More Judgements

2021-VIL-377-BOM  | High Court SGST

GST - fraudulent availment of ITC on the basis of mere documents without receipt of any goods – arrest under Section 69 of the CGST Act for commission of offences punishable under Section 132(1)(b), (c) of the CGST Act – Bail petition - HELD - the Court is not inclined to interfere with the investigation at this stage, as that may tantamount to foreclosing the out-come to the investigation - considering the magnitude and the scale of the alleged fraud involving public money and the critical stage, when investigation to get hold of the mastermind and other key conspirators as well as the modus operandi is underway in wh... [Read more]

GST - fraudulent availment of ITC on the basis of mere documents without receipt of any goods – arrest under Section 69 of the CGST Act for commission of offences punishable under Section 132(1)(b), (c) of the CGST Act – Bail petition - HELD - the Court is not inclined to interfere with the investigation at this stage, as that may tantamount to foreclosing the out-come to the investigation - considering the magnitude and the scale of the alleged fraud involving public money and the critical stage, when investigation to get hold of the mastermind and other key conspirators as well as the modus operandi is underway in which Petitioner is alleged to be an active participant, at this stage, the Court is not inclined to indulge into the request for grant of bail - the prayer for bail is rejected [Read less]

2021-VIL-379-BOM  | High Court SGST

GST - Commission of offences under sections 132(1)(a),(c),(d) and (f) punishable under clause (i) of section 132(1) of CGST Act - Arrest in exercise of powers under section 69 of the CGST Act - arrest for alleged non-payment of GST and irregular availment of Input Tax Credit – HELD – the petitioners had responded to the summons and attended the dates, in the circumstances, there could not have been justification to arrest the petitioner - there had not been any evidence about petitioner’s tampering with the documents or trying to influence the witnesses, observing that mere allegation is not sufficient - petitioner h... [Read more]

GST - Commission of offences under sections 132(1)(a),(c),(d) and (f) punishable under clause (i) of section 132(1) of CGST Act - Arrest in exercise of powers under section 69 of the CGST Act - arrest for alleged non-payment of GST and irregular availment of Input Tax Credit – HELD – the petitioners had responded to the summons and attended the dates, in the circumstances, there could not have been justification to arrest the petitioner - there had not been any evidence about petitioner’s tampering with the documents or trying to influence the witnesses, observing that mere allegation is not sufficient - petitioner has filed an affidavit that he has already paid an amount of Rs.45,00,000/- and that he would deposit Rs.5,00,00,000/- under protest towards the alleged amount of tax evasion to demonstrate bona fides and that it would be subject to, adjudication of the amounts alleged and rights and remedies of the petitioner. Another additional affidavit stating that in addition to aforesaid amount aggregating to Rs.5.45 Crore, further amount of Rs.55 Lakh will be deposited. Entire aggregate amount of Rs.6 Crore would be deposited within a period of fortnight which would be under protest and subject to adjudication – the petitioner is enlarged on conditional bail [Read less]

2021-VIL-375-BOM  | High Court VAT

Suo Motu Public Interest Litigation - interim orders passed by the Bombay High Court or the courts and tribunals subordinate to this Court – extension of protective interim order granted on April 16, 2021 till June 30, 2021 or until further orders whichever is earlier

2021-VIL-371-MAD  | High Court SGST

GST – Bail – Ongoing investigation - Petitioner received commission for selling details of GST registration pertaining to defunct companies to other individuals who utilised the same for the purpose of raising fake GST invoices – whether the act of the petitioner attracts section 132(5) of the CGST Act and is a cognizable and non-bailable offence – HELD - the petitioner was acting as middleman is not disputed - the petitioner was indulged in procuring the credentials of the defunct companies at a price and passing them over to other individuals for higher amount – it is accepted by the petitioner himself that he ... [Read more]

GST – Bail – Ongoing investigation - Petitioner received commission for selling details of GST registration pertaining to defunct companies to other individuals who utilised the same for the purpose of raising fake GST invoices – whether the act of the petitioner attracts section 132(5) of the CGST Act and is a cognizable and non-bailable offence – HELD - the petitioner was acting as middleman is not disputed - the petitioner was indulged in procuring the credentials of the defunct companies at a price and passing them over to other individuals for higher amount – it is accepted by the petitioner himself that he had procured the credentials and given it to other persons for being utilised for creating fake/fraudulent transactions - the petitioner was well aware that the said credentials would be used for fake and fraudulent transactions. The petitioner cannot feign ignorance on this aspect. Once the petitioner, on clear and proper thinking, has obtained the credentials of defunct firms and handed over the same to the other persons for being misused for cheating the exchequer, the petitioner cannot absolve himself from the said offence by holding that he is only a middleman - the Hon'ble Supreme Court has cautioned the High Courts against grant of bail, where probe is yet to be completed, more so in cases involving GST - The case is at preliminary stage and enlarging the petitioner at this point of time on bail would be detrimental to investigation. Further, without petitioner role as middleman, the crime could not have been perpetrated. The nexus of very many persons within the administrative framework could not be ruled out and a proper and full-fledged investigation is necessary to unearth the larger conspiracy involved - the Court is not inclined to grant bail to the petitioner - the petition is dismissed [Read less]

2021-VIL-374-MAD-CE  | High Court CENTRAL EXCISE

Central Excise - Petitioner procured Tea, Herbs & Spices and permitted food colours and mixed together to make product “Herbal Sherbat Granules” – petitioner claims the product is only a flavoured tea and not a ready to drink or instant tea item - show cause notice seeking to classify the impugned product under sub-heading No.2101 2090 – maintainability of the writ petition in view of efficacious appellate remedy – HELD - the petitioner has not exhausted the appeal remedy provided under the Act - if an efficacious Appellate Remedy is available before the Appellate Tribunal, then the High Court need not go into t... [Read more]

Central Excise - Petitioner procured Tea, Herbs & Spices and permitted food colours and mixed together to make product “Herbal Sherbat Granules” – petitioner claims the product is only a flavoured tea and not a ready to drink or instant tea item - show cause notice seeking to classify the impugned product under sub-heading No.2101 2090 – maintainability of the writ petition in view of efficacious appellate remedy – HELD - the petitioner has not exhausted the appeal remedy provided under the Act - if an efficacious Appellate Remedy is available before the Appellate Tribunal, then the High Court need not go into those facts unnecessarily and the institutional respects are to be maintained and the statutory appeals are to be exhausted in all circumstances. The Tribunal has got powers to adjudicate all the factual as well as the legal grounds raised by the respective parties. More so, the Tribunal is empowered to consider the merits with reference to the documents as well as the evidences. Such an exercise cannot be done by the High Court under Article 226 of the Constitution of India - the petitioners are bound to exhaust the Appellate remedy as contemplated under Section 35-B of the Central Excise Act, 1944 - the writ petition is dismissed [Read less]

2021-VIL-378-MAD-CU  | High Court CUSTOMS

Customs – Refund of SAD - Import of Latex Gloves – After clearance, goods were packed in pouches after undergoing a process of sterlization and were sold in retail market – Assessees filed applications for refund of Special Additional Duty of Customs (SAD) paid by them by relying on a Notification No.102/2007 – Original Authority had sanctioned refund – SCN proposing to recovery of sanctioned amount pertaining to refund claims under Section 28(4) of the Customs Act, to assessee on ground that assessee had not fulfilled conditions specified in Paragraph No.2 of Notification – Tribunal accepted stand taken by ass... [Read more]

Customs – Refund of SAD - Import of Latex Gloves – After clearance, goods were packed in pouches after undergoing a process of sterlization and were sold in retail market – Assessees filed applications for refund of Special Additional Duty of Customs (SAD) paid by them by relying on a Notification No.102/2007 – Original Authority had sanctioned refund – SCN proposing to recovery of sanctioned amount pertaining to refund claims under Section 28(4) of the Customs Act, to assessee on ground that assessee had not fulfilled conditions specified in Paragraph No.2 of Notification – Tribunal accepted stand taken by assessees by holding that assessees are entitled to refund of SAD and set aside order passed by original Authority – Revenue in appeal – HELD - Courts have to read exemption notification as such without substituting words or phrases – Tribunal has not considered correctness of order passed by Adjudicating Authority qua applicability of Circular, which explains intention of Notification – Tribunal found fault with Adjudicating Authority in not granting relief in respect of imports after 11-7-2014 – While granting relief to assessees, Tribunal proceeded on basis that earlier Notification No.56/1998 required imported goods to be sold “as such” and it had a more stringent condition and there is no such requirement in Notification No.102/2007 – Finding of Tribunal appears is not sustainable, as issue in regard to either Notification No.102/2007 was in supersession of Notification No.56/1998 was required to be considered and decided – Order passed by Tribunal set aside and matter remanded back to Commissioner to consider issue afresh – Refund applications should stand restored to file of Assistant Commissioner to be taken up for fresh consideration after Commissioner completes de novo adjudication based on order of remand – revenue appeal is allowed - Commissioner challenged order passed by Tribunal – Assistant Commissioner challenged order passed in writ petitions filed by assessees prayed to direct Revenue to sanction refund as claimed by assessees – Whether writ petitions filed by assessees challenging orders of Assistant Commissioner rejecting refund claim are maintainable – HELD – As against order in original passed by Assistant Commissioner, assessees had an effective alternate remedy of appeal before Commissioner (Appeals) – Assessees did not file appeal before Commissioner (Appeals) within time permitted and had challenged order in original after a period of three years by filing writ petitions in year 2019-2020 – Assessees explained that they have submitted representations to Assistant Commissioner to reconsider his order in original in light of impugned order passed by Tribunal – Single Bench found explanation offered by assessees to be reasonable and entertained writ petitions against order in original – Assistant Commissioner does not have power to review his own orders – Explanation offered by assessees needs to be outrightly rejected – Writ petitions filed by assessees are held to be not maintainable and accordingly, they are dismissed [Read less]

2021-VIL-365-MAD-CU  | High Court CUSTOMS

Customs - EPCG Scheme – document evidencing export - Fulfillment of export obligation through third party export - non-mention of its EPCG numbers on the shipping bills - challenge to rejection of applications filed by the petitioner seeking amendment of its shipping bills - whether the mention of the EPCG licence number on the shipping bill was mandatory – HELD – the factum of export can be done by the petitioner by any number of methods, including confirmations from said third party, correspondences and other documents at its disposal, among others – no doubt, it is for the petitioner to establish that its export... [Read more]

Customs - EPCG Scheme – document evidencing export - Fulfillment of export obligation through third party export - non-mention of its EPCG numbers on the shipping bills - challenge to rejection of applications filed by the petitioner seeking amendment of its shipping bills - whether the mention of the EPCG licence number on the shipping bill was mandatory – HELD – the factum of export can be done by the petitioner by any number of methods, including confirmations from said third party, correspondences and other documents at its disposal, among others – no doubt, it is for the petitioner to establish that its exports through third party have, in fact, taken place. However, such opportunity does not appear to have been extended to the petitioner - para 5.7.1 of the Export Promotion Capital Goods (EPCG) Scheme requires the mention of both the name of the supporting manufacturer as well as the EPCG authorization number on the shipping bill and in this case both are absent. However, the requirements, though mandatory, are capable of being satisfied constructively as well and non-mention is not fatal to the claim of concessional rate of duty - The impugned order is a non-speaking order that has not adverted to the justification put forth by the petitioner and is hence set aside – the writ petition is allowed by remand [Read less]

2021-VIL-184-CESTAT-AHM-CE  | CESTAT CENTRAL EXCISE

Central Excise - Cenvat Credit – Renting of storage space outside the factory premises for storing the imported inputs – appellant did not obtained permission under Rule 8 of CCR, 2004 warehouses outside the factory - denial of credit on the ground that this service has no nexus with the manufacture of final product for the reason that the said warehouse/ godown are located out of the appellant’s factory premises – invocation of extended period - scope of SCN – HELD - the reasoning in adjudication order and order of Commissioner (Appeals) is not flowing from the show cause notice even without going into the legal... [Read more]

Central Excise - Cenvat Credit – Renting of storage space outside the factory premises for storing the imported inputs – appellant did not obtained permission under Rule 8 of CCR, 2004 warehouses outside the factory - denial of credit on the ground that this service has no nexus with the manufacture of final product for the reason that the said warehouse/ godown are located out of the appellant’s factory premises – invocation of extended period - scope of SCN – HELD - the reasoning in adjudication order and order of Commissioner (Appeals) is not flowing from the show cause notice even without going into the legality of the above two issues, the impugned order does not sustain since any issue which were not raised in the SCN, cannot be imported into the adjudication order or Commissioner (Appeals) order - further, in case of Service Tax it is not necessary that warehouse is the location of receipt of service should be in factory only. The only aspect to be seen is that whether the service even though received outside the factory is in relation to the manufacturing activity of the appellant. In the present case there is no dispute that the warehouse / godown outside the factory premises was taken on rent for storage of input which is meant for production of final product, therefore, there is a direct nexus of warehousing / storage service with the manufacturing activity of the appellant – in terms of Rule 8 of Cenvat Credit Rules, 2004 the appellant is required to obtain the permission for storage of inputs outside the factory premises, only in a cases were the Cenvat Credit on such input has been availed. In the present case, there is no allegation that the appellant have availed the Cenvat Credit in respect of the inputs lying in warehouse outside the factory. Therefore, in the given facts Rule 8 is not applicable, moreover, as regard the Cenvat Credit in respect of input services Rule 8 does not come into the play as the location of the receipt of service is not material and Rule 8 is not relevant for the purpose of availing the Cenvat Credit on the input service - the demand, penalty and corresponding interest are set aside and the appeal is allowed - The only allegation in the Show cause notices that since, the renting of immovable property service is not included in the definition of input service. Accordingly, the said service used by the appellant neither falls under scope definition of input service nor has nexus with manufacturing activity. However, in the adjudication order and order of Commissioner (Appeals) both the authorities have travelled beyond the scope of show cause notice. In as much as the Cenvat credit was denied on the ground that the godown / warehouse where the input is stored is outside the factory premises and the appellant have not obtained the permission under Rule 8 of Cenvat Credit Rules, 2004. Since, reasoning in adjudication order and order of Commissioner (Appeals) is not flowing from the show cause notice even without going into the legality of the above two issues, the orders of the both the authorities does not sustain since any issue which were not raised in the show cause notice, cannot be imported into the adjudication order or Commissioner (Appeals) order [Read less]

2021-VIL-372-MAD-CU  | High Court CUSTOMS

Customs Act, 1962 – Section 25(1), (2A) & (4) – Insolvency and Bankruptcy Code, 2016 – Section 31(1) – Amendment of notification – relevant date for change in rate of duty – Reassessment of Bill of Entry - Petitioner had filed Bill of Entry dated 15-9-2015 in advance to clear consignment of crude palm oil of edible grade in bulk – petitioner proposed to pay duty at 7.5% as per Serial No.55 to Notification No.12/2012-Customs dated 17-3-2012 as it stood on 15-9-2015 – After import and at time when said Bill of Entry was taken up for assessment, Serial No.55 to Notification dated 17-3-2012 was amended vide Not... [Read more]

Customs Act, 1962 – Section 25(1), (2A) & (4) – Insolvency and Bankruptcy Code, 2016 – Section 31(1) – Amendment of notification – relevant date for change in rate of duty – Reassessment of Bill of Entry - Petitioner had filed Bill of Entry dated 15-9-2015 in advance to clear consignment of crude palm oil of edible grade in bulk – petitioner proposed to pay duty at 7.5% as per Serial No.55 to Notification No.12/2012-Customs dated 17-3-2012 as it stood on 15-9-2015 – After import and at time when said Bill of Entry was taken up for assessment, Serial No.55 to Notification dated 17-3-2012 was amended vide Notification dated 17-9-2015 – Amended Serial No.55 to Notification dated 17-3-2012 increased rate of BCD to 12.5% from 7.5% – Petitioner has challenged reassessment of Bill of Entry dated 15-9-2015 – Petitioner contended that as per Section 25(4) of the Customs Act, every notification issued under Section 25(1) or (2A) of the Act comes into force on date of its issue by Central Government for publication in Official Gazette and also when it is published and offered for sale on date of its issue by Directorate of Publicity And Public Relations of Board – HELD – Reading of unamended Section 25(4) of the Customs Act would indicate that every notification issued under Section 25(1) or (2A) of the Act shall come into force on date of issue by Central Government for publication in official Gazette – Not only amended notification was posted in website of CBEC on 17-9-2015, but was also published in official Gazette of Government of India on 17-9-2015 – Petitioner cannot complain that it was unaware of change in rate of duty merely because sale of official Gazette was purportedly made only on 21-9-2015 – Amended notification came into force on date of its publication in official Gazette on 17-9-2015 – Submission of Petitioner, that amending Notification came into force only on 21-9-2015 and not on date of its publication on 17-9-2015, is rejected | Issue 2: Extinguishment of rights of Respondent/Customs Department to duty in view of Insolvency and Bankruptcy proceedings initiated against Petitioner – Petitioner contended that Customs Department has lost all its rights over differential duty demanded in view of corporate resolution plan approved by National Company Law Board under provisions of the Code – HELD – One of prime objects of the Code was to provide for implementation of insolvency resolution process in a time bound manner for maximisation of value of assets in order to balance interests of all stakeholders – Amended Section 31(1) of the Code clarified that resolution plan approved by Adjudicating Authority shall be binding on Central Government, any State Government or any local authority to whom a debt is owed in respect of payment of dues arising under any law for time being in force – Case remitted back to Respondent to await clarification to be obtained by Petitioner from National Company Law Board as to either Corporate Resolution Plan filed by Corporate Applicant included “customs duty” to be paid by Petitioner on import under subject bill of entry – If Petitioner fails to get any clarification from National Company Law Board within prescribed time, Respondents shall proceed to recover amount of duty short paid under subject bill of entry together with interest from Petitioner in accordance with law. [Read less]

2021-VIL-369-MAD  | High Court SGST

GST - Rectification of inadvertent clerical error in TRAN-1 – HELD - the error is inadvertent, constituting a human error. Moreover, the era of GST is nascent and a rigid view should not be taken in procedural matters such as the present one - The petitioner is permitted to transition the credit. After all, the consequence of such transition is only the availment of the credit and not the utilization itself, which is a matter of assessment and which can be looked into by the Assessing Officer at the appropriate stage - The writ petition is allowed

2021-VIL-370-GUJ  | High Court VAT

Gujarat Value Added Tax Act, 2003 – Section 44 – Recovery of demand – Attachment of bank account – Pendency of second appeal – challenges to order passed under Section 44 of the GVAT Act attaching bank account of Petitioner for recovery of demand – Petitioner contended that act of Respondent of attaching bank account during pendency of second appeal as also request of stay, is wholly an unjustifiable action – HELD - Petitioner is already before second appellate authority and without deciding his application for stay, second appellate authority has chosen to invoke its powers under Section 44 of the Act to at... [Read more]

Gujarat Value Added Tax Act, 2003 – Section 44 – Recovery of demand – Attachment of bank account – Pendency of second appeal – challenges to order passed under Section 44 of the GVAT Act attaching bank account of Petitioner for recovery of demand – Petitioner contended that act of Respondent of attaching bank account during pendency of second appeal as also request of stay, is wholly an unjustifiable action – HELD - Petitioner is already before second appellate authority and without deciding his application for stay, second appellate authority has chosen to invoke its powers under Section 44 of the Act to attach bank account – Attaching of bank account would naturally result into serious consequences – There could not have been any order without availing opportunity in wake of pendency of appeal and pending adjudication of an application of stay – While relegating parties to Respondent/Appellate authority, it is directed that application of stay, if not entire Appeal, shall be determined on availing due opportunity of hearing to Petitioner within two weeks of receipt of copy of order – If time schedule is not adhered to by authority concerned, without any delay on part of Petitioner, order of impugned attachment shall be suspended at end of two weeks without any requirement of further order – If authority concerned does not decide matter within period of three months, order of attachment shall stand automatically vacated – the petition disposed of [Read less]

2021-VIL-376-MAD-ST  | High Court SERVICE TAX

Service Tax - construction of civil structure - Activities in relation to construction of “Scientific Storage Godowns” – eligibility to exemption from service tax in terms of Serial No.12(a) of notification No.25/2012-ST, dated 20.06.2012 or Works Contract service – HELD - The petitioner is a public sector undertaking. It is funded entirely by the Government. Even for the construction activities in question, the allocation was made only by the State Government. Such construction activities have been explicatively exempted by the Mega Exemption Notification issued on 20.06.2012 – Although for a short duration the ... [Read more]

Service Tax - construction of civil structure - Activities in relation to construction of “Scientific Storage Godowns” – eligibility to exemption from service tax in terms of Serial No.12(a) of notification No.25/2012-ST, dated 20.06.2012 or Works Contract service – HELD - The petitioner is a public sector undertaking. It is funded entirely by the Government. Even for the construction activities in question, the allocation was made only by the State Government. Such construction activities have been explicatively exempted by the Mega Exemption Notification issued on 20.06.2012 – Although for a short duration the exemption was not available but then, by a subsequent notification, the break in the exemption had also been bridged. Therefore, it should be held that the petitioner always was entitled to the benefit under Clause 12(a) of the mega exemption notification - when the appellate order was to the benefit of the writ petitioner for the period upto October 2015, it was certainly not open to the original adjudicating authority to pass an order adverse to the petitioner for the period from October 2015 - the order impugned stands quashed and the writ petition is allowed [Read less]

2021-VIL-373-KAR  | High Court VAT

Karnataka VAT Act, 2003 - Transport of goods – Non-production of documents – Enhancement of penalty - CTO intercepted the goods vehicle and issued notice under Section 53(12) of the Karnataka VAT Act proposing to levy penalty of three times the amount of tax payable in respect of goods, since no documents were found in proof of goods under transport – On perusal of reply filed by Appellant, CTO reduced the penalty – First Appellate Authority upheld order passed by CTO – Revisional Authority enhanced penalty to three times of tax - Whether Revisional authority is justified in exercising Revisional powers to enhanc... [Read more]

Karnataka VAT Act, 2003 - Transport of goods – Non-production of documents – Enhancement of penalty - CTO intercepted the goods vehicle and issued notice under Section 53(12) of the Karnataka VAT Act proposing to levy penalty of three times the amount of tax payable in respect of goods, since no documents were found in proof of goods under transport – On perusal of reply filed by Appellant, CTO reduced the penalty – First Appellate Authority upheld order passed by CTO – Revisional Authority enhanced penalty to three times of tax - Whether Revisional authority is justified in exercising Revisional powers to enhance penalty levied by CTO - HELD – Section 53(2)(b) of the KVAT Act casts an obligation on owner or person in charge of goods vehicle to carry with him such documents as may be prescribed in respect of goods carried in goods vehicle – Consequences of non-compliance are prescribed under Section 53(12)(a) of the Act – CTO has power to levy penalty double or triple the amount of tax leviable in respect of goods under transport, in case sufficient cause is not shown – Commercial Tax Officer has discretion in matter of imposition of penalty and question of imposition of penalty is not automatic – Explanation of Appellant was accepted by CTO as well as by First Appellate Authority – Revisional Authority exceeded its power in interfering with concurrent findings of fact recorded by Commercial Tax Officer as well as by First Appellate Authority and in imposing three times the penalty on amount of tax merely on ground that assessee had contravened provisions of Section 53(2)(b) of the Act – Order passed by Additional Commissioner imposing penalty of three times of amount of tax quashed and appeal is allowed [Read less]

2021-VIL-185-CESTAT-CHD-ST  | CESTAT SERVICE TAX

Service Tax - EOU Unit – Rejection of refund claim unutilized cenvat credit – Rent-a-cab service – input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - HELD - at the time of availement of the cenvat credit, it was never disputed that the appellant is not entitled to the cenvat credit on the service in question. The dispute in the matter is of sanction of refund claim of unutilized cenvat credit and not the availment of the cenvat credit on the input service, therefore, the Revenue has fell in error to raise the issue of availment of the cenvat credit while entertaining the refund claim. In case, the... [Read more]

Service Tax - EOU Unit – Rejection of refund claim unutilized cenvat credit – Rent-a-cab service – input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - HELD - at the time of availement of the cenvat credit, it was never disputed that the appellant is not entitled to the cenvat credit on the service in question. The dispute in the matter is of sanction of refund claim of unutilized cenvat credit and not the availment of the cenvat credit on the input service, therefore, the Revenue has fell in error to raise the issue of availment of the cenvat credit while entertaining the refund claim. In case, the appellant had not filed the refund claim, the appellant was entitled of the cenvat credit which was not objected at the time of availment - the time of entertaining the refund claim, the issue of admissibility of the cenvat credit cannot be raised - the impugned orders are set aside and appeal is allowed [Read less]

2021-VIL-186-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax – Reimbursable charges – Valuation, Supply to SEZ, packing and repacking services, Manufacture - Inclusion of reimbursable expenses in the taxable value of clearing and forwarding services – demand under man power supply service on services provided to service recipient situated in SEZ - demand of service tax under BSS on rendering of packing and repacking services - HELD - the appellant has not included the charges in the nature of electricity, diesel generator charges, fuel charges, telephone charges, water charges, stationery chargers etc. incurred for providing clearing and forwarding services in the ... [Read more]

Service Tax – Reimbursable charges – Valuation, Supply to SEZ, packing and repacking services, Manufacture - Inclusion of reimbursable expenses in the taxable value of clearing and forwarding services – demand under man power supply service on services provided to service recipient situated in SEZ - demand of service tax under BSS on rendering of packing and repacking services - HELD - the appellant has not included the charges in the nature of electricity, diesel generator charges, fuel charges, telephone charges, water charges, stationery chargers etc. incurred for providing clearing and forwarding services in the taxable value. These are actual reimbursements made to the appellants by their customers. On such score, the issue stands covered by the decision of the Hon’ble Apex Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd - the demand under this category cannot sustain and set aside - Demand under man power supply service on services provided to service recipient situated in SEZ – HELD - as per Notification No.40/2012-ST dated 20.06.2012, the services provided to service recipient situated in SEZ is exempted from service tax. However to claim such exemption the appellant has to produce certain document - Only because the appellant did not produce the said documents, the exemption as per Notification No.40/2012-ST was denied - Section 51 of SEZ Act, 2005 is to have an overriding effect. The denial of the benefit of exemption by relying upon procedural requirement of a notification would be against the provisions laid down in the SEZ Act - the demand of service tax under Man power service cannot sustain and set aside - Demand of service tax under BSS - appellant is rendering certain packing and repacking services in their warehouse so as to make the package of goods seaworthy for export - As per Section 2 (f) of Central Excise Act, 1944, packing and repacking would fall under “manufacture”. The very same activity cannot be termed to be a service – Moreover, the definition of ‘Business Support Service’ as contained in Finance Act, 1944 does not mention such activity of packing or repacking - the demand of service tax under ‘Business Support Service’ on the activity of packing and repacking cannot sustain and set aside [Read less]

2021-VIL-187-CESTAT-CHE-CE  | CESTAT CENTRAL EXCISE

Central Excise – Manufacture, Sludge, waste - demand of excise duty on lime sludge - The appellants are engaged in manufacture of paper and paper boards - During the process of manufacture, intermediary “Black Liquor” produced which was subjected by appellants to a treatment for recovering caustic soda. As a result of this process, lime sludge was obtained as residue which was disposed of by the appellants by way of sale - The department was of the view that appellant is liable to pay excise duty on the lime sludge – confirmation of demand of duty along with interest and imposing penalties – HELD - It is not the ... [Read more]

Central Excise – Manufacture, Sludge, waste - demand of excise duty on lime sludge - The appellants are engaged in manufacture of paper and paper boards - During the process of manufacture, intermediary “Black Liquor” produced which was subjected by appellants to a treatment for recovering caustic soda. As a result of this process, lime sludge was obtained as residue which was disposed of by the appellants by way of sale - The department was of the view that appellant is liable to pay excise duty on the lime sludge – confirmation of demand of duty along with interest and imposing penalties – HELD - It is not the case of the department that the appellant has manufactured lime sludge. It is only generated in the process of manufacture of paper - sludge generated in the course of manufacture is not excisable as it is not “manufactured” by the assessee – further, the amendment to Section 2(d) of the Central Excise Act, 1944 was introduced w.e.f. 10.05.2008 so as to bring the goods which are capable of being marketed also to be excisable. Since the period involved in these cases is prior to 10.05.2008, the amended provision of Section 2(d) will not be applicable - the demand cannot sustain and is set aside - the appeals are allowed [Read less]

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