TODAY'S CASE (INDIRECT TAX)

April 05, 2025

++ CX - Mere interconnection under Income Tax law does not establish a related party transaction under Central Excise law, thereby invalidating department's demand for duty at 110% of production cost: CESTAT

++ ST - Removal of smart cards for pairing with set-top boxes (STBs) constituted job work under Rule 4(5)(a) of CCR, 2004 and thus, reversal of CENVAT credit is not required: CESTAT

++ ST - Activity of serving as intermediary between foreign entities & Indian customers, qualifies as export of services; commissions earned by assessee will not attract Service Tax levy: CESTAT

++ CX - Valuation - Specifications meant for guidance purposes per se differ from detailed engineering drawings; only the latter is to be included in assessable value: CESTAT

++ CX - Invocation of extended period under Section 11A(4) and penalty under Section 11AC is unwarranted since all facts including product details and classification are declared in returns and known to department: CESTAT

++ Cus - Import of motor bike - Confiscation u/s 111(d), (i) & (j) not tenable as bike not prohibited for import; or concealed or removed from Customs area without permission - Penalty u/s 112(b) quashed as no evidence that appellant knew that bike was liable for confiscation: CESTAT

April 04, 2025

++ Cus - From photograph, it is clear that though material is Polyurethanes, but it is not in its Primary Form - Goods are top skin, bottom skin, side skin, shredding and trimmings, therefore, it comes within definition of scrap, waste and parings - DGFT has restricted import of such items, hence seizure is proper: HC

++ ST - Question of limitation is a mixed question of law and fact, therefore, the Single Judge rightly refused to exercise his discretion in entertaining the writ petition: HC

++ GST - Petitioner is granted liberty to approach the appellate authority and raise all the grounds raised in this writ petition, in the appeal - status quo prevailing as on date shall be maintained by respondent: HC

++ GST - Circular trading issue - Matter is liable to be decided in presence of all five assessees - In order that the petitioner also participates, the dismissal order is recalled and petition is restored in view of changed circumstances: HC

++ GST - 95 days delay - Appellate Authority has no power to condone the delay - In absence of any statutory provisions, even the High Court cannot condone the delay beyond the period of one month: HC

++ GST - Since the PSU is an entity which is a GOI company and is owned, controlled and administered by UOI, Court is of the opinion that counsel for Revenue may use his good offices at appropriate levels, in conjunction with counsel for petitioner to explore a resolution: HC

++ ST - Bifurcation of contracts for service tax and VAT purposes is legitimate, service tax could not be levied on value of goods where VAT had already been paid: CESTAT

++ ST - Appellant's activity of providing trailers on hire did not fall under 'Supply of Tangible Goods' service and is exempt from service tax: CESTAT

++ ST - Tax demand not tenable where SCN is issued based on incorrect presumptions: CESTAT

++ Cus - Classification disputes must be resolved based on tariff notes and without penalizing importers for alleged misdeclarations unless clear evidence of intent exists : CESTAT

++ CX - Merely performing intermediate processes like cutting or bending does not amount to manufacture, denial of exemption under Notfn 214/86-CE for procedural lapses by principal manufacturer is unjustified: CESTAT

April 03, 2025

++ GST - Once orders are passed in violation of principles of natural justice, Court cannot impose any condition requiring petitioner to make any deposit - However, voluntary payment of 25% of disputed tax accepted and matter remanded: HC

++ GST - When respondents intended to pass orders confirming demand, they ought to have provided an opportunity of hearing - Dropping proceedings, based on reply filed, can very well be done: HC

++ GST - Time limit prescribed u/s 73(2) for issuance of SCN is mandatory and if there is any violation of the aforesaid period, the same would render the SCN otiose: HC

++ GST - Appeal has been rejected stating that no application for adjournment was submitted and no further adjournment can be allowed - Grounds canvassed in the appeal petition have not been adverted to by the appellate authority - Matter remanded: HC

++ GST - Cancellation of registration - Ends of justice would warrant the petitioner being accorded an opportunity to furnish a response to SCN: HC

++ GST - Authority has failed to assign or accord any reasoning or even allude to the response submitted by petitioner, while confirming the demand - Order unreasoned, hence will not sustain: HC

++ Cus - Penalty imposed on steamer agent for exporting goods with cancelled LEO - export remittance was received, indicating that export indeed occurred; Customs website reflected goods as ready for shipment - penalty quashed: CESTAT

++ Cus - Exemption under EPCG scheme cannot be denied solely on grounds that it was not claimed at the time of import of relevant goods; exemption can be claimed at time of de-bonding of the goods: CESTAT

++ ST - Reimbursable expenses, operational surplus and freight brokerage are not taxable under CHA or Business Auxiliary Services: CESTAT

++ ST - As is trite law, renting of immovable property by municipalities may not be subject to Service Tax as it may be considered a sovereign function; case remanded for reconsideration: CESTAT

++ CX - Disallowance of Cenvat credit availed on inputs - SCN not issued & no justification given as to how Assessee was required to clear goods under full exemption as per Notfn No 04/2006-CE; denial of credit not tenable: CESTAT

April 02, 2025

++ GST - Via automated email and SMS on registered mobile number, SCNs were sent for all periods - Only for 2019-20, petitioner states that he did not receive copy and which is not possible to accept - Nonetheless, petitioner permitted to file appeal: HC

++ GST - Respondent department has failed to assign any valid reason justifying the action of cancellation of registration and that too with retrospective effect: HC

++ Cus - Classification of product is a recurring and a legal issue - Court deems it appropriate to remand the matter to CESTAT, for a fresh adjudication on the classification issue itself: HC

++ Cus - T-3 IGI - Gold bangles weighing 50 grams seized - Since one year period has elapsed, no SCN can be issued - Detention impermissible: HC

++ Cus - Old iPhones seized - Whether SCN was delivered to petitioner within prescribed period is a question of fact - Reply to be filed and provisional release may be sought: HC

++ CX - Co-noticees cannot be held liable once the main noticees have resolved the matter under SVLDRS, as no further liability exists for them: CESTAT

++ Cus - The right to a fair hearing is fundamental and must be upheld even if procedural lapses occur on the part of appellant or department: CESTAT

++ ST - Extended limitation - Department can request further documents or conduct an inquiry if duty escapes assessment; audit process should not be used as basis to assume suppression of facts: CESTAT

++ ST - Department cannot invoke extended limitation on charges of evasion of tax, where it is aware of assessee's activities during relevant period: CESTAT

++ ST - Allegations of suppression of facts with intent to evade payment of tax, do not hold where based on open-source documents & where issue involves interpretation of law: CESTAT

April 01, 2025

++ GST - ITC availed on inputs consumed in manufacture of Steel Nails, that got destroyed in fire accident, is required to be reversed: AAAR

++ GST - 22 days delay - Order was communicated to appellant at the email id mentioned in GST ARA-01, therefore, it is incorrect to state that order was not received in time - Delay in filing appeal unexplained, hence appeal rejected: AAAR

++ GST - Petitioner has not caused any loss to the State Exchequer as he has been filing GST returns on time and all due taxes have been paid promptly - Anticipatory bail granted: HC

++ Cus - Personal jewellery could not have been detained in the first place - No SCN issued even after lapse of one year from detention date - Jewellery to be released: HC

++ Cus - Petitioners are Indian citizens who had come back after attending their son-in-law's 50th birthday in USA and jewellery which was owned by them were their personal effects - No justification for detaining jewellery - To be released: HC

++ Cus - Head office expense allocations must involve specific services and consideration to attract service tax liability, allocations without evidence of specific services or contractual obligations are deemed non-taxable: CESTAT

++ CX - 1% transit loss allowed on Naphtha cleared for export holding that CBEC Circular permitting such loss remains valid and applicable even under export warehousing: CESTAT

++ ST - Excess freight and insurance charges collected from dealers during sale of goods cannot be taxed under 'Business Auxiliary Services' as they form part of assessable value on which excise duty has already been paid: CESTAT