Issues: (i) Whether separately invoiced goods and service values were correctly accepted for works-contract service tax valuation. (ii) Whether tax paid during investigation must be deducted when computing the penalty for intentional evasion.

Issue (i): Whether separately invoiced goods and service values were correctly accepted for works-contract service tax valuation.

Analysis: Rule 2A provides for valuation of the service portion after deducting the value of goods, with percentage-based valuation where that value is not determined. Revenue bore the burden of establishing that the invoices were incorrect but produced no such evidence. VAT had been paid and returns filed on the declared goods values.

Conclusion: The separately invoiced values were correctly accepted, in favour of the assessee.

Issue (ii): Whether tax paid during investigation must be deducted when computing the penalty for intentional evasion.

Analysis: Sections 73(3) and 73(4) distinguish pre-notice payments from cases involving specified conduct with intent to evade tax. Section 78 provides for a penalty equivalent to the unpaid tax in such circumstances. Service tax had been collected from recipients but not deposited, and wilful suppression had been found.

Conclusion: The penalty must equal the entire confirmed tax without deducting amounts paid during investigation, against the assessee.

Final Conclusion: The works-contract valuation stands, while the penalty must be recalculated on the full confirmed service tax.

Ratio Decidendi: Where service tax is unpaid by reason of suppression with intent to evade, payment during investigation does not reduce the tax base for computing the penalty.

Issues: (i) Whether a body corporate was covered by the definition of consulting engineer before the 2005 amendment; (ii) whether reimbursable expenses were includible in taxable service value for the period in dispute.

Issue (i): Whether a body corporate was covered by the definition of consulting engineer before the 2005 amendment.

Analysis: The governing Supreme Court interpretation treats a body corporate as a person within the pre-amendment definition, displacing contrary decisions.

Conclusion: Yes. The issue is against the assessee.

Issue (ii): Whether reimbursable expenses were includible in taxable service value for the period in dispute.

Analysis: Rule 5 of the valuation rules provided for inclusion of reimbursable expenses, but was declared ultra vires section 67 of the Finance Act, 1994. Section 67 was subsequently amended in 2015 to include such expenses; the disputed period preceded that amendment.

Conclusion: No. The issue is in favour of the assessee.

Final Conclusion: The disputed pre-2015 reimbursements are excluded from taxable value notwithstanding the provider's coverage as a consulting engineer.

Ratio Decidendi: A valuation rule cannot require inclusion of reimbursable expenses in taxable service value where the governing pre-amendment statute does not authorise it.

Issues: (i) Whether the trader was liable for excise duty and confiscation of goods as a manufacturer; (ii) whether unrecorded goods at the registered manufacturer's premises were liable to confiscation; (iii) whether seized cash was liable to confiscation as proceeds of clandestine clearances; and (iv) whether duty, confiscation and penalties were sustainable against the repacker.

Issue (i): Whether the trader was liable for excise duty and confiscation of goods as a manufacturer.

Analysis: Verification disclosed no power connection, machinery or manufacturing infrastructure at the premises. The alleged manufacture through job workers was unsupported by investigation or evidence from the job workers. Where goods are manufactured by a job worker, the job worker is the manufacturer liable for duty.

Conclusion: The duty demand and confiscation of the trader's goods were set aside, in favour of the assessee.

Issue (ii): Whether unrecorded goods at the registered manufacturer's premises were liable to confiscation.

Analysis: The Revenue did not establish that the goods had reached the finished stage or were intended for clandestine removal. Evidence of testing and affixing of maximum retail price stickers was absent; the goods had subsequently been cleared on payment of duty.

Conclusion: Confiscation, redemption fine and penalty were set aside, in favour of the assessee.

Issue (iii): Whether seized cash was liable to confiscation as proceeds of clandestine clearances.

Analysis: Cash records and an agreement supported the stated sources of amounts seized from the manufacturer's premises and residences. The Revenue produced no evidence connecting those amounts with clandestine clearances.

Conclusion: Confiscation of the cash was set aside and refund directed, in favour of the assessee.

Issue (iv): Whether duty, confiscation and penalties were sustainable against the repacker.

Analysis: The supplier had paid duty on the maximum retail price-based goods. The repacker had not taken the corresponding Cenvat credit, the duty payable was equivalent to that credit, and affixing stickers did not change the assessable value. The situation was revenue neutral.

Conclusion: The duty demand, confiscation, redemption fine and penalty were set aside, in favour of the assessee.

Final Conclusion: The findings removed the basis for the duty demands, confiscations, redemption fines and penalties, including penalties on the individuals; the seized cash was refundable.

Ratio Decidendi: Where goods are manufactured by a job worker, the job worker is the manufacturer liable for excise duty.

Issues: (i) Whether components supplied for free warranty replacement qualified for the special additional duty end-use exemption; (ii) whether recovery of the duty was barred by limitation; (iii) whether Cenvat credit of the duty paid was admissible; (iv) whether interest on the duty was payable; and (v) whether the customs and Cenvat penalties were sustainable.

Issue (i): Whether components supplied for free warranty replacement qualified for the special additional duty end-use exemption.

Analysis: The exemption notifications incorporated the 1996 Rules, which required actual use of the imported components in manufacture at the registered factory. The separate inclusion of free-warranty goods as inputs for Cenvat credit did not alter that condition. End-use certificates based on incomplete returns certified factual use and did not require prior review before recovery. Special additional duty arose on import and did not depend on a subsequent taxable sale of the same goods.

Conclusion: The exemption was unavailable for the warranty components, and the duty was recoverable under Rule 8, against the assessee.

Issue (ii): Whether recovery of the duty was barred by limitation.

Analysis: Rule 8 operates independently of Section 28 of the Customs Act and prescribes no limitation period; a notice must instead be issued within a reasonable time. The notice followed disclosure of the transfers by less than a year. A wrong reference to Section 28 did not invalidate action supported by Rule 8.

Conclusion: The demand was raised within a reasonable period and was not time-barred, against the assessee.

Issue (iii): Whether Cenvat credit of the duty paid was admissible.

Analysis: Rules 2, 3 and 9 of the Cenvat Credit Rules treat free-warranty goods as inputs, permit credit of eligible duty and recognise challans evidencing additional customs duty as credit documents. The exclusion for duty recoverable through specified conduct with intent to evade required proof of that intent. Duty paid would have been creditable without reversal on free-warranty removal; the transfers were reflected in returns, disclosed when queried and followed by payment before notice.

Conclusion: The duty credit was admissible, and its recovery and associated interest were set aside, in favour of the assessee.

Issue (iv): Whether interest on the duty was payable.

Analysis: Rule 8 itself requires interest on duty recovered for breach of the end-use condition, from importation until actual payment. Its reference to the Customs Act fixes the interest rate rather than supplying the source of liability.

Conclusion: Interest of Rs. 36,57,166 was payable, with adjustment of the amount already paid, against the assessee.

Issue (v): Whether the customs and Cenvat penalties were sustainable.

Analysis: Section 114A requires the specified deliberate conduct, which the evidence did not establish; its substantive penalty provision also did not extend to special additional duty during the period in dispute. Penalty under Rule 15 of the Cenvat Credit Rules presupposed wrongful credit, and was not automatic upon denial of credit.

Conclusion: Both penalties were set aside, in favour of the assessee.

Final Conclusion: Breach of the end-use condition attracted duty and interest despite revenue neutrality, while the absence of established intent to evade preserved the eligible credit and removed the grounds for the penalties.

Ratio Decidendi: Rule 8 of the 1996 Rules independently authorises recovery for breach of an end-use condition within a reasonable time, without applying the limitation periods in Section 28 of the Customs Act.

Issues: Whether fitting prescription lenses into spectacle frames constitutes manufacture for central excise purposes.

Analysis: Section 2(f) of the Central Excise Act, 1944 governs the meaning of manufacture. The applicable precedents distinguish manufacture from mere assembly, including the incidental refining and adjustments required to fit lenses into frames. The manufacture of lenses and frames is distinct from their subsequent assembly.

Conclusion: Fitting prescription lenses into spectacle frames does not constitute manufacture for central excise purposes. The issue is decided in favour of the assessee.

Ratio Decidendi: Mere assembly of lenses and frames, including incidental fitting and adjustments, does not constitute manufacture for central excise purposes.

Issues: (i) Whether the works-contract supplies qualified for the concessional GST rate of 12%; (ii) Whether interest on the differential tax and the statutory penalty could be waived for bona fide conduct; (iii) Whether the differential tax was to be recomputed on a cum-tax basis; (iv) Whether the disputed input tax credit and associated interest were properly disallowed.

Issue (i): Whether the works-contract supplies qualified for the concessional GST rate of 12%.

Analysis: The applicable notification required both a qualifying recipient and works predominantly meant for non-commercial, non-industrial use. The societies, rather than the supervising government department, received the supplies. Registration under the general cooperative law and government supervision or funding of projects did not establish that the societies were set up by statute or established by government. The works were factory buildings intended for spinning yarn for sale; the societies' social objectives did not alter that intended use. Departmental decisions concerning the GST component of contract prices could not override the notified rate.

Conclusion: The concession was unavailable and the supplies were taxable at 18%, against the assessee.

Issue (ii): Whether interest on the differential tax and the statutory penalty could be waived for bona fide conduct.

Analysis: Interest under Section 50(1) is compensatory and depends on unpaid tax, not the taxpayer's state of mind. Section 73 addresses cases without fraud or suppression and prescribes a penalty unless tax and interest are paid within the statutory period after notice. Promissory estoppel cannot override liabilities imposed by law.

Conclusion: Interest and the Section 73 penalty were not waivable on the claimed grounds, against the assessee.

Issue (iii): Whether the differential tax was to be recomputed on a cum-tax basis.

Analysis: Section 15 bases valuation on the transaction value. The invoices identified contract receipts as exclusive of tax and charged tax separately; the sales register likewise recorded the receipts as tax-exclusive.

Conclusion: Cum-tax recomputation was unavailable, against the assessee.

Issue (iv): Whether the disputed input tax credit and associated interest were properly disallowed.

Analysis: Sections 16 and 155 require the claimant to establish eligibility, including payment of the tax charged on the supplies. The applicable circular provides for verification of return discrepancies through supplier or accountant certificates. The records lacked invoice-wise reconciliation and the contemplated certificates; supplier return-filing printouts did not establish payment of tax on the particular supplies. An adequate opportunity to produce evidence had been available. Section 50(3) applies where credit was wrongly availed and utilised, and the net-basis calculation was not disputed.

Conclusion: The credit disallowance and associated interest were sustained, against the assessee.

Final Conclusion: The confirmed liabilities remain subject to adjustment of amounts already paid, while the existing conditional refund entitlement is undisturbed.

Ratio Decidendi: A works-contract rate concession requiring a qualifying government recipient and predominantly non-commercial use cannot be established merely by government sponsorship of a project or the owner's social objectives when the recipient's qualifying status is unproved and the works are intended for industrial use.

Issues: Whether spools covered by an EPCG authorisation qualify for customs exemption despite a difference in tariff classification.

Analysis: The Foreign Trade Policy permits eligible capital goods to be imported under the EPCG scheme and defines capital goods by reference to their use in manufacture or production. The exemption notification adopts that definition. The spools were described in both the authorisation and the bill of entry, and their inclusion in the negative list was not alleged. Customs had neither sought clarification from the authorising authority nor obtained modification or annulment of the authorisation.

Conclusion: The exemption is available irrespective of the classification difference. The duty demand, penalty and redemption fine are not warranted. The issue is decided in favour of the assessee.

Ratio Decidendi: Where goods qualify as capital goods under the applicable policy and are covered by an unaltered EPCG authorisation, a difference in tariff classification alone does not justify denying the exemption.

Issues: (i) Whether penalty was justified for availing ineligible input tax credit; (ii) Whether interest was leviable on input tax credit claimed to have been reversed without utilisation.

Issue (i): Whether penalty was justified for availing ineligible input tax credit.

Analysis: The credit was admittedly ineligible. The penalty appeared to have been imposed under Section 73 of the applicable GST enactments; a penalty under Section 122 would not materially differ in the amount imposed.

Conclusion: The penalty was upheld, against the assessee.

Issue (ii): Whether interest was leviable on input tax credit claimed to have been reversed without utilisation.

Analysis: Interest depends on utilisation of the credit, rather than mere availment. The credit was claimed to have remained in the electronic credit ledger and to have been reversed without utilisation.

Conclusion: Interest is not leviable if the credit was not utilised. The interest levy was set aside for conditional reconsideration, in favour of the assessee.

Final Conclusion: The penalty remains payable, while the interest liability requires fresh consideration.

Ratio Decidendi: Availing ineligible input tax credit justifies penalty, whereas interest on that credit requires its utilisation.

Issues: Whether proceedings founded on discrepancies noticed upon scrutiny of returns could be initiated without prior notice in Form GST ASMT-10, despite the taxpayer's subsequent participation.

Analysis: Section 61 of the Assam Goods and Services Tax Act and Rule 99 of the Assam Goods and Services Tax Rules require discrepancies noticed during scrutiny to be communicated to the registered person for an explanation before further action. The proposed demand arose from examination and comparison of returns and related records; no independent source was demonstrated. A reply in subsequent proceedings serves a different purpose from the statutory safeguard at the scrutiny stage.

Conclusion: No. The notice and consequential adjudication order are set aside in favour of the petitioner.

Ratio Decidendi: Where proceedings for tax determination are founded on discrepancies noticed during scrutiny of returns, the prescribed scrutiny notice must precede those proceedings; subsequent participation does not waive that statutory safeguard.

Issues: Whether the order for the financial year 2018-19 was passed within the prescribed limitation period.

Analysis: Section 73 of the Assam Goods and Services Tax Act, 2017 prescribes a three-year period from the due date for the annual return. Under Section 44 and Rule 80, the return for 2018-19 was due by 31 December 2019. A notification under Section 168A extended the deadline for the order to 31 March 2024; the order was passed on 24 April 2024.

Conclusion: The order was time-barred and was set aside and quashed.

Ratio Decidendi: An order passed after the applicable limitation period, including its statutory extension, cannot be sustained.

Issues: Whether the adjudication order and its summary should be set aside to afford an opportunity to respond to the show cause notice.

Analysis: The adjudication order under Section 74 of the Central and Karnataka Goods and Services Tax Acts followed non-response to the notice. Records showed that the petitioner had been diagnosed with a terminal illness, undergone surgery and received prolonged treatment. These circumstances demonstrated bona fides for the non-participation.

Conclusion: The adjudication order and its summary were quashed, and the petitioner was permitted to respond to the notice within the stipulated or extended time.

Issues: (i) Whether the original order could be rectified to exclude the GST component or in light of a subsequent order in another case. (ii) Whether amounts attributable to homebuyers could be deposited in the Consumer Welfare Funds instead of refunded directly.

Issue (i): Whether the original order could be rectified to exclude the GST component or in light of a subsequent order in another case.

Analysis: Rule 31 confines rectification to clerical, arithmetical or factual mistakes apparent from the record and does not confer a general power of review. The GST component had been expressly addressed in the original order, and payment of GST was distinct from the obligation to pass on the input tax credit benefit. The subsequent order in separate proceedings was not material available when the original order was passed.

Conclusion: The rectification application was not maintainable; neither the GST component nor the original determination was altered. This issue was against the assessee.

Issue (ii): Whether amounts attributable to homebuyers could be deposited in the Consumer Welfare Funds instead of refunded directly.

Analysis: Rule 133 of the Central Goods and Services Tax Rules, 2017, read with Section 57 of the Central Goods and Services Tax Act, 2017, permits deposits where an eligible person does not claim the amount or is not identifiable. Missing bank details alone do not establish either condition. The principle that the law does not compel the impossible requires evidence of genuine inability despite reasonable efforts and cannot override statutory requirements. Direct refunds remain required where payment can be made, with documented homebuyer-wise efforts and compliance with the allocation and interest requirements for eligible deposits.

Conclusion: Deposits in the Consumer Welfare Funds were permitted to the limited extent that the statutory conditions were satisfied. The original complainant must be refunded directly. This issue was partly in favour of the assessee.

Final Conclusion: The original profiteered amount, GST component and interest remain payable, with limited flexibility in the manner of disbursement.

Ratio Decidendi: Rectification under Rule 31 is confined to apparent clerical, arithmetical or factual mistakes and cannot reopen an adjudicated issue merely because a subsequent decision in separate proceedings is relied upon.

Issues: (i) Whether the claim was for unutilised input tax credit or excess tax paid; (ii) whether an SEZ unit could claim a refund of unutilised input tax credit distributed by an input service distributor.

Issue (i): Whether the claim was for unutilised input tax credit or excess tax paid.

Analysis: The claim documents described the balance as unutilised credit in the electronic credit ledger. The alternative characterisation as excess tax paid was unsupported by documentary evidence or law.

Conclusion: The claim was for unutilised input tax credit, not excess tax paid, in favour of the Revenue on characterisation.

Issue (ii): Whether an SEZ unit could claim a refund of unutilised input tax credit distributed by an input service distributor.

Analysis: Section 54 of the Central Goods and Services Tax Act, 2017 and Rule 89 of the associated Rules govern refund claims. Binding jurisdictional precedent addressed credit distributed by an input service distributor where no supplier could claim its refund. No stay of the relevant precedent was shown. The circulars concerning manual refund processing did not alter substantive refund rights.

Conclusion: The SEZ unit could claim the refund of unutilised input tax credit distributed by the input service distributor, in favour of the assessee.

Final Conclusion: The SEZ unit's refund entitlement remains governed by the statutory scheme as interpreted by binding precedent, without curtailment by procedural circulars.

Ratio Decidendi: An SEZ unit may claim a refund of unutilised input tax credit distributed by an input service distributor where no supplier can claim refund of that distributed credit.

Issues: Whether the exclusion of three companies as transfer-pricing comparables raised a substantial question of law.

Analysis: The undisputed functional profiles showed activities beyond software distribution, including software development, research and development, ownership of intellectual property, and other services. The Tribunal had not applied a separate functionality filter. No question or reason alleging perversity in its factual findings was identified.

Conclusion: The exclusion of the comparables stands; no substantial question of law arose. The issue was decided in favour of the assessee.

Ratio Decidendi: A factual finding of functional dissimilarity based on undisputed functional profiles does not raise a substantial question of law where no perversity is alleged or shown.

Issues: Whether a penalty for undisclosed income was leviable on an excess futures and options loss arising from a computational error in the return.

Analysis: Section 271AAB defines undisclosed income by reference to specified assets, entries, documents or transactions found during a search, or a false expense entry that would not have been discovered without the search. The assessee voluntarily reported the excess loss during post-search assessment proceedings. The claim that no document found during the search recorded the excess loss was not negated. An inadvertent mistake was distinguished from a false expense entry, even where scrutiny followed the search.

Conclusion: The penalty was not leviable and was deleted.

Ratio Decidendi: An inadvertent computational error voluntarily corrected after a search does not constitute undisclosed income for a search-related penalty where it is not established through search-discovered material or a false expense entry within the statutory definition.

Issues: Interim custody of the seized vehicle and participation in the confiscation proceedings.

Outcome: The writ petition was disposed of with directions for the competent authority to decide the interim custody application and for the petitioner to participate in the confiscation proceedings. No final determination was made on release or confiscation of the vehicle.

Issues: Whether an appeal against a Tribunal order concerning a refund is maintainable before the High Court when it raises a question of taxability.

Analysis: Section 35G of the Central Excise Act, 1944 excludes appeals involving questions relating to the rate of duty or value of goods for assessment. Section 35L includes determination of taxability or excisability within questions relating to the rate of duty and provides for an appeal to the Supreme Court. Although the dispute concerned a refund, its rejection rested on the asserted taxability of the services, and that question was contested before the Tribunal and raised in the appeal.

Conclusion: The appeal is not maintainable before the High Court.

Ratio Decidendi: An appeal involving determination of taxability for assessment falls outside the High Court's jurisdiction under Section 35G, even where the underlying dispute concerns a refund.

Issues: Whether separate GST penalty proceedings may be initiated against a partner for input tax credit allegedly wrongly claimed by the partnership firm, when proceedings have also been initiated against the firm.

Analysis: The Court observed that separate proceedings against the partner did not appear necessary.

Outcome: Notice was issued on the petition and interim prayer. Further action under the show-cause notice was restrained until the next returnable date. The petition and interim prayer remain pending, with no final adjudication.

Issues: Whether a system-generated show cause notice supported cancellation of GST registration.

Analysis: The notice referred to the jurisdictional office and bore a digital signature of the GST network. The adopted precedent distinguished a notice identifying its issuing authority from a system-generated notice bearing neither the name nor office of that authority. The statutory power to issue a notice rests with an officer, not the system.

Conclusion: The cancellation and appellate orders were set aside. The authorities remain free to issue a fresh notice in accordance with law.

Ratio Decidendi: A system-generated notice for cancellation of GST registration that identifies neither the name nor office of the issuing authority is invalid because the power to issue it vests in an officer, not the system.

Issues: (i) Whether reassessment proceedings could be issued against the PAN of a company that had ceased to exist before the relevant assessment year; (ii) whether the non-filer flag and the need for verification justified reassessment in the circumstances.

Issue (i): Whether reassessment proceedings could be issued against the PAN of a company that had ceased to exist before the relevant assessment year.

Analysis: The company ceased to exist upon conversion into an LLP before the relevant year. Continued reporting of dividend payments and tax credits against its PAN did not restore its existence. The proceedings could not be transferred to the successor's PAN, and no valid return for the relevant year could be filed under the former company's PAN.

Conclusion: The notices and order issued against the former company's PAN are invalid and stand quashed, in favour of the petitioner.

Issue (ii): Whether the non-filer flag and the need for verification justified reassessment in the circumstances.

Analysis: Reassessment requires information suggesting escapement of income. A risk-management flag requires application of mind, including consideration of the taxpayer's explanation and reconciliation. The non-filer flag relied on the absence of a return under the former company's PAN despite the successor's return. The order identified no specific discrepancy and sought comprehensive verification during reassessment.

Conclusion: The non-filer flag and proposed verification did not justify reassessment, in favour of the petitioner.

Final Conclusion: The impugned non-filer information cannot support the reassessment proceedings against either PAN.

Ratio Decidendi: Reassessment requires information suggesting escapement of income, assessed with due application of mind to the taxpayer's explanation; an erroneous non-filer flag and a desire for verification do not suffice.