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GST – Electronic filing of appeal on GST portal - Rejection of appeal on ground of non-filing of hard copy of appeal and certified copy of order - The appellate authority rejected the appeal on the ground that the petitioner had not submitted the hard copy of the appeal and the certified copy of the impugned order - Whether the rejection of the appeal solely on the ground of non-filing of hard copy of the appeal is legally sustainable - HELD – The Sub-Section (5) of Section 107 JKGST Act, 2017 provides that every appeal in this section shall be filed in such form and verified in the prescribed manner. Further, the Rule... [Read more]

GST – Electronic filing of appeal on GST portal - Rejection of appeal on ground of non-filing of hard copy of appeal and certified copy of order - The appellate authority rejected the appeal on the ground that the petitioner had not submitted the hard copy of the appeal and the certified copy of the impugned order - Whether the rejection of the appeal solely on the ground of non-filing of hard copy of the appeal is legally sustainable - HELD – The Sub-Section (5) of Section 107 JKGST Act, 2017 provides that every appeal in this section shall be filed in such form and verified in the prescribed manner. Further, the Rule 108(1) of the JKGST Rules, 2017 clearly provides that the appeal shall be filed along with all the relevant documents either in Form GST APL-01 electronically or otherwise as may be notified by the Commissioner. Thus, it is clearly envisaged by the Rule that the appeal could be submitted electronically to the Appellate Authority. The only other method for filing the same would be as notified by the Commissioner, the respondents have failed to place on record any notification to this effect, which in any case would be in addition to the prescribed mode of filing the appeal electronically. Therefore, rejection of the appeal merely on the ground that hard copy of the appeal has not been filed is unsustainable as there is no requirement to file a hard copy – Further, the respondents could have granted time to the petitioner to file the hard copy if required, instead of outright rejection of the appeal on this technical ground. The principle that substantial justice cannot be sacrificed on the ground of mere technicalities - The impugned order rejecting the appeal is set aside and matter is remanded back to the appellate authority to decide the appeal afresh on merits after affording an opportunity of hearing to the petitioner – The writ petition is allowed - Whether the rejection of the appeal on the ground of non-filing of the certified copy of the impugned order is legally sustainable - HELD - The requirement of submitting the certified copy of the impugned order has been removed by way of an amendment to the relevant rules. Since the impugned order was already uploaded on the GST portal, there was no need for the petitioner to submit the certified copy. The appeals should not be dismissed on hyper-technical grounds when the appeal itself was filed within the statutory period along with a copy of the order. [Read less]

GST - Taxability of reimbursement of foreign patent attorney fees under Reverse Charge - Applicant filed patent applications in Japan, USA and UK through its Indian service provider. The service provider raised invoices to the applicant which had two parts- Part A for reimbursement of foreign patent attorney fees and Part B for own fees - Whether the applicant is liable to pay GST under Reverse Charge Mechanism on the reimbursement of foreign patent attorney fees (Part A of the invoice) - HELD - The reimbursement amount does not qualify as a 'pure agent' transaction under Rule 33 of the CGST Rules, 2017 as the conditions t... [Read more]

GST - Taxability of reimbursement of foreign patent attorney fees under Reverse Charge - Applicant filed patent applications in Japan, USA and UK through its Indian service provider. The service provider raised invoices to the applicant which had two parts- Part A for reimbursement of foreign patent attorney fees and Part B for own fees - Whether the applicant is liable to pay GST under Reverse Charge Mechanism on the reimbursement of foreign patent attorney fees (Part A of the invoice) - HELD - The reimbursement amount does not qualify as a 'pure agent' transaction under Rule 33 of the CGST Rules, 2017 as the conditions therein are not satisfied - The applicant has paid beforehand the amount of expenses to be made by the Indian service provider (Seenergi IPR). It is not the case that service provider has incurred and spent some expenses on behalf of the applicant and then the applicant is reimbursing the same amount. Since the amount has been paid by the applicant beforehand, it cannot be considered as reimbursement per se. On the other hand, the Indian service provider is not providing the service of filing patent application for the applicant. So the amount under question is not consideration for any supply provided by Seenergi IPR. This is a case where the applicant has received service of filing patent application from foreign companies situated outside India – The foreign patent attorney services received by the applicant are legal services having SAC 9982, and as per the GST notifications, legal services provided by foreign advocates are taxable under reverse charge mechanism when provided to a business entity. The supply of the foreign patent attorney's legal service to the applicant is a taxable supply as per Section 9(3) of the CGST Act and Notification 13/2017. The place of supply is in India as per Section 13 of the IGST Act since the recipient (applicant) is located in India - The applicant is liable to pay GST under reverse charge mechanism on the reimbursement of foreign patent attorney fees (Part A of the invoice) as it is a taxable supply of legal services received from the foreign attorneys – Ordered accordingly [Read less]

GST – Gujarat AAR - GST Exemption, Charitable Activities, Activity of plantation and maintenance of trees, including avenue plantation for the preservation of environment - Eligibility of activities of tree plantation and maintenance activities for GST exemption under Entry No. 1 of Notification No. 12/2017-CT(R) dated 28.06.2017, which provides exemption to "Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities" - Whether the applicant's tree plantation and maintenance activities would qualify as "charitable activities" under the definition provided in th... [Read more]

GST – Gujarat AAR - GST Exemption, Charitable Activities, Activity of plantation and maintenance of trees, including avenue plantation for the preservation of environment - Eligibility of activities of tree plantation and maintenance activities for GST exemption under Entry No. 1 of Notification No. 12/2017-CT(R) dated 28.06.2017, which provides exemption to "Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities" - Whether the applicant's tree plantation and maintenance activities would qualify as "charitable activities" under the definition provided in the notification, which includes "activities relating to preservation of environment including watershed, forests and wildlife" – HELD - The applicant's tree plantation and maintenance activities, including the work under the Harit Van Path Yojna scheme, would be covered under the definition of "charitable activities" as per the GST exemption notification, as they relate to the preservation of the environment. Therefore, the applicant would be eligible for GST exemption on the services provided for these activities under Entry No. 1 of Notification No. 12/2017-CT(R) – Ordered accordingly [Read less]

GST – Gujarat AAR - Input Tax Credit on construction of warehouse - Whether ITC eligible on the construction of the warehouse under Section 17(5)(c) of the CGST Act, 2017 – HELD - The Supreme Court in the case of Safari Retreats held that the expression "plant and machinery" used in Section 17(5)(c) has a plain and natural meaning as defined in the explanation to Section 17, which excludes land, building, or any other civil structures. Therefore, the ITC of the works contract services supplied for the construction of the warehouse is not available - The ITC is not admissible for the goods or services utilized for the c... [Read more]

GST – Gujarat AAR - Input Tax Credit on construction of warehouse - Whether ITC eligible on the construction of the warehouse under Section 17(5)(c) of the CGST Act, 2017 – HELD - The Supreme Court in the case of Safari Retreats held that the expression "plant and machinery" used in Section 17(5)(c) has a plain and natural meaning as defined in the explanation to Section 17, which excludes land, building, or any other civil structures. Therefore, the ITC of the works contract services supplied for the construction of the warehouse is not available - The ITC is not admissible for the goods or services utilized for the construction of the warehouse or shed from which storage and warehousing services are provided as furtherance of business or provided on rent – Ordered accordingly - Whether ITC is available on the construction of the warehouse under Section 17(5)(d) of the CGST Act, 2017 – HELD - The Supreme Court in Safari Retreats held that the expression "plant or machinery" used in Section 17(5)(d) should be interpreted based on the functionality test. However, the Legislature has amended Section 17(5)(d) and substituted the words "plant or machinery" with "plant and machinery" with effect from 01.07.2017. The new explanation also clarifies that any reference to "plant or machinery" shall be construed as a reference to "plant and machinery", which is defined in the explanation to Section 17 and excludes land, building, or any other civil structures. Therefore, the applicant is not eligible to avail ITC on the cement, steel, beams, columns, and construction services used for the construction of the warehouse. [Read less]

Goa Value Added Tax Act, 2005 - Taxability of Extra Neutral Alcohol (ENA)/Rectified Spirit (RS)/High Bouquet Spirit (HBS) - Levy of interest under Section 25(4) of the Goa VAT Act for delayed payment of VAT on the sales of ENA/RS/HBS effected during FY 2019-20 - Whether the levy of interest is valid given the ambiguity and lack of clarity on the taxability of ENA/HBS/RS under the GST or VAT law - HELD - Though there was some ambiguity regarding the taxability of ENA/RS/HBS under the GST regime after its introduction from 1st July 2017, the petitioner was aware that these goods would continue to be taxable under the Goa VAT... [Read more]

Goa Value Added Tax Act, 2005 - Taxability of Extra Neutral Alcohol (ENA)/Rectified Spirit (RS)/High Bouquet Spirit (HBS) - Levy of interest under Section 25(4) of the Goa VAT Act for delayed payment of VAT on the sales of ENA/RS/HBS effected during FY 2019-20 - Whether the levy of interest is valid given the ambiguity and lack of clarity on the taxability of ENA/HBS/RS under the GST or VAT law - HELD - Though there was some ambiguity regarding the taxability of ENA/RS/HBS under the GST regime after its introduction from 1st July 2017, the petitioner was aware that these goods would continue to be taxable under the Goa VAT Act. The petitioner had collected VAT on sale of these goods but did not deposit the same within the prescribed time, which attracted the interest liability under Section 25(4). Once the petitioner filed the returns, even showing 'zero' liability, the tax became 'due and payable' as per the statutory scheme under Section 25 and the GVAT Rules. The petitioner cannot justify the delay on the ground of uncertainty – Further, the petitioner had already paid VAT for the first quarter and cannot claim benefit of uncertainty selectively. The petitioner was conscious of the goods being taxable under the GVAT Act and it had earlier approached the Court challenging the condition of furnishing an undertaking for payment of any future GST liability on ENA/RS/HBS, thereby acknowledging the applicability of the Goa VAT Act. There is no merit in the petitioner's contention that the delay in payment was on account of the uncertainty and the interest was rightly levied for the delayed payment of tax - The levy of interest under Section 25(4) of the GVAT Act on the petitioner is valid - The writ petition is dismissed [Read less]

Central Excise – Rule 173Q of Central Excise Rules, 1944 – Demand of duty – Imposition of penalty – Appellant claimed benefit of concessional rate of duty on clearance of goods as prescribed under SSI Notification No.1/93-CE – Assistant Commissioner disallowed benefit of Notification No.1/93-CE to Appellant and confirmed demand of duty and also imposed penalty on Appellant under Rule 173Q of the Rules – Commissioner (Appeals) upheld order of lower authority – Whether Appellant is entitled to SSI benefit for their clearances under Notification No.1/93-CE – HELD – Concessional rate of duty as per Notificati... [Read more]

Central Excise – Rule 173Q of Central Excise Rules, 1944 – Demand of duty – Imposition of penalty – Appellant claimed benefit of concessional rate of duty on clearance of goods as prescribed under SSI Notification No.1/93-CE – Assistant Commissioner disallowed benefit of Notification No.1/93-CE to Appellant and confirmed demand of duty and also imposed penalty on Appellant under Rule 173Q of the Rules – Commissioner (Appeals) upheld order of lower authority – Whether Appellant is entitled to SSI benefit for their clearances under Notification No.1/93-CE – HELD – Concessional rate of duty as per Notification No.1/93-CE shall only be available, if aggregate value of clearance of all excisable goods for home consumption by a manufacturer, from one or more factories or from any factory, by one or more manufacturers, does not exceed Rs.200 Lakh in preceding Financial Year. There is no dispute in present case that aggregate value of clearance by both units of Appellant during relevant period had exceeded the limit prescribed under notification and therefore, clearances of excisable goods will not be eligible to concessional rate of duty and it will have to suffer excise duty at normal rate. Appellant will not be entitled to SSI benefit for their clearances under Notification No.1/93-CE. There is no infirmity with impugned order, but considering the quantum of duty involved in this case, it is inclined to reduce penalty imposed on Appellant by lower authority. With above modifications, impugned order is uphold – Appeal disposed of [Read less]

Customs – Section 113(d) of Customs Act, 1962 – Export of prohibited goods – Order of confiscation – Sustainability – Appellant filed two shipping bills for export of Natural Abrasive – Investigation revealed that export consignment contain Natural Garnet, a prohibited item for export as per DGFT Notification No.26/2015-20 – After following the due process of law, Additional Commissioner ordered for confiscation of impugned goods under Section 113(d) of the Act – Commissioner (Appeals) upheld order of Additional Commissioner – Whether impugned goods are liable for confiscation under Section 113(d) of the ... [Read more]

Customs – Section 113(d) of Customs Act, 1962 – Export of prohibited goods – Order of confiscation – Sustainability – Appellant filed two shipping bills for export of Natural Abrasive – Investigation revealed that export consignment contain Natural Garnet, a prohibited item for export as per DGFT Notification No.26/2015-20 – After following the due process of law, Additional Commissioner ordered for confiscation of impugned goods under Section 113(d) of the Act – Commissioner (Appeals) upheld order of Additional Commissioner – Whether impugned goods are liable for confiscation under Section 113(d) of the Act – HELD – As per Notification No.26/2015-20, Garnet could only be exported by India Rare Earth Limited (IREL) and no other entity. Notification itself dealt with sensitive materials seen from perspective of national security and placed restrictions of canalising the same to designated agencies and not otherwise. From point of view of national security, restrictions of this nature in any law or notification are required to be strictly interpreted. Test reports in respect of samples drawn from export goods indicating that it is in form of Pinkish red coarse powder and had characteristics of Natural Almandine Pyrope Garnet. Appellant had exported goods without involving canalising agency, i.e. IREL, even when they had knowledge of procedures as well as restrictions involved, therefore, this conduct cannot be justified. Garnet in question being of Rajasthan origin does not take it out of scope of DGFT notification, whose intention is to restrict export of Garnet irrespective of its origin. Order of confiscation of exported goods under Section 113(d) of the Act is uphold – Appeal dismissed [Read less]

GST - Classification of Tobacco Products - Classification of non-fermented, non-liquored crushed tobacco leaves packed in small retail pouches as "Chewing tobacco" under Tariff Heading 2403 or "Unmanufactured tobacco" under Tariff Heading 2401 – Petitioner classifying the product under Tariff Heading 2401 as "unmanufactured tobacco" during the excise regime and continued the same classification under the GST regime - Dept issued SCNs and passed orders classifying the petitioners' product as "chewing tobacco" under Tariff Heading 2403 instead of 2401 – Demand of differential GST and Compensation Cess - Whether the respo... [Read more]

GST - Classification of Tobacco Products - Classification of non-fermented, non-liquored crushed tobacco leaves packed in small retail pouches as "Chewing tobacco" under Tariff Heading 2403 or "Unmanufactured tobacco" under Tariff Heading 2401 – Petitioner classifying the product under Tariff Heading 2401 as "unmanufactured tobacco" during the excise regime and continued the same classification under the GST regime - Dept issued SCNs and passed orders classifying the petitioners' product as "chewing tobacco" under Tariff Heading 2403 instead of 2401 – Demand of differential GST and Compensation Cess - Whether the respondents are justified in classifying non-fermented, non-liquored crushed tobacco leaves in small retail pouches as "chewing tobacco" under Tariff Heading 2403 instead of "unmanufactured tobacco" under Tariff Heading 2401 – HELD - The definition of "manufacture" under Section 2(72) of the CGST Act, 2017 is different from the definition under the Central Excise Act. While under the Central Excise Act, the petitioners' process of repacking the tobacco leaves in small retail pouches without adding any ingredients was considered as "unmanufactured tobacco" classifiable under Tariff Heading 2401, whereas the definition of "manufacture" under the GST Act means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacture" shall be construed accordingly - The tobacco leaves in gunny bags procured by the petitioners which is a raw material is processed by the petitioner by drying, cleaning, sieving, sizing, cutting and packing the tobacco leaves in small retail pouches for the purpose of chewing resulted in the emergence of a new product with a distinct name, character and use, i.e., "chewing tobacco". This would fall within the description of "chewing tobacco" under Tariff Heading 2403 as per the Explanatory Notes to the HSN – the provisions of the Cigarettes And Other Tobacco Products (Prohibition Of Advertisement And Regulation Of Trade And Commerce, Production, Supply And Administration) Act, 2003 (‘Copta’) also shows that what is sold by the petitioners is “chewing tobacco” and merely because no ingredients are added, it would not be “unmanufactured tobacco” falling under Tariff Heading No. 2401 2090 - The respondents are justified in classifying the petitioners' product as "chewing tobacco" under Tariff Heading 2403 based on the definition of "manufacture" in the GST Act and the Explanatory Notes, and the petitioners would be liable to pay GST and Compensation Cess applicable to that classification. However, the impugned order to the extent that the show cause notice and order should be treated as having been issued under Section 73 of the CGST Act instead of Section 74, as the extended period of limitation under Section 74 cannot be invoked - The Respondents are directed to pass the order giving effect after recomputing the amount payable as GST considering the SCNs and the impugned order-in-original as having been passed under section 73(9) of the CGST Act without considering the extended period of limitation from July, 2017 onwards - The petitions are partly allowed [Read less]

GST - Section 107(1), (4) and (11) and Section 169 of the CGST Act, 2017 - Rule 142 (1), (1A) and (2) of the CGST Rules, 2017 - Mode and manner of service of notices/orders under GST - Service of notice only through electronic mode and not through physical mode – Whether Electronic service of notice/orders amounts to 'communication' under the CGST Act, 2017 - The petitioner’s grievance that the show cause notices and adjudication orders were not served on the petitioners physically/offline, and were only made available on the Common Portal managed. The petitioners contend that this deprived them of an opportunity to fi... [Read more]

GST - Section 107(1), (4) and (11) and Section 169 of the CGST Act, 2017 - Rule 142 (1), (1A) and (2) of the CGST Rules, 2017 - Mode and manner of service of notices/orders under GST - Service of notice only through electronic mode and not through physical mode – Whether Electronic service of notice/orders amounts to 'communication' under the CGST Act, 2017 - The petitioner’s grievance that the show cause notices and adjudication orders were not served on the petitioners physically/offline, and were only made available on the Common Portal managed. The petitioners contend that this deprived them of an opportunity to file replies and impaired their right to challenge the orders within the hard statutory period of limitation. The revenue authorities maintained that under Section 169 of the GST laws, service through electronic mode, including uploading on the Common Portal, is valid - Whether service of show cause notices and adjudication orders through electronic mode, including uploading on the Common Portal, is valid and sufficient for the purposes of Section 107 of the CGST Act, 2017 – HELD – The service of notices and orders through electronic mode, including uploading on the Common Portal, is permissible under the law. However, the deeming fiction of 'deemed service' under Section 169(2) and (3) of the CGST Act applies only to service through modes specified in Clauses (a), (b), (e) and (f) of Section 169(1), and not to service through electronic mode under Clauses (c) and (d) - The GST laws have undergone a transformative change from the earlier offline/physical mode of service to an electronic mode. This has caused difficulties for small and medium-sized assessees who were accustomed to the earlier physical mode of service and communication. The legislature has consciously used the term 'communicated' in Section 107 for the purpose of start of limitation to file appeals, which requires actual or constructive service of the contents of the notice or order, and not merely 'receipt' of the electronic communication. The legislature has deliberately not used the word ‘upload’ and its derivatives but the phrase 'making it available'. Thereby the legislative intent has been clearly expressed that the document or communication should be readily available to the noticee - In the absence of any verifiable mechanism with the GSTN or revenue authorities to ascertain when the notices or orders were retrieved, downloaded or viewed by the assessees on the Common Portal, the date of 'communication' for the purpose of Section 107 would be governed by actual or constructive service strictly in terms of Section 169 of the Act – In the absence of any legislative intent, uploading of notices/orders on the Common Portal cannot be equated with the modes of 'tendering', 'publishing' or 'affixation' under Section 169(2) and (3) for the purpose of deemed service - The individual adjudication orders are set aside subject to the petitioners depositing 10% of the disputed demand of tax and matters are remitted to the Adjudicating Authority for fresh consideration after providing the petitioners with copies of the show cause notices and documents and an opportunity of hearing – The writ petitions are allowed [Read less]

Customs – Import of automobile parts – Rejection of transaction value – Demand of differential duty – Appellant is engaged in import of automobile parts – Department received information to effect that Appellant is involved in mis-declaration in respect of brand description and value of imported goods – Investigation revealed that goods were of reputed brands, however no brand was declared by Appellant – Original authority rejected declared value of imported goods and re-determined the transaction value and also ordered for recovery of differential duty – Commissioner (Appeals) affirmed order passed by Orig... [Read more]

Customs – Import of automobile parts – Rejection of transaction value – Demand of differential duty – Appellant is engaged in import of automobile parts – Department received information to effect that Appellant is involved in mis-declaration in respect of brand description and value of imported goods – Investigation revealed that goods were of reputed brands, however no brand was declared by Appellant – Original authority rejected declared value of imported goods and re-determined the transaction value and also ordered for recovery of differential duty – Commissioner (Appeals) affirmed order passed by Original authority – Whether impugned order upholding rejection of transaction value of imported goods is sustainable – HELD – Onus to prove that declared price did not reflect true transaction value is always on department. Undervaluation is alleged based on allegation that goods imported by Appellant were of renowned brand, but no brand was declared by Appellant in Bill of Entry. Proprietor of Appellant had stated in his statement that goods in question/automobile parts were not actually branded and were only bearing some spurious markings/brand names on outer covering of packages. No enquiries were conducted by Investigating Officers with respective brand owners. There is no evidence produced by department to discharge their onus that impugned goods were branded goods. Findings in impugned order that goods in question were branded are held to be wrong without any basis/evidence for same. Impugned order upholding rejection of transaction value is not sustainable. Impugned order passed by Commissioner (Appeals) is set aside – Appeals allowed [Read less]

GST – Requirement of specific categorical finding of fraud, willful misstatement or suppression of fact for proceedings under Section 74 of the CGST Act, 2017 - Authorities initiated proceedings against the petitioner alleging circular trading - Whether the proceedings under Section 74 can be initiated without recording any specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax - HELD - For initiating proceedings under Section 74 of the GST Act, the adjudicating authority must record specific categorical finding of fraud, willful misstatement or suppression of fact to e... [Read more]

GST – Requirement of specific categorical finding of fraud, willful misstatement or suppression of fact for proceedings under Section 74 of the CGST Act, 2017 - Authorities initiated proceedings against the petitioner alleging circular trading - Whether the proceedings under Section 74 can be initiated without recording any specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax - HELD - For initiating proceedings under Section 74 of the GST Act, the adjudicating authority must record specific categorical finding of fraud, willful misstatement or suppression of fact to evade payment of tax or wrongful availment of input tax credit. Mere allegation of circular trading without any such finding is not sufficient to confer jurisdiction on the authorities to proceed under Section 74 - In the absence of specific finding of fraud, willful misstatement or suppression of fact, the proceedings under Section 74 are without jurisdiction. Further, the petitioner had duly disclosed all the transactions in its books of accounts and GST returns, and the authorities had failed to point out any defect in the same - Once the proceedings has been dropped against the supplier of the petitioner itself, no adverse inference can be drawn against the petitioner on that basis. The allegation made by the revenue that petitioner is engaged in the circular trading is of no aid to and without any material on record. The impugned orders passed by the State GST authorities under Section 74 of the GST Act are quashed – The writ petition is allowed - Whether the State GST authorities had jurisdiction to initiate proceedings against the petitioner in the absence of any cross-empowerment notification - HELD - The petitioner falls within the jurisdiction of Central GST department. The petitioner had specifically raised the issue of lack of jurisdiction of the State GST authorities in the absence of any cross-empowerment notification, but the authorities had failed to justify their jurisdiction. Mere initiation of proceedings by the State GST authorities does not confer jurisdiction on them, and in the absence of any material to establish the cross-empowerment, the proceedings initiated by the State GST authorities were without jurisdiction - Whether the authorities were justified in drawing adverse inference against the petitioner for non-production of toll plaza receipts - HELD - The GST Act and Rules do not mandate the production of toll plaza receipts to justify the actual physical movement of goods. The petitioner had produced tax invoices, e-way bills, and bilty, along with the bank statements showing the payments made to the transporter, which were sufficient to establish the actual movement of goods. The authorities had failed to point out any defect in the documents produced by the petitioner. The adverse inference drawn by the authorities against the petitioner for non-production of toll plaza receipts was patently perverse and without any basis. [Read less]

GST – Maintainability of writ petition in the face of statutory remedy of appeal – Challenge to orders imposing penalty under Section 129(1)(b) of the UPGST Act, 2017 and release of the seized vehicle and goods - The respondent State raised a preliminary objection regarding the maintainability of the writ petition in view of the availability of a statutory remedy of appeal – HELD - The petitioner had not responded to the show cause notice. There is no material with the authorities to lead to any doubt that the supplier does not exist - The petitioner had relied on an earlier order in the case of M/S Mz Momin Products... [Read more]

GST – Maintainability of writ petition in the face of statutory remedy of appeal – Challenge to orders imposing penalty under Section 129(1)(b) of the UPGST Act, 2017 and release of the seized vehicle and goods - The respondent State raised a preliminary objection regarding the maintainability of the writ petition in view of the availability of a statutory remedy of appeal – HELD - The petitioner had not responded to the show cause notice. There is no material with the authorities to lead to any doubt that the supplier does not exist - The petitioner had relied on an earlier order in the case of M/S Mz Momin Products vs State of Uttar Pradesh & Anr, where the court had observed that the goods were traceable to a bonafide dealer and had directed the authorities to determine the quantum of penalty in accordance with Section 129(1)(a) of the UPGST Act, 2017 - The two orders passed in similar matters, M/S Mz Momin Products and M/S Caviar Trading Company, were not in conflict as they were based on the specific facts presented before the Court. In the present case, the petitioner had failed to file any reply to the show cause notice, and there was no material to show that the goods were traceable to a bona fide dealer. The fact disputes involved in the case should be considered in the appeal proceedings – The petition is dismissed leaving it open to the petitioner to pursue its statutory remedy of appeal [Read less]

Service Tax - Mandatory nature of pre-consultative process prior to issuance of show cause notice - Whether pre-consultative process under the Central Excise Act is mandatory prior to issuance of show cause notice on the merits of the matter/passing of orders-in-original - HELD - The Bombay High Court in Rochem Separation Systems (India) Pvt. Ltd. v. The Union of India has held that the requirement of pre-consultation process cannot be dismissed as an empty formality and would have to be held to be mandatory. The Court also referred to various other decisions of various courts where it has been held that the Circulars issu... [Read more]

Service Tax - Mandatory nature of pre-consultative process prior to issuance of show cause notice - Whether pre-consultative process under the Central Excise Act is mandatory prior to issuance of show cause notice on the merits of the matter/passing of orders-in-original - HELD - The Bombay High Court in Rochem Separation Systems (India) Pvt. Ltd. v. The Union of India has held that the requirement of pre-consultation process cannot be dismissed as an empty formality and would have to be held to be mandatory. The Court also referred to various other decisions of various courts where it has been held that the Circulars issued by the CBIC are binding upon the authorities, and thus, pre-consultation process must be taken to be mandatory. The Courts today are looking to integrate, as far as possible, the elements of Alternate Dispute Resolution mechanisms even within statutory frameworks, and the pre-consultative process adumbrated by the CBIC is such an attempt - The impugned SCNs are quashed and the Revenue is directed to carry out the pre-consultative process by issuing a pre-consultation notice – The petitions are disposed of [Read less]

Central Sales Tax Act, 1956 - Manufacture and sale of earth moving equipment, Replacement of Parts During Warranty Period – During the warranty period, the revisionist-assessee replaced certain defective parts in the equipment sold to customers without charging any consideration - The Assessing Authority levied tax on the value of replacement parts, which was upheld by the Tribunal by relying on the Supreme Court judgment in Mohd. Ekram Khan and ignoring the judgment in Tata Motors Limited v. The Deputy Commissioner of Commercial Taxes - Whether the Tribunal was legally justified in imposing tax on the parts replaced fre... [Read more]

Central Sales Tax Act, 1956 - Manufacture and sale of earth moving equipment, Replacement of Parts During Warranty Period – During the warranty period, the revisionist-assessee replaced certain defective parts in the equipment sold to customers without charging any consideration - The Assessing Authority levied tax on the value of replacement parts, which was upheld by the Tribunal by relying on the Supreme Court judgment in Mohd. Ekram Khan and ignoring the judgment in Tata Motors Limited v. The Deputy Commissioner of Commercial Taxes - Whether the Tribunal was legally justified in imposing tax on the parts replaced free of cost during the warranty period – HELD - The finding of fact recorded by the lower authorities that the revisionist-assessee had realised amounts from customers for the replacement parts and had not provided details of the parts used against the supply of particular machinery to particular customers. This finding of fact, which was not challenged, showed that there was a consideration involved in the replacement of parts, and thus it could not be said that the parts were provided free of cost - The judgment of the Supreme Court in Tata Motors Limited Taxes squarely covered the issue in favor of the revenue. The mere assertion that no credit note was issued and no amount was charged from the customer or dealer is of no help to the revisionist, as the finding of fact recorded against the revisionist that some money had been charged could not be disputed without any cogent material - No interference is called for in the impugned order, and the questions of law were answered in favour of the Revenue - The revision petitions are dismissed [Read less]

Central Excise - Valuation of Excisable Goods, Amortized Value of Moulds, Job Work, Transaction Value, Section 4(1)(b) of Central Excise Act, 1944, Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - The appellant is engaged in the manufacture of parts and accessories of vehicles and during the course of an audit, it was observed that the appellant was supplied free of cost moulds by its customers (OEMs) to manufacture the goods. The adjudicating authority re-determined the assessable value of the goods by including the value of the moulds, excluding duty, to be amortized in terms o... [Read more]

Central Excise - Valuation of Excisable Goods, Amortized Value of Moulds, Job Work, Transaction Value, Section 4(1)(b) of Central Excise Act, 1944, Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - The appellant is engaged in the manufacture of parts and accessories of vehicles and during the course of an audit, it was observed that the appellant was supplied free of cost moulds by its customers (OEMs) to manufacture the goods. The adjudicating authority re-determined the assessable value of the goods by including the value of the moulds, excluding duty, to be amortized in terms of Section 4(1)(b) of the Central Excise Act, 1944 read with Rule 6 of the Central Excise Valuation Rules, 2000. The appellant contended that the inter-unit movement of goods was done by paying 110% of the cost of production as per Section 8 of the Valuation Rules, and that the moulds belonged to the OEMs who supplied them under job work challans - Whether the value of the moulds supplied free of cost by the OEMs should be included in the assessable value of the goods cleared by the appellant - HELD - The Tribunal, following its own previous decision in the appellant's case and the judgment of the Supreme Court in the case of International Auto Limited vs Commissioner of Central Excise, held that the ratio of the Supreme Court judgment is squarely applicable to the present case - Since the moulds were supplied by the OEMs under job work challans and their value was amortized by the OEMs while clearing the final product, the appellant could not be asked to include the value of such moulds in its assessable value - The impugned orders confirming the demand were unsustainable and accordingly set aside the orders - The appeals are allowed [Read less]

Customs - Duty drawback, Supplementary claim, Limitation period - The appellant is a limited company engaged in the business of exports. The appellant had exported Men's Cotton Knitted Vests and Gents Cotton Knitted T-Shirts to a unit at Falta Special Economic Zone (FSEZ) and claimed duty drawback. The drawback claims were initially processed and sanctioned. However, the appellant later sought re-valuation and re-consideration of the drawback amount. After several communications, the matter was referred to the Apparel Export Promotion Council (AEPC), which opined that the value of the T-Shirts should be higher than what wa... [Read more]

Customs - Duty drawback, Supplementary claim, Limitation period - The appellant is a limited company engaged in the business of exports. The appellant had exported Men's Cotton Knitted Vests and Gents Cotton Knitted T-Shirts to a unit at Falta Special Economic Zone (FSEZ) and claimed duty drawback. The drawback claims were initially processed and sanctioned. However, the appellant later sought re-valuation and re-consideration of the drawback amount. After several communications, the matter was referred to the Apparel Export Promotion Council (AEPC), which opined that the value of the T-Shirts should be higher than what was initially considered. The appellant then filed supplementary drawback claims under Rule 15 of the Customs, Central Excise Duties & Service Tax Drawback Rules, 1995 - Whether the supplementary drawback claims filed by the appellant were barred by limitation under Rule 15 of the Drawback Rules - HELD - The supplementary drawback claims filed by the appellant were not barred by limitation under Rule 15 - The cause of action for the supplementary claims arose only on the date the appellant received the AEPC's valuation, which was October 5, 2007. The appellant filed the supplementary claims on January 3, 2008, which was well within the 3-month limitation period prescribed under Rule 15 - The appellant had also reminded the authorities about the pending claims, indicating due diligence on their part - Accordingly, the Tribunal set aside the orders passed by the Development Commissioner rejecting the supplementary claims as time-barred, and remitted the matter back for consideration of the claims on merits as per the AEPC's re-valuation - The appeals filed by the appellant were allowed [Read less]

Central Excise - Inclusion of Sales Tax/VAT Concession in assessable value for Central Excise Duty - The appellant is engaged in the manufacture of UPVC Pipes, Water Storage Tanks and allied products. It was granted a certificate of eligibility by the Assam State Government under the Industrial Policy of Assam, 2003 and the Assam Industries (Sales Tax Concession) Scheme, 1997, which allowed it to avail sales tax/VAT exemption in the form of remission for a period of 7 years. The Department issued a show cause notice alleging that the appellant had failed to include the 99% of the Value Added Tax retained by it as remission... [Read more]

Central Excise - Inclusion of Sales Tax/VAT Concession in assessable value for Central Excise Duty - The appellant is engaged in the manufacture of UPVC Pipes, Water Storage Tanks and allied products. It was granted a certificate of eligibility by the Assam State Government under the Industrial Policy of Assam, 2003 and the Assam Industries (Sales Tax Concession) Scheme, 1997, which allowed it to avail sales tax/VAT exemption in the form of remission for a period of 7 years. The Department issued a show cause notice alleging that the appellant had failed to include the 99% of the Value Added Tax retained by it as remission under the Assam Industries (Tax Remission) Scheme, 2005 in the assessable value for the purpose of payment of central excise duty during the period from May 2009 to March 2010 - Whether the 99% of the VAT retained by the appellant as remission under the State Government's scheme is required to be included in the assessable value for the purpose of payment of central excise duty - HELD - The issue regarding the includability of sales tax/VAT concession retained by the assessee in the assessable value for the purpose of levy of central excise duty was settled by the Supreme Court in the case of Commissioner of Central Excise v. Super Synotex (India) Ltd., wherein the Court held that unless the sales tax/VAT is actually paid to the concerned governments or statutory authorities, no benefit towards excise duty can be claimed under the concept of transaction value as envisaged under Section 4 of the Central Excise Act, 1944 and such, is not excludible - Further, the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944 cannot be invoked in the present case as the appellant had not suppressed any material facts from the Department. The Department was aware of the appellant availing the sales tax/VAT remission scheme and the issue was mired in litigation during the relevant period, with conflicting decisions by the Tribunal. Therefore, no mens rea could be attributed to the appellant for not including the remitted amount in the assessable value - The Tribunal also relied on the Board's Circular No. 1063/2/2018-CX, which clarified that the extended period is not invocable in such cases - The entire demand raised against the appellant and the penalty imposed on the appellant is set aside - The appeal is allowed [Read less]

Central Excise – Manufacture of vehicles – Classification – Appellant is engaged in manufacture of Bullet Proof Special Purpose Vehicle – Appellant cleared impugned vehicles by classifying same under CETH 8705 9000 and availing exemption under Notification No.12/2012 – Revenue issued show cause notice proposing classification of impugned vehicles under CETH 8710 0000 and demand of duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether impugned vehicles merits classification under CETH 8705 9000 as claimed by Appellant or under CETH 8710 0000 as held in impugned order – HELD �... [Read more]

Central Excise – Manufacture of vehicles – Classification – Appellant is engaged in manufacture of Bullet Proof Special Purpose Vehicle – Appellant cleared impugned vehicles by classifying same under CETH 8705 9000 and availing exemption under Notification No.12/2012 – Revenue issued show cause notice proposing classification of impugned vehicles under CETH 8710 0000 and demand of duty – Adjudicating Authority confirmed proposals made in show cause notice – Whether impugned vehicles merits classification under CETH 8705 9000 as claimed by Appellant or under CETH 8710 0000 as held in impugned order – HELD – Light armoured bulletproof vehicles are specifically excluded from classification under tariff heading 87.10. Bulletproof vehicles manufactured by Appellant are light armoured bulletproof vehicles. Primary purpose of said vehicle was patrolling, surveillance and security of forces inside vehicle while being stationed at battlefield. Impugned vehicles are not principally designed for transport of passengers or goods and hence, are not excluded from purview of heading 8705. Bulletproof special purpose vehicles deserved to be classified under chapter heading 8705. Admittedly, vehicle in question is a special purpose vehicle, therefore, same have merited classification under tariff heading 8705 9000 as claimed by Appellant. Since issue of classification of vehicles is decided in favour of Appellant, impugned vehicles are eligible for exemption. Impugned order passed by Adjudicating Authority is set aside – Appeal allowed [Read less]

Service Tax – Providing of services from outside India – Tax liability – Appellant, a Company registered under laws of USA, entered into License Agreement with Petroleum Companies in India, vide which, it granted non-exclusive right to use licensed technology, which was patented outside India, to Petroleum Companies in India – Petroleum Companies in India had agreed to pay a fixed consideration at pre-determined intervals – Department issued show cause notice to Appellant by proposing demand of Service Tax on consideration received for Intellectual Property Rights (IPR) services – Adjudicating Authority confirm... [Read more]

Service Tax – Providing of services from outside India – Tax liability – Appellant, a Company registered under laws of USA, entered into License Agreement with Petroleum Companies in India, vide which, it granted non-exclusive right to use licensed technology, which was patented outside India, to Petroleum Companies in India – Petroleum Companies in India had agreed to pay a fixed consideration at pre-determined intervals – Department issued show cause notice to Appellant by proposing demand of Service Tax on consideration received for Intellectual Property Rights (IPR) services – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of IPR services – HELD – It is not dispute that patents and IPR are registered in USA. Terms of agreement indicate that payment for such transfers is to be made in USD. Neither show cause notice nor impugned order established that liaison office in India had provided services on their own to Indian Petroleum companies. Services were rendered by Appellant from USA, a place outside India. Services were provided entirely from outside of India and no part of services were ever performed in India. Appellant did not have any establishment, office, employee or any assets in India where the disputed services were provided. Services provided beyond territorial waters of India are not liable to service tax, as provisions of Service Tax have not been extended to such areas to a service recipient in India. Presence of a liaison office in India would not have made any difference. Appellant cannot be obligated to discharge Service Tax on services provided by it from outside India. Impugned order cannot be sustained – Appeals allowed [Read less]

Service Tax - CENVAT Credit, Export of Services, Place of Provision of Services - The appellant filed claims for refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. The refund claims were rejected by the adjudicating authority on two main grounds: (i) inadmissibility of availment of credit to the extent of Rs. 3,61,15,586, and (ii) ineligibility for the entire refund claim for not having exported services as per Rule 6A of the Service Tax Rules, 1994 - Whether the original authority was empowered to deny the CENVAT credit on 'inputs' and 'input services' while disposing of the refund claim under Rule 5 o... [Read more]

Service Tax - CENVAT Credit, Export of Services, Place of Provision of Services - The appellant filed claims for refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. The refund claims were rejected by the adjudicating authority on two main grounds: (i) inadmissibility of availment of credit to the extent of Rs. 3,61,15,586, and (ii) ineligibility for the entire refund claim for not having exported services as per Rule 6A of the Service Tax Rules, 1994 - Whether the original authority was empowered to deny the CENVAT credit on 'inputs' and 'input services' while disposing of the refund claim under Rule 5 of the CENVAT Credit Rules, 2004 - HELD - The proceedings for processing of claim for refund under Rule 5 of the CENVAT Credit Rules, 2004 do not offer any authority for re-visiting the eligibility to claim CENVAT credit on 'inputs' and 'input services' procured by the claimant. Such disallowance of CENVAT credit can only be done by recourse to Rule 14 of the CENVAT Credit Rules, 2004 - Accordingly, the impugned order, to the extent of such inadmissibility having been upheld, was held to be not in accordance with law - The appeals were allowed by way of remand - Whether the appellant's activity of coordinating the procurement of 'clinical research' services for its pharmaceutical/biotech clients abroad, along with its Singapore affiliate, should be considered as 'export of service' under the Place of Provision of Service Rules, 2012 - HELD - The lower authorities had proceeded on the premise of 'new law new assessment' without considering the manner in which the activity of 'clinical research' service was to be fastened on the appellant under the new regime - The findings in the separate proceedings, where the tax liability was fastened on the same activity, should be considered by the lower authorities in disposing the application for refund - Further, the factum of 'goods' (samples of the product to be researched) and 'handling' thereof within the framework of Rule 4 of the Place of Provision of Service Rules, 2012, as far as the appellant is concerned, had not been dealt with by the lower authorities. The Tribunal, therefore, set aside the impugned order and restored the application before the original authority for fresh consideration in accordance with the facts as pleaded by the appellant and the provisions of Rule 5 of the CENVAT Credit Rules, 2004. [Read less]

Customs – Section 14 of Customs Act, 1962 – Import of motor controller – Enhancement of value – Setting aside of assessment order – Respondent imported Motor Controller vide bills of entry – Assessing Officer reassessed importation by enhancing CIF value and rejected declared value of impugned goods – Commissioner (Appeals) set aside orders of assessment and accepted the value declared by Respondent – Whether Commissioner (Appeals) is justified in setting aside of orders of assessment passed by Assessing Officer – HELD – Assessing officer had rejected transaction values without any valid basis and witho... [Read more]

Customs – Section 14 of Customs Act, 1962 – Import of motor controller – Enhancement of value – Setting aside of assessment order – Respondent imported Motor Controller vide bills of entry – Assessing Officer reassessed importation by enhancing CIF value and rejected declared value of impugned goods – Commissioner (Appeals) set aside orders of assessment and accepted the value declared by Respondent – Whether Commissioner (Appeals) is justified in setting aside of orders of assessment passed by Assessing Officer – HELD – Assessing officer had rejected transaction values without any valid basis and without following the due procedure as laid down under Section 14 of the Act and especially when there is nothing on record to suggest that transaction values declared by Respondent were not the price actually paid for goods when sold for export to India. Department had adduced no evidence that Respondent had paid any amount over and above the invoice value to foreign supplier. In these circumstances, enhancement of assessable value by Assessing officer is liable to be struck down and set aside and impugned bill of entry is to be assessed at values declared by Respondent. Impugned order passed by Commissioner (Appeals) is uphold – Appeals dismissed [Read less]

Service Tax – Sections 77 and 78 of Finance Act, 1994 – Demand of tax – Imposition of penalty – Appeal had been filed by Appellant assailing Order-In-Appeal passed by Commissioner (Appeals) – Whether impugned order confirming demand of Service Tax raised against Appellant is sustainable – HELD – Vide impugned order, Commissioner (Appeals) partly allowed appeal filed by Appellant to extent of exempting works contract service pertaining to construction of Government Industrial Training Institute, but disallowed exemption on remaining service value received for construction of residential houses. Admittedly, wor... [Read more]

Service Tax – Sections 77 and 78 of Finance Act, 1994 – Demand of tax – Imposition of penalty – Appeal had been filed by Appellant assailing Order-In-Appeal passed by Commissioner (Appeals) – Whether impugned order confirming demand of Service Tax raised against Appellant is sustainable – HELD – Vide impugned order, Commissioner (Appeals) partly allowed appeal filed by Appellant to extent of exempting works contract service pertaining to construction of Government Industrial Training Institute, but disallowed exemption on remaining service value received for construction of residential houses. Admittedly, work contract for construction of residential buildings did not fall within period covered under Sr.No.12A of Exemption Notification No.25/2012-ST. Confirmation of demand of Service Tax is upheld, but penalty imposed under Sections 77 and 78 of the Act is set aside, as there is no suppression of fact on part of Appellant with intent to evade payment of Service Tax. Impugned order passed by Commissioner (Appeals) is modified to above extent – Appeal partly allowed [Read less]

Central Excise – Manufacture of goods – Denial of exemption – Demand of duty – Appellant is engaged in manufacture of Builders ware of Plastics – Appellant availed exemption under Notification No.8/2003-CE on manufacture and clearance of excisable goods – Department issued show cause notice alleging that Appellant had wrongly availed exemption under Notification No.8/2003 – Adjudicating Authority denied exemption and confirmed demand of duty – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is eligible for exemption under Notification No.8/2003-CE – HELD – impu... [Read more]

Central Excise – Manufacture of goods – Denial of exemption – Demand of duty – Appellant is engaged in manufacture of Builders ware of Plastics – Appellant availed exemption under Notification No.8/2003-CE on manufacture and clearance of excisable goods – Department issued show cause notice alleging that Appellant had wrongly availed exemption under Notification No.8/2003 – Adjudicating Authority denied exemption and confirmed demand of duty – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether Appellant is eligible for exemption under Notification No.8/2003-CE – HELD – impugned order denied benefit of exemption on ground that Appellant had used inputs bearing brand names or trademarks of third parties in manufacture of final excisable goods. Burden of proving that finished goods bear another person’s brand so as to indicate a trade connection, rests on Department. There is no satisfactory evidence that finished goods as removed from Appellant’s factory carried the brand name or trade name of some other person in such a manner as to indicate that goods belonged to or were the produce of such other person. Department had not established any intention on part of Appellant in affixing brand name of other persons In absence of such proof, legal embargo in Notification cannot be invoked to deny SSI benefit. Impugned Order-in-Appeal denying SSI exemption under Notification No.8/2003-CE is set aside. Appellant is entitled to benefit of SSI exemption – Appeal allowed [Read less]

Service Tax – Section 78 of Finance Act, 1994 – Providing of construction service – Tax liability – Appellant is engaged in providing Construction of Residential Complex Service – Appellant agreed to construct and hand over 33 apartments to landowners, who in turn handed over their land as consideration for construction activity – As Appellant had failed to pay service tax on consideration, department issued show cause notice – Adjudicating Authority confirmed demand along with interest and penalty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant/Developer has p... [Read more]

Service Tax – Section 78 of Finance Act, 1994 – Providing of construction service – Tax liability – Appellant is engaged in providing Construction of Residential Complex Service – Appellant agreed to construct and hand over 33 apartments to landowners, who in turn handed over their land as consideration for construction activity – As Appellant had failed to pay service tax on consideration, department issued show cause notice – Adjudicating Authority confirmed demand along with interest and penalty – Commissioner (Appeals) affirmed order passed by Adjudicating Authority – Whether Appellant/Developer has provided any construction service to land owner and service tax is exigible on owner's share – HELD – Department issued show cause notice demanding service tax on owner's share on ground that Appellant had rendered taxable construction service to land?owner and had not discharged due service tax on value of owner's share. Prior to 1-7-2010, there is no leviability of tax on owner’s share of apartments. After 1-7.2010, Developer is liable to pay service tax on construction service provided to land owner and value of flats should ordinarily be taken as the price of similar flats charged to independent buyers at nearest point of time. Value of flats given to landowner, which was the consideration for development rights, was used to determine service tax liability. Service tax is payable by builder at time when possession or right in property was transferred to landowner. Appellant is providing construction services to land owner for a consideration (owner's share). Appellant is liable to pay service tax on owner’s share of flats constructed – Appeal partly allowed - Imposition of penalty – Sustainability – Whether penalty imposed on Appellant under Section 78 of the Act is sustainable – HELD – During disputed period, there is a lot of uncertainty as to Service Tax liability and also for its quantification by a developer in respect of joint venture agreements. As such, attributing any malafide to Appellant that there is suppression or intention to evade tax is not justified. Though it is held that Appellant is liable to pay service tax on owner’s share of flats constructed, imposing penalty is not justified. Impugned Order-in-Appeal passed by Commissioner (Appeals) is modified to extent of setting aside penalty imposed, but upholding demand of service tax along with interest due thereon. [Read less]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursement of expenditure – Tax liability – During audit of Appellant, department noticed that Appellant have received an amount towards Consulting Engineer Service from their clients by way of income receipts, but have not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether reimbursement of expenditure incurred towards experts advice and legal c... [Read more]

Service Tax – Section 67 of Finance Act, 1994 – Reimbursement of expenditure – Tax liability – During audit of Appellant, department noticed that Appellant have received an amount towards Consulting Engineer Service from their clients by way of income receipts, but have not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of Service Tax – Adjudicating Authority confirmed demand as proposed in show cause notice – Commissioner (Appeals) upheld order passed by Adjudicating Authority – Whether reimbursement of expenditure incurred towards experts advice and legal charges will form part of taxable value under Section 67 of the Act – HELD – Appellant had paid for Advocates on request of its clients (Dyeing factory owners) on premise of an agent, as they are located at Tirupur and Appellant stationed in Chennai was requested to co-ordinate with different agencies like High Court, Anna University and IIT Chennai. Amount was recovered by Appellant from Dyeing Factory owners. Expenditure incurred is not part of Consulting Engineering Services. No service element or profit margin was involved in reimbursements and these were bona fide expenses incurred on behalf of clients which is beyond scope of project management (contracts) and therefore, reimbursements will not form part of gross value of service under Section 67 of the Act. Impugned order passed by Commissioner (Appeals) is set aside – Appeal allowed [Read less]

Service Tax - CENVAT Credit, Trading Activity, Online Ticketing Platform - The respondent is engaged in the business of providing online ticketing platform through its website 'bookmyshow.com' for booking of cinema tickets and event tickets. The respondent had entered into agreements with cinema hall owners and event organisers to provide the online ticketing platform, where the respondent would collect the ticket price from the customers and remit the same to the cinema hall owners/event organisers, while retaining a convenience fee. The department issued a show cause notice proposing to recover the irregularly availed CE... [Read more]

Service Tax - CENVAT Credit, Trading Activity, Online Ticketing Platform - The respondent is engaged in the business of providing online ticketing platform through its website 'bookmyshow.com' for booking of cinema tickets and event tickets. The respondent had entered into agreements with cinema hall owners and event organisers to provide the online ticketing platform, where the respondent would collect the ticket price from the customers and remit the same to the cinema hall owners/event organisers, while retaining a convenience fee. The department issued a show cause notice proposing to recover the irregularly availed CENVAT credit on the ground that the respondent was engaged in 'trading activity' of tickets, which is an exempt service, and therefore not eligible for the CENVAT credit - Whether the respondent's activity of providing the online ticketing platform amounts to 'trading activity' of tickets, thereby rendering the activity as an exempt service and making the respondent ineligible for CENVAT credit under Rule 6(3) of the CENVAT Credit Rules, 2004 - HELD - The respondent's activity of providing the online ticketing platform does not amount to 'trading activity' of tickets. The Tribunal analysed the agreements entered into by the respondent with the cinema hall owners and event organisers, which clearly show that the respondent was acting as a booking agent and had no control over the inventory or pricing of the tickets. The respondent was merely providing an interface for the customers to book the tickets, and the entire ticket price was remitted to the cinema hall owners/event organisers, with the respondent retaining only the convenience fee - The Tribunal relied on various judicial precedents to hold that the respondent was providing a taxable service and not engaged in any trading activity, and therefore, the proposals in the show cause notice for reversal of CENVAT credit under Rule 6(3) were not sustainable - The impugned order dated 27.05.2016 passed by the Commissioner is upheld and the appeal filed by the revenue is dismissed [Read less]

Customs - Differential Duty, Exemption Notification, Rules of Origin, Certificate of Origin, Regional Value Content (RVC) - The appellant imported Tin Ingots and availed the benefit of Notification No. 46/2011, claiming the goods were of Malaysian origin. The department denied the benefit based on the finding that the Certificates of Origin (COOs) were issued based on false declarations and the goods did not meet the 35% regional value content (RVC) requirement under the ASEAN-India Free Trade Area (AIFTA) rules of origin - Whether the appellant was eligible for the exemption benefit under Notification No. 46/2011 for the ... [Read more]

Customs - Differential Duty, Exemption Notification, Rules of Origin, Certificate of Origin, Regional Value Content (RVC) - The appellant imported Tin Ingots and availed the benefit of Notification No. 46/2011, claiming the goods were of Malaysian origin. The department denied the benefit based on the finding that the Certificates of Origin (COOs) were issued based on false declarations and the goods did not meet the 35% regional value content (RVC) requirement under the ASEAN-India Free Trade Area (AIFTA) rules of origin - Whether the appellant was eligible for the exemption benefit under Notification No. 46/2011 for the imported Tin Ingots - HELD - While the investigation revealed issues with the cost sheets used by the Malaysian exporter (M/s. Malaysia Smelting Corporation) to obtain the COOs, the admitted fact remained that the goods were partially manufactured in Malaysia - The mere issue with the cost sheets did not invalidate the COOs, as there was no evidence produced to prove the COOs were fake - Regarding the RVC requirement, the department did not provide any evidence or calculation to show that the RVC was less than 35% - In the absence of such evidence, the appellant could not be denied the benefit of Notification No. 46/2011 merely based on an allegation of RVC violation - Further, Rule 13 of the AIFTA rules of origin requires the COOs to be issued by the designated government authority, which was complied with in this case - Therefore, the appellant had fulfilled the conditions to avail the exemption benefit under Notification No. 46/2011 and set aside the demand for differential customs duty - The appeal filed by the appellant is allowed [Read less]

SVLDRS, 2019 - Extension of time to pay under Sabka Vishwas (Legacy Dispute Resolution) Scheme - Due to the COVID-19 pandemic, the petitioner could not pay the amount by the deadline and sought an extension. The authorities summarily directed the petitioner to pay the entire liability, including interest and penalty, on the ground that the SVLDRS scheme had lapsed - Whether the petitioner can be granted an extension of time to pay the amount determined under the SVLDRS scheme despite the lapse of the Scheme's timeline – HELD – In view of the decisions of its coordinate benches in Sitec Labs Ltd., Innovative Antares Pvt... [Read more]

SVLDRS, 2019 - Extension of time to pay under Sabka Vishwas (Legacy Dispute Resolution) Scheme - Due to the COVID-19 pandemic, the petitioner could not pay the amount by the deadline and sought an extension. The authorities summarily directed the petitioner to pay the entire liability, including interest and penalty, on the ground that the SVLDRS scheme had lapsed - Whether the petitioner can be granted an extension of time to pay the amount determined under the SVLDRS scheme despite the lapse of the Scheme's timeline – HELD – In view of the decisions of its coordinate benches in Sitec Labs Ltd., Innovative Antares Pvt. Ltd., and Cradle Runways Pvt. Ltd., the petitioner should be granted an extension of time to pay the amount under the SVLDRS scheme. The decisions of the coordinate benches had considered the decision in Yashi Constructions and still granted relief to the petitioners. The revenue had not challenged the issue of extension per se in the review petition filed against the decision in Sitec Labs Ltd. The petitioner, being an event management company, could not carry on any business during the COVID-19 pandemic, and hence, the petitioner's case deserved to be governed by the decisions in Innovative Antares Pvt. Ltd. and Cradle Runways Pvt. Ltd., which directed petitioner to pay interest at 6% per annum, rather than the decision in Jatin S. Thakar (HUF) which directed petitioner to pay interest at 15% per annum – The writ petition is allowed [Read less]