![CESTAT Annual Digest 2023 [Part 20 ] - TAXSCAN](https://www.taxscan.in/wp-content/uploads/2024/01/CESTAT-Annual-Digest-2023-Part-20-TAXSCAN.jpg)
This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Kolkata Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the possession of ornaments is not an offence and allowed the release of Gold Balas from custody.
The CESTAT held that “the seized gold Balas are ornaments and may be released to the Appellant.” The impugned order was set aside and the Appeal filed by the Appellant was allowed with consequential relief, as per law.
While considering the case of anti-dumping Duty, the Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed modification of products to saturated fatty alcohol.
A Coram comprising of Justice Dilip Gupta, President, Mr P V Subba Rao Member (Technical) and Ms Rachna Gupta, Member (Judicial) observed that there is no error in the finding recorded by the designated authority in including pure cuts C12 and C14 in the product under consideration.
The New Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Commissioner (Appeals) has no Jurisdiction to issue SCN under section 73 of the Finance Act, 1994 and the order passed by the Commissioner of Appeal, which confirmed the demand of interest and Penalty is not valid.
A Coram comprising Justice Dilip Gupta, President and Mr P V Subba Rao, Member (Technical) held that the Commissioner (Appeals) did not have the power to issue the notice under section 73(1) of the Finance Act.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax on NSDL & CDSL charges is collected by brokers paid to depositories under Depositories Act, 1996.
The coram of Ms Sulekha Beevi C.S, Member (Judicial) observed that the allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable.
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the demand of duty on test production before starting commercial production is not tenable.
The Coram of Anil Choudhary, Member (Judicial) observed that the appellant has done only test production before 11.11.2010 and they have been doing mainly trading of finished goods as the factory was not fully set up at the testing stage.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench set aside service tax demand as there was a bonafide belief in eligibility of exemption being Governmental work.
The Coram observed that “We find force in the submissions made by the Advocate on this count. In the given set of facts and circumstances, the bonafide belief entertained by the Appellant cannot be questioned. Also, if
to pay the same. Whatever Service Tax, if paid by the Appellant, would have been back to back availed as Cenvat Credit by the main contractor anyway.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that demand of duty is not permissible when no misdeclaration under Pan Masala Packing Machines Rules, Demand of duty not permissible.
While allowing the appeal, the Tribunal held that the Revenue cannot demand duty unless the orders of determination of production capacity-based duty have been reviewed and set aside the impugned Order.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Supply of ISO Tankers on lease by foreign suppliers is deemed sale, hence sales tax would not be leviable.
“The Commissioner failed to appreciate that since the translation involved sale or purchase of goods in the course of import of goods into India, no sales tax/VAT was required to be paid even if the transaction qualified as a deemed sale” the Tribunal added.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), dismissed appeal on the ground that the rectification application was filed instead of appeal for alleged mistake in order passed by the Adjudicating Authority.
“The Additional Commissioner could have taken a possible view that the judgement of the Madhya Pradesh High Court would govern the issue relating to refund and examined the two applications in the light of the observations made by the Madhya Pradesh High Court. Such a view could have been corrected in an appeal, but not by way of an application filed for rectification of an alleged mistake” the Tribunal noted.
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that the service tax refund shall be allowed to the builder on cancellation of booking by the flat buyer.
Allowing refund to the assessee, the CESTAT held that “Since Service Tax, in issue, received by the concerned authority is not backed by any authority of law, the department has no authority to retain the same.”
The Ahmedabad bench Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the registration of Trademark in the name of a family member not bar to deny SSI exemption since all the family members are entitled to use the brand for the purpose of availing SSI exemption.
Granting relief to the appellant, Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) held that the appellant firm using the brand name of “Bintex” for which the appellant firm partner Shri Rajesh Harshdrai Punatar is one of the owner of the brand name “Bintex”, the appellant firm is eligible for exemption under Notification No. 8/2003-CE dated 01.03.2003.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the software activation services cannot be termed as “Business Auxiliary Services” and therefore, not subject to service tax as the assessee already discharged VAT liability in respect of the same.
Allowing relief to the assessee, the CESTAT held that “the amount collected by the Appellant from their customers against as “activation charges” of equipment/ software features are covered under the activity of sales of goods and not covered under the provisions of “Service” as defined in the Act. Therefore, we don’t find any merits in impugned order.”
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that an intermediary in the sale of space/ time for media agencies on commission basis is not liable to pay service tax under the head “Advertising Agency” under the provisions of Finance Act, 1994.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), validated filing of refund claim within limitation period by speed post. “Therefore the appellant has successfully established that they have filed the refund claim of the amount of Rs.2 lakhs within limitation in the year 2017 itself and accordingly the said issue is decided in favour of the appellant” the Tribunal noted.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that no service tax can be demanded on CHA Services when already paid on behalf of Customs House Agent.
The Tribunal of Sulekha Beevi CS, Judicial Member observed that “The appellant has been contending that M/s. Trinity Clearing and Shipping Agencies, Chennai had collected the tax from customers and discharged the service tax on behalf of the appellant. The department cannot collect service tax again on the impugned service.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), New Delhi Bench set aside an office memorandum by the Ministry of Finance for reconsideration of recommendations made by designated authority on anti-dumping duty. A Coram consisting of Justice Dilip Gupta, President, P V Subba Rao, Technical Member and Rachna Gupta, Judicial Member observed that “The office memorandum is set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority.”
In a major relief to Reliance Industries Ltd, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), allowed Cenvat Credit on premium paid for group insurance under Voluntary Separation Scheme (VSS). A Coram consisting of C J Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “In view of the precedent decision in an identical dispute of the very same appellant, we set aside the impugned order and allow the appeal.”
As a relief to Reliance Media Work ltd, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Service Tax can’t be levied under ‘Business Support Service’ (BSS). In light of the decision by the Supreme Court and the Tribunal, it was observed that no service tax can be levied on the appellant under BSS. While allowing the appeal, the Tribunal set aside the impugned order.
The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no contemporaneous imports of goods in the absence of evidence and rejection of transaction value are not valid during which it was observed that, observed that as per Rule 4 the value shall be the value of contemporaneous imports of identical goods and if such a value is not found, then as per Rule 5, the value shall then be the value of contemporaneous imports of similar goods. Only if neither is available, Rule 7 can be resorted to.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed conversion from free shipping bills to Advance Authorization shipping bills on fulfilment of conditions on Board Circular. The Tribunal of P Dinesha, Judicial Member observed that “The denial of conversion from free shipping bills to Advance Authorization shipping bills by the lower authority and the impugned order, being bad in law, are set aside.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench observed that no service tax payable by Stock Broking Company on Computer-to-Computer Linkage charges, Commission on Public Issue and Inter Settlement charges.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), CESTAT quashed suspension of the Customs Broker Licence on the ground that there was no proof of manipulating boiling points of samples of Superior Kerosene Oil (SKO). The MAT Shipping is the appellant in the present case.
“This dichotomy has not been clarified in the impugned order. Since all the charges essentially flow from this
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Service Taxis not leviable on the Construction of complex services in relation to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana.
The Bench held that the construction service was provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana and the service tax is not leviable to such a project. The appeal was allowed with consequential relief.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the additional premise is extension of factory and quashed demand of duty on transfer of capital goods and it was observed that “The additional premise is an extension of factory of the appellant and hence benefit of notification no. 67/95-CE cannot be denied to the appellant. In the circumstances, demand of duty on transfer of such capital goods on the ground that the other premise is to be treated as separate premise requiring separate registration under the Act is not tenable.”
In the same case,
The bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “Since department has not preferred appeal against the said OIA and hence said order has attained finality in respect of issue of utilisation of cenvat credit of basic excise duty towards discharge of education cesses.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that entry to India for Breaking Recycling Purpose Only Not contravention of UNSC resolution and Order Prohibiting Vessels from Importation is not valid.
The Tribunal stated that there is no sufficient material to substantiate the case of misstatement. While allowing the appeal, it was held that “since the vessel cannot be said to have been imported contrary to any prohibition in force, redemption fine and penalties upon the appellants imposed by the impugned order are liable to be set aside.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that demand of duty is not permissible when no misdeclaration under Pan Masala Packing Machines Rules, Demand of duty not permissible.
While allowing the appeal, the Tribunal held that the Revenue cannot demand duty unless the orders of determination of production capacity-based duty have been reviewed and set aside the impugned Order.
Earlier Payments made through Cenvat Account are to be re-credited on payment of Duty in Cash: CESTAT M/s Mideast Integrated Steels Ltd vs Commissioner of CGST & Excise
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has ruled that the earlier payments made through Cenvat Account are to be re-credited on payment of duty in cash.
The appellant having discharged the duty burden from their PLA Account and as such, there being no dispute about the same, the Tribunal consisting of P. K. Choudhary, the Member (Judicial) observed “It is my
liable to be re-credited in the said Account and no objection that such recredit was not on the basis of any eligible document can be adopted by the Revenue. Admittedly, it is not a case of availment of credit in the ordinary course, but such re-credit was to neutralize the subsequent payment of duty in cash.”
“My view gets fortified by the judgement of the High Court of Madras in the case of ICMC Corporation Limited v. CESTAT, Chennai reported, whereby it was held that the suo motu credit of Cenvat reversed earlier involved only an account entry reversal and in the process, no outflow of funds from the assessee, and accordingly, filing of refund claim under Section 11B of the Central Excise Act, 1944, is not required” the Tribunal noted.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT ), has recently in an appeal filed before it, ruled that the buying and selling of SIM cards and recharge coupons does not amount to providing business auxiliary service. The aforesaid observation was made by the Tribunal when the appellant, M/s J.K. Enterprises, engaged in the buying and selling of SIM cards, recharge coupons etc. for mobile phones, under a super distributor agreement with M/s Vodafone Essar Digilink Ltd. approached the Tribunal with regard the demand of service tax and penalty imposed on it, via a show cause notice issued , covering the period April 2008 to March 2012 , with the allegation that it was providing business auxiliary service to M/s Vodaphone Essar Digilink Ltd. as their franchisee for sale/distribution and marketing of the SIM cards and recharge coupons.
“We find that this Tribunal has consistently held that buying and selling of SIM cards and recharge coupons does not amount to providing business auxiliary service to the principal in several cases as in the case of M/s Devangi Communications & Others”, pronouncing its ruling the Bench comprising of Justice Dilip Gupta, the President and P.V. Subba Rao, the Member (Technical) observed.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, has set aside the denial of credit of input services used for the removal and disposal of Fly Ash and recognized that Fly Ash is necessary for running of a captive power plant. Pronouncing its ruling, the Tribunal comprising of PK Choudhary, the Judicial Member observed “I am of the view that removal of coal Fly Ash is one of the necessities for running of the captive power plant. Without such removal of the coal fly ash from the captive power plant, the same cannot operate and run, in which case, the power won’t be generated and the appellant would not be in a position to manufacture their final product.” “The denial of benefit of credit of input services used for removal and disposal of Fly Ash is not sustainable” the Tribunal further noted.
With M/s. ARS Steels & Alloy International Pvt Ltd, filing an appeal against the order passed by the Commissioner of Customs, whereby the First Appellate Authority had confirmed the findings of the Adjudicating Authority, the of redemption fine as the Pre-Shipment Inspection (PSI) Certificate furnished as per Appendix 28 of Foreign Trade Policy (FTP).
The Adjudicating Authority having inter alia held that the appellant had violated the provisions of the Import Policy since the PSI Certificate furnished by it was not as per Appendix-28 of the Foreign Trade Policy; that the redemption of the goods in lieu of confiscation was allowed on payment of redemption fine and further that a penalty was also imposed under Section 112(a) of the Customs Act, 1962, the Tribunal of P Dinesha, the Judicial Member, while Setting aside the redemption fine, observed “To put it in simple terms, the goods have not been imported contrary to any prohibition imposed by or under the Act or contrary to any prohibition imposed by any other law for the time being in force. This is because the import is subject to fulfilment of stipulated condition, failing which the only consequence prescribed is the 100% inspection of the entire consignment.”
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently quashed the confiscation and customs duty recovery order against Chimes Aviation Private Limited for use of aircrafts for purposes other than training.
Having observed that the appellant had submitted an application before the Ministry of Civil Aviation (MCA) for grant of a No Objection Certificate (NOC) to operate non-scheduled (charter) services, and that the same was granted by the MCA on 15.06.2009 and on 28.07.2009 an endorsement was also made in the permit, the Bench of Justice Dilip Gupta and Justice P V Subba Rao observed that the customs authorities could have proceeded to recover the duty on the basis of the undertaking only when the competent authority in the DGCA found as a fact that the appellant had violated the conditions of the permit.
“In the present case, such a finding has not been recorded and on the other hand, the permits have been renewed from time to time”, the tribunal bench set aside the impugned order of detention and demand, ruling in favour of the assessee, Chimes Aviation Private Limited.”, the Tribunal further added.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has, while allowing an appeal filed before it, held that the Import of Urea on high Seas Sale from State Trading Enterprises (STE) is not violative of ITC policy and quashed the penalty under section 112(a)(i) of the Income Tax Act,1961.
It was observed by the coram comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) that “when the import is allowed “through” STC, MMTC and Indian Potash, it means that so long as the purchase of the Urea from the foreign supplier is effected by STC, MMTC or Indian Potash ,and the payment to the foreign supplier is made by STC, MMTC or Indian Potash, who in turn sell the same to a party in India whether on High Seas or otherwise, the import is clearly through STC, MMTC or Indian Potash.”
Deciding the appeal of N R Agarwal Industries Ltd, the Ahmedabad bench of the Customs, Excise & Service Tax
It was observed that for service providers falling under the category of renting of a motor vehicle, the motor vehicle would always be capital goods. As such the expression – “which is not a capital good appearing in the said exclusion clause would require examination vis-à-vis the service provider and not vis-à-vis the recipient of the service.”
Ongoing through the said exclusion Clause, a Coram comprising of Mr Ramesh Nair, Member (Judicial),while allowing the appeal observed that since the Motor Vehicle was held to be a capital good, the eligibility of Cenvat credit on Rent-a-Cab service shall not be hit by the exclusion clause provided under Rules 2(l) of Cenvat Credit Rules, 2004.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has recently, in an appeal filed before it, held that the installation of thermal insulation is a “works contract service” and service tax is not demandable.
The aforesaid observation was made by the Tribunal when an appeal was preferred before it on the basis of the intelligence received that Rudra Engineering, the Appellant, was wrongly availing abatement of 67% for calculating the taxable value for payment of service tax ,as per the provisions of Notification No. 1/2006-ST dated 01.03.2006, as amended.
With the Tribunal observing that though the sale price of the material was not being separately shown in the invoice, however, substantial VAT/Sales Tax under the appropriate scheme and at appropriate rates were paid, and further that the approx.. involvement of the material in the work undertaken is about 70% of the total cost, a Coram comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) further added that in clause (a) thermal insulation is also mentioned and that the appellant had also paid VAT/ sales tax on goods which is used in the installation of thermal insulation.
“The impugned activity of the assessee was nothing but “works contract service””, the Tribunal thus held.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered release of Chinese mobiles on the ground that there was no evidence on allegation of smuggling.
The aforesaid observation was made by the Tribunal when the appellant, Dharmesh B. Bhavsar, a trader engaged in trading of electronic goods filed an appeal before it.
The Tribunal further observed “I find from the record that no evidence has been brought on record in support of its allegation. Further, sale-purchase of goods in India is supported by the levy of Sales Tax by the Sales Tax Department of Rajasthan.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench , has confirmed the denial of Cenvat Credit on Secondary and Higher Education Cess under invoice issued by EOU, in an appeal filed before it by the appellant Huber Group India Pvt Ltd.
The Bench comprising Ramesh Nair, Judicial Member observed that “In the show cause notice, it can be seen that the demand of Cenvat Credit is not only in respect of basic Excise duty but also of Education Cess and Secondary & Higher Education Cess. Therefore, in this fact it cannot be said that the order denying the Cenvat credit on Education Cess and Secondary & Higher Education Cess is travelling beyond the scope of show cause notice. Hence, the demand was rightly made by the adjudicating authority.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has currently, in an appeal filed before it by M/s AFT Tobacco Pvt Ltd, ruled that no interest demand can be made in absence of condition precedent under Section 11AA of Central Excise Act, 1944.
The Tribunal of Anil Choudhary, Member (Judicial) observed that “Here both the conditions are not available to Revenue as admittedly neither there is any determination of duty liability of NCCD under Section 11A, nor there is voluntary default in deposit of the amount of NCCD.”
“In absence of condition precedent in Section 11AA of the Central Excise Act, I hold that no interest can be demanded from the appellant –assessee.”, the Bench ruled.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has ruled that there is no excise duty on outward freight from Leamak Healthcare P Ltd to ITC Ltd when included in assessable value.
The Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “No excise duty needs to be paid on the outward freight from Leamak to ITC, Marketing spends by ITC and fixed costs of ITC relating to activities of ITC other than provision of moulds at concessional cost”, thus setting aside the impugned order in so far as it seeks to include outward freight from Leamak to ITC godown and marketing spends for charging excise duty.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has, in an appeal filed before it by the Appellant, Shri Balaji Ceramic Products allowed free import under Foreign Trade Policy (FTP) on establishment of identity and genuine export of Calcined Petroleum Coke (CPC).
Listening to the contentions of the appellant the Bench comprising of Anil Choudhary, the Judicial Member observed “ I find that both the identity of the goods is also established and also that the appellant had genuinely exported the goods to the user buyer in Saudi Arabia. Further, on rejection by the buyer, the appellant was obligated to re-import the goods to mitigate his loss.”
“Admittedly, the export in this case was made through shipping bill which is before the date of restriction imposed vide Notifications. Thus, I hold that CPC was free for export-import on the day of export, the re-import by the appellant of the rejected goods, has to be treated as freely importable under the Foreign Trade Policy” the Tribunal noted.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT),of Raju, (Technical Member)confirmed composite penalty when charges pertained to period prior to and after introduction of Section 11 AC of the Central Excise Act, 1944. The Bench determined that “In view of this I do not find any error in imposition of composite penalty under Rule 173 Q read with Section 11 AC as in the instant case all the charges have been confirmed and the charges pertains to both the period prior to introduction of Section 11 AC and thereafter.”
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