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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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PART-2 Update on Advance Ruling Decision in the case of M/s JSW Energy

PART-2 Update on Advance Ruling Decision in the case of M/s JSW Energy

In continuation to our earlier update regarding the decision given in the case of M/s JSW Energy Ltd., we hereby discuss the implication of the Supreme Court decision given in the case of M/S PRESTIGE ENGINEERING (INDIA) VS COLLECTOR OF C.EX., MEERUT [1994 (73) E.L.T. 497 (S.C.)] and relied upon by the AAAR. As stated in our earlier update, it was held by the Apex Court that a job worker should not add substantial goods during the process of job-work and only minor additions are permissible. Following this analogy, it was held that since in the case of M/s JSW Energy Ltd., only coal was supplied to JEL, the activity cannot be considered as ‘job-work’. Now, the question arises is whether it is necessary that all the goods used in the process are to be supplied by the principal to the job worker in order to claim the benefit of clearing goods without payment of duty? Well, the answer to this question lies in various judicial pronouncements that have been rendered by distinguishing the ratio advanced in the case of Prestige Engineering (India).

It was held in the case of COMMISSIONER OF CUSTOMS & C. EX., BHOPAL VERSUS ABHINAV CHEMICALS [2012 (284) E.L.T. 589 (Tri. - Del.)] that the notification no. 214/86-CE (pertaining to excise exemption to goods sent on job-work basis) does not require that all the raw materials for the manufacture of final product must be supplied by the principal manufacturer. Consequently, even if the job-worker uses inputs during the course of processing, it will not lead to denying the said process as job-work. Furthermore, it was also held that the conclusion given in the case of Prestige Engineering was based on the definition of job work as given under notification no. 119/75-CE which is different from the definition of job work as given under notification no. 214/86. Consequently, the ratio of the decision given by the Apex Court cannot be applied for the job work done under notification no. 214/86-CE. It was also held that the exercise is 
revenue neutral as even if the job-worker paid central excise duty, the principal would be eligible to avail the credit of the same.

Similar view that it is not necessary that raw materials should also be supplied along with moulds and dies sent for job-work was taken in the case of COMMISSIONER OF C. EX., PONDICHERRY VERSUS WHIRLPOOL OF INDIA LTD. [2015 (316) E.L.T. 209 (MAD.) by Madras High Court. Apart from the above cited decisions, Bombay High Court has also held in the case of COMMR. OF CUS. (IMPORTS), MUMBAI VERSUS SUJAG FINE CHEMICALS (INDIA) LTD. [2013 (295) E.L.T. 32 (BOM.)] that the phrases used in a particular notification are to be strictly read and the meaning of job work as given in notification no. 119/75-CE cannot be imported for construing job work under notification no. 32/97-Cus. Hence, this decision also indicated that the conclusion given by the Apex Court in the case of Prestige Engineering was specific to job work under notification no. 119/75 and cannot be applied universally.

It is submitted that from the above referred decisions it is clear that there were contradictory views regarding this issue in the erstwhile taxation regime. It was not necessary condition that minimal material should be added by job-worker in order to avail benefit of exemption. It is further submitted that the GST Law is framed by taking the provisions of erstwhile taxation regime as base and most of the provisions are similar. Hence, whether the AAAR was correct in placing reliance on the decision of Apex Court is surely doubtful, particularly when there were contrary views on this issue even in the earlier regime. If the view of AAAR is taken, it will surely revamp the entire concept of job-work in the GST regime. We will discuss the impact of application of this opinion in the concept of job work in the GST regime in our next update.

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