TODAY'S CASE (INDIRECT TAX)

December 21, 2024

++ ST - Transfer of right to use brewery license also included ability to operate brewery without interference/limitation, free of charge/encumbrance or third-party rights - such transaction is Deemed Sale under Article 366(29A)(d); no Service Tax leviable thereon: CESTAT

++ ST - Appellants have received commission for rendering services to their foreign principals by booking orders in India for their goods - Services rendered have been 'exported' - Tax demand cannot survive: CESTAT

++ Cus - Where exporter has received export proceeds only for net quantity shown in their invoices, then value for export duty has to be taken as per transaction value only: CESTAT

December 20, 2024

++ CX -Pure coconut oil, packaged in small quantities ranging from 5 ml to 2 litres, is classifiable as Edible oil under Heading 1513 CETA, 1985: SC LB

++ CX - That coconut oil is also usable for cosmetic purposes, does not per se exclude it from ambit of Coconut oil or make it classifiable as hair oil: SC LB

++ CX - Once entries are aligned & reflect same position, General/Explanatory Notes in HSN are applicable & cannot be ignored while classifying goods as per headings in First Schedule to CETA 1985: SC LB

++ CX - Trademark per se does not indicate that every product sold thereunder is the same and meant only for one use: SC LB

++ CX - Rule 1 of General Rules of Interpretation in the First Schedule to CETA 1985 must be applied in first instance & only if classification cannot be determined thereunder do other Rules come into play: SC LB

++ CX - When interpreting tax statures, words must be construed in consonance with their commonly accepted meaning in trade & their popular meaning; except if there is an artificial definition or special meaning for such word in statute: SC LB

++ VAT - Supply of helicopters to Andaman & Nicobar Islands administration does not qualify as'transfer of right to use goods' as per Sec 2(g)(vi) of CST Act, if there was no transfer of effective control & possession: HC

++ FEMA - Ongoing investigation, devoid of any tangible progress or launch of proceedings, cannot ipso facto justify the denial of a NOC: HC

++ GST - Failure to grant an opportunity for cross-examination and relying upon the statements of persons to impose penalty have violated principles of natural justice: HC

++ GST - It is settled law that parallel proceedings cannot be initiated and maintained at the same time - Respondent to dispose of rectification applications filed by petitioner u/s 161, within four weeks: HC

++ Cus - Whether Department was right in attempting to negate permission u/s 65 after having permitted not only establishment of warehouse but also import of equipment - Order stayed subject to conditions: HC

++ Cus - Tribunal has given relief to the company and the question of penalty on the Director would be consequential - Order is a reasoned order based on facts and no perversity is shown: HC

++ CX - There is no legal presumption that a wrong self-assessment implies evasion of duty: CESTAT

++ CX - Department is responsible for detecting errors during normal period of limitation; if it fails to do so, responsibility therefor lies with it & not with assessee: CESTAT

December 19, 2024

++ GST - Word 'shall' substituted with 'may' - Non-issuance of pre-show cause notice during the period prior to amendment of rule 142(1A) - Contentions raised are arguable - Petitioner relegated to respond to SCN: HC

++ GST - Payment of pre-deposit not indicated while filing appeal online - Dismissal of appeal even after the error was corrected is excessively disproportionate: HC

++ CX - Cash seized and deposited as FD in bank - Merely because the time was insufficient for department to check the calculations when the same was filed cannot be ground on which the order can be reviewed: HC

++ Cus - Ex parte order passed is valid where demand is upheld on merits as well as due to assessees' failure to appear for hearing despite being given 7 opportunities: CESTAT

++ ST - Service Tax on sale of coal rejects, not payable, where such value is already included in taxable value for beneficiation service: CESTAT

++ Cus - Specific description of 'prepared additives for cements, mortars or concretes' under heading 3824 will prevail over more general category of modified starches under heading 3505: CESTAT

December 18, 2024

++ GST - Assistant Commissioner discarded reply filed by a one-liner observation that explanation given is not comprehensible, conceivable, not perspicuous and is ambiguous - SCN cannot be decided in such cavalier manner: HC

++ Kerala GST - Tax treatment of discounts received by petitioner from its suppliers - case remanded as this aspect was overlooked while passing assessment orders: HC

++ GST - Petitioner's refund application stalled due to it being listed as risky exporter; Proper Officer directed to dispose off refund application in 2 months' time; petitioner at liberty to seek removal from risky exporter list: HC

++ CX - Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules - condition of a continuous period exceeding 15 days was met, regardless of how it was spread over multiple months - Abatement be allowed: HC

++ Cus - Once duty liability under EPCG scheme is settled, penalty imposed u/s 112(a) of Customs Act, which is tied to confiscation provisions of Section 111(o), cannot be enforced: HC

++ Cus - In absence of any condition of end use certificate in Notification, same cannot be imposed and for that reason exemption cannot be denied: CESTAT

++ Cus - As per settled legal position, freight is not included in duty calculation when foreign vessel is imported for first time: CESTAT

++ Cus - Duty payable on ship stores consumed during ship's coastal run, is rightly excluded while finalising Bill of Entry: CESTAT

++ Cus - CBLR - Regulation 10(e) stands contravened as broker failed to exercise due diligence in handling documents & filing import declarations by permitting unauthorised use of it's dongle for filing bill of entries: CESTAT

++ Cus - Order revoking Customs broker's license & forfeiting security deposit and imposing penalty, are untenable where timelines prescribed for issuing SCN, submitting inquiry reports & passing order, are not adhered to: CESTAT

December 17, 2024

++ GST - Bench would like to know at the earliest as to why the GSTAT has not been made functional till date: SC

++ GST - Condition of time limit in s.16(4) is jettisoned by inserting s.s(5) in s.16 by s.118 of FA, 2024: HC

++ GST - Refund of IGST on goods/services exported out of India - Omission of rule 96(10) by 20/2024-CT - Matter to be re-notified for further consideration: HC

++ VAT - Revenue authorities must pass order for refund & interest claimed by assessee after verification of Form-C along with statutory interest payable under provisions of CST Act: HC

++ Cus - Since the basic issue which arises from Tribunal's order deals with classification and rate of duty, appeal not maintainable before High Court but lies before Supreme Court: HC

++ Cus - Tribunal took a sympathetic view and finding that the revocation of the licence would detrimentally affect employees, decided to interfere - Not mandatory that Court should interfere with order, though not legal, which meets interest of justice: HC

++ Cus - Jurisdiction of DRI to issue SCN - Matter settled by recent decision of Apex Court in Canon India - Petitioners relegated to challenge order before appropriate authority: HC

++ ST - Services rendered by Assessee which directly benefit the foreign principal, qualify as export of service; are thus exempt from service tax levy: CESTAT

++ Cus - Anti Dumping - Until controverted, documentary evidence gets precedence over any suspicion emanating from the packaging of imported items: CESTAT

December 16, 2024

++ Cus - Appellants being manufacturers who regularly import scrap both for melting and re-rolling, imported cargo cannot be treated as seconds and defectives and so are eligible for benefit of concessional rate of duty in terms of Notfn 12/2012-Cus: CESTAT

++ ST - Transitional credit being a vested right, it cannot be taken away on procedural or technical grounds: CESTAT

December 14, 2024

++ Cus - Penalties imposed under Sections 112(a) & 112(b) stands reduced where the appellants were not involved in smuggling activities & did not benefit therefrom: CESTAT

December 13, 2024

++ Cus - Anticipatory bail plea allowed where claimant not proven to have nexus with illegal importation of relevant items: HC

++ GST - To afford opportunity of hearing is a statutory mandate which cannot be violated by proper officer - Order set aside and matter remanded: HC

++ GST - IGST refund - SCN issued on the basis of retrospective operation of Notification No. 54 of 2018 dated 09.10.2018 is held to be without jurisdiction: HC

++ GST - Refund of IGST - SCN issued on the basis of retrospective operation of Notification No.54 of 2018 dated 09.10.2018 is held to be without jurisdiction: HC

++ GST - Tax in its entirety has reached the hands of the ex-chequer - Petitioner cannot be made liable to pay double tax on reverse charge basis - Matter remitted: HC

++ GST - Refund of IGST - Notice issued on the basis of retrospective operation of Notification  No.54 of 2018  dated 09.10.2018 is held to be without jurisdiction: HC

++ GST - Refund of IGST - SCN dated 31.03.2023 issued on the basis of retrospective operation of Notification No.54 of 2018 dated 09.10.2018 is without jurisdiction: HC

++ GST - Refund of IGST - Summons issued on the basis of retrospective operation of Notification  No. 54 of 2018  dated 09.10.2018 is held to be without jurisdiction: HC

++ GST - Refund of IGST - Notice issued on the basis of retrospective operation of Notification  No.54 of 2018  dated 09.10.2018 is held to be without jurisdiction: HC

++ GST - Non-grant of personal hearing - Contradictory statements regarding opportunity of hearing - Classic case of raising disputed question of fact - Petition dismissed: HC

++ GST - Excess payment of tax - Futile exercise to remand matter as it is apparent that the petitioner is entitled to the refund claimed: HC

December 12, 2024

++ GST - Rule 86A is not a beneficial legislation to be interpreted liberally to benefit the aggrieved person - Negative blocking of Electronic Credit Ledger is 'permissible': HC

++ GST - Revision of order u/s 108 of CGST Act is invalid where no evidence is furnished to show that original order is invalid or illegal: HC

++ GST - Rule 96 - Refund of Integrated Tax - Notification 54/2018-CT would be applicable prospectively w.e.f 09.10.2018 and not from 23.10.2017: HC

++ Cus - CEPA - Import of bullion - Tariff Rate Quota revised - Since the review decision was made without affording the Petitioners an opportunity to be heard, DGFT to examine all issues and make a fresh decision: HC

++ Cus - Order in the matter of Review petition by Department in Canon India case - DRI has jurisdiction to issue SCN - Notice restored to Adjudicating authority for adjudication: HC

++ Kerala VAT - Provisions of Section 25(1) do not permit AO to pass fresh order for same AY, where assessment order already passed, is not modified or set aside: HC

++ Cus - Smuggling of Red Sanders wood - Penalty imposed u/s 114 of Customs Act quashed, as appellant was unaware of smuggling activity & in fact, helped uncover the same: CESTAT

++ ST - Import of services - As is settled law, no Service Tax can be levied for the period prior to the insertion of Section 66A; demand for period from 01.04.2001 to 17.04.2006 not valid: CESTAT

++ ST - Demand raised under Manpower Recruitment or Supply Agency Service is sustained, given clear distinctions in control, deliverables, & payment terms outlined in Master Service Agreements: CESTAT

December 11, 2024

++ Cus/ST - s.28 - 'where it is possible to do so' - Flexibility which the statute confers is not liable to be construed as sanctioning lethargy or indolence - Respondents clearly failed to discharge their obligation within a reasonable time - SCNs and final orders quashed: HC

++ CX - Tribunal rightly came to a categoric finding that the case of unaccounted manufacture and clearance was built on sketchy evidence without any concrete corroboration: HC

++ CX - Mere fact that the respondent agreed to deposit duty amount to avoid any kind of litigation, itself cannot be held to be the basis for confirming duty demand: HC

++ ST - Exemption Notfn . 25/2012-ST - Respondents have applied dual standards, resulting in differential tax treatment to similarly placed assessees without any rational basis - Discriminatory treatment violates rights of petitioner under Article 14: HC

++ GST - Petitioner claims that due to family dispute, they were unaware of the SCN and could not attend hearing - Petitioner to deposit 50% of demand for matter to be heard and passing of fresh order: HC

++ GST - Writ court under Article 226 of the Constitution cannot delve into disputed question of facts and cannot undertake detailed examination and scrutiny of documents: HC

++ GST - Increasing trend of taking chances by instituting petitions and making incorrect and frivolous averments - Petitioner relegated to avail alternate remedy of appeal: HC

++ CX - Penalty cannot be sustained in absence of recorded statement from accused & any evidence showing personal benefit from alleged evasion: CESTAT

++ ST - Assessee-company constructed residential project; cannot retain Cenvat credit in respect of unsold flats & must proportionately reverse the same: CESTAT

++ ST - Extended limitation is rightly invoked where assessee suppressed facts with intent to evade tax payment; having adopted self assessment, assessee did not reveal that it provided construction services; interest u/s 75 & penalty u/s 78 are upheld: CESTAT

++ Cus - Imported goods in question identifying as Low Aromatic White Spirit rightly classified as such under CTH 2710 1990; FTP provisions not contravened as goods not classifiable as Kerosene: CESTAT

++ Cus - SEZs are governed by SEZ Act along with Customs Act as movement of goods is controlled by Customs officers; any person operating in SEZ or warehousing in SEZ cannot be expected to have mala fide intent to evade duty: CESTAT

December 10, 2024

++ GST - GST under RCM on issuance of corporate guarantee is required to be paid on one-time basis, as guarantee is issued only once & is valid for a specified period without need for periodic renewal: AAR

++ GST - Reply filed to the notice was not taken into consideration while passing the impugned order - Counsel for respondent does not dispute the same - Matter remanded: HC

++ GST - Refund of IGST - To obviate the impossible, it must be held that petitioner could have filed application only after Notification in question was finally struck down and appeal of UOI dismissed in year 2022: HC

++ GST - Refund - Rule 89 - ITC which was reversed by the petitioner during the summons proceedings without there being any adjudication process, is required to be restored: HC

++ GST - Error in filing Form GSTR-1 is a genuine mistake & is not sufficient grounds to deny IGST refund: HC

++ ST - VCES, 2013 - An audit report is not an order of determination u/s 106(1) - Since SCN did not cover any of the dues in r/o which declaration was filed, taxpayer cannot be deprived benefit: HC

++ Cus - Insulin manufactured using r-DNA technology qualifies as mono component insulin; Notfn No. 12/2012-Cus. dt 17.03.2012 & Notfn No. 50/2017-Cus. dt 30.06.2017: CESTAT

++ ST - As inadequacy in documents is deemed to be a technical error and that there is no allegation that the services had not been rendered or that tax had not been discharged, denial of credit cannot sustain: CESTAT

++ ST - As per non-obstante clause in Section 142(6) of CGST Act, Assessee is entitled to cash refund of accumulated Krishi Kalyan Cess credits, for which refund application was filed u/s 11B of CEA; specific explantion under CGST Act does not impact refund process: CESTAT

++ CX - As per settled law, disputes over classification do not imply mala fide intent to evade duty or suppress facts, particularly where assessee accurately recorded all transactions: CESTAT

December 09, 2024

++ GST - While procedural compliance under GST framework is crucial, penalties for procedural lapses without evidence of tax evasion or malicious intent are unjustified: HC

++ GST - Rules should be applied contextually, taking into account the facts of the matter & intentions of the assessee: HC

++ GST - Gold held by petitioner as stock-in-trade seized by Department; Gold released conditional on payment of bond & undertaking to not alienate it till appeal is filed before GSTAT: HC

++ VAT - Recovery proceedings as well as order of attachment issued by VAT Authorities against deceased Director, to recover outstanding dues of company in default, are not sustainable: HC

++ Cus - Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules - Rule 5 thereof are applicable onto manufacturers & not onto importers: CESTAT

++ Cus - Charges of mis-declaration & alteration of MRP are not tenable where Department fails to establish any direct involvement of appellant in such activity: CESTAT

++ Cus - Since as per certificate produced by appellant, percentage of Fe content works out to less than 58%, therefore, in terms of Notfn 15/2016-Cus., appellant is not liable to pay export duty on exported goods : CESTAT

++ CX - As per settled position in law, proving clandestine removal does not require mathematical precision, as nature of such activities involves concealment of evidence: CESTAT

++ CX - clandestine removal - Charges upheld where director of assessee-company acknowledges shortages of finished goods & raw materials, goods' removal without payment of duty, failure to issue invoices & goods not accounted for in records: CESTAT

++ CX - Assessee manufactures both exempted & dutiable goods; assessee's contention of following provisions of Rule 6(3) CCR 2004: CESTAT

++ ST - As is settled position in law, reimbursed expenses should not be included in taxable service value; extended limitation cannot be invoked where no suppression of facts is attributed to assessee: CESTAT

++ ST - Service Tax cannot be levied on contracts meant for lending of money & not for leasing or hire-purchase: CESTAT

++ ST - Penalty not imposable where assessee regularly pays tax & no contravention of Section 78 of Finance Act 1994 or Rule 15 of CCR, 2004, is made out: CESTAT

December 07, 2024

++ Cus - Officers of Directorate of Revenue Intelligence are proper officers for the purposes of s.28 and are competent to issue show cause notice - Revenue appeal allowed: HC

++ Cus - Confiscation of gold chain and kara worn by foreign national - If that were the law, what fate will befall foreign tourists with gold capped teeth who arrive in India: HC

++ CX - A glaring aspect is that petitioner was manufacturing "Gutkha" in a clandestine manner without having any Registration; without registering the machines - Since case involves disputed question of facts, Bench declines to entertain petition: HC

December 06, 2024

++ GST - ITC Refund - Circular No. 181/22 insofar as it clarifies that the amendment by 14/2022-CT is not clarificatory in nature is quashed and set aside: HC

++ GST - Tax on ocean freight - Gujarat Electricity Regulatory Commission shall consider amount of refund as a part of revenue for determination of tariff of petitioner-Company - Transfer to Consumer Welfare fund incorrect: HC

++ GST - SCN placed in 'Additional Notices and Orders' tab - Portal architecture was modified only in January 2024 - Stand taken in the writ petition of lack of notice appears to have substance: HC

++ GST - Fact that limitation for passing assessment order was expiring cannot be a reason for not affording an opportunity of hearing to the party: HC

++ GST - Refund - Interest u/s 56 - State disowns liability - Petitioner cannot be deprived of the amount of interest on account of the inter se dispute between the State and Central authorities: HC

++ Cus - The sole active component in goods defines their essential character; hCG Pregnancy Rapid Test Strip & hCG Pregnancy Rapid Test Cassette are covered under exemption Notfn No 12/2012-Cus & Notfn No 50/2017-Cus: CESTAT

++ Cus - Tax demands are rendered invalid where based solely on statements u/s 108 recorded before Customs officers, but where cross-examination of their deponents is not permitted, in contravention of Section 138B: CESTAT

++ CX - Manufacture of firecrackers - Department denied SSI exemption based on erroneous assumption that assessee was operating as a partnership, while overlooking the fact that said partnership had subsequently dissolved & assessee bifurcated into separate entities: CESTAT

++ CX - No provisions in Cenvat Credit Rules 2005 or Central Excise Act 1944 permit refund in cash, of accumulated/unutilised Cenvat credit; that claimant was unable to utilise such credit due to not having utilised TRAN-1 route or file revised return in time, does not per se establish eligibility for refund: CESTAT

++ ST - Assessee availed Cenvat credit in respect of trading activities, which are not tied to any taxable activity; credit so availed warrants being reversed: CESTAT

++ ST - Since the Department has not brought any evidence on record to establish the intention to evade payment of tax on the part of appellant, demand confirmed by invoking extended period of limitation is not sustainable: CESTAT

++ ST - Reversal of CENVAT Credit was unjustified since assessee paid service tax on full invoice value, despite having paid lesser amount to service provider: CESTAT

December 05, 2024

++ GST -s.73(10), 168A - For AY 2017-18, the expiry of limitation stands extended to 21.01.2025, that of 2018-19 and that of 2019-20 to 28.02.2025: HC

++ GST - Refund of unutilised ITC - Authorities could not have adopted a hyper-technical approach by depriving petitioner of CENVAT credit which was available as on 01.07.2017 on the ground that such credit was reflected in ECL only in August, 2017 on processing of Form GST TRAN-1: HC

++ GST - S.17(5)(c) & (d) held to be not ultra vires in Safari Retreats case - Petitioner to comply with SCN on merits: HC

++ GST - In today's day and age, insistence on 'certified copy' of orders which can be obtained directly from the website of judicial and quasi-judicial bodies is regressive in nature and puts a premium on needless archaism: HC

+ GST - Cancellation of registration - No reply was filed in response to SCN and the appeal against order was also filed after more than a year -  Petitioner firm is not entitled for any relief on the ground of being lethargic in approach : HC

++ GST - SCN issued in name of a company which ceased to exist on account of its amalgamation, is invalid: HC

++ DGFT - provisions of Section 28AA of the Customs Act cannot be applied to levy interest on repayment of duty credit scrip: HC

++ GST - Commissioner to take appropriate measures to ensure that officials concerned are sensitised regarding passing of appropriate orders in accordance with law and not mechanical orders: HC

++ GST - Contents of the petitioner's reply have been scanned and re-printed; even the letter head of the petitioner has been printed in the said order - Respondent has not applied his mind - Order quashed: HC

++ GST - Rectification - limitation for filing appeal would start from date of rejection of rectification application & not from date of original assessment order: HC

++ ST - Assessee was not given proper notice to clarify correct classification of services - Demand rightly quashed: CESTAT

++ CX - Negligence or doubt about duty obligations alone cannot trigger extended limitations; that assessee acted in bona fide belief of goods not being dutiable, does not invite invoking extended limitation: CESTAT

++ CX - Section 11D, applicable to exempt excisable goods, could not apply to Zinc Ash which was deemed non-excisable: CESTAT

++ CX - As is trite law, if shortage is very negligible & there is no allegation of clandestine removal or even no proof of excess clearance of final products or inputs as such, availment of Cenvat credit by manufacturer is valid: CESTAT

December 04, 2024

++ ST - As per settled position in law, refund proceedings are considered execution proceedings & cannot modify prior assessments: CESTAT

++ ST - Self-assessment constitutes an assessment order, which is appealable - Ergo, refund claims cannot proceed without modification of original assessment: CESTAT

++ ST - Amount received as EX-GRATIA is component of job work charges only and is not given for refraining appellants or tolerating any act, it is not a consideration for any service at all, hence there is no application of Section 66E of Finance Act, 1994: CESTAT

December 03, 2024

++ ST - Works contract service cannot be equated either with contract for sale of goods or contract for supply of services simplicitor: CESTAT

++ ST - Demand in respect of Works Contract Service can be raised only after after introduction of a charge on Works contract service & not under any other service: CESTAT

++ CX - As is settled precedent, no duty is payable on samples not cleared from factory & which are destroyed soon after testing, as per SOP: CESTAT

December 02, 2024

++ GST - Imported goods while being transported to factory were not accompanied with Part-B of E-way bill - Contravention is venial and technical - Penalty of Rs.25000/- would suffice: HC

++ GST - S.74 does not indicate that SCN must be for one particular year and on the contrary refers to a 'period' - Difficult to hold that bunching of SCNs for six FYs is illegal: HC

++ GST - Order records finding on issues not mentioned in SCN - Replies filed have not been duly considered by authority - Order is cryptic and does not contain any reason for finalising liability - Order quashed: HC

++ GST - ITC after due date of furnishing return - S.16(5) to the rescue - Matter remanded: HC

++ NDPS - Applicant is in custody from last 3 years and till date there is absolutely no progress in the said matter - The conclusion of trial in near future is a remote possibility - Bail granted on strict conditions: HC

++ Cus - Personal jewellery which is not found to have been acquired on an overseas trip and was always a used personal effect of the passenger would not be subject to the monetary prescriptions incorporated in Rules 3 and 4 of the 2016 Rules: HC

++ CX - Petitioner would be entitled to transit loss up to 1% for non-payment of duty on the products transferred from the refinery/factory to the place of storage for the purpose of export: HC

++ GST -  Department is bound by Circular 76/50/2018 -  If the invoice mentions the name of the consignor, the consignor shall be deemed to be owner - Order to be passed u/s 129(1)(a) and goods/vehicle to be released: HC

++ GST - OIO challenged on ground that ITC was not taken into consideration - Matter remanded subject to condition that petitioner deposits Rs.8 lakhs within four weeks: HC

++ GST - Availment of input tax credit as CGST and SGST instead of IGST - No loss of revenue - GST Council shall issue necessary directions to resolve the issue: HC

++ GST - Orders passed in February 2020; appeals filed in December 2023 and writ petition filed in year 2024 - Contention that petitioner was sick and advised bed rest due to fatty liver disease has to be taken with a pinch of suspicion - Petitioner failed to approach within a reasonable time - Petition dismissed: HC 

++ GST - Levy of IGST on ocean freight - Since the levy has been held to be unconstitutional in Mohit Minerals case, refund of IGST must be allowed: HC

++ Misc - Bonds which are specified as long term capital assets u/s 54EC of I-T Act are subject to strict redemption rules; writ remedy for premature redemption disallowed, as no grounds made to prove mistake or misguided advice behind bonds' purchase: HC