellant remaining liable only for the differential customs duty – The appeal is allowed [Read less]

Customs - Conditional exemption under Notification No. 104/94-Cus. – Non-submission of proof of re-export – Violation not established without container-wise verification - Appellant, a Steamer Agent/Main Line Operator, imported durable containers availing exemption under Notification No. 104/94-Cus. upon execution of a continuity bond. The Respondent issue Notice proposing recovery of duty, confiscation and penalties on the allegation that proof of re-export had not been furnished in respect of certain containers - HELD - Being a conditional exemption, the burden lies upon the Department to establish breach of the Noti... [Read more]

Customs - Conditional exemption under Notification No. 104/94-Cus. – Non-submission of proof of re-export – Violation not established without container-wise verification - Appellant, a Steamer Agent/Main Line Operator, imported durable containers availing exemption under Notification No. 104/94-Cus. upon execution of a continuity bond. The Respondent issue Notice proposing recovery of duty, confiscation and penalties on the allegation that proof of re-export had not been furnished in respect of certain containers - HELD - Being a conditional exemption, the burden lies upon the Department to establish breach of the Notification conditions before denying the benefit. The record reveals that the alleged violated containers were originally 6163, which were reduced to 4020 in first adjudication, and further to 3886 in de novo proceedings due to duplicate entries and discrepancies. The reconciliation statement categorizes the disputed containers showing that verifiable export data is available for a substantial majority, certain containers were exported through ports other than Chennai with alternative export evidence such as Shipping Bills and LEO records available, and some containers do not belong to the appellant - The lower authorities merely relied upon aggregate figures without undertaking a comprehensive container-wise analysis showing date of import, expiry of permissible period, alleged default and corresponding duty liability for each container - The repeated revisions in disputed quantity, existence of duplicate entries and unresolved reconciliation issues indicate that the factual foundation remains incomplete and the controversy is essentially one of proper verification and comprehensive reconciliation rather than established non-re-export - In the absence of comprehensive container-wise verification of evidence produced by the appellant, the allegation of violation cannot be said to have been conclusively established – The impugned order is set aside and the matter is remanded to the adjudicating authority to examine vessel-wise export records, terminal-generated container lists, Shipping Bills, EGM particulars, LEO details, ICEGATE data and all other documentary evidence produced by the appellant - All issues including limitation, confiscation, redemption fine and penalty are kept open for consideration by the adjudicating authority – The appeal is allowed by remand [Read less]

Service Tax - Valuation of Services - Reimbursable Expenses- Reimbursement of insurance premium and workmen compensation expenses - Whether reimbursable expenses incurred by the service provider on behalf of the service receiver can be included in the valuation of taxable services for charging service tax – HELD - the reimbursable expenses of insurance incurred by the appellants on behalf of the service receiver has been included by the Department in terms of Section 67 of the Finance Act read with Rule 5(1). It is pertinent to note that Rule 5(1) which provides for inclusion of expenditure or cost incurred by the servic... [Read more]

Service Tax - Valuation of Services - Reimbursable Expenses- Reimbursement of insurance premium and workmen compensation expenses - Whether reimbursable expenses incurred by the service provider on behalf of the service receiver can be included in the valuation of taxable services for charging service tax – HELD - the reimbursable expenses of insurance incurred by the appellants on behalf of the service receiver has been included by the Department in terms of Section 67 of the Finance Act read with Rule 5(1). It is pertinent to note that Rule 5(1) which provides for inclusion of expenditure or cost incurred by the service provider in the course of providing of taxable service has been held ultra vires of Sections 66 & 67 by the Delhi High Court in the case of Intercontinental Consultants and Technocrats Private Limited which have been upheld by the Hon’ble Supreme Court by dismissing the appeal of the Department - As Rule 5(1) has been declared ultra vires, the inclusion of reimbursable expenses in the value of taxable service is unsustainable. The revenue failed to establish the ingredients necessary for invoking the extended period of limitation, rendering the demand for the period prior to 30.09.2010 time-barred - The impugned orders are set aside and the appeal is allowed [Read less]

Service Tax - Reverse Charge Mechanism - Failure to pay service tax under the reverse charge mechanism for availing services of a goods transport agency - Whether the extended period of limitation under Section 73(1) of the Finance Act 1994 can be invoked and whether penalty is sustainable on the appellant – HELD - Since the impugned demand has been worked out by the revenue authorities from the books of accounts of the appellant itself, there exists no intent for suppression or concealment of information on the part of the appellant. It is a settled legal position that when the demand is based on balance sheet figures a... [Read more]

Service Tax - Reverse Charge Mechanism - Failure to pay service tax under the reverse charge mechanism for availing services of a goods transport agency - Whether the extended period of limitation under Section 73(1) of the Finance Act 1994 can be invoked and whether penalty is sustainable on the appellant – HELD - Since the impugned demand has been worked out by the revenue authorities from the books of accounts of the appellant itself, there exists no intent for suppression or concealment of information on the part of the appellant. It is a settled legal position that when the demand is based on balance sheet figures and other documents of the assessee available in the public domain, invocation of extended period on grounds of suppression with intent to evade payment of duty cannot be sustained - The appellant had voluntarily paid the entire demand with interest before the adjudication itself, demonstrating no deliberate evasion. As the situation is revenue neutral and the appellant is entitled to avail credit of the duty paid, the invocation of extended period is uncalled for and the demand becomes time-barred. There is nothing substantive to establish concealment or suppression on the part of the appellant, and therefore the penalty imposed is unjustified and set aside – The appeal is allowed [Read less]

GST - Whether the Tribunal has jurisdiction to condone the delay beyond the time period provided under sub-Section 4 of the Section 107 of the CGST Act, 2017 – HELD - The Registry is directed to immediately call for the particulars of all such appeals from the respective State Benches and place the same before this Bench on 20.07.2026 – Ordered accordingly

Karnataka Value Added Tax Act, 2003 - Input Tax Credit on Furnace Oil – Principle of Consistency and Estoppel – The respondent-assessee claimed ITC on furnace oil used as fuel in the manufacturing process - Assessing Authority initially disallowed the claim, but upon rectification application, accepted it raising nil demand. Subsequently, the same issue was reopened and the input tax credit was disallowed - The Tribunal allowed the assessee's appeal and set aside the orders of the lower authorities – Whether the Appellate Tribunal has erred in holding that there is no error on the part of the respondent in determinin... [Read more]

Karnataka Value Added Tax Act, 2003 - Input Tax Credit on Furnace Oil – Principle of Consistency and Estoppel – The respondent-assessee claimed ITC on furnace oil used as fuel in the manufacturing process - Assessing Authority initially disallowed the claim, but upon rectification application, accepted it raising nil demand. Subsequently, the same issue was reopened and the input tax credit was disallowed - The Tribunal allowed the assessee's appeal and set aside the orders of the lower authorities – Whether the Appellate Tribunal has erred in holding that there is no error on the part of the respondent in determining inadmissible input tax credit for purchase of furnace oil purchased both locally and inter-State – HELD - The respondent's method of computation for input tax credit on furnace oil has been consistently upheld by the Tribunal across multiple assessment years for 2006-07 to 2014-15, and the Revenue having not challenged the said methodology in those years but only challenging it for the year 2008-09 after a lapse of seven years amounts to picking and choosing, which is impermissible. The revenue is bound by the rule of consistency and is estopped from taking a contrary stand. Therefore, without going into the methodology adopted for computation of input tax credit, the revision petition is liable to be dismissed on this ground alone by confirming the order passed by the Tribunal. Accordingly, the revision petition filed by the Revenue is dismissed [Read less]

GST - Limitation period for filing of Appeals, Exclusion of time spent in pursuing Rectification Application - Applicability of Section 14 of Limitation Act – Rejection of appeal by the Appellate Authority on ground of time-barred since it was filed beyond the prescribed period of limitation of three months plus one month extended period. Petitioner contended that the time spent in pursuing a Rectification Application under Section 161 of the CGST Act, 2017 should be excluded from computing period of limitation under Section 107 of CGST Act - Whether the principle of exclusion of time under Section 14 of the Limitation A... [Read more]

GST - Limitation period for filing of Appeals, Exclusion of time spent in pursuing Rectification Application - Applicability of Section 14 of Limitation Act – Rejection of appeal by the Appellate Authority on ground of time-barred since it was filed beyond the prescribed period of limitation of three months plus one month extended period. Petitioner contended that the time spent in pursuing a Rectification Application under Section 161 of the CGST Act, 2017 should be excluded from computing period of limitation under Section 107 of CGST Act - Whether the principle of exclusion of time under Section 14 of the Limitation Act, 1963 is applicable to exclude the period spent in pursuing a prior Rectification Application from the period of limitation prescribed under Section 107 of the CGST Act for filing an appeal before the Appellate Authority – HELD - While Section 5 of the Limitation Act stands excluded from application to special enactments like the CGST Act in view of Section 29(2) of the Limitation Act, the principle of exclusion of time embedded in Section 14 of the Limitation Act remains applicable to quasi-judicial proceedings as well. The principle of Section 14 requires that where a party prosecutes another proceeding bona fide with due diligence relating to the same matter, which ultimately proves abortive, the time spent in such proceeding must be excluded from the prescribed limitation period as otherwise the party would be penalized for pursuing a lawful remedy - In the present case, the Petitioner filed the Rectification Application within three months of the Order-in-Original, demonstrating due diligence, and supported the application with evidence showing that the supplier had filed delayed returns, demonstrating good faith and due care - When an appeal is presented beyond the normal period but within the extended period of limitation, the Appellate Authority must provide at least one opportunity to the appellant to explain the delay by filing an application for condonation, following the principle enunciated in procedural law, before dismissing the appeal as time-barred - The period of forty-eight days spent between 08.03.2025 and 24.04.2025 in pursuing the Rectification Application is excluded from the limitation period, extending the deadline to 20.06.2025. The appeal filed on 23.05.2025 falls within this extended period - The impugned Order-in-Appeal is set aside and quashed and the matter is remitted to the Appellate Authority to provide a reasonable opportunity to the Petitioner to file an application for condonation of delay and to consider the explanation before disposing of the appeal – The writ petition is allowed [Read less]

Customs - Customs Broker Licensing Regulations, 2018 – Violation of Regulations 10(d), 10(e) and 10(n) – Revocation of License - The licensing authority revoked the appellant's customs broker license, forfeited the security deposit, and imposed penalties, concluding that the appellant had actively connived with the exporter and violated regulations 10(d), 10(e) and 10(n) of the Customs Brokers Licensing Regulations, 2018, by failing to advise the client to comply with customs provisions, failing to exercise due diligence in ascertaining correctness of information, and failing to verify the antecedent and correctness of... [Read more]

Customs - Customs Broker Licensing Regulations, 2018 – Violation of Regulations 10(d), 10(e) and 10(n) – Revocation of License - The licensing authority revoked the appellant's customs broker license, forfeited the security deposit, and imposed penalties, concluding that the appellant had actively connived with the exporter and violated regulations 10(d), 10(e) and 10(n) of the Customs Brokers Licensing Regulations, 2018, by failing to advise the client to comply with customs provisions, failing to exercise due diligence in ascertaining correctness of information, and failing to verify the antecedent and correctness of the importer exporter code number and identity of the client - Whether the appellant customs broker has committed violations of regulations 10(d), 10(e) and 10(n) of the Customs Brokers Licensing Regulations, 2018, thereby warranting revocation of license – HELD - The findings of the licensing authority do not sustain on the grounds that the charge of not advising the client to comply with the Customs Act is not founded on any allegation that advice sought had not been rendered. The conclusion that the exporter could not have executed overvalued exports without collusion from the appellant is too far-fetched to accept as overvaluation of export goods is easily executed and does not necessarily require a fellow conspirator - The allegation of breach of obligation to exercise due diligence is not founded on any information sought by the client or accusation that the appellant had misinformed the client but is based on a sweeping presumption unsupported by factual narration. The appellant had produced requisite documents evidencing that the allegations for failure to comply with declarations and non-submission of documents are contrary to facts on record - The Customs broker has no locus standi in respect of transaction value of export goods which is negotiated between the overseas buyer and Indian exporter; the value of export goods is determined by the exporter or proper officer as per the Customs Valuation Rules and not by the customs broker who is neither authorized nor obligated to redetermine value – Further, separate penalties had already been imposed on the appellant under the Customs Act for the same conduct, and therefore, imposing penalty again in the licensing proceedings is not proper - The impugned order revoking the license is set aside and the appeal is allowed [Read less]

Service Tax on Supply of Electricity as Goods – Appellant entered into an agreement with CESC Limited to transform high-tension electricity into low-tension electricity and distribute it to occupiers, recovering charges from them for such redistribution and sale of electricity - Whether the amount recovered by Appellant from occupiers towards redistribution and sale of electricity is exigible to service tax under the category of "Management, Maintenance or Repair Service"- HELD - The supply of electricity constitutes a transaction of sale of goods and does not attract service tax liability. The Tribunal relies on its pre... [Read more]

Service Tax on Supply of Electricity as Goods – Appellant entered into an agreement with CESC Limited to transform high-tension electricity into low-tension electricity and distribute it to occupiers, recovering charges from them for such redistribution and sale of electricity - Whether the amount recovered by Appellant from occupiers towards redistribution and sale of electricity is exigible to service tax under the category of "Management, Maintenance or Repair Service"- HELD - The supply of electricity constitutes a transaction of sale of goods and does not attract service tax liability. The Tribunal relies on its precedent decision in the appellant's own case which conclusively established that electricity, despite being intangible, falls squarely within the definition of "goods". Once electricity is held to be goods, charging service tax on the same treating it as provision of service is incorrect and unwarranted - The demand for service tax on electricity charges is set aside and the appellant is not liable to pay service tax. Consequently, no penalty is imposable on the appellant – The appeal is allowed - Service Tax on Refundable Security Deposits - Appellant collected refundable maintenance deposits from occupiers on super built-up area as a financial safeguard, adjustable only in the event of a default by the occupier in clearing monthly maintenance, electricity or common expenses -Whether maintenance deposits collected by Appellant from tenant/unit holders, which were adjustable only in the event of a default and were not adjusted during the relevant period, could be construed as an advance payment towards provision of a taxable service – HELD – The refundable security deposits cannot be considered as taxable consideration towards the provision of any service. When maintenance deposits are collected solely as a financial safeguard and are strictly refundable without being utilized by the appellant for maintenance purposes, no consideration is received for any taxable service. The principle that deposits merely held in custody for subsequent transfer or adjustment cannot constitute taxable consideration applies where no amount was charged for maintenance from such deposits nor was any amount thereof spent by the appellant. The fact that no default occurred during the relevant period and deposits remained unadjusted, untouched, and fully returnable demonstrates the absence of taxable consideration - The demand for service tax on maintenance deposits is set aside, consequently, no penalty is imposable on the appellant – The appeal is allowed [Read less]

GST – Ex-Parte Assessment Order - Failure to access web portal-based communications and notices issued by the assessing officer – HELD - The assessee is entitled to an opportunity to present submissions and produce supporting documents before the assessing officer on equitable grounds. The part-time accountant failed to notice the proceedings and the respondent uploaded all communications solely on the web portal, resulting in non-access to notices - In the absence of any excess or wrong claim, the question of imposing interest and penalty does not arise on the facts. Considering the nature of discrepancies, the explan... [Read more]

GST – Ex-Parte Assessment Order - Failure to access web portal-based communications and notices issued by the assessing officer – HELD - The assessee is entitled to an opportunity to present submissions and produce supporting documents before the assessing officer on equitable grounds. The part-time accountant failed to notice the proceedings and the respondent uploaded all communications solely on the web portal, resulting in non-access to notices - In the absence of any excess or wrong claim, the question of imposing interest and penalty does not arise on the facts. Considering the nature of discrepancies, the explanation provided by the assessee, and the reason for non-participation, the ex parte assessment order is set aside – The matter is remanded to the assessing officer for fresh consideration – The petition is disposed of [Read less]

GST – Recovery proceedings – Applicability of explanation to Section 75(12) of the CGST Act, 2017– Procedural compliance under Rule 88C of the CGST Rules, 2017 – Issue of garnishee notice in respect of discrepancy between details of outward supplies and Annual return - Petitioner challenges the notice on the ground that it does not precede any adjudication proceedings, while the respondent contends that under Section 75(12) of the Act, recovery proceedings can be undertaken in cases of self-assessed tax without adjudication - Whether recovery proceedings under Section 79 can be initiated directly without compliance... [Read more]

GST – Recovery proceedings – Applicability of explanation to Section 75(12) of the CGST Act, 2017– Procedural compliance under Rule 88C of the CGST Rules, 2017 – Issue of garnishee notice in respect of discrepancy between details of outward supplies and Annual return - Petitioner challenges the notice on the ground that it does not precede any adjudication proceedings, while the respondent contends that under Section 75(12) of the Act, recovery proceedings can be undertaken in cases of self-assessed tax without adjudication - Whether recovery proceedings under Section 79 can be initiated directly without compliance with the mandatory procedure prescribed under Rule 88C of the Rules, which requires issuance of an intimation in the prescribed Form GST DRC-01B giving the registered person an opportunity to furnish explanation for the discrepancy – HELD - Although the explanation added to Section 75(12) of the CGST Act w.e.f. 01.01.2022, clarifies that self-assessed tax includes tax payable in respect of outward supplies furnished under Section 37 but not included in the return under Section 39, and does not impose any additional liability beyond what the petitioner would have been otherwise liable for, the recovery proceedings must strictly comply with the procedural requirements prescribed under Rule 88C - The Rule 88C mandates that before recovery action under Section 79 is initiated, the proper officer must issue an intimation in the prescribed Form GST DRC-01B, highlighting the difference and directing the person to either pay the differential tax liability with interest or furnish explanation within seven days. Only where the amount remains unpaid within the specified period and no explanation is furnished or where the explanation is found unacceptable by the proper officer, recovery proceedings under Section 79 can be initiated - In the present case, the prescribed procedure under Rule 88C was not followed, depriving the petitioner of the opportunity to furnish an explanation in the prescribed form before recovery action was taken - The impugned garnishee notice is set aside with the direction that the proper officer shall issue the intimation under Rule 88C, consider any explanation furnished by the petitioner, and only thereafter proceed with recovery action if warranted – The writ petition is allowed [Read less]

Service Tax – Payment of service tax on profit derived from Foreign Exchange Transaction, suo motu adjustment of refund – Appellant paid service tax on the profit earned from foreign exchange transactions on the instructions of the audit team of the Department. Subsequently, upon verification, it was found that such profit cannot be levied with service tax - Appellant filed a refund claim which was rejected on the ground of limitation. The Appellant then suo motu adjusted the amount in the subsequent return, which led to the issuance of a demand order for service tax along with penalty - Whether the suo motu adjustment... [Read more]

Service Tax – Payment of service tax on profit derived from Foreign Exchange Transaction, suo motu adjustment of refund – Appellant paid service tax on the profit earned from foreign exchange transactions on the instructions of the audit team of the Department. Subsequently, upon verification, it was found that such profit cannot be levied with service tax - Appellant filed a refund claim which was rejected on the ground of limitation. The Appellant then suo motu adjusted the amount in the subsequent return, which led to the issuance of a demand order for service tax along with penalty - Whether the suo motu adjustment made by the Appellant of the erroneously paid service tax amount, after the refund claim was rejected on grounds of limitation, can be treated as an improper or impermissible process warranting penalty under the Finance Act, 1994 – HELD - When service tax has been paid by the Appellant solely on the instructions of the audit team and it is subsequently found that the profit from foreign exchange transactions is not liable to be taxed under Service Tax, the Respondent ought to have refunded the amount at the first instance. Having failed to do so, when the Appellant suo motu adjusts the amount, it cannot be termed as an improper or impermissible process for imposing penalty - The unjust enrichment of the Department cannot be approved on the ground of limitation or failure to prefer an appeal against the refund rejection order. The adjustment represents a technical error or mistake made without any mala fide intention, and therefore the penalty imposed cannot be sustained - The order of the Tribunal and the order-in-original are set aside and appeal is allowed [Read less]