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Central Excise - Excise duty on Ready Mix Concrete (RMC) manufactured at construction site - Whether RMC manufactured at construction site is dutiable under Central Excise Act – HELD - The manufacturing process and composition of RMC is different from the conventional concrete mix. RMC is an excisable product classifiable under CTH 38245010 under Miscellaneous Chemical Products under the Central Excise Tariff Act, 1985 and attracts duty at the applicable rate. However, as per the rulings of the Supreme Court and the Board Circular, the exemption from levy of Central Excise duty is available only to 'concrete mix' and not... [Read more]

Central Excise - Excise duty on Ready Mix Concrete (RMC) manufactured at construction site - Whether RMC manufactured at construction site is dutiable under Central Excise Act – HELD - The manufacturing process and composition of RMC is different from the conventional concrete mix. RMC is an excisable product classifiable under CTH 38245010 under Miscellaneous Chemical Products under the Central Excise Tariff Act, 1985 and attracts duty at the applicable rate. However, as per the rulings of the Supreme Court and the Board Circular, the exemption from levy of Central Excise duty is available only to 'concrete mix' and not to 'RMC' - The goods manufactured by the Appellant at the batching plant at the construction site was 'concrete mix' and not 'RMC', and thus the Appellant is entitled to the exemption from Central Excise duty - The impugned orders are set aside and the appeals filed by the appellant are allowed [Read less]

Central Excise - Penalty under Rule 26 of Central Excise Rules, 2002 on a body corporate - Appellant, a body corporate, was imposed penalty under Rule 26 of the Central Excise Rules, 2002 for goods cleared by a related party which were found to be undervalued, resulting in short payment of excise duty - Whether penalty under Rule 26 can be imposed on a body corporate – HELD – The expression "person" used in Rule 26 includes body corporates and not just natural persons. The definition of "person" under the General Clauses Act, 1897 which includes body corporates, would apply to the provisions of the Central Excise Act a... [Read more]

Central Excise - Penalty under Rule 26 of Central Excise Rules, 2002 on a body corporate - Appellant, a body corporate, was imposed penalty under Rule 26 of the Central Excise Rules, 2002 for goods cleared by a related party which were found to be undervalued, resulting in short payment of excise duty - Whether penalty under Rule 26 can be imposed on a body corporate – HELD – The expression "person" used in Rule 26 includes body corporates and not just natural persons. The definition of "person" under the General Clauses Act, 1897 which includes body corporates, would apply to the provisions of the Central Excise Act and Rules. Under Section 4(3)(b) of the Central Excise Act, the term "person" is used in a wide sense to include both natural and juristic persons - Further, the goods cleared by related party are liable for confiscation under Rule 25 of the Central Excise Rules, 2002 due to the established undervaluation, which is an essential ingredient for invoking the penalty provisions under Rule 26. The appellant was aware of the undervaluation and the consequent tax evasion, and therefore, had the requisite knowledge that the goods were liable for confiscation - The imposition of penalty under Rule 26 on the appellant, a body corporate, is upheld and the appeal is dismissed [Read less]

Service Tax - Taxability of cash incentives provided by banks to credit card users - Department sought to levy service tax on the cash incentives accruing to the Respondent-Assessee on usage of the commercial credit card provided by the banks, contending that the activity undertaken by the respondent assessee amounts to a taxable service in terms of Section 65(E)(e) of the Finance Act, 1994 - The respondent assessee submitted that there is no service involved and they are merely a recipient of the credit card service from the bank, using the card for their business transactions, and the cash back incentives are not a consi... [Read more]

Service Tax - Taxability of cash incentives provided by banks to credit card users - Department sought to levy service tax on the cash incentives accruing to the Respondent-Assessee on usage of the commercial credit card provided by the banks, contending that the activity undertaken by the respondent assessee amounts to a taxable service in terms of Section 65(E)(e) of the Finance Act, 1994 - The respondent assessee submitted that there is no service involved and they are merely a recipient of the credit card service from the bank, using the card for their business transactions, and the cash back incentives are not a consideration for any service – HELD - The use of the commercial credit card by the respondent assessee is merely for promoting their own business and not the business of the banks. No service is being rendered by the respondent assessee to the banks - As per the Circular No. 214/1/2023-S.T. dated 28.02.2023, the activities contemplated under Section 66E(e) require an agreement between the parties with a flow of consideration, which is not present in this case. The appellant revenue department had invoked Section 66E(e) for the first time in the grounds of appeal, which was not part of the show cause notice. An order or appeal cannot travel beyond the scope of the show cause notice - The service tax is payable only if the conditions mentioned in Section 67 are satisfied, i.e., the amount charged should be for the service provided and have a nexus with the taxable service. Accordingly, the impugned order is sustained and the Revenue appeal is dismissed [Read less]

Service Tax – Supply of crude oil from Refinery through pipeline - Crude oil transportation chain involving pipeline, storage, and further transportation - Taxability of Terminal Facilities/Warehousing - Whether terminal facilities / warehousing services are incidental to pipeline service or independent service liable to service tax – HELD - The terminal facilities/warehousing services provided by the respondent-refinery are not incidental or integral to the pipeline service, but constitute an independent service liable to service tax - Without having any storage or warehousing facilities, crude oil not be transhipped ... [Read more]

Service Tax – Supply of crude oil from Refinery through pipeline - Crude oil transportation chain involving pipeline, storage, and further transportation - Taxability of Terminal Facilities/Warehousing - Whether terminal facilities / warehousing services are incidental to pipeline service or independent service liable to service tax – HELD - The terminal facilities/warehousing services provided by the respondent-refinery are not incidental or integral to the pipeline service, but constitute an independent service liable to service tax - Without having any storage or warehousing facilities, crude oil not be transhipped from pipeline to other mode of transport. Therefore, the terminal facilities or discharge facilities is nothing but store and warehousing of the crude oil before entering into third step of transportation for final destination of supply of crude oil - As per the MoU, the respondent charged separately for the "discharge facility" or "terminal facilities" or "storing of crude oil" before the next phase of transportation, which cannot be considered as an integral part of the pipeline transportation. The definition of "storage and warehousing" under the Finance Act, 1994 and the legal precedents establish that the storage of crude oil at refinery before further transportation to the final destination is a distinct service and not merely incidental to the pipeline service. The respondent is liable to pay service tax on the terminal facilities/warehousing services provided to the recipient - The appeal filed by the Department is allowed, and the order of the CESTAT is set aside, restoring the order of the Commissioner - Maintainability of Department’s appeal - Pecuniary jurisdiction – HELD – The present appeal has been filed for total tax evasion of less than 1 Crore, which is not a permissible limit for adjudication in terms of Notifications dated 22.08.2019 and 06.08.2024 before this Court – However, on the certain material factual aspects, appellate Tribunal failed to touch core issue and, thus, the Court is convinced enough that the substantial questions of law is involved in the matter, as the finding of the Tribunal is directly and substantially affecting the right of the appellant/department - The present appeal is maintainable before this Court, as the substantial questions of law appears involved irrespective of the financial limitations. [Read less]

Customs - Refund of Extra Duty Deposit (EDD) paid against Customs Bills of Entry, Limitation period for claiming refund of EDD - Whether the appellant has passed on the incidence of EDD to other person, thereby disentitled to refund under the principle of unjust enrichment – HELD - The appellant had taken a loan from their principals to deposit the EDD and later repaid the loan. The EDD deposited was shown as recoverable from Customs Authority in the Balance Sheets. The loan transaction between the appellant and their principal is separate from the clearance of imported goods and the burden of EDD has been borne by the a... [Read more]

Customs - Refund of Extra Duty Deposit (EDD) paid against Customs Bills of Entry, Limitation period for claiming refund of EDD - Whether the appellant has passed on the incidence of EDD to other person, thereby disentitled to refund under the principle of unjust enrichment – HELD - The appellant had taken a loan from their principals to deposit the EDD and later repaid the loan. The EDD deposited was shown as recoverable from Customs Authority in the Balance Sheets. The loan transaction between the appellant and their principal is separate from the clearance of imported goods and the burden of EDD has been borne by the appellant. The findings of the lower authorities that the appellant has passed on the incidence of EDD to other person is erroneous and not sustainable. The appellant is entitled to the refund of EDD and also interest on delayed refund – Further, the EDD paid is not in the nature of customs duty but a deposit to secure any duty that may be found payable. When the allegation of under-declaration is found to be not valid, the substratum of EDD deposit no longer exists. Therefore, the limitation period for claiming refund of customs duty under Section 27 would not apply to the refund of EDD. The refund claim is within time and cannot be rejected on the ground of limitation – The impugned order is set aside and the appeal is allowed - Rejection of refund of EDD on the ground of unjust enrichment – HELD - The transaction between the appellant and their principal is a separate transaction whereby loan has been advanced by the principals to the appellant. The loan amount received by the appellant from their principal cannot be said to be the part of the transaction of clearance of the imported goods from Customs for which the burden of duty has been passed on to the recipients of the goods after clearance of the goods. In this case the recipient of the goods after clearance from the customs is the appellant-importer who has used these goods in their process of manufacture. For application of the principles of unjust enrichment, the burden should have been passed on to the party who is part of the same transaction, i.e. if the goods were sold after the importation to the buyer of the goods. As the burden of EDD deposited has been borne by the appellant as evidenced by the Certificate of chartered accountant, the impugned order whereby the refund of this amount has been rejected on the ground of unjust enrichment is quashed. [Read less]

GST - Arrest - Petitioner was arrested under CGST Act but grounds of arrest not annexed to arrest memo, neither furnished to petitioner nor his nominated person - Violation of Supreme Court rulings on mandatory requirement of furnishing grounds of arrest - Remand order passed mechanically without examining legality of arrest – HELD – The arrest and remand order is illegal and unconstitutional. Apex Court rulings in Radhika Agarwal, Vihaan Kumar, and Gautam Navlakha mandate strict compliance with procedural safeguards for arrest, including furnishing grounds of arrest to the arrested person and their nominated represent... [Read more]

GST - Arrest - Petitioner was arrested under CGST Act but grounds of arrest not annexed to arrest memo, neither furnished to petitioner nor his nominated person - Violation of Supreme Court rulings on mandatory requirement of furnishing grounds of arrest - Remand order passed mechanically without examining legality of arrest – HELD – The arrest and remand order is illegal and unconstitutional. Apex Court rulings in Radhika Agarwal, Vihaan Kumar, and Gautam Navlakha mandate strict compliance with procedural safeguards for arrest, including furnishing grounds of arrest to the arrested person and their nominated representative - In the present case, the respondents failed to comply with these safeguards, rendering the arrest and remand illegal. Mere recital of alleged offense amount and status of "mastermind" does not satisfy requirement of recording necessity of arrest. Remand order passed without application of mind by Magistrate is also illegal – the impugned arrest, detention and remand order are quashed, and the petitioner is directed to be released from custody forthwith – The petition is allowed [Read less]

Customs - Classification of imported goods - "Thinner, General Purpose for Synthetic Paints and Varnishes" vs "Petroleum Hydrocarbon Solvent 125/240" – Respondent-assessee classified imported goods as “Thinner, General Purpose for Synthetic Paints and Varnishes” as per IS 14317:1995, whereas according to Revenue, these goods fall under the category of “Petroleum Hydrocarbon Solvent 125/240” as per IS 1745:2018 – HELD - The test reports submitted by the Revenue were inconclusive as they did not cover all the essential parameters required under the two IS specifications. The non-examination of any product on all ... [Read more]

Customs - Classification of imported goods - "Thinner, General Purpose for Synthetic Paints and Varnishes" vs "Petroleum Hydrocarbon Solvent 125/240" – Respondent-assessee classified imported goods as “Thinner, General Purpose for Synthetic Paints and Varnishes” as per IS 14317:1995, whereas according to Revenue, these goods fall under the category of “Petroleum Hydrocarbon Solvent 125/240” as per IS 1745:2018 – HELD - The test reports submitted by the Revenue were inconclusive as they did not cover all the essential parameters required under the two IS specifications. The non-examination of any product on all the parameters laid down by the Customs authority will always lead to uncertainty and doubt, which are required to be removed when dealing with confiscatory proceedings – The Revenue is directed to ensure that proper testing facilities are made available in the appropriate laboratories for undertaking tests for all the essential parameters in the future to avoid such disputes. Considering the fact that the goods have been lying in the Customs area since August 2025, the importer is allowed to provisionally clear the goods on execution of a bond for the full value of the goods supported by a bank guarantee, pending the final determination of the classification - The matter is remanded to the Adjudicating Authority for re-testing of the samples by an appropriate Government laboratory for all the parameters prescribed under the relevant Indian Standards (IS) specifications to determine the exact nature of the goods for correct classification – The appeal is disposed of [Read less]

Central Excise - Valuation of goods cleared to related party - Appellant cleared scrap to its related party (GPIL) at a lower price than the price at which the same goods were sold to independent buyers - Department demanded central excise duty on the ground that the appellant did not follow the provisions of Rule 9 of the Valuation Rules, 2000 for clearance of goods to the related party - Whether the provisions of Valuation Rules such as Rule 9 and 10 are applicable in the case where the goods are cleared from one unit to another unit of the same legal entity – HELD - The appellant and GPIL are the same legal entity pos... [Read more]

Central Excise - Valuation of goods cleared to related party - Appellant cleared scrap to its related party (GPIL) at a lower price than the price at which the same goods were sold to independent buyers - Department demanded central excise duty on the ground that the appellant did not follow the provisions of Rule 9 of the Valuation Rules, 2000 for clearance of goods to the related party - Whether the provisions of Valuation Rules such as Rule 9 and 10 are applicable in the case where the goods are cleared from one unit to another unit of the same legal entity – HELD - The appellant and GPIL are the same legal entity post amalgamation as they share the same PAN and Corporate Identification Number. Hence, the transaction between the two units is not a "sale" under Section 2(h) of the Central Excise Act, as there are not two legal persons existed as per Section 3(42) of the General Clauses Act, 1897 for a 'sale' to happen. Since there is no transfer of ownership or consideration between two distinct persons, the provisions of Valuation Rules such as Rule 9 and 10 are not attracted in the present case - The Tribunal relied on the decision in the case of Jindal Steel and Power Ltd. vs. Commissioner of Central Tax, GST & Central Excise and held that Rule 8 of the Central Excise Valuation Rules, 2000 would be applicable for arriving at the valuation in respect of clearance of goods to own unit – Further, the demand of central excise duty is not sustainable on the ground of ‘revenue neutrality’ as the duty paid by one unit would be available as Cenvat Credit to the other unit. Additionally, the demand is not sustainable on account of limitation as there was no suppression of facts with an intent to evade payment of tax - The demand of central excise duty confirmed in the impugned order is set aside and the appeal is allowed - Irregular availment of Cenvat Credit - The appellant availed Cenvat Credit beyond the prescribed period of six months/one year from the date of invoice - Whether the denial of Cenvat Credit on the ground of procedural irregularity is justified – HELD - The receipt and utilization of the inputs in the manufacture of goods is not in dispute. The credit availed by the appellant has been denied only on the ground that it was taken beyond the prescribed period, which is a procedural requirement. The substantive benefit of Cenvat Credit, which is otherwise eligible to the appellant, cannot be denied merely because of the procedural irregularity, if any - The denial of Cenvat Credit and the consequential demand of interest and penalty is set aside [Read less]

Central Excise - Clandestine clearance of goods without payment of duty – Appellant was found to have suppressed taxable turnover based on lorry receipts (LRs) recovered from their premises. Some of the LRs matched with duty-paying invoices, but others did not have any corresponding invoices, indicating clandestine clearance of goods without payment of duty - Whether the charges of clandestine clearance and consequent demand of differential central excise duty along with interest and penalty are sustainable – HELD - The partner of the appellant firm in his statement admitted to the recovery of LRs and that some of the ... [Read more]

Central Excise - Clandestine clearance of goods without payment of duty – Appellant was found to have suppressed taxable turnover based on lorry receipts (LRs) recovered from their premises. Some of the LRs matched with duty-paying invoices, but others did not have any corresponding invoices, indicating clandestine clearance of goods without payment of duty - Whether the charges of clandestine clearance and consequent demand of differential central excise duty along with interest and penalty are sustainable – HELD - The partner of the appellant firm in his statement admitted to the recovery of LRs and that some of the sales invoices issued during 2010-11 and 2011-12 completely tallied with the description shown in the LRs, but majority of the LRs did not have any corresponding central excise invoices. He further admitted to clearing goods shown in the LRs in a clandestine manner without preparing any invoice and without payment of central excise duty, with the intent to evade duty. The confessional statement of the partner, which remained un-retracted, is admissible evidence to support the charges of clandestine clearance – The confession statement made before the Customs/Excise authorities, even if retracted later, can form the sole basis for conviction if found to be voluntary. The recovery of LRs for which there were no corresponding duty-paying invoices, coupled with the partner's confessional statement, is sufficient evidence to establish the charges of clandestine clearance - The demand of differential central excise duty along with interest and equal penalty on the appellant firm is upheld. However, the separate penalty imposed on the partner is set aside as the penalty had already been imposed on the partnership firm – The appeal is partly allowed [Read less]

Central Excise - Clandestine removal of goods - The appellant claimed that the subject goods were lying in the godown prior to obtaining registration under the Central Excise Act, and were not liable to central excise duty - Demand of central excise duty – HELD - The mere presence of goods in a godown cannot automatically lead to the conclusion that they were manufactured and cleared clandestinely - The allegation of clandestine removal of goods has not been established by the department. There is no tangible evidence to substantiate the claim of clandestine manufacture and clearance, as required under the principles lai... [Read more]

Central Excise - Clandestine removal of goods - The appellant claimed that the subject goods were lying in the godown prior to obtaining registration under the Central Excise Act, and were not liable to central excise duty - Demand of central excise duty – HELD - The mere presence of goods in a godown cannot automatically lead to the conclusion that they were manufactured and cleared clandestinely - The allegation of clandestine removal of goods has not been established by the department. There is no tangible evidence to substantiate the claim of clandestine manufacture and clearance, as required under the principles laid down by the Delhi High Court in Flevel International v. Commissioner of Central Excise - The department has merely relied on presumptions and assumptions, without producing any evidence of excess raw materials, actual instances of removal of unaccounted finished goods, discovery of such goods outside the factory, statements of buyers, proof of transportation, etc. Accordingly, the demand of central excise duty confirmed in the impugned order is not legally sustainable and is set aside. As the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise - The impugned order is set aside and the appeal filed by the appellant is allowed [Read less]

Service Tax - Demand of service tax based on financial statements - Whether the demand of service tax and imposition of penalties solely based on the figures shown in the Profit and Loss Account and Balance Sheets submitted to the Income Tax authorities can be sustained – HELD - The whole case of demand has been built up merely on the basis of figures shown in the ITR and the financial statements. The Department has not made any enquiry to ascertain the reason of difference between the figures shown in the Profit & Loss Account and Balance Sheets. I find that the demand raised by invoking the longer period of limitation ... [Read more]

Service Tax - Demand of service tax based on financial statements - Whether the demand of service tax and imposition of penalties solely based on the figures shown in the Profit and Loss Account and Balance Sheets submitted to the Income Tax authorities can be sustained – HELD - The whole case of demand has been built up merely on the basis of figures shown in the ITR and the financial statements. The Department has not made any enquiry to ascertain the reason of difference between the figures shown in the Profit & Loss Account and Balance Sheets. I find that the demand raised by invoking the longer period of limitation is solely based upon the Profit & Loss Account and Balance Sheet submitted with the Income Tax Authorities which has consistently been held to be as not proper - The Revenue’s reliance upon Profit & Loss Account are irrelevant for the purpose of confirmation of tax. Inasmuch as, the Revenue’s entire case is based upon the Profit & Loss Accounts and Balance Sheet and the Service Tax stands confirmed by invoking the longer period of limitation, the impugned order is not sustainable on limitation itself – The impugned order is set aside and the appeal is allowed [Read less]

Service Tax - Levy of service tax on liquidity damages - Appellant entered into various contracts for supply of materials and services, which contained a penalty clause for recovering 'liquidity damages' from the supplier/vendor in case of delay - Department of the view that the amount received as 'liquidity damages' is consideration towards an act of tolerance, which is liable to service tax as 'declared service' under section 66E(e) of the Finance Act, 1994 w.e.f. 01.07.2012 - Whether the 'liquidity damages' collected by the appellant can be subjected to service tax as a 'declared service' under section 66E(e) – HELD -... [Read more]

Service Tax - Levy of service tax on liquidity damages - Appellant entered into various contracts for supply of materials and services, which contained a penalty clause for recovering 'liquidity damages' from the supplier/vendor in case of delay - Department of the view that the amount received as 'liquidity damages' is consideration towards an act of tolerance, which is liable to service tax as 'declared service' under section 66E(e) of the Finance Act, 1994 w.e.f. 01.07.2012 - Whether the 'liquidity damages' collected by the appellant can be subjected to service tax as a 'declared service' under section 66E(e) – HELD - The appellants were collecting certain amount, which they had declared as liquidity damages in their books of accounts from their supplier/service. These liquidity damages were charged only when the supplier or the service provider failed to deliver the goods or perform the service within the time limit specified in the contract. Appellant deducted 0.5% / 1% of the total contract value per complete week of delay or part thereof subject to maximum of 5% / 10%. Therefore, in certain cases of purchase of goods or procurement of service, they had invoked this clause and had collected liquidity damages - The issue of levying service tax on liquidity damages is no longer res integra, as in a catena of judgments, various Benches of the Tribunal have held that no service tax can be levied on liquidity damages. The ratio of such judgments is squarely applicable in the present factual matrix – The impugned order is set aside and the appeal is allowed [Read less]

Customs - Payment of Education Cess, Secondary & Higher Education Cess through MEIS scrips - whether payments of Education Cess and Secondary & Higher Education Cess made by importers through debit in Merchandise Exports from India Scheme (MEIS) duty credit scrips constituted valid discharge of duty liability – HELD - In light of CBIC Circular No. 02/2020-Customs dated 10.01.2020 and binding judicial precedents, payments made by importers through MEIS scrips towards EC and SHEC for past periods constitute valid discharge of duty liability. It is not in dispute that the imports in question pertain to a period prior to iss... [Read more]

Customs - Payment of Education Cess, Secondary & Higher Education Cess through MEIS scrips - whether payments of Education Cess and Secondary & Higher Education Cess made by importers through debit in Merchandise Exports from India Scheme (MEIS) duty credit scrips constituted valid discharge of duty liability – HELD - In light of CBIC Circular No. 02/2020-Customs dated 10.01.2020 and binding judicial precedents, payments made by importers through MEIS scrips towards EC and SHEC for past periods constitute valid discharge of duty liability. It is not in dispute that the imports in question pertain to a period prior to issuance of the Circular dated 10.01.2020 and the importers had actually discharged the duty liability, including Education Cess and Secondary & Higher Education Cess, albeit through MEIS scrips. There is no allegation of suppression, fraud, or mis-declaration on part of the importers - The Adjudicating Authority has correctly applied the CBIC Circular dated 10.01.2020 and the payments made by the importers through debit in MEIS duty credit scrips towards EC and SHEC, for the relevant past period, constitute valid discharge of duty liability. The attempt by Revenue to recover the same in cash would lead to double recovery, which is impermissible in law - The appeals filed by the Revenue are dismissed [Read less]

Customs - Mis-declaration resulting in suppression of value of goods at the time of import with a view to evade payment of customs duty - Penalty under Section 112(a) of Customs Act - Appellant implicated as co-noticee along with importer, allegations of under-valuation – HELD - The penalty imposed on the appellant is liable to be set aside as the Tribunal has already set aside the penalties imposed on the importer and another co-noticee on the same set of facts. Further, the appellant's role was limited to sale of goods after clearance for home consumption and there is no evidence to show his involvement in under-valuat... [Read more]

Customs - Mis-declaration resulting in suppression of value of goods at the time of import with a view to evade payment of customs duty - Penalty under Section 112(a) of Customs Act - Appellant implicated as co-noticee along with importer, allegations of under-valuation – HELD - The penalty imposed on the appellant is liable to be set aside as the Tribunal has already set aside the penalties imposed on the importer and another co-noticee on the same set of facts. Further, the appellant's role was limited to sale of goods after clearance for home consumption and there is no evidence to show his involvement in under-valuation of goods. The allegation of under-valuation was made on the basis of comparison with the price of goods imported by another entity which was not appropriate as the price was lower due to a SAARC agreement, and no other evidence was brought on record to show under-valuation by the importer. Therefore, the allegation of under-valuation against the appellant is not sustained, and consequently, the penalty imposed under Section 112(a) of the Customs Act is not sustainable and is set aside - The penalty imposed is set aside and the appeal is allowed [Read less]

Service Tax - Defective Show Cause Notice – Show Cause Notice for non-payment of service tax on "Data Processing Fees" without specify the particular sub-clause of Section 65(19) of the Finance Act, 1994 under which the appellant's activities were proposed to be classified - Whether the non-specification of the sub-clause in the Show Cause Notice renders it defective and violates the principles of natural justice - HELD - The Show Cause Notice is fundamentally defective as it failed to specify the particular sub-clause of Section 65(19) under which the appellant's activities were proposed to be classified. Where a statut... [Read more]

Service Tax - Defective Show Cause Notice – Show Cause Notice for non-payment of service tax on "Data Processing Fees" without specify the particular sub-clause of Section 65(19) of the Finance Act, 1994 under which the appellant's activities were proposed to be classified - Whether the non-specification of the sub-clause in the Show Cause Notice renders it defective and violates the principles of natural justice - HELD - The Show Cause Notice is fundamentally defective as it failed to specify the particular sub-clause of Section 65(19) under which the appellant's activities were proposed to be classified. Where a statutory provision contains several distinct sub-clauses, each describing a separate species of taxable activity, the Show Cause Notice must identify the specific sub-clause or sub-clauses alleged to be attracted. This requirement is not merely a matter of form, but of substance, as it enables the assessee to comprehend the exact allegation and formulate an effective reply - The deficiency or vagueness of a SCN cannot be cured by the adjudicating or appellate authority, as the Show Cause Notice is the source from which the adjudicating authority derives its jurisdiction. Allowing the adjudicating authority to specify the sub-clauses at the adjudication stage would be impermissible as it would improve the Revenue's case at the expense of the assessee's right of defence - The impugned order is set aside and the appeal is allowed on the ground that the Show Cause Notice was defective and violated the principles of natural justice [Read less]

Central Sales Tax Act, 1956 - Burden of proof to show transfer of goods was not by way of sale – Jurisdiction of Deputy Commissioner of Commercial Taxes to pass assessment order - The appellant failed to discharge the burden under Section 6A of the CST Act, 1956 and did not submit the documents required under Rule 14(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957 to establish that the transfer of goods from the State of Andhra Pradesh to other States was by way of consignment sales to agents and not inter-State sales – Whether the Deputy Commissioner of Commercial Taxes was the competent assessment officer fo... [Read more]

Central Sales Tax Act, 1956 - Burden of proof to show transfer of goods was not by way of sale – Jurisdiction of Deputy Commissioner of Commercial Taxes to pass assessment order - The appellant failed to discharge the burden under Section 6A of the CST Act, 1956 and did not submit the documents required under Rule 14(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957 to establish that the transfer of goods from the State of Andhra Pradesh to other States was by way of consignment sales to agents and not inter-State sales – Whether the Deputy Commissioner of Commercial Taxes was the competent assessment officer for the Assessment Year 2000-01 - HELD - In absence of the relevant documents, the transfer of goods had to be taken as inter-State sales. The appellant's contention that the Deputy Commissioner did not have the jurisdiction to pass the assessment order is rejected as Section 4A of the 1957 AP Sales Tax Act empowered the Deputy Commissioner to exercise the powers of subordinate officers - Even if the initial power to assess was with officers subordinate to the Deputy Commissioner, section 4A empowered the Deputy Commissioner of Commercial Taxes to exercise powers of the officers so empowered subject to any instructions issued by the Commissioner in this regard. The contention of the ld. counsel for the appellant is that the Deputy Commissioner of Commercial Taxes could have exercised power only if the Commissioner of Commercial Taxes had issued such instructions is rejected - The appeals filed by the appellant are dismissed - Limitation period for assessment - The appellant argued that the assessment order was passed beyond the limitation period. The Tribunal held that under Section 14(3) of the 1957 AP Sales Tax Act, where the dealer produced accounts and documents after inspection, the assessing authority could complete the assessment within six years from the expiry of the relevant year. Since the appellant had produced the documents after inspection, the six-year limitation period was applicable, and the assessment order was passed within this period. [Read less]

Service Tax - Defective filing of appeal before the first appellate authority - Appellant filed an appeal before the Commissioner (Appeals) challenging the Order-in-Original, which partially confirmed a demand for short payment of service tax. The Commissioner (Appeals) dismissed the appeal, noting that the appellant had failed to file the requisite 'Statement of Facts and Grounds of Appeal' along with the memorandum of appeal in the prescribed Form ST-4 - Whether the dismissal of the appeal by the Commissioner (Appeals) on the ground of defective filing of the appeal is correct – HELD - The filing of grounds of appeal i... [Read more]

Service Tax - Defective filing of appeal before the first appellate authority - Appellant filed an appeal before the Commissioner (Appeals) challenging the Order-in-Original, which partially confirmed a demand for short payment of service tax. The Commissioner (Appeals) dismissed the appeal, noting that the appellant had failed to file the requisite 'Statement of Facts and Grounds of Appeal' along with the memorandum of appeal in the prescribed Form ST-4 - Whether the dismissal of the appeal by the Commissioner (Appeals) on the ground of defective filing of the appeal is correct – HELD - The filing of grounds of appeal is not a mere procedural formality, but serves the substantive purpose of apprising the appellate authority of the specific findings in the order under challenge that are assailed, the legal or factual grounds on which the challenge is founded, and the precise relief sought. In the absence of such grounds, the appellate authority is placed in a position where it is unable to meaningfully examine or adjudicate upon the merits of the challenge - When a statute prescribes a specific form or manner for the exercise of a right, the prescribed procedure must be strictly adhered to. Therefore, there is no error in the impugned order of the Commissioner (Appeals) given the deficient state of the pleadings placed before the said authority - However, in the interest of justice and to afford the appellant a full and fair opportunity to have its case decided on merits, the impugned Order-in-Appeal is set aside and the matter is remanded to the Commissioner (Appeals) for a fresh decision. The appellant was directed to file the statement of facts and grounds of appeal in the prescribed Form ST-4, along with the relevant documentary evidence - The appeal is allowed by way of remand [Read less]

Service Tax - Demand of service tax on exhibition expenses held outside India – Department confirmed a demand of service tax on the exhibition expenses incurred by the appellant for an event held in Geneva, Switzerland - Whether service tax was leviable on the exhibition expenses incurred outside India - HELD – As per Rule 6 of the Place of Provision of Services Rules, 2012, the provision of service relating to events shall be the place where the event is actually held. Since the event was held in Switzerland, which is a non-taxable territory, no service tax is leviable on the expenses incurred for the event. The Appel... [Read more]

Service Tax - Demand of service tax on exhibition expenses held outside India – Department confirmed a demand of service tax on the exhibition expenses incurred by the appellant for an event held in Geneva, Switzerland - Whether service tax was leviable on the exhibition expenses incurred outside India - HELD – As per Rule 6 of the Place of Provision of Services Rules, 2012, the provision of service relating to events shall be the place where the event is actually held. Since the event was held in Switzerland, which is a non-taxable territory, no service tax is leviable on the expenses incurred for the event. The Appellate Authority has wrongly invoked the default Rule 3 instead of the specific Rule 6. The bona fide belief of the assessee that no service tax is payable on the expenses incurred for an event held outside India cannot be outrightly rejected - The demands of service tax is set aside and the appeal is allowed both on merits as well as on limitation - Sale of software licenses - Taxability under service tax – HELD - The demand of service tax on the income earned by the appellant on sale of software licenses to their customers is not legally sustainable. The appellant is a software product company primarily engaged in development of standardized software products catering to the needs of the travel industry. As per the End User License Agreements, the appellant was providing Information Technology Software Service in the form of sale of license along with perpetual right to use. The predominant part of the contract is the sale of software which was sold on a perpetual basis. The appellant has discharged VAT on the sale of software, considering it as the sale of goods. The appellant has also paid service tax on the service portion, if any, as mentioned in the separate schedule. An entity cannot be taxed under both service tax as well as VAT. The appellant had a bona fide belief that no service tax is payable on the sale of software. [Read less]

GST – Anti-profiteering - Profiteering allegation against real estate developer - DGAP investigated a complaint against Respondent-real estate developer alleging profiteering by not passing on the benefit of Input Tax Credit to the home buyers – It is the complainant’s case that the Respondent retained his money for a longer period of more than 10 years. Therefore, entitled to Interest on his deposited money from the Respondent - HELD - The developer had voluntarily accepted the DGAP's report and its conclusions. The developer had contravened the provisions of Section 171 of the CGST Act, 2017 and had indulged in pro... [Read more]

GST – Anti-profiteering - Profiteering allegation against real estate developer - DGAP investigated a complaint against Respondent-real estate developer alleging profiteering by not passing on the benefit of Input Tax Credit to the home buyers – It is the complainant’s case that the Respondent retained his money for a longer period of more than 10 years. Therefore, entitled to Interest on his deposited money from the Respondent - HELD - The developer had voluntarily accepted the DGAP's report and its conclusions. The developer had contravened the provisions of Section 171 of the CGST Act, 2017 and had indulged in profiteering. The Tribunal accepted the DGAP's report and directed the developer to pay interest at the rate of 18% on the profiteered amount from the date of collection of the higher amount till the date of return of such amount, as provided under Rule 133(3)(b) of the CGST Rules, 2017 - The arguments raised by the home buyers regarding the retention of their money by the developer and the cancellation of their allotment did not fall within the purview of Section 171 of the CGST Act, 2017, and they could approach the appropriate forum to address their grievances – Ordered accordingly [Read less]

Customs - Confiscation of mobile phones and imposition of penalties on merchant exporter - Department alleged that the appellant had mis-declared the description of mobile phones under export as they had subjected the phones to usage prior to export by unsealing the original packaging, activating the handsets, and then repacking them - Whether the confiscation of goods and imposition of penalties on the appellants are legally sustainable - HELD - The issues raised in the present appeals are no longer res integra in view of the judgements passed by the High Court of Delhi in the case of AIMS Retail Services Pvt. Ltd. & Anr.... [Read more]

Customs - Confiscation of mobile phones and imposition of penalties on merchant exporter - Department alleged that the appellant had mis-declared the description of mobile phones under export as they had subjected the phones to usage prior to export by unsealing the original packaging, activating the handsets, and then repacking them - Whether the confiscation of goods and imposition of penalties on the appellants are legally sustainable - HELD - The issues raised in the present appeals are no longer res integra in view of the judgements passed by the High Court of Delhi in the case of AIMS Retail Services Pvt. Ltd. & Anr. and the subsequent dismissal of the Department's appeal by the Supreme Court. The High Court had observed that the unlocking/activating of mobile phones to enable their use in a particular geographical territory outside India is merely 'configuration' of the product to make it usable and does not constitute "taken into use" under the Drawback Rules - The alleged acts of the appellants of unsealing the original packaging, activating the handsets, and then repacking them do not amount to mis-declaration or suppression of facts - The impugned order is set and the appeal is allowed [Read less]

Customs - Rejection of transaction value - The Customs authorities sought to reject the declared transaction value and re-determine the value under Customs Valuation Rules based on statements recorded under Section 108 of the Customs Act and documents retrieved from the laptop of the importer – HELD - The statements recorded under section 108 of the Customs Act cannot be relied upon to reject the declared transaction value under rule 10 of the Customs Valuation Rules as the mandatory procedure under section 138B of the Customs Act was not followed. Section 138B requires that the person who made the statement must be exam... [Read more]

Customs - Rejection of transaction value - The Customs authorities sought to reject the declared transaction value and re-determine the value under Customs Valuation Rules based on statements recorded under Section 108 of the Customs Act and documents retrieved from the laptop of the importer – HELD - The statements recorded under section 108 of the Customs Act cannot be relied upon to reject the declared transaction value under rule 10 of the Customs Valuation Rules as the mandatory procedure under section 138B of the Customs Act was not followed. Section 138B requires that the person who made the statement must be examined as a witness before the adjudicating authority and the authority must form an opinion that the statement should be admitted in evidence. This procedure was not followed in the present case, hence the statements cannot be used as evidence to reject the transaction value. The Commissioner's reliance on the statements to support the plea of under-valuation is not justified - The print-outs retrieved from the laptop cannot be relied upon as the retrieval was not done in his presence. Further, the procedure under section 138C of the Customs Act, which requires a certificate, was also not followed. Hence, the documents retrieved from the laptop cannot be used as evidence against the appellants - The impugned order is set aside and the appeals are allowed - Rejection of transaction value and re-determination - No evidence of mis-declaration of thickness - Contemporaneous import data rejected incorrectly – HELD - The charge of mis-declaration of thickness of the goods is not established as there is no physical examination or laboratory report to support it. The Commissioner rejected the contemporaneous import data obtained by the appellants under RTI incorrectly, merely on the ground that the appellants may have selectively asked for information. This data should have been considered, especially when even one import of identical/similar goods with value similar to the declared value was available. In the absence of any evidence of over-invoicing or mis-declaration, the rejection of the transaction value under rule 10 and re-determination under rules 5/6 is not justified. [Read less]

Central Excise - Bail application in criminal case related to evasion of central excise duty and cess - The applicant was arrested in connection with a case registered under Sections 9(1)(B) of the Central Excise Act, 1944 and Rule 22 of the Chewing Tobacco Zarda, Sentenced Tobacco and Gutkha Packing Machines (Determination and Collection of Duty) Rules, 2006 - The applicant was alleged to have been engaged in illegal manufacture and packing of chewing tobacco, zarda and scented tobacco pouches through packing machines installed in his premises, without payment of the requisite central excise duty - Whether the applicant s... [Read more]

Central Excise - Bail application in criminal case related to evasion of central excise duty and cess - The applicant was arrested in connection with a case registered under Sections 9(1)(B) of the Central Excise Act, 1944 and Rule 22 of the Chewing Tobacco Zarda, Sentenced Tobacco and Gutkha Packing Machines (Determination and Collection of Duty) Rules, 2006 - The applicant was alleged to have been engaged in illegal manufacture and packing of chewing tobacco, zarda and scented tobacco pouches through packing machines installed in his premises, without payment of the requisite central excise duty - Whether the applicant should be granted bail in the present case – HELD - The offences alleged are economic offences involving substantial evasion of Government revenue, and such offences constitute a class apart and need to be visited with a different approach in the matter of bail. The prosecution has made out a prima facie case against the applicant, with material including statements, seizure of machines, raw materials and finished products, supporting the prosecution allegations. There is substance in the prosecution's argument that under the amended statutory regime and newly introduced Chewing Tobacco, Zarda, Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026, the liability extends to notified stock and installed packing machinery, and the material collected during the investigation indicates deliberate non-disclosure of packing machines and evasion of statutory obligations – There is possibility of the applicant tampering with evidence and influencing witnesses, as the investigation is still in progress regarding procurement of machinery, supply chain, purchasers, suppliers and involvement of other persons. Given the gravity and nature of the allegations, the huge alleged tax evasion, the statutory scheme under the Rules of 2026 and Notification dated 31.12.2025, and the non-bailable nature of the offence under Section 9A(1A) of the Central Excise Act, the Court is not inclined to extend the benefit of bail to the applicant at this stage - The bail application filed by the applicant stands dismissed [Read less]

Central Excise - Eligibility of Cenvat credit on capital goods and inputs used for setting up a power plant - The appellant, a sugar mill manufacturer, availed Cenvat credit on capital goods and inputs used for setting up a power plant to generate electricity, some of which was used captively for the sugar mill operations and the rest was supplied to the electricity department - Department denied the Cenvat credit on the ground that the power plant was an exempted good and not an excisable good - Whether the appellant is eligible to avail Cenvat credit on the capital goods and inputs used for setting up the power plant - H... [Read more]

Central Excise - Eligibility of Cenvat credit on capital goods and inputs used for setting up a power plant - The appellant, a sugar mill manufacturer, availed Cenvat credit on capital goods and inputs used for setting up a power plant to generate electricity, some of which was used captively for the sugar mill operations and the rest was supplied to the electricity department - Department denied the Cenvat credit on the ground that the power plant was an exempted good and not an excisable good - Whether the appellant is eligible to avail Cenvat credit on the capital goods and inputs used for setting up the power plant - HELD - As per the definition of "capital goods" under the Cenvat Credit Rules, 2004, the goods on which credit has been taken fall within the categories listed and have been used in the factory of the appellant for manufacturing of the final products - The goods on which the credit has been taken fall within the categories of the goods listed in the definition of the capital goods and have been used for the manufacturing of final product. The fact that the capital goods are installed and become a fixed structure does not disentitle the manufacturer from availing Cenvat credit, as long as the goods satisfy the definition of "capital goods" under the Rules. The reliance by the department on the CBEC Circular and the Supreme Court decisions in Triveni Engineering and Quality Steel Tubes cases is misplaced as the issues in those cases were different from the present case – Further, the department failed to prove any positive act of suppression on the part of the appellant to invoke the extended period of limitation, and the imposition of penalty was also not warranted considering the appellant's bonafide belief and the complex interpretation of the legal provisions involved - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Classification of imported integrated drive generator and starter generator - The appellant imported integrated drive generator and starter generator for use in turboprop/turbofan engines of aircraft - Department classified the goods under CTH 8511 while the appellant claimed classification under CTH 8501 – HELD - The subject goods are classifiable under CTH 8501 as they are electrical generators used in conjunction with turboprop/turbofan engines, which are gas turbine engines and not spark-ignition or compression ignition internal combustion engines covered under CTH 8511. CTH 8501 covers all electric generat... [Read more]

Customs - Classification of imported integrated drive generator and starter generator - The appellant imported integrated drive generator and starter generator for use in turboprop/turbofan engines of aircraft - Department classified the goods under CTH 8511 while the appellant claimed classification under CTH 8501 – HELD - The subject goods are classifiable under CTH 8501 as they are electrical generators used in conjunction with turboprop/turbofan engines, which are gas turbine engines and not spark-ignition or compression ignition internal combustion engines covered under CTH 8511. CTH 8501 covers all electric generators, whereas CTH 8511 covers only those generators used in conjunction with spark-ignition or compression ignition internal combustion engines. The finding of the Department that CTH 8511 covers "internal combustion engines of any kind" and therefore the goods are classifiable under CTH 8511 is incorrect, as the term "any kind" in CTH 8511 refers to the internal design of the internal combustion engine, i.e. piston type or other types, and not to all types of internal combustion engines including gas turbine engines - Further, the extended period of limitation under section 28(4) of the Customs Act could not have been invoked as mere misclassification by the importer does not mean that the duty was short paid with an intention to evade payment. Consequently, penalty under section 114A of the Customs Act is also not imposable. The penalty imposed on the CHA under section 117 of the Customs Act is also not sustainable as the CHA acted as per the instructions of the importer - The impugned orders are set aside and the appeals are allowed - Invocation of extended period of limitation - The department invoked the extended period of limitation under section 28(4) of the Customs Act on the ground that the importer had short-paid the duty by misclassifying the goods – HELD - Mere misclassification by the importer would not mean that the duty was short paid with an intention to evade payment. The classification adopted by the importer, even if ultimately found to be incorrect, would not mean that the import by misclassifying the goods was with an intention to evade payment of duty. In the present case, the classification adopted by the appellant has been found to be correct. Therefore, the extended period of limitation was not correctly invoked - Imposition of penalty on CHA - The department imposed a penalty on the customs house agent under section 117 of the Customs Act on the ground that uniformity was not maintained by it in the classification of the goods while declaring the same in the Bills of Entry – HELD - The role of a customs house agent is confined to making entries on the basis of the documents provided by the importer and to facilitate proper filing of such documents. The customs house agent acted as per the instructions of the importer. Therefore, the penalty under section 117 of the Customs Act could not have been imposed upon the customs house agent. [Read less]

Service Tax – Taxability of Director’s remuneration - Appellant company paid performance commission and perquisites to its Directors beyond the fixed monthly salary - Department issued notice demanding service tax on such payments under RCM - Whether the remuneration paid by the appellant company to its directors beyond fixed monthly salary constitutes "service" and is liable to service tax under reverse charge mechanism - HELD - The remuneration paid by the appellant company to its whole-time Directors, which included commission, perquisites and performance incentive, is in the nature of "salary" and not "service". Th... [Read more]

Service Tax – Taxability of Director’s remuneration - Appellant company paid performance commission and perquisites to its Directors beyond the fixed monthly salary - Department issued notice demanding service tax on such payments under RCM - Whether the remuneration paid by the appellant company to its directors beyond fixed monthly salary constitutes "service" and is liable to service tax under reverse charge mechanism - HELD - The remuneration paid by the appellant company to its whole-time Directors, which included commission, perquisites and performance incentive, is in the nature of "salary" and not "service". The Directors were appointed as "whole-time" or "working" directors of the company and were considered as "employees" under the Companies Act – Further, as evident from the Form-16 certificates issued to the directors, the remuneration was subject to deduction of tax at source under the salary mechanism. Once the relationship between the company and the directors is found to be one of employer-employee, the charging provisions under the Finance Act, 1994 for levy of service tax do not get attracted – The impugned order is set aside and the appeal is allowed [Read less]

GST - Alternative Remedy – Challenge to demand order directly before the High Court under Article 226 of the Constitution, instead of availing the statutory remedy of appeal - The petitioner claimed that the impugned order was passed in violation of principles of natural justice and the STO lacked jurisdiction to initiate proceedings – Maintainability of writ petition – HELD - Where a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing such right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Arti... [Read more]

GST - Alternative Remedy – Challenge to demand order directly before the High Court under Article 226 of the Constitution, instead of availing the statutory remedy of appeal - The petitioner claimed that the impugned order was passed in violation of principles of natural justice and the STO lacked jurisdiction to initiate proceedings – Maintainability of writ petition – HELD - Where a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing such right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution - The exceptions to the rule of alternative remedy, such as violation of principles of natural justice or the order being without jurisdiction, are not attracted in the present case - The show cause notice provided the petitioner sufficient time to file a reply and attend the personal hearing, and the petitioner's failure to do so cannot be construed as a denial of opportunity of hearing. Additionally, the STO has the jurisdiction to initiate proceedings under Section 73 of the J&K GST Act based on the audit conducted under Section 65 of the CGST Act - The writ petition is dismissed as not maintainable in view of the availability of an equally efficacious statutory remedy of appeal [Read less]

GST - Show Cause Notice - Omission of Proposed Interest and Penalty Amounts - Whether the show cause notice issued under the CGST Act, 2017 is valid and legally tenable despite the omission of the proposed amounts of interest and penalty – HELD - While the show cause notice must mention the proposed interest and penalty amounts as per the statutory mandate under Sections 75(6) and 75(7) of the CGST Act, 2017, the mere omission of these specific amounts does not render the show cause notice illegal - The remedy available to the petitioner is to prefer a statutory appeal, which cannot be dismissed on the ground of limitati... [Read more]

GST - Show Cause Notice - Omission of Proposed Interest and Penalty Amounts - Whether the show cause notice issued under the CGST Act, 2017 is valid and legally tenable despite the omission of the proposed amounts of interest and penalty – HELD - While the show cause notice must mention the proposed interest and penalty amounts as per the statutory mandate under Sections 75(6) and 75(7) of the CGST Act, 2017, the mere omission of these specific amounts does not render the show cause notice illegal - The remedy available to the petitioner is to prefer a statutory appeal, which cannot be dismissed on the ground of limitation, provided the petitioner deposits 10% of the liability. The respondent is directed to ensure that the show cause notice clearly proposes the interest amount to be recovered, the rate at which such interest shall be levied, and the proposed penalty, in compliance with the statutory requirements – The writ petition is disposed of [Read less]

GST - Opportunity of hearing before rejecting refund application – Rejection of refund application under Section 54 of the CGST Act, 2017 on the ground that it was barred by limitation – HELD - The refund rejection order was passed in gross violation of Rule 92(3) of the CGST Rules, 2017. It is not disputed that in response to the Show Cause Notice dated 06.02.2026, the petitioner in his reply submitted on 12.02.2026 sought a date for personal hearing by virtual mode, but without considering the said request and without fixing any date for hearing, the Department proceeded to pass the impugned order - The Rule 93(3) of... [Read more]

GST - Opportunity of hearing before rejecting refund application – Rejection of refund application under Section 54 of the CGST Act, 2017 on the ground that it was barred by limitation – HELD - The refund rejection order was passed in gross violation of Rule 92(3) of the CGST Rules, 2017. It is not disputed that in response to the Show Cause Notice dated 06.02.2026, the petitioner in his reply submitted on 12.02.2026 sought a date for personal hearing by virtual mode, but without considering the said request and without fixing any date for hearing, the Department proceeded to pass the impugned order - The Rule 93(3) of CGST Rules specifically provides for the grant of an opportunity of hearing before any rejection order is passed in respect of a prayer for refund. Thus, there was a clear violation of Rule 93(3) of the Rules - The impugned order is quashed and the matter is remitted back to the respondent for proceeding strictly in accordance with law - The writ petition is allowed [Read less]

Central Excise - Eligibility of CENVAT credit on hiring of chartered aircraft, club/association services and hotel services - Whether the respondent-assessee is eligible to avail CENVAT credit on the services of hiring a chartered aircraft, club/association services and hotel services - HELD - The Tribunal relied on the decision in Pepsico India Holdings Pvt Ltd v. Commissioner of Central Tax, wherein it was held that post 01.04.2011, the definition of 'input service' is wide enough to cover any service used directly or indirectly in relation to the manufacture. Further, the Department failed to issue a show cause notice t... [Read more]

Central Excise - Eligibility of CENVAT credit on hiring of chartered aircraft, club/association services and hotel services - Whether the respondent-assessee is eligible to avail CENVAT credit on the services of hiring a chartered aircraft, club/association services and hotel services - HELD - The Tribunal relied on the decision in Pepsico India Holdings Pvt Ltd v. Commissioner of Central Tax, wherein it was held that post 01.04.2011, the definition of 'input service' is wide enough to cover any service used directly or indirectly in relation to the manufacture. Further, the Department failed to issue a show cause notice to the input service distributor who had distributed the credit, and that the credit cannot be denied to the recipient unit without first denying the credit to the ISD - With respect to the club/association services and hotel services, the respondent is eligible to avail CENVAT credit on these services as they were used for business/manufacturing purposes and not for personal use - The impugned order passed by the Commissioner which had allowed the CENVAT credit on the various input services availed by the respondent is upheld and the Revenue appeal is dismissed [Read less]

GST – Tamil Nadu AAAR - Composite Supply of service or Supply of food as restaurant/food service - Appellant procures food from third party kitchens and supplies it to their corporate clients, without any preparation or serving - Whether the supply of food by the appellant should be treated as a supply of goods or a supply of service – HELD - The appellant is not merely an aggregator of food but is actively involved in finalizing the menu, ensuring quality and hygiene standards, and arranging for delivery of the food to the client's premises. The supply of food by the appellant under a contractual arrangement with the ... [Read more]

GST – Tamil Nadu AAAR - Composite Supply of service or Supply of food as restaurant/food service - Appellant procures food from third party kitchens and supplies it to their corporate clients, without any preparation or serving - Whether the supply of food by the appellant should be treated as a supply of goods or a supply of service – HELD - The appellant is not merely an aggregator of food but is actively involved in finalizing the menu, ensuring quality and hygiene standards, and arranging for delivery of the food to the client's premises. The supply of food by the appellant under a contractual arrangement with the client is not a supply of goods or a restaurant service, but rather a composite supply of service that includes the supply of food as well as logistical and quality assurance services. The dominant intention of the supply is the provision of a service, and the supply of food is an integral part of that service - The supply of food by the appellant is a composite supply of service under Para 6(b) of Schedule II of the CGST Act, 2017 and is taxable at 18% GST as per Entry 7(vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 – The advance ruling of the AAR is upheld and the appeal is rejected [Read less]

GST – Gujarat AAR - Classification of Autoclaved Aerated Concrete (AAC) Bricks/Blocks – Applicant is engaged in the manufacture and supply of Autoclaved Aerated Concrete (AAC) bricks/blocks, which are used in the construction industry as a substitute for conventional burnt clay bricks – Whether the product, AAC bricks/blocks would be classifiable under Heading 69041000 "Building Bricks" or under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" – HELD - The manufacturing process of the AAC bricks/blocks, as detailed by the applicant, draws parallel with the process men... [Read more]

GST – Gujarat AAR - Classification of Autoclaved Aerated Concrete (AAC) Bricks/Blocks – Applicant is engaged in the manufacture and supply of Autoclaved Aerated Concrete (AAC) bricks/blocks, which are used in the construction industry as a substitute for conventional burnt clay bricks – Whether the product, AAC bricks/blocks would be classifiable under Heading 69041000 "Building Bricks" or under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" – HELD - The manufacturing process of the AAC bricks/blocks, as detailed by the applicant, draws parallel with the process mentioned in the HSN notes to Heading 6810, except for the high temperatures (800°C to 1500°C) claimed by the applicant, which appear to be incorrect as the AAC bricks are typically subjected to temperatures of 180-220°C in the autoclave - The chemical composition of the AAC bricks/blocks, as per the test report submitted by the applicant, does not match the composition of standard ceramic bricks/blocks, indicating that the AAC bricks/blocks are not ceramic in nature and hence, do not fall under Chapter 69 - The Chapter Notes to Chapter 69 explicitly state that articles heated to temperatures less than 800°C are not considered to be "fired" and are excluded from Chapter 69, which would be the case for the AAC bricks/blocks - Based on the above analysis, it is concluded that the AAC bricks/blocks manufactured by the applicant are correctly classifiable under Heading 6810 "Articles of cement, of concrete or of artificial stone, whether or not reinforced" of the Customs Tariff Act, 1975, and not under Heading 69041000 "Building Bricks" of Chapter 69 – Ordered accordingly [Read less]

GST - Gujarat AAR - Classification and applicable GST rate on "Black Mineral Water" – Whether the product "Black Mineral Water" is classifiable under HSN 22011010 (mineral waters) or some other HSN heading – HELD - The applicant's "Black Mineral Water" product is correctly classified under HSN 22011010 (mineral waters) of the First Schedule to the Customs Tariff Act, 1975. The product, based on the laboratory report and the production process details provided by the applicant, does not contain any added sugar, sweetening matter, or flavoring, and only contains added minerals - The Chapter Notes and Explanatory Notes of... [Read more]

GST - Gujarat AAR - Classification and applicable GST rate on "Black Mineral Water" – Whether the product "Black Mineral Water" is classifiable under HSN 22011010 (mineral waters) or some other HSN heading – HELD - The applicant's "Black Mineral Water" product is correctly classified under HSN 22011010 (mineral waters) of the First Schedule to the Customs Tariff Act, 1975. The product, based on the laboratory report and the production process details provided by the applicant, does not contain any added sugar, sweetening matter, or flavoring, and only contains added minerals - The Chapter Notes and Explanatory Notes of Chapter 22 of the First Schedule to the Customs Tariff Act, 1975, treats mineral waters (natural or artificial) as covered under the sub-headings for mineral waters, and the addition of minerals does not preclude classification under HSN 22011010 as long as there is no added sugar or flavoring. The product falls under Entry No. 146 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and liable to GST at the rate of 5% - The applicant's "Black Mineral Water" product is classifiable under HSN 22011010 (mineral waters) and is liable to GST at the rate of 5% - Ordered accordingly [Read less]

Service Tax - Taxability of grants-in-aid received from Government Departments/Ministries under scientific or technical consultancy services - Appellant, a research institute, received grants-in-aid from various Government departments and Ministries - Department alleged that these grants-in-aid are taxable under the category of 'Scientific or Technical Consultancy Services' and raised a demand for service tax - Whether the grants-in-aid received by the appellant from government departments/ministries are taxable under the category of 'Scientific or Technical Consultancy Services' - HELD - The grants-in-aid received by the ... [Read more]

Service Tax - Taxability of grants-in-aid received from Government Departments/Ministries under scientific or technical consultancy services - Appellant, a research institute, received grants-in-aid from various Government departments and Ministries - Department alleged that these grants-in-aid are taxable under the category of 'Scientific or Technical Consultancy Services' and raised a demand for service tax - Whether the grants-in-aid received by the appellant from government departments/ministries are taxable under the category of 'Scientific or Technical Consultancy Services' - HELD - The grants-in-aid received by the appellant from Government departments/Ministries are not taxable under the category of 'Scientific or Technical Consultancy Services'. A grant-in-aid is a financial assistance provided by the government to another government body, institution or individual for a specific purpose, without requiring repayment. Such grants are typically used to support specific projects, programs or services and come with specific conditions and reporting requirements. The grants-in-aid received from the government cannot be treated as 'consideration' and therefore are not taxable under the service tax. Further, the demand invoking the extended period of limitation is also unsustainable as the appellant was under a bona fide belief that they are not liable to pay service tax on the grants-in-aid received - The demand and penalty imposed on the appellant is set aside and the appeals are allowed [Read less]

Central Excise – Eligibility to interest on delayed refund under Section 11BB of Central Excise Act, 1944 – Entitlement to interest on the delayed payment of interest - HELD - As per the interpretation of Section 11BB by the Supreme Court in the case of Ranbaxy Laboratories Ltd., interest under Section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the refund application. In the present case, the appellant had filed the refund/rebate claim on 15.11.2007, and hence interest becomes payable to them on the unpaid amount of refund from 15.02.2008 - The contention of the revenue t... [Read more]

Central Excise – Eligibility to interest on delayed refund under Section 11BB of Central Excise Act, 1944 – Entitlement to interest on the delayed payment of interest - HELD - As per the interpretation of Section 11BB by the Supreme Court in the case of Ranbaxy Laboratories Ltd., interest under Section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the refund application. In the present case, the appellant had filed the refund/rebate claim on 15.11.2007, and hence interest becomes payable to them on the unpaid amount of refund from 15.02.2008 - The contention of the revenue that the date for computation of interest should be the date of order of the appellate authority allowing the appeal of the appellant against the order appropriating the refund amount, is rejected. However, there is no merit in the appellant's claim for interest on the delayed payment of interest, as there was no statutory provision in the Central Excise Act, 1944 for the same - The appeal is partly allowed, with the appellant being entitled to interest under Section 11BB at the prescribed rate from 15.02.2008 to 29.07.2008, but no interest on delayed payment of interest – The appeal is partly allowed [Read less]

Customs - Classification of mandarin orange concentrate - The appellant imported 'Mandarin (Kinow) Frozen Concentrate' and classified it under Tariff entry 2009 1100 (orange juice) - Department reclassified it under Tariff entry 2009 3900 (juice of any other single citrus fruit) - whether the orange/mandarin juice concentrate is classifiable under CTI 2009 1100 as per the appellants or under CTI 2009 3900 as per Revenue – HELD - The Customs Tariff makes a clear distinction between "Oranges" and "Mandarins (including tangerines and satsumas)" under Chapter 8, and this distinction extends to their juices under Chapter 20. ... [Read more]

Customs - Classification of mandarin orange concentrate - The appellant imported 'Mandarin (Kinow) Frozen Concentrate' and classified it under Tariff entry 2009 1100 (orange juice) - Department reclassified it under Tariff entry 2009 3900 (juice of any other single citrus fruit) - whether the orange/mandarin juice concentrate is classifiable under CTI 2009 1100 as per the appellants or under CTI 2009 3900 as per Revenue – HELD - The Customs Tariff makes a clear distinction between "Oranges" and "Mandarins (including tangerines and satsumas)" under Chapter 8, and this distinction extends to their juices under Chapter 20. The HSN and the Explanatory Notes also treat oranges and mandarins as distinct fruits and their juices accordingly. The application of the "common parlance" test cannot override the clear statutory scheme and the term "orange juice" under Heading 2009 must be read consistently with the meaning ascribed to "oranges" elsewhere in the Act - The mandarin orange concentrate cannot be classified under the "orange juice" sub-headings and must be classified under the residuary "juice of any other single citrus fruit" sub-heading - The appellant’s claim that Mandarin Frozen Concentrate is classifiable under Tariff Item 2009.11.00 as orange juice, is not acceptable. The classification of Mandarin Orange Juice concentrate under Tariff entry 2009 3900, by the impugned order is upheld – The appeal is answered in favour of the Revenue on the merits of classification and in favour of the appellants on the issue of limitation – The appeal is partly allowed - Extended period of limitation - The Department invoked the extended period of limitation under Section 28(4) of the Customs Act - HELD - The extended period of limitation cannot be invoked as there was no suppression or misdeclaration with intent to evade payment of duty. The appellant was a regular importer, and the classification adopted by the appellant was known to the Department. The demand arose from an audit objection, and there was no positive act by the appellant to evade payment of duty. When a demand is based on an audit objection, there cannot be any allegation of suppression. [Read less]

GST - Demand of interest on delayed GST Payment - Whether the petitioner is liable to pay interest on entire output tax liability or only on net cash liability - Amendment in Section 50 of CGST Act, 2017 with Retrospective Effect – HELD - In light of the amendment inserted in Section 50 of the CGST Act, 2017 with retrospective effect from 1st July, 2017, the petitioner is required to make interest payments for delayed GST only on net cash liability and not on the entire output tax liability - The matter was remitted back to the respondent authorities to decide it afresh after affording due opportunity of hearing to the ... [Read more]

GST - Demand of interest on delayed GST Payment - Whether the petitioner is liable to pay interest on entire output tax liability or only on net cash liability - Amendment in Section 50 of CGST Act, 2017 with Retrospective Effect – HELD - In light of the amendment inserted in Section 50 of the CGST Act, 2017 with retrospective effect from 1st July, 2017, the petitioner is required to make interest payments for delayed GST only on net cash liability and not on the entire output tax liability - The matter was remitted back to the respondent authorities to decide it afresh after affording due opportunity of hearing to the petitioner, strictly in accordance with the amendment. The impugned demand notices to the extent they sought to demand interest on the entire output tax liability without allowing the reduction of valid input tax credit available to the petitioner, is quashed – The petition is disposed of [Read less]

GST – Gujarat AAR - Eligibility of Input Tax Credit on goods and services used for setting up of Continuous Catenary Vulcanization (CCV) Tower - Applicant is setting up a new factory for manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables and has engaged a third party for engineering, procurement and construction (EPC) of the CCV tower - Whether the applicant is eligible to avail ITC on the inputs and input services used for construction of the CCV tower under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 – HELD - The CCV tower is an essential structural support for the ent... [Read more]

GST – Gujarat AAR - Eligibility of Input Tax Credit on goods and services used for setting up of Continuous Catenary Vulcanization (CCV) Tower - Applicant is setting up a new factory for manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables and has engaged a third party for engineering, procurement and construction (EPC) of the CCV tower - Whether the applicant is eligible to avail ITC on the inputs and input services used for construction of the CCV tower under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 – HELD - The CCV tower is an essential structural support for the entire CCV machine line used in the manufacture of insulated cables and thus qualifies as "plant and machinery" under the explanation to Section 17(5) of the CGST Act. The CCV tower, made of specialized steel structure, is necessary to support and erect the CCV lines while maintaining the structural integrity, stability, precision and overall efficiency of the manufacturing process – When the ITC sought is on construction of foundation and structural support relating to plant and machinery, it moves out of the ambit of section 17(5)(c) and (d) even if it is on their own account. This being the case, the applicant is eligible for availing the ITC on inputs and input services used lor construction of specialised steel CCV tower to support and erect the CCV lines at the factory of the applicant for manufacture of electrical cables – Since as per CBIC Circular No.219/13/2024-GST when ITC is not restricted even in respect of ducts and manhole used in optical fibre cables under section 17(5) of the CGST Act, 2017, the ITC, on inputs and input services used for construction of steel CCV tower to support and erect the CCV lines, for manufacture of insulated electrical cables also cannot be restricted - The applicant is eligible to avail the ITC on the inputs and input services used for setting up of the CCV tower at the factory for manufacture of insulated cables – Ordered accordingly [Read less]

Service Tax - Exemption to rent-a-car services provided to SEZ unit – Non-payment of service tax on the hire charges collected for providing cars for transportation of staff to SEZ unit - Show cause notice issued demanding service tax along with interest and penalties - Whether the service of providing cars on hire by the appellant to the SEZ unit is exempt from service tax – HELD - The Special Economic Zones (SEZ) Act, 2005 is a special legislation enacted with the objective of promoting exports, and as per Section 51 of the SEZ Act, its provisions have an overriding effect over any other inconsistent law, including t... [Read more]

Service Tax - Exemption to rent-a-car services provided to SEZ unit – Non-payment of service tax on the hire charges collected for providing cars for transportation of staff to SEZ unit - Show cause notice issued demanding service tax along with interest and penalties - Whether the service of providing cars on hire by the appellant to the SEZ unit is exempt from service tax – HELD - The Special Economic Zones (SEZ) Act, 2005 is a special legislation enacted with the objective of promoting exports, and as per Section 51 of the SEZ Act, its provisions have an overriding effect over any other inconsistent law, including the Finance Act. Further, Section 26(1)(e) of the SEZ Act grants a substantive and statutory exemption from service tax on all taxable services provided to a Developer or a Unit for carrying on authorised operations in an SEZ, and this exemption is not conditional upon the place where the services are rendered - The services provided by the appellant to the SEZ unit are intrinsically connected with the authorised operations of the SEZ unit, and hence, are exempt from service tax - The impugned order is set aside and the appeal is allowed [Read less]

GST – Gujarat AAR - Eligibility of Input Tax Credit on inputs and input services used for construction of concrete tower to support and erect the Vertical Continuous Vulcanization (VCV) lines for manufacture of Extra High Voltage (EHV) cables - The applicant is setting up a new manufacturing plant for making EHV cables using the Vertical Continuous Vulcanization (VCV) process. The VCV manufacturing line is required to be supported by a concrete structure in the form of a multi-storied VCV tower. The applicant has procured inputs and input services for the construction of this concrete tower and is seeking eligibility of ... [Read more]

GST – Gujarat AAR - Eligibility of Input Tax Credit on inputs and input services used for construction of concrete tower to support and erect the Vertical Continuous Vulcanization (VCV) lines for manufacture of Extra High Voltage (EHV) cables - The applicant is setting up a new manufacturing plant for making EHV cables using the Vertical Continuous Vulcanization (VCV) process. The VCV manufacturing line is required to be supported by a concrete structure in the form of a multi-storied VCV tower. The applicant has procured inputs and input services for the construction of this concrete tower and is seeking eligibility of input tax credit on the same - Whether the applicant is eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017 – HELD - The concrete structure in the form of VCV tower serves as a critical and essential structural support system to the entire VCV machine line for manufacture of EHV cables while maintaining the structural integrity, stability, precision and overall efficiency. The plant and machinery in terms of the explanation to Section 17 specifically includes foundation and structural support, and the exclusions from plant and machinery are land, building or any other civil structures, telecommunication towers, and pipelines laid outside the factory premises - The CBIC Circular No. 219/13/2024-GST clarified that input tax credit is not restricted in respect of ducts and manholes used in network of optical fiber cables as they are considered as plant and machinery. Similarly, the ITC on inputs and input services used for construction of concrete VCV tower to support and erect the VCV lines cannot be restricted - The applicant is eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017 – Ordered accordingly [Read less]

Customs - Imposition of penalty on partner and firm – Appellant-partner of the firm was imposed penalties under Sections 112(a) and 114AA of the Customs Act, 1962 in relation to the import of goods containing concealed SD memory cards - Whether the imposition of penalties on both the firm and the partner is legally valid – HELD - Once a penalty is levied on the firm, no separate penalty can be imposed on the partners, as the firm and the partners are not separate legal entities. The firm had already been penalized, and hence, imposing a separate penalty on the Appellant, as a partner, was not permissible in law - Howev... [Read more]

Customs - Imposition of penalty on partner and firm – Appellant-partner of the firm was imposed penalties under Sections 112(a) and 114AA of the Customs Act, 1962 in relation to the import of goods containing concealed SD memory cards - Whether the imposition of penalties on both the firm and the partner is legally valid – HELD - Once a penalty is levied on the firm, no separate penalty can be imposed on the partners, as the firm and the partners are not separate legal entities. The firm had already been penalized, and hence, imposing a separate penalty on the Appellant, as a partner, was not permissible in law - However, with respect to the penalty imposed under Section 114AA of the Customs Act, 1962, the same is upheld - The appellant had admitted to his involvement in the concealment of the SD memory cards and his role in the transaction, and therefore, the imposition of penalty under Section 114AA was justified. However, the penalty is reduced from Rs. 25 Lakhs to Rs. 2 Lakhs, as the appellant's admitted benefit from the transaction was only Rs. 1 Lakh, and the higher penalty is disproportionate - The appeal is partly allowed, with the penalty under Section 112(a) being set aside and the penalty under Section 114AA being reduced to Rs. 2 Lakhs - The appeal is partly allowed [Read less]

GST – Release of goods and vehicle under Sections 129 and 130 of CGST Act, 2017 - Appeal against the orders of the ld. Single Judge dismissing their interim applications seeking modification of the interim orders – Appellant seeking direction to release of the goods and vehicles subject to the appellant furnishing 25% of the demand raised and furnishing bank guarantee for the remaining 75% - Whether the ld. Single Judge was justified in dismissing the interim applications and not modifying the interim orders to allow release of the goods and vehicles on the same terms as in other similar matters, i.e. deposit of 200% o... [Read more]

GST – Release of goods and vehicle under Sections 129 and 130 of CGST Act, 2017 - Appeal against the orders of the ld. Single Judge dismissing their interim applications seeking modification of the interim orders – Appellant seeking direction to release of the goods and vehicles subject to the appellant furnishing 25% of the demand raised and furnishing bank guarantee for the remaining 75% - Whether the ld. Single Judge was justified in dismissing the interim applications and not modifying the interim orders to allow release of the goods and vehicles on the same terms as in other similar matters, i.e. deposit of 200% of the tax payable and execution of indemnity bond – HELD - The impugned interim orders passed by the ld. Single Judge is in accordance with law and did not require any modification - Once an order under Section 130 is passed and the title to the goods and the conveyance vests in the Government, the mechanism contemplated under Section 129 ceases to be available – The Co-ordinate Bench had held that once an order of confiscation is passed under Section 130 of the CGST Act, the mechanism contemplated under Section 129 ceases to be available and the adjudication with regard to confiscation, valuation, and determination of tax, penalty, interest and fine is governed exclusively by the provisions of Section 130 - In the present cases, since the orders of confiscation under Section 130 had already been passed, the release of the goods would be subject to the conditions laid down under Section 130. The impugned interim order passed by the learned Single Judge by imposing the conditions is in accordance with law and does not require any modification - The writ appeals are dismissed [Read less]

Central Excise - Valuation of Excisable Goods under Rule 7 of Central Excise Valuation Rules 2000 - Appellants are engaged in the manufacture of MS Ingots and clear goods directly as well as through their registered depot - Department ignored the actual transaction value and adopted the highest price of the week, raising a demand on the premise of "greatest aggregate value" - Whether Rule 7 of Central Excise Valuation Rules 2000 permits adoption of highest price in respect of actual transaction value – HELD - The Supreme Court in Ispat Industries case has held that the valuation of excisable goods must be determined base... [Read more]

Central Excise - Valuation of Excisable Goods under Rule 7 of Central Excise Valuation Rules 2000 - Appellants are engaged in the manufacture of MS Ingots and clear goods directly as well as through their registered depot - Department ignored the actual transaction value and adopted the highest price of the week, raising a demand on the premise of "greatest aggregate value" - Whether Rule 7 of Central Excise Valuation Rules 2000 permits adoption of highest price in respect of actual transaction value – HELD - The Supreme Court in Ispat Industries case has held that the valuation of excisable goods must be determined based on the actual transaction value and not on a hypothetical or artificial valuation. Rule 7 of the Central Excise Valuation Rules 2000 provides that the value shall be the normal transactional value at the depots. The expression "greatest aggregate quantity" refers to the price at which the maximum quantity is sold, not the highest price at which a smaller quantity is sold - The department's method of adopting the highest price arbitrarily and ignoring the bulk transactional values is legally unsustainable, as it is contrary to the settled law - The appellants have demonstrated uniform pricing at the factory and depot, with no price fluctuation or manipulation, and complete transparency in invoices. This satisfies the requirement of Rule 7 of the Central Excise Valuation Rules 2000 - The entire demand is based on recorded transactions, filed returns, and verified invoices, and there is no suppression, misstatement, or intent to evade. Therefore, the extended period and penalty are not sustainable - The impugned order is set aside and the appeal is allowed [Read less]

GST - Anti-profiteering, Passing on of benefit of additional ITC to homebuyers - DGAP alleged that the respondent failed to pass on the benefit of ITC by way of commensurate reduction in prices to homebuyers in its residential project - Whether the respondent had derived any additional benefit of ITC consequent to the introduction of GST – HELD - Upon the introduction of GST, the respondent became entitled to avail ITC on both goods and input services, unlike the pre-GST regime where credit was restricted. The comparison of ITC in the pre-GST and post-GST periods showed that an additional benefit accrued to the responden... [Read more]

GST - Anti-profiteering, Passing on of benefit of additional ITC to homebuyers - DGAP alleged that the respondent failed to pass on the benefit of ITC by way of commensurate reduction in prices to homebuyers in its residential project - Whether the respondent had derived any additional benefit of ITC consequent to the introduction of GST – HELD - Upon the introduction of GST, the respondent became entitled to avail ITC on both goods and input services, unlike the pre-GST regime where credit was restricted. The comparison of ITC in the pre-GST and post-GST periods showed that an additional benefit accrued to the respondent. In terms of Section 171 of the CGST Act 2017, such benefit is required to be passed on to the homebuyers by way of commensurate reduction in prices - The respondent's contention that ITC on input services should be excluded is rejected, as the benefit under GST includes ITC on both goods and services. The respondent had, at the time of implementation of GST, factored the anticipated ITC benefit into the pricing of flats, and to that extent, the benefit stood passed on through the pricing mechanism itself. However, the DGAP's revised computation and determined that the respondent profiteered a balance amount, which it is liable to pass on to the eligible recipients along with interest at 18% per annum - The respondent is directed to pass on the profiteered amount along with GST to the eligible homebuyers, with interest at the rate of 18% per annum from the date of collection of the higher amount till the date of refund. Penalty under Section 171(3A) of the CGST Act, 2017 is also attracted – Ordered accordingly [Read less]

GST - Legality of arrest under Section 69 of the CGST Act, 2017 - Non-supply of verbatim 'reasons to believe' recorded by Commissioner - Whether the non-recording of "reasons to believe" by the Commissioner and providing its copy to the arrestee renders the arrest illegal – HELD – The Section 69(1) of the CGST Act, 2017 empowers the Commissioner to record the 'reasons to believe' that a person has committed an offence specified under the Act which is punishable, and to authorize any officer to arrest such person. The requirement of recording 'reasons to believe' is a jurisdictional condition and the arrestee has a righ... [Read more]

GST - Legality of arrest under Section 69 of the CGST Act, 2017 - Non-supply of verbatim 'reasons to believe' recorded by Commissioner - Whether the non-recording of "reasons to believe" by the Commissioner and providing its copy to the arrestee renders the arrest illegal – HELD – The Section 69(1) of the CGST Act, 2017 empowers the Commissioner to record the 'reasons to believe' that a person has committed an offence specified under the Act which is punishable, and to authorize any officer to arrest such person. The requirement of recording 'reasons to believe' is a jurisdictional condition and the arrestee has a right to challenge the validity of the arrest by examining the 'reasons to believe'. While the Commissioner must record the 'reasons to believe' himself, the statute does not mandate that the verbatim copy of the 'reasons to believe' as signed by the Commissioner must be provided to the arrestee. The essence is that the 'reasons to believe' as recorded by the Commissioner, whether in the form of office notings or a separate document, must be furnished to the arrestee to enable him to challenge the arrest - In the present case, the 'reasons to believe' as recorded by the Additional Director General, who was authorized by the Commissioner, was substantially provided to the petitioner. The form and manner of providing the 'reasons to believe' is immaterial as long as the substance is conveyed to the arrestee, enabling him to exercise his right to challenge the arrest. The contention regarding non-supply of the verbatim copy as signed by the Commissioner is rejected as neither the provisions of the Act nor the judgments prescribe the mode and manner in which the "reasons to believe" is to be furnished - The petition is dismissed as devoid of any merits [Read less]

Service Tax - Demand based on the figures in Form 26AS – Dept considered entire turnover received by the appellant, as per the Form 26AS, chargeable to Service Tax - Whether the Department was correct in treating the entire amount reflected in the ITR/Form 26AS as being chargeable to Service Tax – HELD - The entire case of demand was built solely on the basis of the figures shown in the ITR and Form 26AS statement, which may not be accurate and conclusive evidence to levy Service Tax. It is further seen that the figures shown in Form-26AS statement differs with turnover declared in the Profit & Loss Account. The Depart... [Read more]

Service Tax - Demand based on the figures in Form 26AS – Dept considered entire turnover received by the appellant, as per the Form 26AS, chargeable to Service Tax - Whether the Department was correct in treating the entire amount reflected in the ITR/Form 26AS as being chargeable to Service Tax – HELD - The entire case of demand was built solely on the basis of the figures shown in the ITR and Form 26AS statement, which may not be accurate and conclusive evidence to levy Service Tax. It is further seen that the figures shown in Form-26AS statement differs with turnover declared in the Profit & Loss Account. The Department did not make any inquiry to ascertain the reason for the difference between the figures shown in the P&L Account and the Form 26AS statement - The demand raised by invoking the longer period of limitation is solely based upon the Profit & Loss Account and Form-26AS statement submitted with the Income Tax Authorities is not sustainable - The demand of Service Tax based on the figures in Form 26AS is set aside as the Department failed to judiciously ascertain whether the amounts were actually received for provision of service or for any other purpose – The appeal is allowed [Read less]

GST – West Bengal AAAR - Classification of Transportation services for goods exclusively by road to customers purchasing such goods from Electronic Commerce Operator (ECO) portals – Transportation services involving multiple transit points, namely Source Mother Hub, Destination Mother Hub, Delivery Hub and the end customer, including last-mile delivery through independent delivery partners - The impugned order by the AAR held that the proposed activity satisfies the essential features of GTA service and such GTA services, when provided to unregistered end-customers, are exempt from GST under Sl. No. 21A of Notification... [Read more]

GST – West Bengal AAAR - Classification of Transportation services for goods exclusively by road to customers purchasing such goods from Electronic Commerce Operator (ECO) portals – Transportation services involving multiple transit points, namely Source Mother Hub, Destination Mother Hub, Delivery Hub and the end customer, including last-mile delivery through independent delivery partners - The impugned order by the AAR held that the proposed activity satisfies the essential features of GTA service and such GTA services, when provided to unregistered end-customers, are exempt from GST under Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate) – Revenue filed instant appeal before Appellate Authority for Advance Ruling - Whether the activities undertaken by the respondent constitute an independent GTA service supplied to end customers or an integrated e-commerce fulfillment/courier service – HELD - The substance of the transaction must be examined to ascertain whether the end customer is in fact receiving an independent GTA service, or whether the activity forms part of an integrated e-commerce fulfilment, logistics or delivery arrangement. Mere contractual description of the respondent as a transporter or GTA, or the description of the amount recovered from the end customer as transportation charges/GT charges, cannot be treated as conclusive for determining classification under GST. The mere recovery of an amount described as “transportation charges” from the end customer cannot, by itself, establish that the end customer has received an independent GTA service - The end customer does not independently contract for transportation with the respondent, and the alleged movement thereafter on account of the end customer is only a contractual fiction and not supported by the real conduct of the parties. Consequently, the end customer cannot be treated as having received an independent Goods Transport Agency service from the respondent. The activities undertaken by the respondent, including hub-based collection, sorting, transshipment, tracking, last-mile delivery and doorstep handover, substantially resemble organised courier/logistics fulfillment service rather than conventional GTA service. Accordingly, the respondent's activity cannot be classified as GTA service supplied to unregistered end customers, and the exemption under Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended, is not available – Ordered accordingly - Requirement of a valid consignment note - Whether mere issuance of a document styled as a consignment note is determinative of classification – HELD - Issuance of a valid consignment note is an essential requirement for classification as GTA service. However, such condition cannot be read in isolation or treated as a mere matter of nomenclature. Classification under GST cannot depend solely upon the description adopted by the supplier in its documents. The true character of the service has to be determined from the substance of the transaction and the actual legal and commercial relationship between the parties. In the present case, the purported consignment note does not contain the relevant vehicle details, and the use of modes like two-wheelers or electric-operated vehicles which may not qualify as "goods carriage" is a relevant factor for determining whether the activity can be treated as conventional GTA service. [Read less]

Customs - Reassessment of Duty - Appellant claimed reassessment of B/E on the ground of short shipment of the imported goods - Whether the authorities were correct in rejecting the appellant's request for reassessment of the bill of entry under Sections 17(4) and 17(5) of the Customs Act, 1962 – HELD - The appellant had self-assessed the goods and cleared them on payment of customs duty in March 2019. The relevant documents like invoice and packing list available at the time of assessment showed the quantity as 30 numbers. The appellant claimed short shipment only in 2021, which was beyond the appealable period of 60 day... [Read more]

Customs - Reassessment of Duty - Appellant claimed reassessment of B/E on the ground of short shipment of the imported goods - Whether the authorities were correct in rejecting the appellant's request for reassessment of the bill of entry under Sections 17(4) and 17(5) of the Customs Act, 1962 – HELD - The appellant had self-assessed the goods and cleared them on payment of customs duty in March 2019. The relevant documents like invoice and packing list available at the time of assessment showed the quantity as 30 numbers. The appellant claimed short shipment only in 2021, which was beyond the appealable period of 60 days from the date of assessment – Further, in cases of self-assessment, the assessment order is appealable, and the importer cannot directly seek refund without challenging the assessment. The provisions of Section 17(5) for reassessment cannot be invoked in the present case as the self-assessment was not found to be incorrect at the time of clearance of goods. The appellant cannot through a refund claim reopen the assessment nor can reassessment be entertained beyond the appealable period - the Commissioner (Appeals) was right in rejecting the reassessment since the appellant had not challenged the originally self-assessed B/E and even if the present challenge is to be considered as an appeal before the Commissioner (Appeals), he was right in stating that it was beyond the condonable period as provided in the Act – The impugned order is confirmed and the appeal is dismissed [Read less]

GST – Cancellation of Registration for failure to file returns for a continuous period of six months – Non-speaking order - HELD - The impugned order of cancellation is not a speaking order and does not assign any reasons for the cancellation - The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality - The Proper Officer is obligated to r... [Read more]

GST – Cancellation of Registration for failure to file returns for a continuous period of six months – Non-speaking order - HELD - The impugned order of cancellation is not a speaking order and does not assign any reasons for the cancellation - The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality - The Proper Officer is obligated to record reasons in the cancellation order, as it is an order that brings adverse consequences for the registered person. The absence of reasons in the order is a violation of the statutory prescription and renders the order illegal. While the petitioner's delayed approach in challenging the order is noted, the vulnerability of the order due to statutory non-compliance outweighs the delay. The matter is remanded to the stage of issuance of show cause notice, and the petitioner is granted one month to either submit a reply or furnish all pending returns and make full payment of tax dues along with interest and penalty, upon which the Proper Officer shall pass an appropriate order in accordance with the procedure prescribed under the Section 29 of the CGST Act and Rule 22 of the CGST Rules – The petition is allowed [Read less]

Service Tax - Demand on works contract services and supply of tangible goods services - Works contract services rendered as a sub-contractor to the SEZ units - HELD - The services have been rendered by the appellant as a sub-contractor to the main contractor who are the authorised contractor to render services to the SEZ units. The only objection by the Revenue is that the appellant has provided services to contractors, who are neither SEZ developers nor SEZ units but the contractors for SEZ unit/developer - As per Notification No. 4/2004-S.T., dated 31-3-2004, the services provided by a sub-contractor to the main contract... [Read more]

Service Tax - Demand on works contract services and supply of tangible goods services - Works contract services rendered as a sub-contractor to the SEZ units - HELD - The services have been rendered by the appellant as a sub-contractor to the main contractor who are the authorised contractor to render services to the SEZ units. The only objection by the Revenue is that the appellant has provided services to contractors, who are neither SEZ developers nor SEZ units but the contractors for SEZ unit/developer - As per Notification No. 4/2004-S.T., dated 31-3-2004, the services provided by a sub-contractor to the main contractor, who is rendering services to the SEZ unit, are also eligible for exemption from service tax - Where the services are rendered to SEZ or a unit in SEZ, as long as it is rendered for consumption in a Special Economic Zone, the services are exempt - the impugned order to the extent of denying the benefit of the Notification only because the appellant happens to be a sub-contractor cannot be sustained and the same is set aside - The appeal is disposed of by way of remand - Whether the denial of cenvat credit by the Commissioner on the ground of belated claim and discrepancies in the invoices can be sustained - HELD - The ground of time limit for availing cenvat credit is rejected as there was no time limit during the disputed period. The cenvat credit should be allowed as long as the tax has been paid by the appellant on the service. However, the issue of eligibility of cenvat credit is remanded to the extent of verification of documents as the Commissioner had noted certain discrepancies in the documents - Whether the service tax demand on the works contract services rendered outside the SEZ can be sustained - HELD - The service tax demand is confirmed on the works contract services rendered outside the SEZ. The appellant is eligible to adjust the eligible cenvat credit against the balance service tax payable after verifying the payments made by the appellant. [Read less]

Service Tax - Availing of Rent-a-Cab Services – Non-payment of service tax to the tune of 40% of taxable amount on unabated value of services received in terms of Notification No. 30/2012-ST dated 20.06.2012 – Payment of service tax on being pointed out by CERA Audit - Whether the SCN is sustainable when the payment of service tax and interest by the appellant was before the issuance of the Show-Cause Notice – HELD - As per the provisions of Section 73(3) of the Finance Act, if any service tax has not been levied or paid or has been short-levied or short-paid, and the person chargeable with the service tax pays the a... [Read more]

Service Tax - Availing of Rent-a-Cab Services – Non-payment of service tax to the tune of 40% of taxable amount on unabated value of services received in terms of Notification No. 30/2012-ST dated 20.06.2012 – Payment of service tax on being pointed out by CERA Audit - Whether the SCN is sustainable when the payment of service tax and interest by the appellant was before the issuance of the Show-Cause Notice – HELD - As per the provisions of Section 73(3) of the Finance Act, if any service tax has not been levied or paid or has been short-levied or short-paid, and the person chargeable with the service tax pays the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and informs the Central Excise Officer of such payment in writing, the Central Excise Officer, on receipt of such information, shall not serve any notice under sub-section (1) in respect of the amount so paid - In the present case, the appellant had paid the service tax and interest before the issuance of the Show-Cause Notice and had informed the Department about the same. Therefore, the SCN is unsustainable in law, and any proceedings initiated on the basis of the said Show-Cause Notice is a nullity - The order passed by the Commissioner (Appeals) is set aside and the appeal is allowed [Read less]

Customs - Classification of Automatic Soap Dispenser - The appellant imported automatic soap dispensers and declared them under Customs Tariff Item (CTI) 9616 10 20 - Department classified them under CTI 8424 89 90 - Whether the automatic soap dispensers should be classified under CTI 8424 89 90 as claimed by the appellant or under CTI 9616 10 20 as claimed by the Department – HELD – The automatic soap dispenser imported by the appellant disperses liquid soap in the form of foam and does not spray liquids. Therefore, it is appropriately covered under CTI 8424 89 90 dealing with mechanical appliances for dispersing liqu... [Read more]

Customs - Classification of Automatic Soap Dispenser - The appellant imported automatic soap dispensers and declared them under Customs Tariff Item (CTI) 9616 10 20 - Department classified them under CTI 8424 89 90 - Whether the automatic soap dispensers should be classified under CTI 8424 89 90 as claimed by the appellant or under CTI 9616 10 20 as claimed by the Department – HELD – The automatic soap dispenser imported by the appellant disperses liquid soap in the form of foam and does not spray liquids. Therefore, it is appropriately covered under CTI 8424 89 90 dealing with mechanical appliances for dispersing liquids, and not under CTI 9616 10 20 which deals with sprays – The Chapter Heading 9616 deals with sprays of different kinds, including scent sprays and similar toiletry sprays. The words “dispersing” and “spraying” have both been used in Chapter Heding 8424. It is, therefore, clear that there is a difference between “disperser of liquids” and “spraying of liquids”. In such a situation, the product imported by the appellant cannot fall under Chapter Heading 9616 since it does not spray liquids. The Chapter Heading 9616 specifically excludes dispersing or spraying appliances covered under Chapter 8424 - The automatic soap dispensers imported by the appellant should be classified under CTI 8424 89 90 - The appeal is allowed [Read less]

Customs – Demand of IGST on import of Software in the CD, Invocation of extended period of limitation - The appellant is a PSU engaged in manufacturing of electronic products for defence purposes and imported a CD containing software claimed to be an integral part of the LRSAM system - Department invoked the extended period of limitation under section 28(4) of the Customs Act to demand IGST on the imported CD, alleging that the appellant had intentionally mis-declared the goods to evade duty – HELD - The Serial No. 21 of Notification No. 19/2019-Cus. dated 06.07.2019 provides that the specified goods when imported into... [Read more]

Customs – Demand of IGST on import of Software in the CD, Invocation of extended period of limitation - The appellant is a PSU engaged in manufacturing of electronic products for defence purposes and imported a CD containing software claimed to be an integral part of the LRSAM system - Department invoked the extended period of limitation under section 28(4) of the Customs Act to demand IGST on the imported CD, alleging that the appellant had intentionally mis-declared the goods to evade duty – HELD - The Serial No. 21 of Notification No. 19/2019-Cus. dated 06.07.2019 provides that the specified goods when imported into India by Ministry of Defence or Defence Forces or the Defence Public Sector Units or other Public Sector Units or any other entities for Defence Forces, shall be exempt from whole of duty of customs. Merely because the appellant had retained the CD and had not supplied it to the Ministry of Defence cannot be made a ground to deny exemption from payment of duty under the Exemption Notification – Further, merely because the software was embedded in the LRSAM system initially and the appellant later imported a CD containing the same software for providing support services, it cannot be said that the appellant had deliberately mis-represented or concealed any material facts with the intention to evade payment of duty. The appellant had clearly indicated the details of the imported CD in the B/E, the Department could have sought further information if it had any doubts. The extended period of limitation is not justified in the facts and circumstances of the case, as there was no evidence to show that the appellant had any intention to evade payment of duty - The demand raised for the extended period and the imposition of penalty under section 114A of the Customs Act is set aside - The appeal is allowed [Read less]

Service Tax - Taxability of service charges deducted by foreign banks from export proceeds - The appellant is a manufacturer and exporter of knitted garments. The foreign banks deducted their specified charges from the export sales proceeds due to the appellant before transferring the balance amount to the appellant's Indian bank account - Department alleged that such amounts deducted were the consideration paid by the appellant for the taxable service of "Banking and other Financial Services" provided by the foreign banks and hence the appellant was liable to pay service tax under reverse charge mechanism - Whether the am... [Read more]

Service Tax - Taxability of service charges deducted by foreign banks from export proceeds - The appellant is a manufacturer and exporter of knitted garments. The foreign banks deducted their specified charges from the export sales proceeds due to the appellant before transferring the balance amount to the appellant's Indian bank account - Department alleged that such amounts deducted were the consideration paid by the appellant for the taxable service of "Banking and other Financial Services" provided by the foreign banks and hence the appellant was liable to pay service tax under reverse charge mechanism - Whether the amounts deducted by foreign banks towards bank charges on export proceeds while transferring the same to the appellant's Indian bank account are exigible to service tax at the hands of the appellant under RCM - HELD - The demand is unsustainable as the department has merely made an assumption without any evidence to show the existence of a service provider and service recipient relationship between the appellant and the foreign banks. It is settled that demand cannot be based on assumptions and presumptions. Further, there is no privity of contract between the appellant and the foreign remitting bank, and the foreign bank acted on the instructions of the foreign buyer to fulfil the buyer's obligation to remit payment. The Tribunal relied on its own prior rulings and held that the liability, if any, would rest with the Indian bank as the entity receiving the "remittance service" from the foreign bank, and not with the appellant exporter - The impugned order is set aside and the appeal is allowed [Read less]

Customs - Recovery of duty drawback - Applicability of recovery provisions under Drawback Rules, 1995 after repeal – HELD - The recovery of duty drawback amount under Rule 16 and Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is not maintainable after the enactment of the Customs and Central Excise Duties Drawback Rules, 2017 - The 1995 Drawback Rules ceased to operate with the commencement of the 2017 Drawback Rules, and the savings clause under Rule 20(2) of the 2017 Drawback Rules does not cover the proceedings under rule 16 or rule 16A of the 1995 Drawback Rules. The applicability... [Read more]

Customs - Recovery of duty drawback - Applicability of recovery provisions under Drawback Rules, 1995 after repeal – HELD - The recovery of duty drawback amount under Rule 16 and Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is not maintainable after the enactment of the Customs and Central Excise Duties Drawback Rules, 2017 - The 1995 Drawback Rules ceased to operate with the commencement of the 2017 Drawback Rules, and the savings clause under Rule 20(2) of the 2017 Drawback Rules does not cover the proceedings under rule 16 or rule 16A of the 1995 Drawback Rules. The applicability of the General Clauses Act would require an examination of the language of the new enactment to see whether it expresses a different intention from the earlier Act. The 2017 Drawback Rules have expressed a different intention by not saving the recovery provisions under Rule 16 and Rule 16A of the 1995 Drawback Rules, and hence, the Department cannot resort to these rules for recovering the drawback amount from the appellant - The impugned order is set aside and the appeal is allowed - Confiscation of goods and imposition of penalty – HELD - The goods could not have been confiscated under Section 113 of the Customs Act as it applies to goods which are to be taken out of India and not to goods which have already been taken out of India. As the goods could not have been confiscated, the penalty under section 114 of the Customs Act could not have been imposed upon the appellant. The penalty under section 114AA of the Customs Act could not have been imposed upon the appellant as the appellant had not knowingly or intentionally made, signed or used any declaration, statement or document which is false or incorrect in the transaction of any business for the purposes of the Customs Act. The penalty imposed on the appellant and its partner under sections 114 and 114AA of the Customs Act is set aside. [Read less]

GST - Ex parte order, Communication of notice addressed to email-id which could not be accessed as it was a paid e-mail account – Cancellation of registration due to discrepancy in Form ASMT-10 and petitioner was required to furnish export invoices and also reconciliation statement of export invoices and corresponding FIRC / BRC - Petitioner submitted that he was unable to access the email account where the notice was sent and was not able to reply to the show cause notice – HELD – The petitioner is in possession of the relevant documents and would meet the grounds raised in the show cause notice - The impugned order... [Read more]

GST - Ex parte order, Communication of notice addressed to email-id which could not be accessed as it was a paid e-mail account – Cancellation of registration due to discrepancy in Form ASMT-10 and petitioner was required to furnish export invoices and also reconciliation statement of export invoices and corresponding FIRC / BRC - Petitioner submitted that he was unable to access the email account where the notice was sent and was not able to reply to the show cause notice – HELD – The petitioner is in possession of the relevant documents and would meet the grounds raised in the show cause notice - The impugned order is set aside and the matter is remitted back to the stage of reply to the show cause notice, considering the petitioner's submission that he has relevant documents to reconcile the export invoices and corresponding FIRC/BRC. The respondent to restore the petitioner's GST registration forthwith – The petition is disposed of [Read less]

GST - Refund Claim for Export of Services – Providing of software development and related services to its associated enterprises located outside India – Rejection of refund claim on the ground that the petitioner was providing intermediary services, and not export of services - Whether the petitioner was providing export of services and was eligible for the refund claim, or whether the respondent authority was justified in rejecting the refund claim on the ground that the petitioner was providing intermediary services – HELD - The impugned order rejecting the refund claim was non-speaking and did not consider the sub... [Read more]

GST - Refund Claim for Export of Services – Providing of software development and related services to its associated enterprises located outside India – Rejection of refund claim on the ground that the petitioner was providing intermediary services, and not export of services - Whether the petitioner was providing export of services and was eligible for the refund claim, or whether the respondent authority was justified in rejecting the refund claim on the ground that the petitioner was providing intermediary services – HELD - The impugned order rejecting the refund claim was non-speaking and did not consider the submissions made by the petitioner. The petitioner had contended that it was not a broker or an agent of any of the foreign entities and was providing services to the foreign entities on a principal-to-principal basis, and therefore the services provided by the petitioner would qualify as export of services under Section 2(6) of the IGST Act - The respondent authority had failed to record any specific finding on these contentions before rejecting the refund claim. The impugned order is quashed and matter is remanded back to adjudicating authority to issue a fresh show-cause notice, grant a personal hearing to the petitioner, and pass a fresh and reasoned order after considering the submissions and documents of the petitioner - The petition is disposed of [Read less]

GST - Odisha AAR - Classification of supply – Classification of supply of user license service - Supply of Coursera User License to Odisha Skill Development Authority (OSDA) - Whether the supply is classifiable under Heading 9992 (Education Service), Heading 9973 (Leasing or Rental Services), or Heading 9984 (Online Content Services) – HELD - The supply is not classifiable under Heading 9992 (Education Service) as the applicant does not provide any education or training service, but only facilitates access to third-party educational content on Coursera's proprietary platform. The supply is more appropriately classifiab... [Read more]

GST - Odisha AAR - Classification of supply – Classification of supply of user license service - Supply of Coursera User License to Odisha Skill Development Authority (OSDA) - Whether the supply is classifiable under Heading 9992 (Education Service), Heading 9973 (Leasing or Rental Services), or Heading 9984 (Online Content Services) – HELD - The supply is not classifiable under Heading 9992 (Education Service) as the applicant does not provide any education or training service, but only facilitates access to third-party educational content on Coursera's proprietary platform. The supply is more appropriately classifiable under Heading 9973, specifically under SAC 997331 ("Licensing services for the right to use computer software and databases"), as it involves the grant of a non-exclusive right to access Coursera's intellectual property-based platform - The specific classification under Heading 9973 is preferred over the more general Heading 9984 (Online Content Services). The exemption under Sl. No. 72 of Notification No. 12/2017-Central Tax (Rate) is not applicable as the supply is not classifiable under Heading 9992 (Education Service), OSDA is not the "State Government", and the supply does not qualify as a "training programme" in the strict sense of the term. The applicant correctly charged GST at the rate of 18% on the supply of Coursera User Licenses to OSDA – Ordered accordingly [Read less]

GST - Demand Order and Recovery - Petitioner challenge the demand order raised under Section 74-A(1) read with Section 74-A(5)(ii) of the CGST Act, 2017 and the recovery proceedings initiated pursuant to the said demand order – HELD - The demand order is found to be illegal as no valid show cause notice was issued to the petitioner prior to raising the demand, as required under Section 74A of the GST Act. Additionally, the recovery made by debiting the input tax credit lying in the petitioner's Electronic Cash Ledger, is illegal as it was made on the same day as the passing of the demand order, in violation of Section 78... [Read more]

GST - Demand Order and Recovery - Petitioner challenge the demand order raised under Section 74-A(1) read with Section 74-A(5)(ii) of the CGST Act, 2017 and the recovery proceedings initiated pursuant to the said demand order – HELD - The demand order is found to be illegal as no valid show cause notice was issued to the petitioner prior to raising the demand, as required under Section 74A of the GST Act. Additionally, the recovery made by debiting the input tax credit lying in the petitioner's Electronic Cash Ledger, is illegal as it was made on the same day as the passing of the demand order, in violation of Section 78 of the Act, which grants the assessee a period of three months to deposit the demanded tax. The proviso to Section 78 allows the proper officer to require the assessee to make the payment within a period less than three months, but only after recording reasons in writing, which was not done in the present case. Accordingly, the recovery made was also held to be illegal - The impugned demand order and the recovery made from the petitioner are set aside – The petition is disposed of - Show Cause Notice - Proper Service - The High Court held that the show cause notice was not validly served upon the petitioner as the mode of service through affixation was resorted to without first exhausting the other valid modes of service under Section 169 of the CGST Act, 2017. As per Section 74A of the Act, before any demand can be raised against an assessee, he is required to be served with a valid show cause notice, which is in line with the principles of natural justice. Since the notice was not validly served, the impugned demand order is declared to be illegal. [Read less]

Customs - Customs Broker's Liability for Overvalued Export Goods - Failure by Customs Broker to exercise due diligence - Whether the Customs Broker is liable for penalty under Section 114(iii) of the Customs Act, 1962 for failure to exercise due diligence in accepting export documents from an unauthorized person and for not verifying the exporter's address, which resulted in the export of grossly overvalued goods - Whether the customs broker can be held liable for misdeclaration or overvaluation of export goods, and Whether the CHA is obligated to physically verify the exporter's address under the Customs Broker Licensing ... [Read more]

Customs - Customs Broker's Liability for Overvalued Export Goods - Failure by Customs Broker to exercise due diligence - Whether the Customs Broker is liable for penalty under Section 114(iii) of the Customs Act, 1962 for failure to exercise due diligence in accepting export documents from an unauthorized person and for not verifying the exporter's address, which resulted in the export of grossly overvalued goods - Whether the customs broker can be held liable for misdeclaration or overvaluation of export goods, and Whether the CHA is obligated to physically verify the exporter's address under the Customs Broker Licensing Regulations, 2018 – HELD – The liability for misdeclaration or overvaluation of export goods lies with the exporter, and the Customs broker cannot be held responsible for the same. The customs broker's duty is limited to verifying the authenticity of documents and information provided by the client, not the accuracy of the declared value. The adjudicating authority failed to consider the binding precedent in World Cargo Movers v. Commissioner of Customs, which held that it is not the job of the customs broker to compare the invoice price with market price - Regarding the physical verification of the exporter's address, the Customs Broker Licensing Regulations, 2018 do not mandate physical verification, and only require the customs broker to verify the client's identity and functioning at the declared address using reliable documents and information - The Customs Broker is not required to physically verify the premises of the exporter or compare the declared value with the market price. The adjudicating authority failed to consider the submissions made by the Customs Broker and the binding precedents cited by him. The impugned order is set aside and the matter is remanded back to the adjudicating authority to take a fresh reasoned decision after affording due opportunity to the Customs Broker and considering all the material on record – The petition is disposed of [Read less]

Karnataka Sales Tax Act, 1957 - Rectification of assessment order and entitlement to interest on delayed refund in view of deemed rectification – Levy of tax at the rate of 20% on the sale of coconut oil under a brand name. The petitioner had challenged the amendment imposing the higher tax rate, which was initially struck down by the High Court but later upheld by the Division Bench - The petitioner filed a rectification application seeking modification of the assessment orders, which was not rejected within 60 days and hence deemed to have been allowed - Whether the petitioner is entitled to interest on the delayed ref... [Read more]

Karnataka Sales Tax Act, 1957 - Rectification of assessment order and entitlement to interest on delayed refund in view of deemed rectification – Levy of tax at the rate of 20% on the sale of coconut oil under a brand name. The petitioner had challenged the amendment imposing the higher tax rate, which was initially struck down by the High Court but later upheld by the Division Bench - The petitioner filed a rectification application seeking modification of the assessment orders, which was not rejected within 60 days and hence deemed to have been allowed - Whether the petitioner is entitled to interest on the delayed refund and whether the subsequent proceedings are valid in light of the deemed rectification – HELD – The rectification application stood deemed to have been allowed upon expiry of 60 days as per the second proviso to Section 25-A(1) of the KST Act - Though it may be open to the Assessing Authority to pass more than one rectification order, the same must be in conformity with the statutory provisions. Once the rectification application stood allowed by virtue of the legal fiction, and the deemed rectification had come into force, the Assessing Authority could not have passed another rectification order. Consequently, the rectification order and all subsequent proceedings, including the revisional order, fresh assessment order, refund notice and appellate order, are without jurisdiction and non-est in the eye of law. The petitioner's right to interest under Section 13-A of the KST Act for the delay in granting the refund, i.e., from 22.06.2010 to 09.01.2012, could not be defeated by the subsequent invalid proceedings - The respondents are directed to pay interest at the rate of 6% per annum for the period of delay - The order of the Tribunal is set aside and the Sales Tax Revision Petition is allowed [Read less]

Service Tax - Taxability of transportation services under the Finance Act, 1994 - The petitioner was engaged in the business of transportation of goods by road, which was specifically excluded from the definition of 'taxable service' under Section 66D of the Finance Act, 1994 – Dept treated the entire receipts of the petitioner as receipts from 'taxable service' and proceeded to demand service tax along with interest and penalty – HELD - The demand of service tax, interest and penalty imposed on the petitioner is found to be contrary to the provisions of the Finance Act, 1994. The Adjudicating authority failed to consi... [Read more]

Service Tax - Taxability of transportation services under the Finance Act, 1994 - The petitioner was engaged in the business of transportation of goods by road, which was specifically excluded from the definition of 'taxable service' under Section 66D of the Finance Act, 1994 – Dept treated the entire receipts of the petitioner as receipts from 'taxable service' and proceeded to demand service tax along with interest and penalty – HELD - The demand of service tax, interest and penalty imposed on the petitioner is found to be contrary to the provisions of the Finance Act, 1994. The Adjudicating authority failed to consider that the services provided by the petitioner were specifically excluded from the levy of service tax under Section 66D(i)(A) of the Finance Act, 1994. The Adjudicating authority could not have treated the entire receipts of the petitioner as receipts from 'taxable service' without any evidence that the services provided were not covered under the exclusion provided in Section 66D(i)(A) – Further, the invocation of the extended period of limitation under Section 73(1) is also invalid as there was no finding by the Addl. Commissioner that the case of the petitioner fell under any of the conditions specified in the proviso to Section 73(1), which is a pre-requisite for invoking the extended period of limitation – For the Revenue to invoke the extended period of limitation under Section 73(1), there must be a conclusive finding that the petitioner had wilfully and deliberately evaded or neglected to pay the service tax, which was not evident from the impugned order. The revenue authorities had assumed jurisdiction under Section 73(1) without fulfilling the necessary pre-conditions prescribed by the statute, and therefore, their assumption of jurisdiction was contrary to the provisions of the law - The demand of service tax, interest and penalty imposed on the petitioner is set aside and the writ petition is allowed - Maintainability of writ petition - The Writ Court can interfere any arbitrary action notwithstanding the availability of alternative remedy when the authorities acts within jurisdiction or in exercise of jurisdiction or there is a procedural irregularity or were the order is high handed and is palpably illegal order in as much the same would amount to violation of Article 14 of the Constitution of India - In an ordinary course of proceedings seeking recovery of tax demanded, the normal course would be to avail of the statutory remedies. However, before the authorities invoke their jurisdiction under section 73(1), it is the mandate of the statute that the authorities must come to a specific conclusion that the jurisdiction conferred on the revenue authorities under Section 73(1) can be invoked in the facts and circumstances of the present case - While demand and recovery of taxes as ordinarily prescribed under the provisions of the Act requires careful consideration of the facts and circumstances and satisfaction of all the parameters prescribed upon, the demand and recovery under the extended period of limitation under section 73(1) being an exception to the General Rule, requires a higher degree of responsibility and diligence on the part of the revenue authorities before they can proceed to invoke the powers conferred under section 73(1) - It is under these circumstances that notwithstanding the availability of statutory alternative remedy, this Court considers it an appropriate case to invoke its jurisdiction under Article 226 to interfere with the impugned order in original and to set aside and quash the order-in-original. [Read less]

GST – Liability to collect Tax Collection at Source (TCS) on supplies made through e-commerce portal, Applicability of Section 17(2) and Section 52 of CGST Act, 2017, Invocation of Section 74 – DGGI issued a show cause notice under Section 74 alleging violation of Sections 52 and 17(2) of the CGST Act and proposed tax demand – Applicability of Section 52 of CGST Act - Whether the petitioner, being an e-commerce operator, is liable to collect TCS under Section 52 of the CGST Act – HELD – In terms of Section 52, the TCS obligation arises only when the e-commerce operator collects payment/consideration with respect ... [Read more]

GST – Liability to collect Tax Collection at Source (TCS) on supplies made through e-commerce portal, Applicability of Section 17(2) and Section 52 of CGST Act, 2017, Invocation of Section 74 – DGGI issued a show cause notice under Section 74 alleging violation of Sections 52 and 17(2) of the CGST Act and proposed tax demand – Applicability of Section 52 of CGST Act - Whether the petitioner, being an e-commerce operator, is liable to collect TCS under Section 52 of the CGST Act – HELD – In terms of Section 52, the TCS obligation arises only when the e-commerce operator collects payment/consideration with respect to supplies made through its platform. Section 52 which provides for the e-commerce operator to collect TCS would not apply unless payment / consideration is collected. The petitioner does not collect any payment/consideration with respect to the supplies in question and hence, the provisions of Section 52 are not applicable to the petitioner – Further, there is no provision in the CGST Act to treat the petitioner as an assessee in default and also, there is no provision to issue a notice to the person who has not collected the tax to pay such tax. The impugned SCN alleging that the petitioner had violated Section 52 of the CGST Act, since they failed to collect TCS @ 1% of the net value of the taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator is illegal, arbitrary and without jurisdiction or authority of law and contrary to the provisions of the CGST and the same is quashed – The writ petition is allowed - Promotional activity vs Exempt supply - Applicability of Section 17(2) of CGST Act - Whether the petitioner has violated Section 17(2) of the CGST Act by failing to restrict availment of ITC – HELD – The Section 17(2) restricts exempt supplies which would cover only services attracting nil rate of tax or are wholly exempt from tax. Doing promotional activities which benefit the petitioner and other suppliers cannot be construed or treated as exempt supplies and consequently, in the absence of any specific exemption or the services being levied with “nil” rate of tax, the same cannot qualify as exempt supply leading to the sole conclusion that Section 17(2) would not be applicable to the facts of the instant case - The activities undertaken by the petitioner, i.e., promotion of its own platform along with the services provided therein, are not 'free supplies' and are undertaken for the benefit of the petitioner's own business. The mere non-charging of consideration to enhance footfall on the online portal cannot be construed as 'free or non-taxable or exempt supplies' so as to attract Section 17(2) – The provisions of Section 17(2) would be applicable only to a registered person using goods or services or both partly for effecting taxable supplies including zero rated supplies and partly for effecting exempt supplies. In the absence of any material to show that the petitioner is partly effecting taxable supplies and partly effecting exempt supplies, Section 17(2) has no application. The impugned show cause notice alleging violation of Section 17(2) is illegal and without jurisdiction - Whether the impugned show cause notice issued under Section 74 of the CGST Act is valid and maintainable – HELD - The foundational jurisdictional facts to trigger/invoke Section 74 of the CGST Act, i.e., existence of wilful suppression to evade/avoid payment of GST, are not satisfied in the present case. In the instant case, Section 74 could not have been invoked for any non-compliance of Section 52 as the transactions on which demand is sought to be raised are not the supplies of the petitioner. It is the sellers / service providers who undertook such supplies that are required to discharge GST - Mere omission to mention the value of services correctly in the returns and/or apply the correct GST rate would not amount to wilful suppression, in the absence of any intention to evade payment of tax. Further, when the facts are known to both the parties and the issue of classification itself is in a state of flux, the assessee cannot be attributed with any suppression or misstatement of facts with intent to evade duty. The impugned show cause notice fails to satisfy the mandatory requirements and parameters for invocation of Section 74(1) of the CGST Act. Accordingly, the impugned show cause notice is quashed. [Read less]