![CESTAT Annual Case Digest 2023 - [ Part 30] - TAXSCAN](https://www.taxscan.in/wp-content/uploads/2024/01/CESTAT-Annual-Case-Digest-2023-Part-30-TAXSCAN.jpg)
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that refund of excise duty paid under mistake cannot be denied when it was filed within the time prescribed under section 11B of the Central Excise Act,1944.
It was observed that duty has been paid under mistake of law because they followed the pattern of the earlier exemption Notification No. 41/2007 dated 6.10.2007, but when they realized their mistake, they have claimed a refund of duties paid. The refund of the same paid under a mistake, cannot be denied to them, when the claim is filed within time as per section 11B.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the allegation of removal of clandestine without corroborative evidence is not valid.
No investigation was carried out after intimation letters were received in the Range office even though these were addressed from time to time, much before the audit objection, no verification was carried out. Therefore, it is difficult to accept the allegation of the department that the quantity of goods as shown in the purchase invoices were brought into the factory, processed, converted into finished goods and removed clandestinely without payment of duty.”, held the Judicial Member Dr D M Misra.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the mere omission to give correct information was not s suppression of fact unless it deliberately stop payment of duty.
The two-member panel comprising Sulekha Beevi C.S (Judicial) and Vasa Seshagiri Rao (Technical) quashed the order passed by the Commissioner (Appeals) due to limitation while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Special Additional Duty (SAD) exemption benefits were allowable if the imported pre-packed form of goods meant for the retail sale by the assessee.
The two-member bench comprising P. A. Augustian (Judicial) and R. Bhagya Devi (Technical) upheld the penalty on the ground of the importer had violated the conditions of import policy and did not comply with the conditions of the notification while dismissing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the demand for service tax by the Commissioner (Appeals) under section 73(1) of the Finance Act, 1994 on the ground of Limitation.
The two-member bench comprising Dilip Gupta (President) and Hemambika R. Priya(Technical) quashed the order passed by the Commissioner (Appeals) while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no separate demand of service tax was made to an individual service of transportation under the category of ‘Cargo Handling Service’.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anbazhakan (Technical) held that individual services in the contract of transportation cannot be vivisected to demand service tax from the assessee under the category of ‘Cargo Handling Service’ while allowing the appeal filed by the assessee.
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the refund of a claim by adding invoices of the previous quarter which were not used for claiming during the previous quarter was a valid claim and allowable.
A single-member bench comprising R. Muralidhar (Judicial) held that there was no violation of the conditions imposed under the notification and refund claimed by the assessee while allowing the appeal filed by the assessee.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacturer of final products was entitled to take credit of excise duty on capital goods received in the factory for the production of final products.
The two-member bench comprising Dilip Gupta (President) and Hemambika R Priya (Technical) held that the assessee was entitled to take the credit of excise duty of the final products while dismissing the appeal filed by the revenue.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal held that the invoices or challan issued by the provider of input services was a relevant document for availing CENVAT credit under rule 9 of the CENVAT Credit Rules,2004.
The two-member bench comprising Rachana Gupta (Judicial) and R.Priya (Technical) held that the substantial benefit of availing of CENVAT credit cannot be denied on the grounds of procedural lapse while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise, and Services Tax Appellate Tribunal (CESTAT) quashed the order of demand of central excise duty on the ground of the inclusion of Waste Pickle Liquid (WPL) as the category of the waste component.
The two-member bench comprising Ajay Sharma (Judicial) and Anil.G. Shakkatvar (Technical) held that the waste or rubbish, which is thrown up in the course of manufacture, cannot be said to be a produce of manufacture and cannot be said to be eligible to excise duty and quashed the order of demand while allowing the appeal filed by the assessee.
fall within the purview of Rule 6(3) of CENVAT Credit Rules, 2004.
The Mumbai bench of the Customs, Excise and Services Tax Appellate Tribunal quashed the penalty imposed on
A single-member bench comprising Ajay Sharma (Judicial) quashed the penalty imposed by the Commissioner (Appeals) while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the payment of the license fee which was not a condition of sale cannot be included in the transaction value under rule 10(1) (c ) of the Customs Valuation Rules,2007.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) the order passed by the Commissioner (Appeals) does not require any interference and is liable to be sustained while dismissing the appeal filed by the revenue.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand of duty on the ground of the manufacturing of sugar syrup was not marketable and not liable to pay duty
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) quashed the demand of duty passed by the adjudicating authority while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by denying the CENVAT Credit of duty paid on rough castings on the ground of short payment of duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) held that the denial of credit cannot sustain and is liable to be quashed while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the Commissioner (Appeals) for reversing the CENVAT credit under rule 3(5B) of the CENVAT Credit Rules, 2004 without considering the documentary evidence.
A single-member bench comprising Ajay Sharma (Judicial) held that quashed the order and remand the matter back to the Commissioner (Appeal) for a fresh decision after giving sufficient opportunity to the assessee for placing on record the documentary.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the transaction of purchase and sale of liquor by Rajasthan State Beverages Corporation, the appellant not under Business Auxiliary Service (BAS) and hence is not taxable.
A Two-Member Bench of the Tribunal comprising Justice Dilip Gupta, President, and Hemambika R Priya, Technical Member observed that “transaction of purchase and sale of liquor by the Corporation will not fall within the ambit of BAS and would, therefore, not be taxable. The two appeals filed by the department, therefore, deserve to be dismissed.”
The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled in favour of Mount Everest Breweries Limited and held that service tax and penalty not demandable when non-payment of service tax on alcohol under business auxiliary services under bonafide belief.
A two member bench comprising Justice Dilip Gupta, President and Ms. Hemambika R Priya, Member (Technical) observed that “the appellant is that it was always under a bonafide belief that service tax was not payable by it, as it was a manufacturer in its own right and was not manufacturing alcohol for or on behalf of a client. After noting that this contention of the appellant is not correct since it was providing BAS and service tax would be leviable, the order holds that the appellant with mala-fide intention made a willful statement and suppressed facts with intent to evade payment of the service tax.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and observed that mere use of commission in the clause of payment does not mean commission was paid by the seller.
A Two-Member Bench of the Tribunal comprising observed that “Mere use of the word „commission‟ in the clause dealing with terms of payment would, in view of the aforesaid decisions, not mean that „commission‟ was paid by the seller. There is no third person who can be said to be acting as an agent and the goods were undoubtedly sold on a principal-to-principal basis.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that no appeal can be filed before the Commissioner of Customs when correctness of order has been examined by the High Court.
A Two-Member Bench of the Tribunal comprising Justice Dilip Gupta, President, and P Anjani Kumar, Technical Member observed that “Thus when the appeal was filed by the department before the Commissioner (Appeals) against an order the correctness of which stood decided against the department by the Delhi High Court, the order dated 26.06.2019 passed by the Commissioner (Appeals) on 26.06.2019 would be without jurisdiction.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the Principal Manufacturer not filing requisite undertaking jurisdictional authority, job worker liable to pay excise duty.
A Two-Member Bench of the Tribunal comprising Justice Dilip Gupta, President and Hemambika R Priya, Technical Member observed that “In a case where a principal manufacturer did not file the requisite undertaking to the jurisdictional authority in terms of Notification No. 214/86, it is evident that the principal manufacturer had no intention to pay the duty on the final product and the job worker was liable to pay the duty on the goods manufactured.”
In the case of Godrej Consumer Product, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable for services for periods for which they were not taxable.
A two-member bench comprising of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) held that “the demand of Service Tax on the appellant for the normal period. Consequently, the penalties imposed are also set aside. We order to modify the impugned order to this extent.”
In a recent case, the Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) refunded admissible service tax paid on the transportation of empty containers from port to factory.
A two-member bench comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) has held that “the impugned order is not sustainable in law and set aside the same by allowing the appeal filed by the appellant with consequential relief, if any, as per law.”
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that ‘Dry Tomato Flavour’ falls under Customs Tariff Heading (CTH) 3302 and covers both natural and/or Synthetic Mixtures of Odoriferous Substances.
A two-member bench comprising of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) found that “the imported product is not meant to be directly used for human consumption. It is said to be for industrial use, for making food flavours and to impart a tomato profile. The products that are classifiable under Chapter Heading 2106 mostly consist of food and edible preparations which are meant to be used either directly or after processing such as cooking, dissolving or boiling in milk or water or other liquids, for human consumption. As per the HSN Notes, the said heading excludes a mixture of odoriferous substances, which can be either natural or synthetic or mixed or both, which are used as raw materials in the perfumery, food or drink industries.” The appellant has been arguing that the tomato flavour is of synthetic origin though it may contain some natural odoriferous substances and it cannot be directly or indirectly used in food preparations. In this regard, the appellant has also put forth that it is not necessary that it should be made of essential oil, resinoid or oleoresin alone to merit classification under Chapter Heading 3302 and that in any case, the product contains garlic oil, which is an oleoresin. The CESTAT held that “the item imported is correctly classifiable under CTH 3302 1010 of the Customs Tariff Act, 1975. So, the impugned order is set aside.”
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has directed the re- adjudication since the adjudicating authority rejected the reconciliation statement without reason.
A two-member bench Shri P K Choudhary, Member (Judicial) and Shri K Anpazhakan, Member (Technical) observed that “there is no clear-cut findings by the Adjudicating Authority for rejecting the reconciliation submitted by them. The Appellants claim for receipt of reimbursements of expenses incurred has also not been examined.” The CESTAT set aside the impugned order and remanded the matter back to the adjudicating authority to pass a speaking order after going through the reconciliation statement along with relevant documents submitted by the appellant. The appeal of the assessee got allowed by way of remand to the adjudicating authority.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable by Konkan Railway for the use of the Mangalore-Roha Line.
The tribunal comprising of Dr Suvendu Kumar Pati, Member (Judicial) and Mr Anil G Shakkarwar, Member (Technical) has held that the appellant and the Indian Railways are not separate entities. The Indian Railways are exempt from paying service tax for the prior period up to October 1, 2012. Therefore, confirmation of demand by the Commissioner is unsustainable, for which the order passed by the Commissioner is required to be set aside.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit on sugar cess paid as Countervailing Duty (CVD) on import of raw sugar.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “In view of the above Karnataka High Court judgment in favour of the appellant themselves, the issue is no longer res-Integra. Accordingly, the appellant is legally entitled for the cenvat credit on the sugar cess paid on import of raw sugar.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered fresh adjudication and observed that Rule 8(3A) of the Central Excise Rules 2002 is ultravires.
A Two-Member Bench of the Authority comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “After hearing both the sides and on perusal of the records, we find that impugned orders were passed by the Adjudicating authority. Whereas the Gujarat High Court decision in the matter of Indsur Global Limited vs. Union of India. Therefore, the matter is remanded to the adjudicating authority to decide the case afresh in view of the Gujarat High Court’s decision in the case of Indsur Global Limited (supra) after giving an opportunity of personal hearing to the appellant.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted service tax exemption on services related to construction of roads to Government authorities/agencies.
A Two-Member Bench of the Authority comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “This being a case of interpretation of provisions, charge of suppression of facts, wilful misstatement, fraud, etc., cannot be levelled, for initiation of SCN beyond the normal time limitation. It is settled law that there must be deliberate attempt by the Appellant to suppress the facts from Department with an intention to evade payment of Service Tax, which is not existing in this case.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded back the matter in the case of Differential service tax demand on “Erection Service”, “Pipeline Service” and “Supply of Manpower Service”.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We have carefully considered the submission made by both sides and perused the records. We find that the appellant had admitted the demand of Rs. 35,74,366/-, is sustainable on merit. As regard the appellant’s submission that the amount of Rs. 39, 46,367/- is not payable for various reasons has not been considered by the lower authority.” “Therefore, this matter needs to be remanded back to the Adjudicating Authority for re-quantification of the demand after considering the submission of the appellant.
The Adjudicating Authority also needs to look into the aspect of larger period of demand and imposition of penalty under Section 78 of Finance Act, 1994” the Tribunal concluded.
In a significant case, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the appeal, since the department failed to deliver the sanction order of Special Additional Duty (SAD) refund to the assessee on time.
A two-member bench comprising of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) found that this is the usual practice by the original authority wherein the Order-in-Original itself contains the printed number of the order as well as the date. While allowing the appeal, the CESTAT accepted the contention of the assessee since it was evident that the date of sanction was much earlier.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded back the matter in the case of Differential service tax demand on “Erection Service”, “Pipeline Service” and “Supply of Manpower Service”.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We have carefully considered the submission made by both sides and perused the records. We find that the appellant had admitted the demand of Rs. 35,74,366/-, is sustainable on merit. As regard the appellant’s submission that the amount of Rs. 39, 46,367/- is not payable for various reasons has not been considered by the lower authority.” “Therefore, this matter needs to be remanded back to the Adjudicating Authority for re-quantification of the demand after considering the submission of the appellant. The Adjudicating Authority also needs to look into the aspect of larger period of demand and imposition of penalty under Section 78 of Finance Act, 1994” the Tribunal concluded.
In a significant case, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the appeal, since the department failed to deliver the sanction order of Special Additional Duty (SAD) refund to the assessee on time.
A two-member bench comprising of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) found that this is the usual practice by the original authority wherein the Order-in-Original itself contains the printed number of the order as well as the date. While allowing the appeal, the CESTAT accepted the contention of the assessee since it was evident that the date of sanction was much earlier.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the invocation of an extended period since non-filing of ST-3 returns by subcontractors for a long period will make the intent to evade tax.
“The provisions of the proviso to Section 73 (1) of the Finance Act, 1994 are pari pasu and pari materia to the provisions of the proviso to Section 11A of the Central Excise Act, 1994. The intention to evade payment of tax is manifest and articulated by the non-disclosure of the details of the provision of services and receipt of consideration. Non-filing of ST-3 returns for such a long period i.e., from March 2006 to March 2010 will make the intent to evade tax obvious. So invocation of extended period is justified, consequently, the imposition of penalty are also required to be upheld.”, the two-member comprising Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical).
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the demand under Rule 6(3) of Cenvat Credit Rules, 2004 (CCR) not sustainable on reversal of cenvat credit on input services to exempted services.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We are of the view that once the assessee reversed the cenvat credit on the input services attributed to the exempted services, the demand under Rule 6 (3) of CCR is not sustainable. We also find that since in the show cause notice demand was raised at of 6% /7% and not considered the reversal of cenvat credit, the matter needs to re-considered only for the limited purpose of quantification and correctness of reversal of cenvat credit along with payment of interest.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld recovery of interest and ruled that Lead Acid Batteries supplied to individual customers is to be valued under Section 4A of the Central Excise Act, 1944.
A Two-Member Bench of the Tribunal comprising observed that “there is no difference in the nature of the clearance made to individual customer wherein the valuation was admittedly done by the appellant under Section 4 A and the nature of clearance made to the dealers. Therefore, the clearance made to dealers is also to be valued under Section 4 A of Central Excise Act, 1944.”
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that claim of duty on goods can’t be denied when assessee reverses ineligible credit and allowed the payment of a 1% duty rate on Fruit pulp for Pepsico India.
In light of the case Jai Beverage Pvt. Ltd. Vs. CCE, the two-member bench comprising Ms Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) held that “the appellant was eligible for payment of an effective rate of duty of 1% on the ‘fruit pulp or fruit juice based drinks’ cleared by them, during the impugned period, by availing exemption under Notification No. 1/2011-CE dated 1.3.2011”
The Ahmedabad Bench of the Tribunal comprising observed that the service tax refund cannot be rejected as invoice raised to agent is as good as invoice raised to principal.
A Two-Member Bench of the Tribunal comprising observed that “It can be seen that, in the service provider’s invoice that is issued by M/s Indev Logistics Pvt. Ltd. the name of appellant is appearing as shipper name and in the corresponding invoice of the 4 Star Enterprises which is the appellant’s CHA is showing the exact amount of M/s Indev Logistics Pvt. Ltd. therefore the proper co-relation has been established.” “In the case of Chamundi Textiles Ltd, the tribunal held that even though a document is in the name of another entity but on account of assessee credit cannot be denied on such document. Considering this decision in the case of refund also even though the invoice was raised to the agent of the appellant the refund cannot be rejected as invoice raised to the agent is as good as invoice raised to the appellant being the principal” the Bench noted.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the service tax is not leviable on service of “Construction of Residential Complex” provided to Surat Municipal Corporation under the Jawaharlal Nehru National Urban Renewal Mission.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “The service provided to the service recipient namely Surat Municipal Corporation under Jawaharlal Nehru National Urban Renewal Mission are not taxable.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit and observed that the services for the treatment of industrial waste in relation to overall manufacturing activity are input services.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It can be seen that the issue is no longer res-integra as the services availed in respect of effluent treatment plant for treatment of industrial waste is in relation to the overall manufacturing activity of the appellant’s final product in the appellant’s factory therefore, the said services are input service hence, the credit is admissible.”
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that onsite support service rendered by the US branch office of M/s. Cognizant Technology Solutions India Private Limited (CTS) USA to is Associated Enterprises(AE) situated outside India is exempted.
A two-member bench comprising Ms. Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) held that “the main charge against the appellant fails on merits. This being so, the other issues relating to CENVAT credit and the extended time limit also do not survive. We are hence inclined to set aside the impugned order and allow the appeal with consequential relief, if any, as per law. We order accordingly”
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