More Judgements

2022-VIL-713-CESTAT-HYD-CE  | CESTAT CENTRAL EXCISE

Central Excise – Section 2(m)(ii) of SEZ Act, 2005 – Rule 5 of Cenvat Credit Rules, 2004 – Export of goods under bond to SEZ unit – Refund of accumulative Cenvat credit – Respondent are engaged in manufacture of “Iron Ore Pellets” and are availing facility of Cenvat credit under the Rules – Respondent filed refund claim under Rule 5 of the CCR, 2004 with respect to unutilized Cenvat credit – Said credit is attributable to inputs used in manufacture of goods exported under bond to a SEZ unit – Adjudicating authority rejected refund claim – Commissioner (Appeals) set aside order passed by adjudicating a... [Read more]

Central Excise – Section 2(m)(ii) of SEZ Act, 2005 – Rule 5 of Cenvat Credit Rules, 2004 – Export of goods under bond to SEZ unit – Refund of accumulative Cenvat credit – Respondent are engaged in manufacture of “Iron Ore Pellets” and are availing facility of Cenvat credit under the Rules – Respondent filed refund claim under Rule 5 of the CCR, 2004 with respect to unutilized Cenvat credit – Said credit is attributable to inputs used in manufacture of goods exported under bond to a SEZ unit – Adjudicating authority rejected refund claim – Commissioner (Appeals) set aside order passed by adjudicating authority – Whether Respondent is entitled for impugned refund or not – HELD – As per Rule 5 of the CCR, 2004, assessee is entitled for refund of Cenvat credit of input used in manufacture of goods exported – Section 2(m)(ii) of SEZ Act defines ‘export’ means supplying goods or providing services from Domestic Tariff Area (DTA) to a Unit or Developer in same or in different SEZ – Respondent has cleared its final product to SEZ unit i.e. from DTA to SEZ and accordingly, transaction in question was export of finally manufactured goods – Impugned refund claim was filed within time limit of one year stipulated under Section 11B of the CEA, 1944 – Range Officer reported that there were no government outstanding dues against Respondent – Bills of export under which Respondent had cleared iron ore pallets for export were not in nature of free shipping bills or drawback shipping bills – No condition of Notification No.5/2006 has been violated by Respondent – All these admissions when read with Rule 5 of the Rules and conditions of Notification make it clear that Respondent was entitled for impugned refund – Refund has wrongly been rejected by Adjudicating Authority on pretext of pendency of SCA before Gujarat High Court – Adjudication before High Court is totally unrelated to refund claim filed by Respondent – Impugned order is affirmed and Revenue appeal is dismissed [Read less]

2022-VIL-714-CESTAT-DEL-CE  | CESTAT CENTRAL EXCISE

Central Excise – Rules 2(a), 2(k) and 3(1) of CENVAT Credit Rules, 2004 – Providing of telecommunication services – Usage of input services – Entitlement of Cenvat credit – Appellant is a provider of telecommunication services to customers – Appellant claims to have discharged service tax liability on such services – As a provider of output services, Appellant availed CENVAT credit on inputs, input services and capital goods under the Rules – Commissioner confirmed denial of CENVAT credit on ground that subject goods being attached to earth are immovable in nature and thus not used for providing output serv... [Read more]

Central Excise – Rules 2(a), 2(k) and 3(1) of CENVAT Credit Rules, 2004 – Providing of telecommunication services – Usage of input services – Entitlement of Cenvat credit – Appellant is a provider of telecommunication services to customers – Appellant claims to have discharged service tax liability on such services – As a provider of output services, Appellant availed CENVAT credit on inputs, input services and capital goods under the Rules – Commissioner confirmed denial of CENVAT credit on ground that subject goods being attached to earth are immovable in nature and thus not used for providing output services – Whether Appellant is entitled to claim CENVAT credit on towers and pre-fabricated buildings/shelters – HELD - Rule 3(1) of the CCR, 2004 permits a provider of output service to take credit of excise duties paid on any ‘inputs’ and ‘capital goods’ – If an article is an immovable property, it cannot be termed as excisable goods – Installation or assembly of towers and shelters is based on a rudimentary “screwdriver” technology – Towers and shelters can be bolted and unbolted, assembled and re-assembled, located and re-located without any damage and fastening to earth is only to provide stability and make them wobble and vibration free – Machine or apparatus annexed to earth without its assimilation by fixing with nuts and bolts on a foundation to provide for stability and wobble free operation cannot be said to be one permanently attached to earth and therefore, would not constitute immovable property – In view of decisions referred to above, towers and shelters would not be immovable property – Towers and pre-fabricated shelters form an essential in provision of telecommunication service and therefore would qualify as ‘inputs’ under Rule 2(k) of the CCR, 2004 – Towers and shelters plainly act as components/parts and in alternative as accessory to BTS and are covered by definition of “capital goods” as defined in Rule 2(a) of the CCR, 2004 – Appellant would be entitled to claim CENVAT credit on tower/tower material and pre-fabricated buildings/shelters – impugned Order is set aside and appeal is allowed [Read less]

2022-VIL-715-CESTAT-CHE-CU  | CESTAT Case CUSTOMS

Customs – Sections 112(a) and 125 of Customs Act, 1962 – Mis-declaration of imported goods – Order of confiscation – Imposition of redemption fine – Appellant-importer filed Bill of Entry for clearance of goods declared as Balloon machine, balloon pump, Party throw flower, Plastic clothing accessories, Load cell, Embroidery machine needle, Glitter paper, etc. – Department ordered for applicability of Anti-Dumping Duty in respect of items declared as “Embroidery Machine Needles” – Goods were marked for re-examination as to quantity of needles in order to calculate ADD – After re-examination, Commissioner... [Read more]

Customs – Sections 112(a) and 125 of Customs Act, 1962 – Mis-declaration of imported goods – Order of confiscation – Imposition of redemption fine – Appellant-importer filed Bill of Entry for clearance of goods declared as Balloon machine, balloon pump, Party throw flower, Plastic clothing accessories, Load cell, Embroidery machine needle, Glitter paper, etc. – Department ordered for applicability of Anti-Dumping Duty in respect of items declared as “Embroidery Machine Needles” – Goods were marked for re-examination as to quantity of needles in order to calculate ADD – After re-examination, Commissioner rejected declared value of goods and ordered for confiscation of goods by giving an option to redeem same on payment of redemption fine for limited purpose of re-export and imposed penalty of Rs.7 lakhs – Whether redemption fine of imposed under Section 125 of the Act in regard to subject goods to re-export and penalty imposed under Section 112(a) of the Act is legal and proper – HELD – Appellant accepted enhanced value and classification in respect of items mentioned certain items and apart from those goods, all other goods have been redeemed by Appellant by paying redemption fine and appropriate duty – Appellant is contesting only the redemption fine and penalty imposed in regard to goods mentioned as ‘Embroidery Machine Needle’ – In Sankar Pandi case, Madras High Court observed that redemption fine is not imposable for improper importation of goods if such goods subsequently re-exported by importer, but penalty is required to be imposed for violation of the Act – Relying upon decision of High Court, redemption fine imposed in present case requires to be set aside – Since goods have found to have been mis-declared/mis-classified, penalty imposed under Section 112(a) of the Act is not improper – Penalty of Rs.7 lakhs appears to be on a higher side, so it is reduced to Rs.2 lakhs – Impugned order is modified to extent of setting aside redemption fine imposed for redeeming goods for purpose of re-export of Embroidery Machine Needle and reducing penalty to Rs.2 lakhs – Appeal is partly allowed [Read less]

2022-VIL-711-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax – Banking services – Service Tax liability on Interest restructuring charges – Respondent-assessee is engaged in providing service under category of ‘banking and other financial services’ – Respondent had earned premium of interest for restructuring of loans, but did not pay service tax on it by treated these amount as interest income which are not leviable to service tax – Department issued SCN to Respondent proposing demand of service tax – Commissioner dropped demand initiated against Respondent – Whether restructuring premium charged by Respondent falls under ‘lending’ and leviable to ... [Read more]

Service Tax – Banking services – Service Tax liability on Interest restructuring charges – Respondent-assessee is engaged in providing service under category of ‘banking and other financial services’ – Respondent had earned premium of interest for restructuring of loans, but did not pay service tax on it by treated these amount as interest income which are not leviable to service tax – Department issued SCN to Respondent proposing demand of service tax – Commissioner dropped demand initiated against Respondent – Whether restructuring premium charged by Respondent falls under ‘lending’ and leviable to service tax under ‘banking and other financial services’ – HELD – the term ‘lending’ means depositing of money or property with expectation that same will be returned – In order to provide benefit of lower interest rate in future as against prevailing rate to borrowers, an option is given to borrowers for interest restructuring of loan – In case of interest restructuring, borrower is allowed to swap higher rate of interest with lower rate of interest – By providing interest restructuring facility, Respondent agrees to forgo its future income by way of interest and gets only a portion that interest in advance in the year in which interest restructuring is done – Premium which Respondent receives for interest restructuring of loan is for loss of interest which the Respondent will suffer on account of lowering of rate of interest on loan granted to borrower – Interest restructuring charges would be outside ambit of ‘banking and other financial services’ – It is not possible to accept contention of department that restructuring premium charged by Respondent would fall under ‘lending’ and would be subjected to levy of service tax under ‘banking and other financial services’ – Impugned order is affirmed and Revenue appeal is dismissed [Read less]

2022-VIL-657-KAR  | High Court SGST

GST - Petitioner seeking quashing and setting aside of the Intimation Notice raising GST demand of Rs. 21,000 Crores (plus interest and penalty) and restraining the DGGSTI from levying GST at the rate of 28% on online gaming platform – Whether online gaming being game of chance or a game of skill - HELD - there are several contentious issues and complicated and disputed questions that arise for consideration in the present petition, which would necessarily have to be adjudicated upon at the time of final disposal of the petition - Pending disposal of the petition, the impugned intimation in Form GST DRC-01A is stayed unt... [Read more]

GST - Petitioner seeking quashing and setting aside of the Intimation Notice raising GST demand of Rs. 21,000 Crores (plus interest and penalty) and restraining the DGGSTI from levying GST at the rate of 28% on online gaming platform – Whether online gaming being game of chance or a game of skill - HELD - there are several contentious issues and complicated and disputed questions that arise for consideration in the present petition, which would necessarily have to be adjudicated upon at the time of final disposal of the petition - Pending disposal of the petition, the impugned intimation in Form GST DRC-01A is stayed until further orders - this interim order is restricted and limited to the impugned Intimation notice and without prejudice to the rights and contentions of the parties in any other matter, pending or otherwise and also without expressing any opinion on the merits / demerits of the rival contentions and the same are kept open – matter is listed [Read less]

2022-VIL-77-SC-CU  | Supreme Court CUSTOMS

Customs - Demand of Customs duty and imposition of penalty on the ground that on verification the DEPB Licensees on the basis of which TRAs were issued, were found to be not genuine - By the impugned judgment, the High Court dismissed the assessee’s appeal and confirmed the order passed by the Tribunal confirming the demand of duty on the ground that “fraud” invocation of the extended period of limitation – assessee challenge the impugned order passed by the High Court – HELD - From the judgment and order passed by the Tribunal and even from the findings recorded by the Department, it has been found that the DEPB... [Read more]

Customs - Demand of Customs duty and imposition of penalty on the ground that on verification the DEPB Licensees on the basis of which TRAs were issued, were found to be not genuine - By the impugned judgment, the High Court dismissed the assessee’s appeal and confirmed the order passed by the Tribunal confirming the demand of duty on the ground that “fraud” invocation of the extended period of limitation – assessee challenge the impugned order passed by the High Court – HELD - From the judgment and order passed by the Tribunal and even from the findings recorded by the Department, it has been found that the DEPB licenses/Scrips, on which the exemption benefit was availed of by the appellant(s) were found to be forged - In that view of the matter and on the principle that fraud vitiates everything and such fake DEPB licenses/Scrips are void ab initio, it cannot be said that the Department acted illegally in invoking the extended period of limitation - In the facts and circumstances, the Department was absolutely justified in invoking the extended period of limitation - the moment the appellants were informed about the fake DEPB licenses, Customs Duty was paid be under protest to avoid any further coercive action – however, the fact remains that the DEPB licenses/Scrips on which the exemption was availed on the basis of forged DEPB lincense, therefore, there shall be a duty liability and the same has been rightly confirmed by the Department, which has been rightly confirmed by the Tribunal as well as the High Court - so far as the penalty proceedings are concerned, the matter is remanded by the Tribunal to the adjudicating authority, which is reported to be pending - the adjudicating authority is directed to complete the penalty proceedings on remand, at the earliest - the appeals are dismissed [Read less]

2022-VIL-716-CESTAT-DEL-CE  | CESTAT CENTRAL EXCISE

Central Excise – Area-based exemption - Manufacture of goods in specified areas in the States of Uttarakhand and Himachal Pradesh – Payment of duty – Entitlement of benefit of exemption – M/s ATSPL had set up a new manufacturing unit for manufacturing excisable goods – ATSPL started production after availing exemption from duty under Notification No.50/2003-CE – Appellant had entered into a MoU with ATSPL for transfer of industrial property in favour of Appellant – Appellant, after taking over ownership of ATSPL, started manufacturing declared goods and cleared them by availing area-based exemption under Noti... [Read more]

Central Excise – Area-based exemption - Manufacture of goods in specified areas in the States of Uttarakhand and Himachal Pradesh – Payment of duty – Entitlement of benefit of exemption – M/s ATSPL had set up a new manufacturing unit for manufacturing excisable goods – ATSPL started production after availing exemption from duty under Notification No.50/2003-CE – Appellant had entered into a MoU with ATSPL for transfer of industrial property in favour of Appellant – Appellant, after taking over ownership of ATSPL, started manufacturing declared goods and cleared them by availing area-based exemption under Notification – Dept denied said exemption to Appellant and confirmed demand of Central Excise duty – Commissioner (Appeals) dismissed appeal filed by Appellant – Whether Appellant is entitled to claim exemption under Notification – HELD – Appellant strongly pleads that they have all supporting evidences to claim due intimation as per Notification – After execution of sale deed and taking of possession of ATSPL, Appellant submitted option in writing/declaration to Assistant Commissioner apprising him about taking over of unit from ATSPL and its intention to continue area based exemption – Due intimation had been given by Appellant to Assistant Commissioner to avail area based exemption – Exemption under Notification is qua unit and an eligible unit can add new products, new plant and machinery and can also transfer unit to a new owner without affecting exemption – Appellant had purchased entire unit, as is clear from MOU entered into with ATSPL – Agreement was for transfer of entire industrial property which comprised plant and machinery also – Commissioner (Appeals) committed an error in holding that Appellant had not taken the ‘unit’ run by ATSPL, since it had only taken the land and premises – Findings recorded by Commissioner (Appeals) are factually incorrect and against terms of notification – Denial of exemption to Appellant under Notification cannot be sustained – Appellant is entitled to claim exemption under Notification – Impugned order is set aside and the appeal is allowed [Read less]

2022-VIL-663-CAL  | High Court SGST

GST - Cancellation of Registration - Rejection of application for revocation of Registration without supplying relied upon materials by the Department - violation of principles of natural justice – HELD - If, according to the respondent, there is any adverse material, then a proper show cause notice should have been given to the appellant and her objection should have been invited and further affording an opportunity of personal hearing, a speaking order should have been passed - It is high time that the Commissioner of Commercial Taxes takes note of the manner in which the subordinate officers have been dealing with cas... [Read more]

GST - Cancellation of Registration - Rejection of application for revocation of Registration without supplying relied upon materials by the Department - violation of principles of natural justice – HELD - If, according to the respondent, there is any adverse material, then a proper show cause notice should have been given to the appellant and her objection should have been invited and further affording an opportunity of personal hearing, a speaking order should have been passed - It is high time that the Commissioner of Commercial Taxes takes note of the manner in which the subordinate officers have been dealing with cases, more particularly matters concerning cancellation of registration and it would augur well to conduct an orientation programme to enable to the officers to be sensitized as to how and on what manner the proceedings should be initiated and how it should be dealt with and how speaking order should be passed - Since the enactment under which they are functioning is a new enactment, the officers are required to be sensitized on this issue, for which purpose a copy of this order shall be placed before the Commissioner of Commercial Taxes - in the instant case there has been total violation of principles of natural justice, the order of rejection of the revocation application is a non-speaking order without considering the vital facts - the impugned order is set aside and the appeal is allowed [Read less]

2022-VIL-658-BOM  | High Court SGST

GST - Rule 26 of CGST Rules - Validity of order for cancellation of registration not digitally signed and certified - Petitioner’s case the time limit for filing the appeal against order for cancellation of registration would begin only upon digitally signed order and made available – petitioner challenge the dismissal of by appeal appellate authority on ground of being filed beyond the time limit – HELD – the respondents have stated that petitioner cannot take stand of not receiving the signed copy because the unsigned order was admittedly received by petitioner electronically - if the stand of respondent has to b... [Read more]

GST - Rule 26 of CGST Rules - Validity of order for cancellation of registration not digitally signed and certified - Petitioner’s case the time limit for filing the appeal against order for cancellation of registration would begin only upon digitally signed order and made available – petitioner challenge the dismissal of by appeal appellate authority on ground of being filed beyond the time limit – HELD – the respondents have stated that petitioner cannot take stand of not receiving the signed copy because the unsigned order was admittedly received by petitioner electronically - if the stand of respondent has to be accepted, then the Rules which prescribe specifically that digital signature has to be put will be rendered redundant - unless digital signature is put by the issuing authority that order for cancellation of registration will have no effect in the eyes of law - agree with petitioner’s stand that only on the date on which the signature of issuing authority was put on the order for the purpose of attestation, time to file appeal would commence - the impugned order is set aside and the appeal is restored to file of appellate authority who shall consider the appeal on merits and pass such order as deemed fit in accordance with law – writ petition is disposed of [Read less]

2022-VIL-661-BOM  | High Court VAT

Maharashtra VAT Act, 2002 - Section 23 - Issuance of vague show cause notice – in the impugned order allegations about fake invoices and fake forms have been made against petitioner but show cause notice issued had no such allegations or any details – assessee seeks quashing of impugned order and notice – HELD - The show cause notice does not contain any details of any sale or claims or deductions which petitioner has incorrectly made or claimed or recorded in an incorrect manner. It was duty of respondent to have given all the details to petitioner - Every show cause notice issued by respondents in future shall cont... [Read more]

Maharashtra VAT Act, 2002 - Section 23 - Issuance of vague show cause notice – in the impugned order allegations about fake invoices and fake forms have been made against petitioner but show cause notice issued had no such allegations or any details – assessee seeks quashing of impugned order and notice – HELD - The show cause notice does not contain any details of any sale or claims or deductions which petitioner has incorrectly made or claimed or recorded in an incorrect manner. It was duty of respondent to have given all the details to petitioner - Every show cause notice issued by respondents in future shall contain every detail required to effectively respond to the show cause notice. This is a direction that respondents shall follow without fail – not providing details alongwith the show cause notice is a serious lapse and in many matters the concerned officers do not provide all the details - Perhaps, officer concerned do not have proper training on adjudication matters or they are not even aware about the legal provisions or need to follow principles of natural justice - Though Bench was initially inclined to award substantial cost in favour of petitioner to be recovered from Asst. Commissioner personally, refrain from doing so in this petition - Respondents are warned that the Court will not be so generous in future and may even consider directing the observations made to be specified in the career record of the concerned officer – Board and the Principal Commissioner must take these matters seriously and give proper training to its officers - the impugned order alongwith show cause notice is quashed and set aside – Petition is disposed of [Read less]

2022-VIL-653-CAL  | High Court SGST

GST - Demand of tax and penalty on the ground that the e-way bill had expired and 48 hours had lapsed when it was intercepted – appellants contended that it was an unintentional mistake and due to oversight the e-way bill was not extended – assessee also contended there was no mens rea on the part of the appellants or any attempt to evade payment of tax – HELD – the learned appellate authority should consider the question as to whether there was any intentional attempt made by the appellants to evade payment of tax. Since this aspect has not been considered by the learned appellate authority - The appellants are di... [Read more]

GST - Demand of tax and penalty on the ground that the e-way bill had expired and 48 hours had lapsed when it was intercepted – appellants contended that it was an unintentional mistake and due to oversight the e-way bill was not extended – assessee also contended there was no mens rea on the part of the appellants or any attempt to evade payment of tax – HELD – the learned appellate authority should consider the question as to whether there was any intentional attempt made by the appellants to evade payment of tax. Since this aspect has not been considered by the learned appellate authority - The appellants are directed to obtain an affidavit from the transporter setting out the facts and if necessary the appellate authority can also call for details from the transporter and after hearing the appellants, a fresh decision be taken on merits and in accordance with law - matter remanded to the appellate authority for fresh consideration – the appeal is disposed of [Read less]

2022-VIL-710-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise - Section 11A(1) of Central Excise Act, 1944 – Manufacture of cakes cakes and pastries – Usage of brand name – Denial of SSI exemption – Appellants were manufacturing cakes and pastries by using brand name belonging to another company – Revenue issued SCN alleged that Appellants have short paid central excise duty leviable on cakes and pastries by mis-utilizing exemption provided under Notification No.8/2001 – Adjudicating authority denied benefit of exemption and confirmed demand of Central Excise duty under provisions of Section 11A(1) of the Act – Whether Appellant is entitled for exemption ... [Read more]

Central Excise - Section 11A(1) of Central Excise Act, 1944 – Manufacture of cakes cakes and pastries – Usage of brand name – Denial of SSI exemption – Appellants were manufacturing cakes and pastries by using brand name belonging to another company – Revenue issued SCN alleged that Appellants have short paid central excise duty leviable on cakes and pastries by mis-utilizing exemption provided under Notification No.8/2001 – Adjudicating authority denied benefit of exemption and confirmed demand of Central Excise duty under provisions of Section 11A(1) of the Act – Whether Appellant is entitled for exemption as stipulated under SSI Notification No.8/2001 – HELD - SSI exemption restricts use of brand name of any other person or manufacturer who is not eligible for exemption – Brand name used by Appellant is their own brand, as they have branches at various location and all units put together are called "Ramee Guestline Hotels" which is their group name and not the brand name of any other person – Appellant are not putting any trade name on cake being sold – Only on packing paper board, name of group is written as which is nothing but name of their group hotels – Use of brand name "Ramee Guestline Hotels" by Appellant is not contrary to provision of exemption under SSI Notification No.8/2001 – Cake manufactured and sold by Appellant in restaurant to their customers is not covered under sale of branded goods and hence not liable to any duty upto limit of Rs.100 lakhs – Appellant is entitled for exemption as stipulated under said Notification – Order under challenge is set aside and appeal is allowed [Read less]

2022-VIL-712-CESTAT-MUM-ST  | CESTAT SERVICE TAX

Service Tax – Life insurance service – Service Tax liability on Foreclosure charge and Policy reinstatement charge – Appellant is engaged in insurance business – taxation of insurance products namely, of ‘unit linked insurance policies’ with its combination of risk coverage and investment opportunity – Appellant disputes levy of service tax on ‘foreclosure charges’, ‘surrender charges’ and ‘policy reinstatement charges’ – HELD – Foreclosure charge is not different from surrender charge, except that former is the consequence of a positive decision to discontinue the policy, while latter stems f... [Read more]

Service Tax – Life insurance service – Service Tax liability on Foreclosure charge and Policy reinstatement charge – Appellant is engaged in insurance business – taxation of insurance products namely, of ‘unit linked insurance policies’ with its combination of risk coverage and investment opportunity – Appellant disputes levy of service tax on ‘foreclosure charges’, ‘surrender charges’ and ‘policy reinstatement charges’ – HELD – Foreclosure charge is not different from surrender charge, except that former is the consequence of a positive decision to discontinue the policy, while latter stems from non-payment of ‘premium’ that has the effect of terminating the policy issued by Appellant – Termination of contract of insurance closes the relationship between provider and recipient – Such closure erases provider-recipient framework which is essential for levy of service tax under the Act – Foreclosure charge and surrender charge retained by Appellant is not liable to tax under the Act – ‘Reinstatement charge’ is intended to facilitate continuance of relationship which was in jeopardy by non-compliance with conditions of contract – Restoration of relationship of provider-recipient is contingent upon such additional fee which cannot be anything other than consideration for continuance of ‘taxable service’ and, therefore, liable to service tax – Demand of tax on foreclosure charge and surrender charge is set aside – Tax liability of reinstatement charge is affirmed – penalties arising from, and limited to, the ‘reinstatement charge’ is upheld – assessee appeal is partly allowed [Read less]

2022-VIL-662-P&H  | High Court SGST

GST - Petitioner challenged detention of goods pursuant to physical verification – Petitioner case that goods being wrongly classified as animal feed supplement with HSN 2309 whereas the goods being residue/waste of distillery covered under HSN 2303 – Petitioner aggrieved by rejection of appeal by Appellate Authority without adverting to submissions raised by the petitioner – HELD - Perusal of the impugned order passed by the Appellate Authority would clearly show that the grounds raised by the petitioner in the statutory appeal have not even been adverted to, much less dealt with. The impugned order passed by the Ap... [Read more]

GST - Petitioner challenged detention of goods pursuant to physical verification – Petitioner case that goods being wrongly classified as animal feed supplement with HSN 2309 whereas the goods being residue/waste of distillery covered under HSN 2303 – Petitioner aggrieved by rejection of appeal by Appellate Authority without adverting to submissions raised by the petitioner – HELD - Perusal of the impugned order passed by the Appellate Authority would clearly show that the grounds raised by the petitioner in the statutory appeal have not even been adverted to, much less dealt with. The impugned order passed by the Appellate Authority, as such, cannot sustain - the present writ petition is partly allowed and the impugned order is set aside - The matter is remanded back for consideration afresh at the hands of the Appellate Authority and after taking into account all the submissions and contentions raised by the petitioner - Writ petition is disposed of [Read less]

2022-VIL-652-AP  | High Court SGST

GST – Applicable rate of tax on Mango fruit pulp/puree – Petitioner challenge the order passed by Appellate Authority for Advance Ruling modifying the order passed by the Authority for Advance Ruling and holding that the ‘Mango Pulp/Puree’ is classifiable under Tariff Item 0804 50 40 and chargeable to GST @ 18% - Petitioner seeking declaration that the ‘Mango Pulp’ is classifiable under Chapter Heading 0804 50 40 and exempt from GST in terms of entry 51 of Notification No.2/2017-CT(Rate) dated 28.06.2017 – HELD - on the basis of recommendation of GST Council in its 22nd meeting, the GST rate on ‘Mangoes sli... [Read more]

GST – Applicable rate of tax on Mango fruit pulp/puree – Petitioner challenge the order passed by Appellate Authority for Advance Ruling modifying the order passed by the Authority for Advance Ruling and holding that the ‘Mango Pulp/Puree’ is classifiable under Tariff Item 0804 50 40 and chargeable to GST @ 18% - Petitioner seeking declaration that the ‘Mango Pulp’ is classifiable under Chapter Heading 0804 50 40 and exempt from GST in terms of entry 51 of Notification No.2/2017-CT(Rate) dated 28.06.2017 – HELD - on the basis of recommendation of GST Council in its 22nd meeting, the GST rate on ‘Mangoes sliced, dried’ falling under heading 0804 was reduced from 12% to 5% while GST rate on all forms of dried mangoes (other than sliced and dried mangoes) falling under heading 0804, including mango pulp, was always meant to be at the rate of 12%. Therefore, the petitioner is liable to pay GST on Mango pulp @ 12% - orders passed by the AAAR imposing GST in respect of ‘mango pulp’ @ 18% is incorrect and set aside - the petitioner is liable to pay GST in respect of Mango pulp @ 12% - the writ petition is disposed of [Read less]

2022-VIL-78-SC  | Supreme Court VAT

Rajasthan Value Added Tax Act, 2003 – Approval of Resolution Plan - Refund of pre-deposit – Vide the impugned order High Court allowed refund of pre-deposit amounts deposited by M/s. Binani Cement Ltd. as mandatory statutory obligation while filing the appeals – Revenue filed instant SLP challenging the High Court order - SC: Issue notice, returnable on 17-10-2022 - Meanwhile, refund shall remain stayed

2022-VIL-659-ALH  | High Court SGST

GST – Section 83 - Petitioner challenge provisional attachment of property under section 83 of CGST Act, 2017 – HELD - Each of the ingredients of Section 83 are integral to a valid exercise of power. The statute has not left the formation of opinion to an unguided subjective discretion of the Commissioner - The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of the government revenue. The expression "it is necessary so to do" clearly evidences an intent of the legislature that an attachment is authorized not merely because it is expedient to do so but because it i... [Read more]

GST – Section 83 - Petitioner challenge provisional attachment of property under section 83 of CGST Act, 2017 – HELD - Each of the ingredients of Section 83 are integral to a valid exercise of power. The statute has not left the formation of opinion to an unguided subjective discretion of the Commissioner - The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of the government revenue. The expression "it is necessary so to do" clearly evidences an intent of the legislature that an attachment is authorized not merely because it is expedient to do so but because it is necessary to do so in order to protect interest of the government revenue - The word “necessary” postulates that the interest of the revenue can be protected only by a provisional attachment without which the interest of the revenue would stand defeated. Thus, a more stringent requirement than a mere expediency, has been provided in Section 83. The exercise of unguided discretion cannot be permissible because it will leave citizens and their legitimate business activities to the peril of arbitrary power. There must be a valid formation of the opinion that a provisional attachment is necessary for the purpose of protecting the interest of the government revenue – Section 83 necessarily requires existence of tangible material before the Commissioner so as to enable him to form his opinion for provisional attachment of the property of an assessee including bank account, which may indicates a live link to the necessity to order a provisional attachment to protect the interest of the Government Revenue - Each of the ingredients of Section 83 must be strictly applied and complied before a provisional attachment on the property of an assesses can be made - In the impugned provisional attachment order there is absence of the ingredients of Section 83. Therefore, the impugned order having been passed Commissioner by arbitrarily exercising his power, cannot be sustained and quashed with exemplary cost - Writ petition is allowed with cost of Rs. 50,000/- which shall be paid by the respondents to the petitioner within two weeks [Read less]

2022-VIL-664-CAL-ST  | High Court SERVICE TAX

Service Tax – Cenvat Credit - Sales promotion - Eligibility to input credit of service tax against the commission paid to various service providers who are acting as commission agents – Revenue case that, in the present case, the commission agent is only for the sale and goods and not for the sales promotion – in assessee appeal the Tribunal held that the services under taken by the commission agents for sales promotion are included in the definition of the input services under Rule 2(l) of the CCR, 2004 with effect from 01.04.2011 – Revenue in appeal against Tribunal Order by placing reliance on the decision in Ca... [Read more]

Service Tax – Cenvat Credit - Sales promotion - Eligibility to input credit of service tax against the commission paid to various service providers who are acting as commission agents – Revenue case that, in the present case, the commission agent is only for the sale and goods and not for the sales promotion – in assessee appeal the Tribunal held that the services under taken by the commission agents for sales promotion are included in the definition of the input services under Rule 2(l) of the CCR, 2004 with effect from 01.04.2011 – Revenue in appeal against Tribunal Order by placing reliance on the decision in Cadila Heath Care Limited case for denying credit – HELD - on and after the insertion of the explanation in Rule 2(l) vide notification dated 03.02.2016, the position clear as the explanation seeks to clarify the intention of the legislature with a view to extend the benefit of credit on services of commission agent as was indicated in the circular dated 29.04.2011 - the decision in Cadila Health Care was also taken note of by the department and the position stood clarified that sales promotion would include services by way of sale of goods on commission basis - the decisions of one other High Court in all cases will not bind another High Court and such decisions were held to be of persuasive value. Further, the commission paid by the respondent to the commission stockist is included in the assessable value of the goods on which excise duty has been paid by the respondent-assessee on the final products - the appeal filed by the revenue is dismissed and the appeal is answered against the revenue [Read less]

2022-VIL-656-DEL  | High Court SGST

GST – Rule 25 of the CGST Rules, 2017 - Cancellation of registration - Physical verification of business premises - issuance of notice of inspection – Petitioner case that if the proper officer opted for physical verification of the petitioner’s business premises, it could only be carried out in the presence of its authorized representative and a prior notice/intimation needs to be served by the proper officer – HELD – in terms of Rule 25 of CGST Rules, 2017, if after the grant of registration, the proper officer is satisfied that physical verification of the place of business of the concerned person is required,... [Read more]

GST – Rule 25 of the CGST Rules, 2017 - Cancellation of registration - Physical verification of business premises - issuance of notice of inspection – Petitioner case that if the proper officer opted for physical verification of the petitioner’s business premises, it could only be carried out in the presence of its authorized representative and a prior notice/intimation needs to be served by the proper officer – HELD – in terms of Rule 25 of CGST Rules, 2017, if after the grant of registration, the proper officer is satisfied that physical verification of the place of business of the concerned person is required, the proper officer may get such verification of the business place carried out, but in the presence of the said person - In the instant case, physical verification was carried out by the Revenue without having the petitioner’s authorized representative remain present – Further, although the inspection of the petitioner’s business premises was carried out, no prior notice was given by the Revenue - Had the revenue given notice of the inspection, it could have been carried out in the presence of the authorized representative of the petitioner and hence lent greater authenticity and credibility to the inspection report - The petitioner will file an application for revocation of order of cancellation and the same will be adjudicated by the concerned officer and a speaking order will be passed - the writ petition is disposed of [Read less]

2022-VIL-660-KAR-ST  | High Court SERVICE TAX

Service Tax – Penalty - Section 78(1) of Finance Act 1994 - The short payment service tax due to clerical mistake - Availment of ineligible Cenvat Credit and benefit of abatement under Notification No.1/2006 – assessee paid service tax on various services pointed out by the Revenue with interest - Revenue issued a show cause notice and confirmed the demand along with penalty - Whether the CESTAT was right in holding that no suppression can be alleged merely on audit objections and accepting the assessee plea that the Cenvat credit was wrongly taken on account of clerical mistakes – HELD - short payments of service ta... [Read more]

Service Tax – Penalty - Section 78(1) of Finance Act 1994 - The short payment service tax due to clerical mistake - Availment of ineligible Cenvat Credit and benefit of abatement under Notification No.1/2006 – assessee paid service tax on various services pointed out by the Revenue with interest - Revenue issued a show cause notice and confirmed the demand along with penalty - Whether the CESTAT was right in holding that no suppression can be alleged merely on audit objections and accepting the assessee plea that the Cenvat credit was wrongly taken on account of clerical mistakes – HELD - short payments of service tax were found during the audit. Once the same was brought to the notice of the assessee, the assessee has promptly paid the taxes with interest there on without any demur - the conduct of appellant therein, of making prompt payment of service tax during the enquiry after gaining the knowledge of its liability, is sufficient reason to believe that assessee did not have an intention to evade payment of tax – U/s 78(1) of Finance Act 1994, penalty may be imposed if the service tax is not paid due to any reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act and the Rules made thereunder with the intent to evade payment of service tax - In the absence of the conditions contained in Section 78 of the Finance Act, the imposition of penalty is not sustainable - no interference is called for with the impugned decision of the CESTAT – Revenue appeal is dismissed [Read less]

2022-VIL-655-KAR  | High Court VAT

Central Sales Tax Act, 1956 - Respondent-assessee is engaged in the business of supply and installation of Networking products – Department appeal seeking to disallow the claim of exemption on sales in the course of import - Whether the Tribunal is right in holding that the sale of goods stored in Inland Container Depots by the Respondent-assessee to its customers occasions the import of goods into the territory of India – HELD - respondent is an Authorized Distributor of CISCO in India for Networking products. It places Import orders on CISCO on a back-to-back basis against the Purchase orders of equipments placed by ... [Read more]

Central Sales Tax Act, 1956 - Respondent-assessee is engaged in the business of supply and installation of Networking products – Department appeal seeking to disallow the claim of exemption on sales in the course of import - Whether the Tribunal is right in holding that the sale of goods stored in Inland Container Depots by the Respondent-assessee to its customers occasions the import of goods into the territory of India – HELD - respondent is an Authorized Distributor of CISCO in India for Networking products. It places Import orders on CISCO on a back-to-back basis against the Purchase orders of equipments placed by its Customers. In the case of 'Bill to ship to' model, the foreign vendor CISCO, mentions customer's purchase Order Number and the specifications while despatching the goods directly to Indian customers who obtain Import Approval based on proforma invoices issued by the respondent - Neither the Assessing Authority not the First Appellate Authority has recorded any case of diversion of imported goods by the respondent to any other customer - respondent has acted as an intermediary between the customer and foreign vendor CISCO and it has not independently placed any order on the vendor without referring the Purchase Order of the customer and held that though it appears as two distinct transactions, the same are integrally connected and form a single transaction - KAT is the last fact finding authority and it has returned the above recorded undisputed facts. In view of the above, the questions raised by the Revenue are answered in favour of the assessee and against the Revenue - revision petition fails and dismissed [Read less]

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