Trucks Used to Smuggle Vietnamese Pepper via Nepal Without Owner’s Knowledge: CESTAT Quashes Redemption Fine
Vinod Kumar Agarwal vsCommissioner of Customs (Preventive)
CITATION : 2025 TAXSCAN (CESTAT) 706
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a truck used in the smuggling of Vietnamese black pepper via Nepal could not be confiscated or penalized when the owner had no knowledge of the smuggling activity.
The appellant’s counsel argued that he had no knowledge that the goods carried in the truck were smuggled. They submitted that the truck was handed over to a driver for a transportation job and that the appellant was not involved in the loading or documentation of the consignment. They claimed to have acted only as a transporter and was paid freight charges. He further argued that no evidence was produced by the department to show that he had any involvement or intent to participate in the smuggling.
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CESTAT Finds No Evidence of F-Card Misuse After CHA Suspension; Sets Aside Revocation and Penalty
Shyamal Kumar Ghosh vs PrincipalCommissioner of Customs (Airport & ACC Commissionerate)
CITATION : 2025 TAXSCAN (CESTAT) 705
The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the revocation of the assessee’s F-Card and the ₹50,000 penalty, holding that there was no evidence of misuse after the suspension of the Customs House Agent (CHA) firm’s licence.
The appellate tribunal observed that the imports in question were handled by M/s. P.R. Logistics, and the assessee played only a minor role. The allegations against him were based only on a statement from an importer, and no solid evidence was presented.
PVC Regrind Not Restricted Waste: CESTAT Classifies It as Freely Importable
M/s. Akshaya Steels vs TheCommissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 708
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that PVC Regrind is not classifiable as restricted plastic waste or scrap and thus is freely importable under the applicable Foreign Trade Policy.
The appellant’s counsel argued that the PVC Regrind was a reprocessed material used in manufacturing and fell under Heading 3904, which allows for free import. They submitted a test report from CIPET confirming that the material was a single thermoplastic substance and not plastic waste or scrap. It further argued that the product was declared accurately in the Bills of Entry, and the classification as waste was incorrect and unsupported by evidence.
Works Contract Not Taxable Under Commercial or Industrial Construction Services :CESTAT
M/s Srishti Interiors vsCommissioner of Service Tax CITATION : 2025 TAXSCAN (CESTAT) 707
The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that works contract services provided by the assessee could not be taxed under the category of Commercial or Industrial Construction Services.
The assessee counsel argued that the order was not justified as it did not consider the facts properly. He said the delay in paying service tax was due to the proprietor being hospitalised after a serious car accident. Since the tax and interest were paid before the show cause notice, he claimed no notice was needed under Section 73(3) and penalties should not have been imposed.
14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand
Kiran Gems Pvt. Ltd vsCommissioner of Service Tax-IV
CITATION : 2025 TAXSCAN (CESTAT) 709
In a recent judgment, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed a series of subsequent Service Tax demand notices issued following a service tax show-cause notice (SCN), holding that the Statements of Demand could not stand since the original Show Cause Notice (SCN) dated March 28, 2011 had not been adjudicated.
On this basis, CESTAT set aside the impugned order of March 22, 2016 while directing the original authority to adjudicate the March 28, 2011 SCN together with the subsequent SCNs of November 19, 2011, October 12, 2012 and October 28, 2013, all after providing Kiran Gems a reasonable opportunity of personal hearing.
Rebate of Swachh Bharat Cess on Export Services Permissible Even Without CENVAT Credit Mechanism: CESTAT
Teleperformance Global ServicesPvt Ltd vs Commissioner of Central Goods & Service
CITATION : 2025 TAXSCAN (CESTAT) 710
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that rebate of Swachh Bharat Cess (SBC) on input services used for export of services is permissible even though SBC is not part of the CENVAT credit mechanism.
The department filed an appeal challenging the rebate allowed, while the appellant filed a cross-appeal against the partial rejection. The Commissioner (Appeals) remanded the case for re-examination of several issues including the nature of input services, limitation, applicability of the rebate notification, and whether the services constituted intermediary services.
Call Centers Providing Direct Services Are Not Intermediaries Under Service Tax: CESTAT
Teleperformance Global ServicesPvt Ltd vs Commissioner of Central Goods & Service
CITATION : 2025 TAXSCAN (CESTAT) 710
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that call centers providing services on their own account are not intermediaries under service tax law.
The appellant’s counsel argued that the services were provided on a principal-to-principal basis, directly to foreign clients, and not on behalf of anyone else. They pointed out that the same issue had been settled in their favor in earlier CESTAT rulings, which held that call centers and BPOs are not intermediaries if they act on their own account. The counsel also cited CBEC Circular No. 334/1/2012-TRU, which clarified that service providers acting on their own account do not fall under the definition of intermediary.
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Appellant not expected to Correlate Imports-Exports with whom License was Originally Issued: CESTAT in Relief to Volvo India
M/s.Volvo India Private Ltd. vsThe Commissioner of Customs
CITATION : 2025 TAXSCAN (CESTAT) 711
In a significant relief to Volvo India Pvt. Ltd., the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has ruled that a transferee of a Duty-Free Import Authorization (DFIA) license is not expected to correlate its imports with the exports made by the original license holder. The Tribunal set aside the denial of customs duty exemption amounting to several lakhs, restoring the benefit to the appellant.
After hearing arguments from both sides, the Tribunal held that there was no legal basis to impose such a restriction. The DFIA license in question explicitly permitted the import of “internal combustion engine complete” without specifying its application to any particular type of vehicle. The Tribunal observed that neither the authorization itself nor Notification No. 98/2009 required the imported goods to match the category of goods exported by the original license holder
CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties
M/s S. I. Enterprises vsCommissioner of Central Excise & CGST
CITATION : 2025 TAXSCAN (CESTAT) 712
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has held that income declared in income tax returns or reflected in TDS statements cannot, by itself, form the basis for levying service tax without proper investigation into the actual nature of the transaction. The Tribunal has set aside a service tax demand of ₹7,12,979 raised against M/s S.I. Enterprises, along with related penalties and late fees, on the grounds that the Department had erroneously treated the entire value declared in the income tax filings as consideration for taxable services.
Upon examining the invoices, the Tribunal found that goods worth ₹33,00,650 were supplied under distinct sale transactions supported by work orders and not linked to any service obligations. These were, in effect, pure trading transactions and squarely fell under the negative list category under Section 66D(e) of the Finance Act, 1994, which exempts trading of goods from service tax. The Tribunal also rejected the Commissioner (Appeals)’ argument that service tax could be imposed in the absence of VAT payment, holding that actual payment of VAT is not essential if the transaction is otherwise leviable to VAT under law. The law requires only that the transaction be capable of being taxed as a sale, not that tax must actually have been paid.
Penalty u/s 11AC(1)(c) Not Invokable in Absence of substantive evidence to Prove Deliberate Non-payment of Excise duty: CESTAT
M/s Singareni Collieries CompanyLtd. vs Commissioner of Central Tax
CITATION : 2025 TAXSCAN (CESTAT) 713
In a recent case, the Hyderabad bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 11AC(1)(c) is not invokable in the absence of substantive evidence to prove deliberate non-payment of excise duty.
CA has submitted that while they are otherwise also covered within the purview of Notification No. 12/17-CE as Cess is nothing but excise duty. However, he is now mostly arguing that in terms of amendment brought by way of Finance Act 2024, whereas the Notification 12/2017 dated 30.06.2017 has been retrospectively amended to the effect that even Clean Environment Cess was also brought under the purview of the said exemption notification subject to another additional condition stipulating that appropriate goods and service tax compensation Cess, wherever applicable, will also be payable if cleared on or after 01.07.2017 as leviable on such goods. Therefore, now the said retrospective amendment consequentially cover their goods as all the clearances effected post 01.07.2017 have suffered applicable GST as well as compensation Cess.
CESTAT upholds order denying condonation of Excise Appeal preferred after One Year
Mr. Sanjay Kumar Gupta vsCommissioner of Central Excise & Service Tax
CITATION : 2025 TAXSCAN (CESTAT) 714
In a recent case of the Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the order denying condonation of the Excise Appeal which was preferred after one year.
The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period.
Relief to Taj SATS Air Catering, No Service Tax Leviable When VAT was paid on sale of food & beverages: CESTAT
CITATION : 2025 TAXSCAN (CESTAT) 715
In a ruling in favor of Taj Sats Air Catering Limited, the New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable when VAT was paid on the sale of food and beverages.
The Appellant was required to pay annual lease rental to DIAL along with the royalty calculated in the manner set out in the agreement. Both these amounts were part of the consideration payable by the Appellant to DIAL for lease of premises at the airport. The said amount was recovered by DIAL by raising invoices on the Appellant, on which DIAL charged and paid appropriate Service Tax. Being cost incurred by the appellant in carrying out various transactions, the appellant recovered these charges from its customers.
No Service Tax Payable on affiliation fees collected from Affiliated colleges: CESTAT
Principal Commissioner vs M/s.Makhanlal Chaturvedi
CITATION : 2025 TAXSCAN (CESTAT) 717
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) of the New Delhi bench upheld the ruling of the commissioner that service tax is not payable on affiliation fees collected from affiliated colleges and dismissed the appeal of revenue.
A two member bench of Binu Tamta, Member (Judicial) and Hemambika R. Priya, Member (Technical) found that the Commissioner (Appeals) after considering the provisions in the post negative era, analysed the nature of affiliation fees paid by the educational institutions to the appellant and also the nature of activity involved in the process of receiving affiliation fees, concluded that the same is not chargeable to service tax.
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Royalty and Dead Rent Collected by State for Mining Rights Not Taxable as Services Under Finance Act: CESTAT
The Director vs Commissioner ofCentral GST
CITATION : 2025 TAXSCAN (CESTAT) 718
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that royalty and dead rent collected by the State Government for granting mining rights do not amount to taxable services under the Finance Act, 1994.
They also relied on the CBEC Education Guide of 2012, which clarified that such activities by the government did not constitute a taxable service. They argued that the department’s own conduct showed inconsistency, initially treating the royalty as taxable on a forward charge basis and later shifting to reverse charge after April 1, 2016.
CESTAT sets aside Excise Duty Demand based on Private Diaries and Loose Sheets
M/s. Akshaya Steel Works Pvt.Ltd. vs Commr. of Central Excise & Service Tax
CITATION : 2025 TAXSCAN (CESTAT) 719
The Kolkata bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has set aside the excise duty Demand based on Private Diaries and Loose Sheets. It was viewed that mere recording of the statement of the Director multiple times from 22.11.2011 to 15.03.2012, that is much later than the visit date of 2.4.2009, does not prove that this was on account of continued investigation.
Gold Biscuit Smuggle Worth Rs. 31 Lakh: CESTAT Reduces Penalty Treating Assessee as Mere Carrier
Shri Nirbhay Kumar Upadhyay vsCommissioner of Customs (Preventive)
CITATION : 2025 TAXSCAN (CESTAT) 721
The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) reduced the penalty imposed on the assessee for smuggling gold biscuits worth ₹31.34 lakh, treating him as a mere carrier.
The appellate tribunal observed that there was no evidence to show he was the actual beneficiary. Since he did not challenge the confiscation and only sought a reduction in penalty, the tribunal found it appropriate to take a lenient view.
Service Tax Not Payable on Equipment Supply Treated as Deemed Sale with VAT Already Paid: CESTAT
M/s. Mithun Samanta vsCommissioner of C.G.S.T. and Central ExciseCITATION : 2025 TAXSCAN (CESTAT) 722 The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that Service Tax was not payable on the supply of equipment like JCB, Hydra, and Excavator when the transaction had already been treated as a deemed sale and VAT was paid. A single member bench comprising K.Anpazhakan (Technical Member) noted that the assessee had supplied equipment like JCB, Hydra, and Excavator to clients, and the West Bengal State Tax Department had already treated this as a ‘deemed sale’ and collected VAT. It held that since VAT had been paid, no Service Tax was payable on the same activity.
Admitted Service Tax Liability Incorrectly Recorded as ₹6.06 Lakh Instead of ₹4.53 Lakh: CESTAT Remands Matter for Re-verification
M/s. Manaksia Limited vsCommissioner of C.G.S.TCITATION : 2025 TAXSCAN (CESTAT) 723 The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for re-verification after noting that the admitted Service Tax liability was incorrectly recorded as ₹6.06 lakh instead of ₹4.53 lakh. The appellate tribunal found this needed re-verification, set aside the order, and remanded the matter to the Commissioner (Appeals) to review the admitted amount after giving the assessee a fair hearing. The appeal was disposed of by remand.
CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties
M/s S. I. Enterprises vsCommissioner of Central Excise & CGSTCITATION : 2025 TAXSCAN (CESTAT) 724 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has held that income declared in income tax returns or reflected in TDS statements cannot, by itself, form the basis for levying service tax without proper investigation into the actual nature of the transaction. The Tribunal has set aside a service tax demand of ₹7,12,979 raised against M/s S.I. Enterprises, along with related penalties and late fees, on the grounds that the Department had erroneously treated the entire value declared in the income tax filings as consideration for taxable services. Upon examining the invoices, the Tribunal found that goods worth ₹33,00,650 were supplied under distinct sale transactions supported by work orders and not linked to any service obligations. These were, in effect, pure trading transactions and squarely fell under the negative list category under Section 66D(e) of the Finance Act, 1994, which exempts trading of goods from service tax. The Tribunal also rejected the Commissioner (Appeals)’ argument that service tax could be imposed in the absence of VAT payment, holding that actual payment of VAT is not essential if the transaction is otherwise leviable to VAT under law. The law requires only that the transaction be capable of being taxed as a sale, not that tax must actually have been paid.
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CESTAT Classifies RMC Transportation as GTA Service, Rejects Supply of Tangible Goods Tax Demand
M/s. Namakkal South IndiaTransports vs Commissioner of GST and Central ExciseCITATION : 2025 TAXSCAN (CESTAT) 726 The CESTAT Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that services provided in relation to the transportation of Ready Mix Concrete (RMC) are classifiable under Goods Transport Agency (GTA) services and not under the category of Supply of Tangible Goods Services (STGS). The two-member bench comprising Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed that the core purpose of the contracts was the transportation of RMC and not the supply of equipment. The vehicles remained under the operational control of the appellant, and the agreements did not transfer possession or effective control to the clients. The tribunal pointed out that the contracts clearly indicated that the service tax liability was on the consignors and that the appellants had issued consignment notes, even if not per consignment, which supported their claim under GTA.
Concrete Pumps at Client’s Disposal Attract Supply of Tangible Goods, Not GTA: CESTAT
M/s. Namakkal South IndiaTransports vs Commissioner of GST and Central ExciseCITATION : 2025 TAXSCAN (CESTAT) 725 The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the hiring of concrete pumps amounted to the supply of tangible goods and was not classifiable under Goods Transport Agency (GTA) services. They argued that the pricing was linked to output (i.e., cubic meters pumped), and that the entire arrangement was for making the equipment available for use, fitting the definition of Supply of Tangible Goods Service. The revenue also pointed out that certain contracts clearly mentioned the appellant’s liability to pay service tax.
Denial of CENVAT Credit for Lack of Documents on Input Services: CESTAT Remands Matter for Fresh Verification
M/s. GET & D India Pvt. Ltd.vs Commissioner of GST & Central ExciseCITATION : 2025 TAXSCAN (CESTAT) 727 The Chennai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded a matter involving denial of CENVAT credit due to lack of documents on input services, directing fresh verification by the Adjudicating Authority (AA). It held that the assessee should be given a chance to submit the necessary documents to support its claim for Cenvat credit. The CESTAT set aside the disallowed credit, along with the related interest, penalty, and appropriation, without disturbing the credit already allowed.
CESTAT quashes Service Tax Penalties, upholds Admitted Demands
M/s. Anand Motor Agencies Ltd. vs Commissioner, CentralExcise & Service TaxCITATION : 2025 TAXSCAN (CESTAT) 733 The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad bench, quashed significant service tax penalties on the assessee, while upholding the service tax demands that were admitted by the company. In its order pronounced on January 10, 2025, the Tribunal modified its earlier decision, confirming the admitted service tax demands and ordering appropriation of the amounts already paid by the appellant. However, it quashed the penalties imposed under the Finance Act, 1994, recognizing that the tax dues had been paid prior to the issuance of the show cause notice. CESTAT emphasized that in such circumstances, penalties were not warranted.
Wafers are entitled to reduced rate of excise duty under exemption notification: CESTAT sets aside Order
M/s. Mondelez India Foods Pvt.Ltd vs The Commissioner of CGSTCITATION : 2025 TAXSCAN (ITAT) 1201
The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that ‘Wafers’ are entitled to reduced rate of excise duty under exemption notification and set aside the order imposing penalty under Excise Act.
On scrutiny of the ER-1 returns of the appellant, the department formed a view that the Products manufactured by the appellant are classifiable under ETI 1905 32 11 instead of ETI 1905 32 90. Accordingly, 25 periodical show cause notices were issued to the appellant for the period from November 2006 to July 2017 alleging that the Products manufactured by the appellant deserve classification under ETI 1905 3211 and would, therefore, not be eligible for reduced rate of duty under the Exemption Notification.
Commissioner Excise (Appeals) could not condone Delay in filing Appeal beyond 30 days: CESTAT
M/s Style Digital Color Lab vsCommissioner of Central Excise & Service Tax
CITATION : 2025 TAXSCAN (CESTAT) 734
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Commissioner of Excise (Appeals) could not condone the delay in filing the appeal beyond 30 days and dismissed the appeal.
Section 35 of the Act states that any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) [hereafter in this Chapter referred to as the Commissioner (Appeals)] within sixty days from the date of the communication to him of such decision or order.
CESTAT Directs to decide Services Tax Appeal Filed with due Compliance of Pre Deposit
M/s Royal Construction andMining Works vs Commissioner of Central Excise & CGST
CITATION : 2025 TAXSCAN (CESTAT) 735
The Allahabad bench of the Customs, Excise & Service TaxAppellate Tribunal (CESTAT) has held that since the impugned order do not considers the appeal filed by the appellant on merits, no decision has been rendered on merits by Commissioner (Appeals), the tribunal remanded the matter back to the Commissioner (Appeals) for decision on merits.
It is evident that the Commissioner (Appeals) has dismissed the appeal of the appellant only for want of mandatory pre-deposit. The Appellant has requested for adjournment. I have heard Shri Santosh Kumar Authorized Representative appearing for the revenue.
Sub-Contractors Liable to Pay Service Tax Even if Main Contractor Has Already Paid: CESTAT
M/s. United Fabricators andTechnical Services Pvt Ltd. vs The Commissioner, Central Tax
CITATION : 2025 TAXSCAN (CESTAT) 736
The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that sub-contractors are liable to pay service tax even if the main contractor has already paid service tax on the same project.
The tribunal explained that service tax is levied on the provision of taxable services by any person to another person, including sub-contractors, and there is no exemption from liability for sub-contractors under the law. The tribunal held that the classification under “Erection, Commissioning or Installation Services” was correct, the appellant was liable to pay service tax as a subcontractor, and the extended period and penalties were valid.
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Affiliation Fees Collected by Universities Not Taxable Under Service Tax, Rental Income Exempt if Within Threshold: CESTAT
Rajeev Gandhi ProudyogikiVishwavidyalay vs The Principal Commissioner
CITATION : 2025 TAXSCAN (CESTAT) 738
The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that affiliation fees collected by a university are not taxable under service tax, and rental income also remains exempt when threshold limits apply.
The counsel relied on the Karnataka High Court’s decision in the Rajiv Gandhi University of Health Sciences case, upheld by the Supreme Court, which held that granting affiliation is a statutory function in the furtherance of education and not a taxable service. The counsel also argued that since the affiliation fees were not taxable, the university’s rental income remained within the exemption threshold limit and was not taxable.
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Removal of PPCP to Moulders for Making Battery Parts Not Trading: CESTAT Rules Rule 6 Cenvat Credit Reversal Inapplicable
M/s. Exide Industries Limited vsCommissioner of GST and Central Excise
CITATION : 2025 TAXSCAN (CESTAT) 737
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the removal of Polypropylene Co-Polymer (PPCP) to moulders for making battery parts under reversal of credit is not “trading” and does not attract reversal under Rule 6 of the Cenvat Credit Rules (CCR).
The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that PPCP was cleared to moulders for manufacturing battery parts exclusively for Exide and returned for further use, making it an integral part of the manufacturing process. It was further observed that prior orders, including one by the same adjudicating authority, had accepted PPCP as input under Rule 2(k) and its clearance under Rule 3(5) as valid.