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Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains pro... [Read more]

Central Excise - Manufacture and clearance of Nitrous Oxide I.P. - Eligibility for concessional rate under Sl. No.17 of Notification No.2/2011-CE - Appellant manufactured Nitrous Oxide I.P. (pharmacopoeia-grade anaesthetic) under valid drug licence and cleared to hospitals and licensed drug traders claiming concessional rate under exemption for anaesthetics - Department denied concession for supplies to traders alleging that appellant failed to establish goods were used exclusively for anaesthetic purposes and invoked extended period of limitation - Whether end-use condition can be read into Notification which contains product-based exemption for anaesthetics without prescribing end-use requirement - HELD - Anaesthetic is identified by pharmacological character and therapeutic function namely ability to produce loss of sensation and not by identity of purchaser or ultimate user - Nitrous Oxide I.P. conforming to pharmacopoeial standards and manufactured as medical anaesthetic has character as anaesthetic determined at stage of manufacture and clearance unless relevant exemption notification expressly introduces end-use condition - Sl. No.17 of Notification neither prescribes end-use condition nor requires any certification or verification thereof and such condition cannot be read into notification by implication. The eligibility determined on basis of description of goods at time of clearance and not their subsequent use - Central Excise is duty on manufacture and eligibility to exemption determined by nature and description of goods at clearance not by subsequent distribution or consumption. There is no statutory requirement in Central Excise law that exempt goods must be supplied directly to ultimate user - Once undisputed that goods cleared were Nitrous Oxide I.P. as anaesthetics covered by Sl. No.17 concession cannot be denied merely because purchaser is trader - Department's assumption that traders may divert goods for other uses purely speculative and legally irrelevant in absence of statutory end-use condition - Revenue failed to establish foundation fact of allegation that Nitrous Oxide I.P. sold to traders diverted for non-exempt purpose before onus shifted to appellant – The demand on merits unsustainable and extended period of limitation inapplicable – The impugned order is set aside and the appeal is allowed [Read less]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which ... [Read more]

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which empowers the officer to search and thereupon seize documents or books or things. The power conferred under Section 67(4) can only be exercised upon initiation of the search proceedings and so long the search proceedings are continuing. Once the search proceedings have culminated with the seizure of the goods, documents, books or things, the power under Section 67(4) ceases to exist. The said power can only be exercised where access to such premises, almirah, electronic devices, box or receptacle is denied – Further, the documents or books or things seized should have a correlation to usefulness or relevancy to any proceedings under the Act. An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as “things” liable to confiscation under confiscation under Section 130 of the CGST Act - The sealing of the petitioner's office premises and keeping the premises under seal after the completion of search and seizure cannot be sustained in law. The records do not show that access to the Petitioner's premises was denied at any point. The power under Section 67(4) is for the purpose of carrying out the search and seizure and not for using the premises as a store for retaining the seized goods or documents or things - The sealing of the office premises is illegal and unauthorized and contrary to the mandate of Section 67(4) of the Act - The Respondents are directed to de-seal the premises and hand over possession to the petitioner forthwith - At the time of de-sealing and handing over possession of the office premises to the Petitioner, the Respondents are granted the liberty to take custody of the books or documents if the same are still necessary for examination and for any inquiry or any proceedings – The writ petition is disposed of - Scope of Section 67(2) and First Proviso thereof - Petitioner's office equipment including air conditioners, refrigerators, inverters, batteries, laptops and printers were made subject of an Order of Prohibition restricting removal or dealing with such goods - The Petitioner contended that these goods were merely office equipment used for providing tax consultancy services and were not goods liable to confiscation - HELD - The first proviso to Section 67(2) of the Act refers only to goods and not documents or books or things. The Order of Prohibition issued under the Rules is only limited to goods which are liable for confiscation. The term goods is defined in Section 2(52) of the Act to mean every kind of movable property liable to confiscation under Section 130 of the Act. The goods mentioned in the Order of Prohibition, namely, air conditioners, refrigerators, inverters, batteries, laptops and printers cannot under any circumstances be said to be goods liable for confiscation under Section 130 of the Act – An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as documents or books or things. The goods not liable for confiscation cannot be seized or retained - Custody of Seized Documents, Books and Things - Petitioner's office documents and electronic items seized under Section 67(2) of the were handed over to the Petitioner with a direction that the Petitioner shall not remove or part with such items - HELD - Section 67(2) of the Act empowers search and seizure and upon seizure of goods or books or documents or things, the said items should remain in the custody of the Proper Officer or the Authorized Officer. Sub-section (2) permits the Proper Officer or the Authorized Officer to search and seize the documents or books or things and the custody of the seized items remain with such officers as the same would be useful for or relevant to any proceedings under the Act. The second proviso to Section 67(2) stipulates that documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act - The act on the part of the officer in handing over custody of the books or documents or things seized to the Petitioner gives an impression that the documents or books or things seized were no longer necessary else the custody would not have been handed over. The custody of the books or documents or things should always remain with the Proper Officer or Authorized Officer till issuance of notice under the Act and under no circumstances beyond thirty days from the date of notice - The action of handing over custody of seized documents and books and things to the Petitioner cannot be sustained in law. [Read less]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original A... [Read more]

Service Tax - Refund of wrongly collected tax – Payment of service tax under mistake of law - Service receiver's eligibility to claim refund when service provider did not challenge assessment – Assessee-Respondent provided crude oil extraction services under production sharing contract with ONGC and entered agreement with service provider for supply and operation of floating rigs - Service provider charged service tax under Mining Services and remitted to Department - Respondent sought refund claiming service tax for floating rigs taxable only from 16.05.2008 under Supply of Tangible Goods Service category - Original Authority rejected on ground service provider did not raise classification dispute - Whether service receiver is eligible to claim refund of service tax collected wrongly when service provider did not challenge assessment - HELD - Creation of new entry for Supply of Tangible Goods Service and conclusive finding of Supreme Court in Indian National Shipowners Association lead to irresistible conclusion that respondent as service recipient eligible for refund of service tax paid erroneously under Mining Service classification. The payment of tax due to mistake of law and misclassification can never carry character of lawful levy to satisfy mandate of Article 265 of Constitution - Limitation prescribed under Section 11B of Central Excise Act not applicable for refund claims for service tax paid under mistake of law. The tax collected by mistake and retained by Department constitutes unjust enrichment and violates Article 265 - Concurrent findings by Appellate Authority and Tribunal that service tax was passed on to respondent and burden of unjust enrichment discharged not subject to interference – The service recipient is entitled to claim refund without relying on civil suit or writ petition when factual findings made in favour of assessee and no dispute regarding classification and passing of tax - Authorities below rightly exercised jurisdiction to grant relief as retention of tax against spirit of Constitution - The refund order is upheld and Civil Miscellaneous Appeal dismissed [Read less]

Customs - Refund of IGST on exports to Bhutan - Failure to file Shipping Bills - New procedure under CGST regime - Appellant exported goods to Bhutan and paid IGST but did not file Shipping Bills as required under the new export procedure that came into effect w.e.f. 01.07.2017, instead following the procedure applicable prior to that date - Whether Appellant is eligible for refund of IGST paid when the new Shipping Bill procedure was not followed - HELD - The IGST paid by the Appellant stands undisputed as evidenced from the tax invoices. A harmonious reading of tax invoices, Bhutan invoices, details of consignments being... [Read more]

Customs - Refund of IGST on exports to Bhutan - Failure to file Shipping Bills - New procedure under CGST regime - Appellant exported goods to Bhutan and paid IGST but did not file Shipping Bills as required under the new export procedure that came into effect w.e.f. 01.07.2017, instead following the procedure applicable prior to that date - Whether Appellant is eligible for refund of IGST paid when the new Shipping Bill procedure was not followed - HELD - The IGST paid by the Appellant stands undisputed as evidenced from the tax invoices. A harmonious reading of tax invoices, Bhutan invoices, details of consignments being signed by CGST officials and import declaration from Bhutan authorities shows that though the Appellant has not followed the new procedure prescribed requiring the exporter to file Shipping Bills, all requisite documents as per the earlier procedure have been prepared. Neither the CGST official sealing the container nor the border Checkpost officials allowing the consignment to go out of India raised any objection towards non-filing of Shipping Bills - If the procedure followed was not correct, the Appellant should have been guided to follow the new correct procedure, which was not done. The lapse, if any, is equally attributed to CGST and Customs officials. The Appellant is eligible for refund of IGST paid along with applicable interest. The penalty imposed is set aside – The appeal is allowed [Read less]

Central Excise - Cenvat Credit - Liability of recipient to verify manufacture by supplier - Department contended that the vendor's activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and therefore Appellant is not eligible for taking Cenvat Credit - Whether the recipient of inputs is liable to determine whether the supplier's activity amounts to manufacture - HELD - The Department does not dispute the receipt of Fuel Oil by the Appellant and usage of the same in the Appellant's own manufacturing activities. The Excise Duty paid by the supplier cannot be questioned at the recipie... [Read more]

Central Excise - Cenvat Credit - Liability of recipient to verify manufacture by supplier - Department contended that the vendor's activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and therefore Appellant is not eligible for taking Cenvat Credit - Whether the recipient of inputs is liable to determine whether the supplier's activity amounts to manufacture - HELD - The Department does not dispute the receipt of Fuel Oil by the Appellant and usage of the same in the Appellant's own manufacturing activities. The Excise Duty paid by the supplier cannot be questioned at the recipient's end. According to established Tribunal jurisprudence, the responsibility of the recipient of inputs or capital goods is to ensure that duty has been paid, accounted for and utilized properly - The recipient is not required to determine the duty payable or whether the supplier's activity amounts to manufacture, as assessment and determination of duty payable is required to be done by the supplier. The recipient is eligible to take Cenvat Credit of duty paid which is specified in the invoices – Further, the Appellant has taken the Cenvat Credit and shown the same in the ER-1 Returns, therefore no case has been made out towards suppression against the appellant. The Department did not raise any objection when the Returns were filed. The demand for extended period is time barred – The impugned order is set aside and the appeal is allowed [Read less]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoki... [Read more]

GST – Condonation of delay in filing of appeal on medical ground - Discretion of Appellate Authority under Section 107 of the GST Act - Petitioner filed appeal after the stipulated period of three months. The delay was due to petitioner being under medical treatment - The Appellate Authority rejected the appeal without affording opportunity to the petitioner to explain the delay - Whether the rejection order was proper when the petitioner had not been given opportunity to justify that the delay occurred due to circumstances beyond control - HELD - The Appellate Authority should have considered such delay liberally invoking discretion in terms of sub-section (4) of Section 107 as the appeal has been filed within condonable period. There appears sufficient cause for the petitioner to file appeal beyond the period stipulated under sub-section (1) of Section 107. There is no evidence put forth to establish that the contentions of the petitioner are not genuine and germane. The petitioner is required to be given one opportunity to justify that the delay occurred due to circumstance beyond control - The impugned rejection order is set aside and petitioner is directed to appear before the Appellate Authority and file response to the show-cause notice and the authority concerned shall consider the same by affording opportunity of hearing to the petitioner – The petition is disposed of [Read less]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider reque... [Read more]

GST - Cancellation of registration - Revocation of cancellation order on filing of returns and payment of taxes and late fee - Denial of opportunity of personal hearing before passing ex-parte cancellation order - Petitioner filed application for revocation of cancellation which was rejected citing non-payment of late fee at time of rejection - Whether ex-parte cancellation order without opportunity of hearing and subsequent rejection of revocation application are valid despite petitioner's subsequent compliance - HELD - Once petitioner filed returns paid taxes and deposited late fee competent authority must consider request for revocation of cancellation order. Permanent cancellation of registration inflicts civil death to livelihood of petitioner as he cannot do business - Petitioner filed return within 15 days from date of cancellation paid taxes and deposited late fee and case deserves reconsideration - Competent authority should consider application for revocation of cancellation and not merely remand to Appellate Authority - Instead of remanding the matter to the Appellate Authority, it would be just and proper to remit the matter to the respondent-authority who is competent to consider the request of the petitioner for revocation of the order of cancellation of registration - The impugned orders rejecting revocation application set aside and matter remitted to competent authority for fresh consideration - Assistant Commissioner directed to consider application for revocation of cancellation and pass appropriate order – The petition stands allowed [Read less]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full kn... [Read more]

Customs - Mis-declaration and mis-classification of optical network terminals and MODAMs imported as subscriber equipment - Appellant imported optical network terminals, modems and OLTs and classified them as subscriber and E&D equipments under different CTH seeking exemption under Notification No.24/2005-Cus and Notification No.57/2017-Cus - Department alleged evasion of customs duty through mis-declaration and mis-classification and claimed the goods attracted higher duty - Whether the extended period of limitation is applicable when the classification dispute was not earlier challenged - HELD - The appellant had full knowledge of the technical features of the products conforming to the correct classification but chose to classify them under different tariff headings inconsistently and deliberately. The inconsistency in adoption of classification by the appellant is not an innocuous consequence but pre-meditated tactics to avail ineligible exemptions and evade applicable duty - The appellant uploaded an Equipment Type Approval certificate on e-sanchit which stated the equipment type as GPON ONT and made no mention of subscriber end equipment, showing the appellant was fully aware of the incorrect classification and claim of ineligible exemption - The appellant failed to exercise due diligence while making self-assessment of duties in the Bills of Entry as mandated and the appellant had continued to classify items under the claimed heading and avail exemption benefit. The mala fides and intent to evade customs duty is evident from the conduct of the appellant - The extended period of limitation applies as the case involves intentional availment of exemption benefits with intent to evade duty - The appeals are dismissed [Read less]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to pro... [Read more]

Customs - Penalty and confiscation for smuggling of gold - Imposition of penalty under Section 112(b) and confiscation under Section 115 of Customs Act, 1962 on vehicle driver and hotel proprietors merely on the basis of association with passengers found carrying smuggled gold - HELD - Merely plying a vehicle and carrying passengers who were engaged in smuggling of gold cannot be said to mean that the driver was engaged in the activity of smuggling. No corroborative statement or evidence has been placed by the Revenue on record to establish the involvement of the driver in smuggling activity - The Revenue has failed to produce any evidence on record that the hotel proprietors had any knowledge or relation with the activity of the persons who were apprehended - No evidence has been produced to show that the appellants were involved in the activity of smuggling of gold - Penalty imposed on the driver and hotel proprietors are not sustainable and accordingly dropped - The vehicle confiscated during the course of seizure of gold is not liable for confiscation and directed to be released. The appeals are allowed [Read less]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to al... [Read more]

Customs - Classification of Tab. Mapelein - Eligibility for exemption under Notification No.21/2002-Cus - Appellant imported 10 kgs of Tab. Mapelein classifying it under CTH 3302.1090 claiming exemption under Notification No.21/2002-Cus dated 01.03.2002 Sl. No.119 - Department denied benefit observing that the goods are compound alcoholic preparations with alcoholic content exceeding 0.5 percent by volume and hence fall within the excluded category under the notification - Whether the goods qualify for exemption under the notification - HELD - The benefit of exemption under Sl. No.119 of the notification is available to all goods except compound alcoholic preparations of a kind used for the manufacture of beverages with alcoholic strength exceeding 0.5 percent by volume - The exclusion applies only to goods that are compound alcoholic preparations of a kind used for the manufacture of beverages and unless the Revenue proves the above conditions the benefit cannot be denied - Revenue relied on previous test report for different import without drawing any test report for the present consignment to deny the benefit. The previous decision of the Tribunal in the appellant's own case held that beverage flavours used for manufacture of beverages are not eligible for exemption but categorically stated that for flavours not sold to manufacture of beverages it must be established that they are of a kind used for manufacture of beverages - The Revenue failed to categorically establish that the goods in the present case were of a kind used for manufacture of beverages - The purchase order was placed by M/s. Godfrey Phillips India Ltd. who are major manufacturers of tobacco products establishing that goods were not sold to beverage manufacturers - The Revenue has failed to conclusively prove that the goods were used in the manufacture of beverages which is a condition precedent to deny the benefit of notification - The impugned order is set aside and benefit of notification is extended to the appellant – The appeal is allowed [Read less]

Service Tax - Liability of service tax on expenses incurred for Marketing and Promotion of Music Rights – Tribunal held that the assessee-appellant\'s activities do not fall within the definition of \"service\" under Section 65B(44) of the Finance Act, 1994 – Revenue in appeal – SC HELD – There is no reason to interfere with the impugned order passed by the Tribunal – The CESTAT Order is upheld and the Revenue appeal is dismissed

Customs - SAFTA exemption - Mismatch in tariff classification - Denial of Country of Origin benefit - Appellant imported textile items from Bangladesh and claimed exemption under Notification No. 99/2011 (SAFTA) on the basis of Country of Origin certificate issued by the exporting country. The adjudicating authority found classification mismatch between the codes mentioned in the Certificate of Origin and the codes redetermined by customs authorities and denied the benefit of exemption. Goods were also proposed for confiscation - Whether mismatch in tariff classification at 6-digit level between Country of Origin certifica... [Read more]

Customs - SAFTA exemption - Mismatch in tariff classification - Denial of Country of Origin benefit - Appellant imported textile items from Bangladesh and claimed exemption under Notification No. 99/2011 (SAFTA) on the basis of Country of Origin certificate issued by the exporting country. The adjudicating authority found classification mismatch between the codes mentioned in the Certificate of Origin and the codes redetermined by customs authorities and denied the benefit of exemption. Goods were also proposed for confiscation - Whether mismatch in tariff classification at 6-digit level between Country of Origin certificate and customs authorities' determination invalidates the Country of Origin certificate and disentitles the appellant from exemption benefit - HELD - There was no misdeclaration found on the description of the goods. Even if there is a mismatch in tariff classification, this does not disentitle the appellant from the benefit available on the basis of Country of Origin as none of the conditions under Rule 2 of CAROTAR 2020 for denying COO have been satisfied. The redetermined tariff headings remain well covered within the benefit of the exemption notification - Article 14 of SAFTA Rules states that minor discrepancies between statement made in certificate of origin and documents shall not invalidate the certificate. Under Section 28DA and CAROTAR rules, no provision exists to reject Country of Origin certificate merely on basis of classification mismatch when Country of Origin of goods is not in dispute. Appellant is entitled to benefit of exemption as claimed - Differential duty, interest, penalty, confiscation and redemption fine all set aside – The appeal is allowed - Customs - Valuation - Branded goods - Redetermination of value on basis of NIDB data - Appellant declared value of textile items on basis of supplier's invoice. Adjudicating authority redetermined the value citing NIDB data for similar branded goods without investigating whether goods were counterfeits - Whether valuation can be enhanced based on NIDB data for branded goods without investigating counterfeiting and without following valuation procedure - HELD - Adjudicating authority found that no brands on the goods were registered with Customs and no infringement of Intellectual Property Rights arose. However, value was enhanced by adopting price of branded goods without basis. No investigation was carried out to establish whether goods were counterfeits. Simply naming a brand does not make goods branded or counterfeit. Value of textile items depends on nature and quality of fabric which is vital to arrive at price. Value enhancement was done arbitrarily without following procedure prescribed under Valuation Rules. Declared transaction value cannot be rejected and redetermined value is not sustainable - Redetermined value set aside and transaction value declared by appellant is upheld. [Read less]

GST - Registration cancellation - Appeal dismissed on ground of delay - Petitioner's GST registration was cancelled effective 31.01.2024 for non-filing of GST returns for six months. The petitioner, a proprietorship firm, had engaged an accountant or local advocate to handle statutory compliances but was not informed about the requirement to file GST returns or the issuance of Show Cause Notice - HELD - The GST registration cancellation is virtually a civil death that brings business operations to a standstill. Petitioner was entirely dependent on accountant for statutory compliance who failed to inform about filing requir... [Read more]

GST - Registration cancellation - Appeal dismissed on ground of delay - Petitioner's GST registration was cancelled effective 31.01.2024 for non-filing of GST returns for six months. The petitioner, a proprietorship firm, had engaged an accountant or local advocate to handle statutory compliances but was not informed about the requirement to file GST returns or the issuance of Show Cause Notice - HELD - The GST registration cancellation is virtually a civil death that brings business operations to a standstill. Petitioner was entirely dependent on accountant for statutory compliance who failed to inform about filing requirements and did not file returns for the relevant period. Petitioner remained under bona fide belief that compliances were being handled and was unaware of Show Cause Notice issuance and order in original. The reasons mentioned for non-compliance appear to be genuine and justify condonation of delay. Previous coordinate bench decisions of this Court have entertained similar appeals on merits despite delay. Order dismissing appeal without considering merit is unsustainable – The impugned order set aside and appellate authority directed to consider and decide appeal on own merits subject to statutory deposits – The petition is disposed of [Read less]

GST on online gaming and betting - Petitioner challenged constitutional and statutory validity of levy of GST on online gaming and fantasy sports transactions - Whether levy of GST on actionable claims arising from betting and gambling transactions including online gaming and fantasy sports is constitutionally valid - HELD - The Supreme Court has addressed all substantive issues raised in the writ petition - The writ petition filed by the petitioners had made five substantive prayers. All the contentions and prayers made by the petitioners in the writ petition were also substantive issues before the Supreme Court and the S... [Read more]

GST on online gaming and betting - Petitioner challenged constitutional and statutory validity of levy of GST on online gaming and fantasy sports transactions - Whether levy of GST on actionable claims arising from betting and gambling transactions including online gaming and fantasy sports is constitutionally valid - HELD - The Supreme Court has addressed all substantive issues raised in the writ petition - The writ petition filed by the petitioners had made five substantive prayers. All the contentions and prayers made by the petitioners in the writ petition were also substantive issues before the Supreme Court and the Supreme Court has pronounced its verdict on all such issues. There is no issue raised in the present writ petition, which requires any consideration beyond the pronouncement of the Supreme Court - The writ petition is dismissed and disposed of in terms of the judgment of the Supreme Court - The writ petition is dismissed [Read less]

GST - Refund of IGST exports of goods and services - Omission of Rule 96(10) - Applicability to pending proceedings - Petitioner claimed refund of IGST paid on goods and services exported out of India. Rule 96(10) of CGST Rules 2017 was omitted by Notification No. 20/2024 effective 08.10.2024 which imposed restrictions on refund claims - High Court held omission applies to all pending proceedings - Whether omission of Rule 96(10) without saving clause applies to pending proceedings or only prospectively - HELD - Constitution Bench principle in Kolhapur Canesugar Works case holds that omission of a Rule obliterates it from ... [Read more]

GST - Refund of IGST exports of goods and services - Omission of Rule 96(10) - Applicability to pending proceedings - Petitioner claimed refund of IGST paid on goods and services exported out of India. Rule 96(10) of CGST Rules 2017 was omitted by Notification No. 20/2024 effective 08.10.2024 which imposed restrictions on refund claims - High Court held omission applies to all pending proceedings - Whether omission of Rule 96(10) without saving clause applies to pending proceedings or only prospectively - HELD - Constitution Bench principle in Kolhapur Canesugar Works case holds that omission of a Rule obliterates it from statute completely as if it never existed. General Clauses Act Section 6 applies only to Central Acts or regulations not to Rules. When Rule is omitted without saving clause or provision for continuance of initiated proceedings, the omission applies to all pending proceedings - The GST Council recommendation for prospective application is only advisory and not mandatory. Legislature's intention to omit Rule 96(10) without saving clause was to end unnecessary complications once and for all including in pending proceedings not to keep complications alive. High Court judgment well-reasoned and no interference warranted. Omission of Rule 96(10) applies to all pending proceedings without restriction on refund claims previously imposed by Rule 96(10) – There are many proceedings pending before the various High Courts and conflicting decisions have also been passed. The Bench hopes that such proceedings would get closure with this judgment - The appeals are dismissed [Read less]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particu... [Read more]

Central Excise - Denial of Cenvat credit and recovery of duty on alleged irregular availment of credit without actual physical receipt of inputs - Department based case on verification of vehicle registration numbers through VAHAN portal showing certain vehicles incapable of transporting goods and statements recorded during investigation - Whether the Revenue has established by cogent evidence that inputs were not received and transactions were paper transactions - HELD - The appellant had received disputed inputs under cover of valid Central Excise invoices issued by duly registered dealer with invoices disclosing particulars of original manufacturers and duty paid thereon - Consideration for transactions was discharged through recognized banking channels including RTGS and account-payee cheques with corresponding ledger accounts reflecting realization of sale proceeds. Service tax on GTA services was duly discharged under reverse charge mechanism and reflected in statutory ST-3 Returns - These contemporaneous statutory records lend considerable assurance to bona fides of transactions and cannot be brushed aside without convincing evidence to the contrary - Department nowhere alleged or established that appellant procured non-duty-paid scrap from any undisclosed source - Mere verification of vehicle registration numbers without independent investigation of actual transportation chain is insufficient to sustain serious allegation of fraudulent availment. The investigation remained conspicuously incomplete with no investigation at transporters' end, no verification at suppliers' premises, no physical stock discrepancy and no evidence regarding diversion of inputs elsewhere - Isolated discrepancies in vehicle numbers regarding handful of cases out of more than 150 consignments and nearly 80 transport vehicles cannot justify inference that entire series of transactions was fictitious - Statements recorded do not contain categorical admission of non-receipt and do not inspire confidence with internal contradictions considerably eroding evidentiary value - No evidence of fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation. The entire proceedings barred by limitation - The impugned order is set aside and appeals are allowed [Read less]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD... [Read more]

Central Excise - Denial of Cenvat credit on alleged non-receipt of inputs based on vehicle registration discrepancies - Department initiated action alleging non-receipt of inputs on the ground that certain vehicles shown in invoices were registered as buses, tractors, passenger three-wheelers and other categories incapable of transporting such quantities, and certain vehicle numbers were non-existent in the VAHAN database - Department proposed recovery of CENVAT Credit with penalties invoking extended period under Section 11A(4) - Whether the Revenue has established by cogent evidence that inputs were never received - HELD - Mere verification of vehicle registration numbers through VAHAN portal without independent investigation is wholly insufficient to establish non-receipt of inputs. The Department failed to investigate suppliers themselves, record statements from suppliers or verify their records to ascertain whether disputed inputs had been sold and dispatched to the appellant - The appellant manufactured substantial quantities of finished excisable goods during the relevant period and discharged applicable central excise duty thereon, which undisputed production cannot be reconciled with the allegation that over 6383 MT of inputs were never received - The appellant produced contemporaneous records including transport documents, transporters' invoices, carriage inward accounts, ledger accounts evidencing payments and statutory records maintained in ordinary course of business - The evidentiary basis adopted by the Revenue suffers from serious infirmities including data reflected on VAHAN portal containing technical inaccuracies and deficiencies – The communications received from alleged vehicle owners relate only to an insignificant fraction and were obtained years after alleged transportation without compliance with Section 14 requirements - No cogent and convincing evidence has been brought on record establishing fraud, collusion, wilful misstatement or suppression of facts necessary to invoke extended period of limitation - The impugned order does not merit judicial sustenance and is set aside – The appeals are allowed [Read less]

Central Excise - Valuation - Place of removal – Inclusion of Freight and insurance - Show Cause Notice proposing to add freight and insurance charges to the assessable value on the ground that buyer's premises constitute the place of removal. The adjudicating authority confirmed the demand invoking extended period of limitation - Whether freight and insurance are includible in assessable value when already in-built in the price charged and not separately collected from customers - HELD - The cost of freight and insurance cannot be included in the assessable value when the same is in-built in the price of goods and is not... [Read more]

Central Excise - Valuation - Place of removal – Inclusion of Freight and insurance - Show Cause Notice proposing to add freight and insurance charges to the assessable value on the ground that buyer's premises constitute the place of removal. The adjudicating authority confirmed the demand invoking extended period of limitation - Whether freight and insurance are includible in assessable value when already in-built in the price charged and not separately collected from customers - HELD - The cost of freight and insurance cannot be included in the assessable value when the same is in-built in the price of goods and is not separately collected. The burden lies on the department to prove that extra amount towards freight and insurance has been collected by appellant in addition to price charged. No such proof has been provided except a bald statement in an internal report. The issue of includeability of freight and insurance is settled law in favour of appellant by Supreme Court judgment in Escorts JCB Ltd. case and Ispat Industries Ltd. case which hold that customer's premises cannot be the place of removal. The demand confirmed by including cost of freight and insurance is not sustainable - Demand set aside and the appeal is allowed - Place of removal - Buyer's premises - Appellant sold goods both at factory gate and to depots with uniform prices. The adjudicating authority held buyer's premises as the place of removal and included freight and insurance in assessable value. Relying on the amended definition of place of removal in Section 4, the Revenue contended that since goods were insured in transit, place of removal should be deemed as buyer's premises - Whether buyer's premises can be treated as place of removal for purpose of including freight and insurance in assessable value - HELD - Buyer's premises cannot be treated as place of removal since there is no further removal from the buyer's premises. The ownership passing to buyer and transit insurance do not determine the place of removal. The Supreme Court in Escorts JCB Ltd. case held that mere arrangement of transport and transit insurance by seller does not mean ownership is retained by seller till delivery. In Ispat Industries Ltd. case, Supreme Court categorically held that cost of transportation from place of removal to place of delivery is to be excluded from assessable value. Sales from factory were made FOR Works and not FOR Destination. Therefore, factory or depot from which goods were sold remains the place of removal - Demand set aside - Show Cause Notice - Vague allegations - Hypothetical methodology - The Show Cause Notice computed demand assuming 80% of goods attracted freight at Rs. 6 per kg. and 20% at Rs. 45 per kg. The basis for applying different values was not clear. The Notice did not specify whether quantities related to factory to depot or depot to actual customer movements. The Notice did not refer to price list filed on 18-09-1996 which stated freight would not be deducted from assessable value post Finance Bill 1996. Subsequent price declarations clearly reflected no deduction of freight or insurance was claimed - Whether a vague Show Cause Notice based on hypothetical methodology of computation denies proper opportunity of defence - HELD - The Show Cause Notice is vague and adopted hypothetical methodology for computation of demand which is not permissible. The basis of applying different freight rates to 20% and 80% of clearances is not clear. No actual determination of freight or insurance amount was done. The SCN is the foundation on which department must build its case and if allegations are vague, it is sufficient to hold that noticee was not given proper opportunity to meet the allegations as per Supreme Court judgment in CCE vs. Brindavan Beverages. The demand being vague is liable to be set aside on this ground itself - Demand set aside - Extended period of limitation - Absence of fraud or suppression - Whether extended period of limitation can be invoked where there is no fraud, collusion, suppression or wilful misstatement and all facts were known to department - HELD - There has been no fraud, collusion, suppression or wilful misstatement by appellant on the part of appellant. The fact regarding inclusion of freight in price was informed to department as early as September 1996 in price list and in subsequent correspondences. All facts were in the knowledge of department as yearly audits were conducted. No evidence of separate collection of freight from customers has been produced except bald statement in internal report. Appellant has been regularly filing price lists with jurisdictional officers. Extended period of limitation cannot be invoked where facts were known to department at the time of filing of price lists - Demand set aside. [Read less]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural... [Read more]

GST – Passing of adjudication order day before scheduled hearing - Disallowance of ITC on alleged wrongful availment - Violation of natural justice and principles of due process - Department informed petitioner by e-mail dated 03.02.2026 that matter fixed for personal hearing on 11.02.2026 but adjudication orders passed on 10.02.2026 day before scheduled hearing in absence of petitioner's representative - Whether adjudication order passed in violation of natural justice and statutory requirements - HELD – The petitioner was denied opportunity of personal hearing which amounts to gross violation of principles of natural justice besides being contrary to statutory requirements of CGST Act - Order passed in wholly mechanical manner without application of mind appearing to be cut and pasted from another case as opening portion records order passed in another case even though cause title names petitioner-company – The impugned order is vitiated by violation of Section 75(4) of CGST and non-application of mind. The order passed in absence of petitioner's representative without proper hearing constitutes jurisdictional error - Respondent authorities required to pass fresh order after affording petitioner opportunity of personal hearing upon issuing fresh notice fixing next date of hearing - The impugned order is set aside and the writ petition is allowed [Read less]

GST - Anticipatory bail – Allegation of wrongful availment of Input Tax Credit - Petitioners purchased aluminium scrap from suppliers and obtained invoices. After a raid by authorities, suppliers were arrested for issuing concocted invoices for bogus supply of goods resulting in wrongful availment of ITC - Petitioners were summoned under Section 70 and apprehended arrest. Petitioners claimed they had paid invoice value and tax to suppliers through bank transactions and filed periodic returns with invoices. Learned Sessions Court rejected their bail application - Whether registered purchasers who have complied with GST fr... [Read more]

GST - Anticipatory bail – Allegation of wrongful availment of Input Tax Credit - Petitioners purchased aluminium scrap from suppliers and obtained invoices. After a raid by authorities, suppliers were arrested for issuing concocted invoices for bogus supply of goods resulting in wrongful availment of ITC - Petitioners were summoned under Section 70 and apprehended arrest. Petitioners claimed they had paid invoice value and tax to suppliers through bank transactions and filed periodic returns with invoices. Learned Sessions Court rejected their bail application - Whether registered purchasers who have complied with GST framework and paid through bank channels are entitled to anticipatory bail despite suppliers being involved in fraudulent activities - HELD - GST framework is built on self-assessment and voluntary compliance. Purchaser is entitled to input tax credit only if tax invoice is possessed, goods actually received, tax charged by supplier is paid by purchaser through proper channels, and returns are filed by recipient along with invoices - In present case petitioners are in possession of invoices, have paid invoice value and tax through bank transactions and have periodically filed returns. Principal offender under Section 132 of the CGST Act, 2017 is the supplier who has been granted regular bail. In genuine case where purchaser has paid invoice value and GST and submitted returns periodically, purchaser cannot be held liable for default of supplier except under exceptional circumstances - Custodial interrogation of purchaser not necessary unless prima facie material shows collusion with supplier. Nature of punishment prescribed maximum five years is compoundable offence under Section 138 of Act - Petitioners do not have antecedents and have undertaken to cooperate and produce documents to prove receipt of goods. Arrest cannot be made to merely investigate whether conditions are being met but only when Commissioner has formulated duly recorded opinion that requirements are satisfied based on evidence as held in Radhika Agarwal case - Anticipatory bail granted subject to appearing on specified date, personal bond, cooperation with authorities, mobile phone operational, location dropping on google map, and passport surrender - The petitions are allowed [Read less]

Customs – Utilization of Status Holder Incentive Scrips (SHIS) for import of goods falling beyond the permissible scope of exemption notification - Import of capital goods - Scope of capital goods - Appellant, a manufacturer of steel products accorded Trading House status, imported goods such as gaskets, bushings, bearings, gear reducers, main springs, whims bottom parts and shock absorbers under Status Holder Incentive Scrips (SHIS) licences in January 2013 to November 2013 for setting up Coke Oven Plant, Pellet Plant, Arc Furnace, Steel Melting Shop, Blast Furnace and modernization of captive power plant - SCN issued a... [Read more]

Customs – Utilization of Status Holder Incentive Scrips (SHIS) for import of goods falling beyond the permissible scope of exemption notification - Import of capital goods - Scope of capital goods - Appellant, a manufacturer of steel products accorded Trading House status, imported goods such as gaskets, bushings, bearings, gear reducers, main springs, whims bottom parts and shock absorbers under Status Holder Incentive Scrips (SHIS) licences in January 2013 to November 2013 for setting up Coke Oven Plant, Pellet Plant, Arc Furnace, Steel Melting Shop, Blast Furnace and modernization of captive power plant - SCN issued alleging that the goods imported were parts/spares/components of capital goods and duty had been debited in excess of the permissible ceiling of 10% of the value of SHIS scrips, in violation of Conditions 4(i) and 4(iii) of Notification No. 104/2009-Cus. dated 14.09.2009. The lower authority confirmed demand of duty along with interest and penalty - Whether the goods imported by the appellant constitute capital goods under Notification 104/2009 or only parts/spares subject to 10% restriction - HELD - The definition of capital goods in Notification 104/2009 is of wide import and covers plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, including those required for replacement, modernization, technological upgradation or expansion - All the items imported by the appellant squarely fit within the definition of capital goods as defined in the Notification. The goods imported are not merely spares or parts but are capital goods required for modernization of the plant. The restriction of 10% applies only to components, spares or parts of capital goods imported earlier, and not to fresh import of capital goods including accessories. The appellant has correctly availed the benefit of Notification 104/2009 for import of the said goods - Demand of duty set aside and penalty is not sustainable – The appeal is allowed [Read less]

Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rend... [Read more]

Service Tax - Exemption from payment of Service Tax - Services relating to construction and repair of public infrastructure - Department raised demand of Service Tax on basis of information received from Income Tax Department on gross receipts shown in ITR - Whether construction services for repair of roads and civil structures provided to Zila Panchayat are exempt under Notification No.25/2012-ST as amended by Notification No.09/2016-ST dated 01.03.2016 - HELD - The matter with regards to availability of exemption needs to be re-examined by authorities below as the documents provided by Appellant relating to services rendered in respect of repair and maintenance of road goes to the root of the matter - Exemptions from Service Tax are conditional and require strict compliance with stipulated conditions. The onus is entirely on the assessee to prove eligibility through clear, cogent and admissible documentary evidence - The Original Authority decided the case without examining the nature of the services in detail and the documents provided by Appellant require proper evaluation for determining exemption – The appeal is allowed by remand [Read less]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central ... [Read more]

Central Excise Act - Manufacture of goods - Dilution and repackaging of Styrene Butadiene Latex with addition of preservatives – Respondent purchased duty paid Styrene Butadiene Latex and Organic Bromine Biocide preservative, diluted the latex with water, added preservative, and repackaged the resultant product under brand names and cleared for sale - Whether the process of adding water and preservatives to the inputs classifiable under tariff heading 40.02 and thereafter, packaging the same and marketing it as ‘Sika Latex’ and ‘Sika Latex Power’ will amount to “manufacture” under Section 2(f) of the Central Excise Act, 1944 - HELD - The chemical composition of the inputs and the final diluted and repackaged materials remain identical. As per the principle laid down by the Supreme Court, there must be a transformation and a new and different article must emerge having a distinctive name, character or use for a process to amount to manufacture - Different tests conducted indicated that the raw material as well as the impugned goods are having same chemical characters - The process of dilution of inputs does not result in emergence of a new product to qualify as manufacturing - The classification adopted by the Appellant is correct and the goods cleared merit classification as claimed – The issues have been settled by the Tribunal in the respondent’s own case for the prior period as well as for its other unit - The Department cannot take a contrary view for subsequent periods when it has already accepted a particular legal position in the Appellant's case for the prior period - The appeal filed by Revenue is without merit and accordingly dismissed [Read less]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. T... [Read more]

Central Excise - Eligibility for credit on Service Tax paid on rental charges for company depot used for storage and sale of goods - Appellant took CENVAT Credit for Service Tax charged by the landlord on rental of depot from where sales were taking place - Department denied CENVAT Credit on ground that Appellant not eligible - Whether CENVAT Credit is eligible for Service Tax paid on rental charges of depot - HELD - Rule 2(l) of CENVAT Credit Rules, 2004 provides that input service includes services used for storage upto the place of removal. The Appellant's depot is the place of removal where goods are stored and sold. The CENVAT Credit for Service Tax paid on rental charges of storage cannot be denied - The matter is identical to the previous period for 2013-14 wherein the Tribunal held that appellant would be eligible for CENVAT Credit of Service Tax paid on rental charges. No reason to take a different view as the matter concerns the same appellant with identical facts - The impugned order is set aside and the appeal is allowed [Read less]

GST - Anti-Profiteering - Inclusion of GST in quantification of profiteered amount - Appellant contended that GST component should not be included in profiteered amount as GST was only collected tentatively and deposited with government and does not represent benefit retained by appellant - Whether GST component calculated on inflated base price constitutes part of profiteered amount to be refunded to homebuyers - HELD – The profiteered amount represents total extra consideration extracted from homebuyer unlawfully. When homebuyer was charged GST on inflated base price resulting from non-passing of ITC benefit, the homeb... [Read more]

GST - Anti-Profiteering - Inclusion of GST in quantification of profiteered amount - Appellant contended that GST component should not be included in profiteered amount as GST was only collected tentatively and deposited with government and does not represent benefit retained by appellant - Whether GST component calculated on inflated base price constitutes part of profiteered amount to be refunded to homebuyers - HELD – The profiteered amount represents total extra consideration extracted from homebuyer unlawfully. When homebuyer was charged GST on inflated base price resulting from non-passing of ITC benefit, the homebuyer bore the entire burden of such extra GST which was deposited by developer with government. To restore homebuyer to position that would have existed if benefit was passed on, homebuyer must be refunded entire extra amount paid including GST component on that extra amount - GST collected by supplier on additional realization has rightly been included in profiteered amount. Economic reality is that homebuyer bore additional cost including GST component - GST component at 12% is correctly included in profiteered amount and total profiteered amount – Ordered accordingly - Anti-Profiteering - Determination of recipient for restitution of profiteered amount - Appellant contended that net profiteered amount should be deposited into Consumer Welfare Fund under Rule 133(3)(c) of CGST Rules on ground that eligible persons (homebuyers) have not claimed return and are not identifiable particularly after formation of cooperative housing society and transfer of project - Whether rule providing for deposit in Consumer Welfare Fund applies when recipients are alleged to be unidentifiable despite records showing buyer-wise details - HELD - The Rule 133(3)(c) is residuary provision and is attracted only in those cases where eligible recipients are genuinely unidentified despite exercise of due diligence. Expression not identifiable cannot be interpreted to mean that recipient has not filed complaint, is not presently available or that computation has not initially been made. Identification of recipient is factual determination based on transaction records and not procedural one dependent on filing of complaint or claim. DGAP has clearly stated that consumers are identifiable to investigation report contains buyer-wise details of profiteering amount for 128 units - Real estate developer is expected to maintain exhaustive records of each homebuyer including name, address, unit number, area of flat, agreement value and amounts received. Fact that developer may not have current contact details does not mean they are not identifiable in eyes of law. Records of project contain names and details of original allottees - Net profiteered amount is not liable to be deposited in Consumer Welfare Fund and must be returned to individual homebuyers - Anti-Profiteering - Set-off of excess benefits passed to some customers against profiteering liability owed to other customers - Whether Tribunal possesses power to direct set-off and recovery of excess amounts from consumers or whether statutory obligation is owed to distinct entities separately - HELD - Section 171 of CGST Act mandates benefit of ITC shall be passed on to recipient by way of commensurate reduction in prices. Statutory obligation is to recipient of supply and recipient is person entitled to benefit. Appellant cannot claim set-off of excess payment made to some customers against liability owed to other customers as obligations are owed to distinct and separate legal entities - Tribunal does not possess any power to direct customers to refund excess amount as provision of Section 171 does not contemplate such direction. Power of tribunal under CGST Act is circumscribed by statutory framework and is limited to ensuring that benefit of ITC is passed on by way of commensurate reduction in prices. Act does not confer power on tribunal to order recovery of amounts from consumers or permit set-off of such amounts against liability of supplier to other consumers – The plea for set-off is rejected and appellant cannot deny legitimate claims of remaining 128 customers by seeking adjustment against overcompensation of others - Anti-Profiteering - Interest on profiteered amount - Whether interest at eighteen percent per annum is payable from date of collection of higher amount till actual refund and from which date should interest be computed - HELD - The Delhi High Court in Reckitt Benckiser case explicitly held that Rule 133(3)(b) of CGST Rules providing for interest at 18% per annum is valid enabling provision. Section 171 is broad enough to empower central government to prescribe penalty and interest to ensure that suppliers are deterred from pocketing benefits meant for consumers - However in practical application where profiteering is computed on project-completion basis with per-square-feet benefit determined on project-wide basis it is not possible to determine exact date each homebuyer paid higher amount for each square foot. Therefore interest shall be computed from date of payment of last instalment by each homebuyer which represents date on which final consideration was collected and serves as reasonable and justifiable benchmark for commencement of interest liability - Interest is payable at 18% per annum from date of payment of last instalment by each homebuyer till date of actual refund - Anti-Profiteering - Imposition of penalty for contravention of Section 171 - Appellant contended that Section 171(3A) providing for ten percent penalty was inserted with effect from 01.01.2020 and cannot be applied retrospectively to period when provision was not in force - Whether penalty under Section 171(3A) can be imposed where entire period of alleged contravention was completed prior to date on which penalty provision came into force - HELD - Section 171(3A) of CGST Act was inserted vide Section 112 of Finance (No.2) Act 2019 with effect from 01.01.2020 - Upon examination of facts period of contravention during which appellant is alleged to have profiteered is from 01.07.2017 to 30.10.2019 which is evident from investigation report wherein profiteering is computed for period from July 2017 to October 2019. Appellant received Occupancy Certificate for project on 30.10.2019. Entire period of contravention stands fully completed on 30.10.2019 which is prior to coming into force of Section 171(3A) on 01.01.2020. Since alleged contravention stands fully completed on 30.10.2019 prior to enforcement of Section 171(3A) with effect from 01.01.2020 the said penalty provision has no application to facts of present case. Penal provision cannot be applied retrospectively to period when it was not in force - Appellant is not liable to pay any penalty under Section 171(3A). [Read less]

Service Tax – Refund of service tax collected and deposited by petitioner and subsequently recovered from service recipient – Rejection of refund claim on ground of limitation – Petitioner engaged in providing manpower recruitment and supply agency services, collected service tax during the period when such services were subject to reverse charge mechanism from 01.04.2015 onwards - subsequently the service recipient was audited and found liable to pay the same service tax under reverse charge mechanism and accordingly paid service tax to the Department and issued a debit note to the petitioner - Petitioner filed a re... [Read more]

Service Tax – Refund of service tax collected and deposited by petitioner and subsequently recovered from service recipient – Rejection of refund claim on ground of limitation – Petitioner engaged in providing manpower recruitment and supply agency services, collected service tax during the period when such services were subject to reverse charge mechanism from 01.04.2015 onwards - subsequently the service recipient was audited and found liable to pay the same service tax under reverse charge mechanism and accordingly paid service tax to the Department and issued a debit note to the petitioner - Petitioner filed a refund application under Section 11B of the Central Excise Act, 1944 which was rejected by the Department on the ground that it had been filed beyond the prescribed period of limitation and the appeal preferred by petitioner before the appellate authority was also dismissed – Whether refund claim of petitioner can be rejected solely on the ground of limitation when the Department itself recovered the service tax twice, first from the petitioner and thereafter from the service recipient while retaining the amount earlier deposited by petitioner – HELD – The refund claim cannot be rejected solely on the ground of limitation in these peculiar and exceptional circumstances where the Department has become the beneficiary of unjust enrichment by collecting service tax twice, first from the petitioner despite having no authority in law to do so after 01.04.2015 and thereafter from the service recipient, while the petitioner became aware of such position only when the service recipient issued the debit note thereby constrained to file the refund application. In such exceptional circumstances when the Department itself committed illegality by accepting tax deposited without authority in law and subsequently collecting the same tax again from the service recipient, the respondent authorities cannot reject the claim of the petitioner on the ground of limitation – The impugned orders are quashed and set aside and the respondents are directed to refund the amount to the petitioner within six weeks, failing which the amount shall carry interest at the prescribed rate per annum until the date of actual payment – The petition is allowed [Read less]

Central Excise – Refund of duty paid on galleries of stenter machines – Rejection of refund claims on ground that determination of Annual Production Capacity was not challenged and presumption against appellants under Section 12B could not be discharged – Appellants engaged in manufacture of excisable goods under compounded levy scheme filed refund claims for duty paid on galleries of stenter machines for the period from 16.12.1998 to 28.02.2000, contending that galleries should not be included in the dimensions of hot air stenter for determining Annual Production Capacity - Commissioner (Appeals) allowed the appeals... [Read more]

Central Excise – Refund of duty paid on galleries of stenter machines – Rejection of refund claims on ground that determination of Annual Production Capacity was not challenged and presumption against appellants under Section 12B could not be discharged – Appellants engaged in manufacture of excisable goods under compounded levy scheme filed refund claims for duty paid on galleries of stenter machines for the period from 16.12.1998 to 28.02.2000, contending that galleries should not be included in the dimensions of hot air stenter for determining Annual Production Capacity - Commissioner (Appeals) allowed the appeals holding the levy unconstitutional and accordingly not governed by the provisions of Section 11B and Section 12B - Tribunal allowed the Revenue's appeals observing that the principle of unjust enrichment and consequently refund claims cannot be sustained – Whether the determination of Annual Production Capacity is an appealable order and whether the principle of unjust enrichment applies when the levy is unconstitutional – HELD – The determination of Annual Production Capacity by the prescribed authority is an administrative exercise and not a quasi-judicial order and therefore does not give rise to any appealable order, consequently where a refund claim arises on account of erroneously collected duty on account of inclusion of galleries in the Annual Production Capacity, the assessee is entitled to claim refund without challenging the determination of Annual Production Capacity - When the levy itself is found to be unconstitutional as clarified by the Hon'ble Apex Court and the Rules of 2000, the provisions of Section 11B relating to limitation and the burden under Section 12B to prove that duty was not passed on to third parties would not apply as the principle of unjust enrichment enunciated in Mafatlal Industries applies only to levies which are otherwise valid but erroneously collected, and not to levies which are unconstitutional – The impugned order of the Tribunal is quashed and set aside, the order of Commissioner (Appeals) is restored with a direction to the Commissioner to redetermine the Annual Production Capacity of the appellant excluding the galleries of the stenter in accordance with the applicable Rules and thereafter determine the duty payable and process the refund claim accordingly - Tax Appeals are dismissed [Read less]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - ... [Read more]

GST - Section 128A - Amnesty Scheme - Applicability to Self-Assessed Tax - Interpretation of Section 128A in relation to Section 75(12) of the CGST Act, 2017 - Petitioners applied for waiver of interest or penalty under Section 128A in respect of demands relating to belated filing and payment of GSTR-3B returns containing self-assessed tax - Revenue contended that Section 128A by necessary implication excludes cases falling within the scope of Section 75(12) relying on the non obstante clause in Section 75(12) and Circular No.238 - Whether Section 128A applies to self-assessed tax or is impliedly excluded from its scope - HELD – The Section 128A opens with a wider non obstante clause than Section 75(12) reading "notwithstanding anything to the contrary contained in this Act" and if Parliament intended to exclude self-assessed tax from Section 128A, it would have inserted a qualifying phrase such as "other than cases falling within Section 75(12)" similar to the exclusion in Section 80. The absence of such exclusion coupled with the width of the non obstante clause indicates Parliament did not intend to exclude self-assessed tax from Section 128A - The initiation of proceedings under Section 73 is a sine qua non for filing an application under Section 128A and once the Revenue decides to determine liability under Section 73, whether in relation to self-assessed tax or otherwise, it is open to the taxable person to file an application under Section 128A. The Circular No.238 cannot curtail the scope and ambit of the statute as a Circular issued by CBIC cannot override statutory provisions. The Explanation to Section 75(12) is not applicable to proceedings pertaining to the period from 01.07.2017 to 31.03.2020 - The implied exclusion of cases relating to self-assessed tax cannot be read into Section 128A and petitioners are entitled to waiver benefits under Section 128A if they satisfy the substantive conditions thereof – Ordered accordingly - Time Limits under Rule 164 of the CGST Rules, 2017 - Mandatory or Directory - Petitioners applied for waiver of interest and penalty under Section 128A but some applications were filed after the stipulated deadline of three months from the notified date - Revenue contended that the time limit prescribed in sub-rule (6) of Rule 164 is directory in nature and not mandatory and the doctrine of substantial compliance applies - Whether the time limits prescribed in Rule 164 are mandatory or directory - HELD – The Sub-rule (6) opens with the phrase "Any person who wishes to file an application" which shows the taxable person has an option of filing or not filing the application, however if the taxable person opts to file such application the time limit becomes applicable. Upon holistic consideration of Rule 164, the entire process of consideration and disposal of waiver applications is time bound with prescribed time limits for issuance of show cause notices under sub-rule (8), responses under sub-rule (9) and approval or rejection orders under sub-rule (13). Sub-rule (14) prescribes the drastic consequence of deemed approval and conclusion of proceedings if an order is not issued within the prescribed period. These are clear indications that the time limits form part of the substance of the scheme - The time limit for filing an application forms part of the substance and not a procedural or directory requirement. The doctrine of substantial compliance may apply to formal or procedural defects in filing the application but not to the substantive requirement of filing within the prescribed time limit. - The time limits prescribed in Rule 164 including that in sub-rule (6) are mandatory and not directory and applications filed after the expiry of the prescribed time limit are liable to be rejected - Void Orders - Conditions for Issuance - When can Form GST SPL-05 Approval Orders be declared Void - In some cases, the proper officer issued an order in Form GST SPL-05 accepting the waiver application and subsequently issued another order declaring the earlier Form GST SPL-05 order to be void on the ground that the applicant was not eligible for waiver under Section 128A - The petitioners contended that such void orders were issued without authority under the statute or rules - Whether approval orders issued in Form GST SPL-05 can be declared void by issuing a separate void order - HELD – The Sub-rules (16) and (17) of Rule 164 are the only provisions that prescribe when orders issued in Form GST SPL-05 or Form GST SPL-06 become void. Sub-rule (16) applies when the taxpayer fails to pay additional amounts of tax liability as per the second proviso to sub-section (1) of Section 128A within the prescribed time. Sub-rule (17) applies when the taxpayer fails to pay interest or penalty relating to erroneous refund or demands pertaining to periods other than 01.07.2017 to 31.03.2020 within three months from the date of issuance of the order in Form GST SPL-05 or SPL-06. Except in these situations specified in sub-rules (16) and (17), neither the statute nor the rule enables the issuance of a separate void order after accepting the application and issuing an order in Form GST SPL-05 – The issuance of void orders by invoking Section 161 or otherwise in circumstances other than those enumerated in sub-rules (16) and (17) is unauthorized and without jurisdiction – The void orders issued in cases where the conditions in sub-rules (16) and (17) do not apply are invalid and liable to be set aside and the original Form GST SPL-05 approval orders shall remain valid - Deemed Approval - Conclusion of Proceedings - Non-issuance of Order within Prescribed Time - Sub-rule (14) of Rule 164 prescribes consequences when proper officer fails to issue approval or rejection order within prescribed time - If application for waiver is not disposed of within the time limits specified in sub-rule (13) then the application shall be deemed to be approved and proceedings shall be deemed to be concluded - Whether deemed approval operates unconditionally or is subject to satisfaction of substantive conditions of Section 128A - HELD - The benefit of deemed approval and conclusion of proceedings under sub-rule (14) shall only accrue to an applicant for waiver who satisfies the substantive conditions stipulated in Section 128A. Any other construction would allow a subordinate legislation to override a provision in the parent statute which is impermissible. The deemed approval operates as an incentive for the proper officer to expedite disposal and for taxpayers to file applications within the prescribed time and satisfy the substantive requirements of Section 128A – The applications shall be deemed to be approved and proceedings concluded only when the applicant has complied with all substantive conditions of Section 128A and the proper officer fails to issue an order within the prescribed time limit. [Read less]

Service Tax – Waiver of penalties imposed for short-payment of service tax under Business Support Service category – Penalties imposed under Sections 76 and 78 of the Finance Act – Appellant-Department filed appeals challenging the Tribunal's order of setting aside the penalties – Whether the Tribunal was right in waiving the penalties under Sections 76 and 78 by invoking Section 80 of the Finance Act based on the plea of financial incapacity and non-wilful short-payment of service tax – HELD – When an assessee establishes financial incapacity or financial distress and that the short-payment of tax was not wilf... [Read more]

Service Tax – Waiver of penalties imposed for short-payment of service tax under Business Support Service category – Penalties imposed under Sections 76 and 78 of the Finance Act – Appellant-Department filed appeals challenging the Tribunal's order of setting aside the penalties – Whether the Tribunal was right in waiving the penalties under Sections 76 and 78 by invoking Section 80 of the Finance Act based on the plea of financial incapacity and non-wilful short-payment of service tax – HELD – When an assessee establishes financial incapacity or financial distress and that the short-payment of tax was not wilful in nature, the Tribunal is justified in invoking Section 80 for waiver of penalties. The fact that the assessee reported profits in the financial statements does not per se negate the existence of financial incapacity particularly when there is financial distress arising from outstanding dues from clients. The subsequent events over the years and the financial incapacity of the assessee as recorded by the Tribunal fortify the reasoning given for financial incapacity. While Section 80 of the Finance Act provides for waiver of penalties, such waiver cannot be granted indiscriminately but must be based on sound reasons and evidence showing the inability of the assessee to pay coupled with non-wilful short-payment. In the present case, both these conditions were satisfied on the facts and findings recorded – The appeals filed by the Appellant-Department are dismissed and the order of the Tribunal setting aside the penalties is upheld [Read less]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on ba... [Read more]

Service Tax - Invocation of extended period of Limitation on ground of fraud, collusion, wilful misstatement or suppression of facts - Respondent classified services under CICS head both before and after introduction of WCS on 01.06.2007 without opting for Works Contract Composition Scheme and instead discharged VAT to State of Rajasthan - Department in audit found shortfall and raised Show Cause Notice beyond normal period of limitation proposing reclassification under WCS head - CESTAT set aside on ground of limitation holding no proof of intent to evade - Whether extended period of limitation can be invoked merely on basis of misclassification without proof of fraud, collusion, wilful misstatement or suppression with intent to evade payment of tax - HELD - Respondent entertained bona fide belief that it was correctly discharging tax liabilities by classifying services under CICS head as no SCN was issued within normal period of limitation despite Department's audit - Mere inaction, omission or classification of services under incorrect head does not amount to fraud, collusion, wilful misstatement or suppression of facts. Something positive other than mere inaction or failure or conscious deliberate withholding of information with knowledge otherwise is required to invoke extended period - Suppression means failure to disclose full information with intent to evade payment of duty and has to be construed strictly being deployed in company of strong words as fraud and collusion - Incorrect statement cannot be equated with wilful misstatement as latter implies making statement with knowledge it was not correct - Department failed to adduce cogent evidence of positive act by respondent evincing intent to evade payment of tax - Respondent had throughout filed returns classifying services under CICS head and Revenue never objected within ordinary period of limitation - Burden cast upon Department to prove suppression of fact with intent to evade tax. Extended period of limitation cannot be invoked merely on basis of misclassification without establishing fraud, collusion, wilful misstatement or suppression with intent to evade – The Ld. CESTAT correctly held no element of fraud, collusion, wilful misstatement or suppression of facts was established – The findings of CESTAT is upheld and the Revenue appeal is dismissed [Read less]