This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted relief to Indian Oil Corporation Ltd (IOC), and noted that Chartered Accountant (CA) Certificate is sufficient to discharge obligation that incidence of excise duty has not passed on.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Without evaluation of the pricing practice of the appellant for ‘lubricant’, discard of the certification on supposition of it having been treated as ‘expense’ and, therefore, built into the manufacturing cost of products cleared after 2000 is neither logical nor consistent with obligation of appellate authorities to restrict fact finding only upon evidence.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed denovo adjudication since the rectification order passed by original adjudicating authority on application under section 74 of Finance Act,1994 without hearing.
Since the adjudication order was passed without any hearing and as per the order there was error in computing the demand, the two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) remanded the matter to the Adjudicating Authority for passing denovo adjudication order after considering the appellants submission to be made.
The Bangalore bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal by Commissioner of Customs (COC)(the appellant), Cochin against 4% SAD (Special Additional Duty) refund allowable on imported goods claimed by Mirc Electronics Ltd(the respondent) as there is no requirement that the VAT Chelan should show the bill of entry.
The two- member bench consisting of P.A Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) concluded that the Commissioner of Customs admits that Mirc Electronics Ltd had submitted the VAT Chelan and the only objection is that the Chelan was not correlating with the bill of entry, but there was no requirement for mentioning bill of entry number in the Sale Tax/VAT authority on the sale of goods. The bench further stated that the certificate of the Charted Accountant with the details linking each sale invoice with the bill of entry alone is sufficient for the said correlation. Therefore the order by the Commissioner (Appeals) was upheld and the appeal was dismissed.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the Customs Broker (CB) had an obligation to verify the correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client, and functioning of his client at the declared address by using reliable, independent, authentic documents, data, or information defined under regulation 10(n) of the Customs Broker License Regulations (CBLR), 2018.
Rajeev Gupta, Swati Chopra, and Ravinder Jangu, the counsels for the department relied on the decisions made by the lower authorities and contended that Custom Broker had been found involved in a case of fraudulent import. The Bench observed that the customs broker had to verify the correctness of the importer-exporter code (IEC) number, goods and services tax identification number (GSTIN), identify his client and functioning of his client at the declared address by using reliable,independents, authentic documents, data, or information.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) held that the assessee had not performed his duty with due diligence and utmost efficiency.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Anti- dumping duty was leviable on the import of cold rolled stainless steel coils which was classifiable under the category of mill-edged coils.
The Bench observed that the live consignment of 31 coils was mill-edged and anti-dumping duty was liable to be paid by the assessee. The two-member bench comprising D M Misra (Judicial) and Bhagya Devi (Technical) remanded the matter back to the original authority to re-determine the demand only for the 31 coils for which the reports suggest they are mill-edged coils.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty allowable on spent solvent which was considered as raw materials in the form of drums or barrels which was received by the manufacturer.
The Bench observed that in the case of CCE Vs. West Coast Industrial Gases Ltd, the court held that no duty shall be payable and no reversal of the credit is warranted on waste packages or containers used for packing the inputs on which credit has been taken when cleared from the factory of the manufacturer had availed CENVAT Credit as the same could not be treated as scrap on waste arising out of manufacturing process. The two- member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that the assessee was eligible for the CENVAT credit while allowing the appeal filed by the assessee.
A two-member bench of the Tribunal the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), rejected the claim of concessional rate of basic customs duty on import of G-watch.
The bench affirmed that the imported product is a Smart Watch, classifiable under 8517 6290 and the appellant had erroneously categorized it under 9102 1900. Consequently, the benefit under exemption Notification No.152/2009-Cus. was not applicable to products of the 8517 tariff entry.
The advantage under exemption Notification No. 152/2009-Cus. Is not applicable to products falling under the 8517 tariff entry; hence, it is determined that the claim for the same was incorrect. The claim of concessional rate of basic customs duty is rejected. However, the order imposing penalties and confiscating the goods is annulled. As a result, the current appeal is partially granted.
In a major relief to M/s Vodafone Essar East Limited, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that charges paid for services rendered by the Foreign Telecommunication Operators (FTOs) not taxable under telecommunication services.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “Regarding the service tax demand of Rs. 1,54,50,000/- confirmed under the head “Telecommunication services” on roaming charges paid to Foreign Telecommunication Operators (FTOs), we observe that the payment of roaming charges was made by the Appellant to FTOs for providing connectivity services to their subscribers when they are abroad. We find that during the relevant period only telecommunication services provided by a ‘Telegraph Authority’ to a person were taxable.”
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the construction service rendered by the assessee was not liable to pay service tax for the period before 01.06.2007.
The Bench observed that before the period 01.06.2007, there was a composite contract wherein the supply of materials was also involved, therefore, merits classification was works contract service, which was not in service tax before 01.06.2007. Therefore, no service tax was payable by the assessee for the period before 01.06.2007 under the category of construction services. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand for service tax imposed on the construction service while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the copyright services that were related to the original artistic works done by the assessee are excluded from the payment of service tax.
The Bench observed that there was no service tax demand on ‘Copy Right Service’ and defined under Section 65(za) of the Finance Act specifically excludes the right covered under sub-clause(a) of clause(1) of Section 13 of the Finance Act, which deals with copyrights related to ‘Original literary, dramatic, musical and artistic works’ and the Copy Rights service rendered by the assessee are related to ‘Original Artistic Works’ which are excluded from the payment of service tax. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand for service tax imposed on copyright services and also quashed the penalty imposed while allowing the appeal filed by the assessee.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the denial of refund for anti-dumping duty on past clearances, even after it was determined that no dumping had occurred, violates Article 265 of the Constitution of India.
The bench found that this interpretation contradicted the scheme of anti-dumping laws and was in violation of Article 265 of the Indian Constitution. In result, the two-member bench comprising Shri Raju (Technical Member) and Shri Somesh Arora (Judicial Member) set aside the order and allowed the appeal filed by the appellant. The bench upheld the principle that once a finding is made by the Designated Authority that there was no dumping and no basis for the imposition of anti-dumping duty, there should be no preservation of authority to impose or maintain such duty for past clearances, in line with the Constitutional mandate and the prevailing anti- dumping laws. The decision provides clarity and protection for importers who have paid anti-dumping duty in situations where it is later determined that no dumping occurred.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that when ‘foodstuff’ was transported, the same would be exempted from payment of Service Tax towards GTA expenses.The two-member bench consisted of Muralidhar (Judicial) and Anpazhakan (Technical).
The Bench observed that as per Notification No. 25/2012-ST dated 20/06/2012, when ‘foodstuff’ was transported, the same would be exempted from payment of Service Tax towards GTA expenses.
The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on the works contract involving the supply of materials under ‘supply of manpower services’ on the ground of violation of section 68 of the Finance Act,1994.
The two-member bench comprising P K Choudhary (Judicial) and Sanjiv Srivastava (Technical) quashed the service tax demand against the assessee while allowing the appeal filed by the assessee.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the rejection of the service tax refund claim on grounds of availing of CHA service before the date of export. The bench comprised of a single member, Anjani Kumar (Technical) Sigma Moulds and Stampings Pvt. Ltd, a manufacturer of auto parts that exported goods, appealed against the rejection of its service tax refund claim amounting to Rs.40,906/-. The Commissioner (Appeals) had denied the
The Bench observed that the services availed are that of the CHA whose services are required at the Port of export and therefore, the services are bound to be later than the date of removal of goods from the factory and before the actual export and the services are availed before export, the contention of the Department was incorrect.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of service tax is admissible in refund proceedings in the absence of any proceedings initiated under rule 14 of CCR. The two-member bench comprised of Suvendu Kumar Pati (Judicial) and Anil G Shakkawar (Technical).
Siemens Technology & Services Pvt. Ltd had appealed against the denial of CENVAT credit amounting to Rs.1,22,29,342/-. The Commissioner (Appeals) had confirmed the denial of credit, leading the assessee to file an appeal challenging this decision. The CENVAT credit in question was accumulated on Service Tax liability discharged under the reverse charge mechanism for services procured from outside India and under the normal procedure for services availed within India.
The Bench pointed out that in the case of Capital India Pvt. Ltd. Vs. CCT, the court held that no recovery proceeding was initiated for the alleged erroneous taking of credit, and denial of the said amount during a refund preceding is not in conformity to the law.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the service taxability of an event cannot depend upon a decision taken by the foreign client. The two-member bench comprised of Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical).
Sundaram Asset Management Co. Ltd, the respondent-assessee was engaged in the activity of management of assets of various schemes of Sundaram Mutual Fund and advises on investment to clients both in India and overseas. While providing advisory services to clients abroad they received the consideration in inconvertible foreign exchange.
The revenue appealed against the order passed by the Commissioner (Appeals) for confirming the sanctioning of a rebate claim of Rs.48,82,448/- to the assessee.
The Bench observed that the client who is abroad can opt to accept the advice given by the assessee or reject the same. In such circumstances, a decision taken by a foreign client to invest in India cannot be said to be the deciding factor whether the advisory services amount to the export of service or not.
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on technical inspection and certification agency service on the grounds of service tax exemption. The two-member bench comprised of Dilip Gupta (President) and Subba Rao (Technical).
Sidmak Laboratories (India) Private Limited, a pharmaceutical manufacturer and exporter, appealed against the order confirming a service tax demand of Rs. 4,55,734/- along with interest. The demand was based on payments made by the assessee to the US FDA for obtaining approval for exporting drugs. The appellant argued that no service tax was applicable to these payments, while the department relied on lower authorities’ decisions, asserting the assessee’s liability for service tax payment.
The Bench observed that the US FDA was a statutory authority and its approval of pharmaceuticals to be exported to that country was the statutory function.
In a major relief to M/s Tata Motors Limited, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed excise duty exemption on special purpose bullet proof armored vehicles.
The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that the transfer of credit in case of closure of a factory is permissible in terms of Rule 10 of Cenvat Credit Rules (CCR) 2009.
The Two-member bench comprising of P.A. Augustian (Judicial member) and R. Bhagya Devi (Technical member) held that since Reflective Glass was not found in the Notification No.4/2009- for exempting them from anti-dumping duty, the question of extending the benefit does not arise.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), invalidated the order as vague and non – speaking on the ground that there was non-examination of whether service fall under exclusion clause of input service. The Bench comprising Ramesh Nair, Judicial Member and Rju, Technical Member observed that “The impugned order does not examine the admissibility of Cenvat Credit of these services in the main part of the definition, but relies solely on the changes made in the inclusive part of definition. It is seen that the impugned order does not examine which service would fall under which exclusion clause. The order in this regard is vague and not a speaking order.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT), ruled that goods held liable for confiscation, may be released on payment of redemption fine after adjudication. The Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “After adjudication, if the goods are held liable for confiscation, they may be released on payment of redemption fine. The present case of provisional release of goods needs to be seen in this context.”
In a significant move, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has got 12 new Technical Members as the Government made the postings amidst a huge number of litigations pending with the Tribunal. “The aforesaid officers are required to take charge of the post of Member (Technical) in the bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) mentioned against their respective names within 30 days from the date of issue of this order. They are also requested to submit their medical fitness from an authority specified by the Central Government before assuming charge of the post as Member (Judicial) in the Tribunal,” the office order said.
The Delhi bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Service tax under the head “business support services” is not allowable on health care services by the clinical establishment.
A Coram comprising of Justice Dilip Gupta, President and Mr P V Subba Rao, Member (Technical) set aside the impugned order and held that “the Commissioner was not justified in confirming the demand of service tax under the head “business support services”.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) of Anil Choudhary set aside demand of duty for period prior to starting of commercial production.The bench observed that “Thus, more or less – the appellant has done only test production prior to 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. Further, I find that Revenue has taken contrary stand wherein in the first show cause notice it is admitted that assessee has started commercial production from November, 2010 wherein in the second show cause notice, duty has been demanded from July, 2010.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Mumbai bench has held that the CA certificate cannot be brushed aside by the excise authorities as there is no format prescribed under the Statute.
Ajay Sharma, Member (Judicial) observed that there is certificate of the Chartered Accountant as well as the affidavit of the appellant specifically mentioning therein that the burden towards Cenvat credit, interest and penalty was never passed on to the consumers.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench, while allowing refund of service tax paid towards Banking and Financial Services, has held that the correlation is not required to claim refund of service tax.
It was observed that, “All the business of the appellant was export of goods, therefore, no co-relation was necessary as all the services were availed for export of goods.”
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a penalty under Customs Act,1962 is not imposable when a “No Objection Certificate” (NOC)is not required to be obtained from Drug Inspector and is free to export Drugs.
A Coram of Anil Choudhary, Member (Judicial)observed that even from the test report of CDSCO, Mumbai, out of the three drugs, two drugs namely B-CO syrup and Sabtronbe of standard quality.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) of the Ahmedabad bench, has, in a recent judgement, held that there can be no penalty under sections 76 & 78 of the Finance Act, 1994, when the assessee has paid the entire service tax along with interest.
In light of various judgments, while hearing the contentions of the appellant, the CESTAT coram observed that a penalty under Section 76 cannot be imposed when a penalty under Section 78 is imposed, and that the adjudicating authority, though, had invoked the extended period, but by invoking Section 80, has set aside the penalty because the appellant had admittedly paid the entire service tax along with interest before the issuance of show cause notice.Thus, allowing the appeal, the Tribunal held:
“The adjudicating authority has rightly set aside the penalty under Sections 76 & 78 of the Finance Act, 1994 and set aside the impugned order of the Commissioner (Appeals) being not correct.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has deleted penalty under Section 114 of the Customs Act and observed that Customs House Agent (CHA) cannot be expected to examine and ensure nature of goods in consignment.
The Counsel for the Department having argued that the CHA ought to have taken note of the fact mentioned in test report that the samples were naturally occurring Potassium Chloride and that by incorrect classification, the appellants have abetted in the attempt to export the restricted goods, the Coram of Sulekha Beevi C.S, the Judicial Member and Vasa Seshagiri Rao, the Technical Member observed, “Be that as it may, the appellant as a CHA cannot be expected to examine and ensure the nature of the goods in the consignment. There is no allegation or evidence to establish that the appellant had indulged in any overt act or played any role in any manner so to assist the exporter in his attempt to export the goods.”
“After appreciating the evidence and following the decision of the Tribunal in the above case, we are of the view that the penalty imposed on the appellants under Section 114 of the Customs Act is not warranted” the Tribunal noted.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has, while granting relief to M/s. Aircel Limited, the appellant, deleted the demand of short paid service tax with interest.
With the Counsel for the appellant drawing support from the decision of the Apex Court in the case of M/s. Birla Corporation Ltd. v. Commissioner of Central Excise to and arguing that the Department cannot pick and choose to pursue demands against assessees ,when the issue involved has attained finality, deleting the service tax demand, the Bench comprising Sulekha Beevi CS, the Judicial Member and Vasa Seshagiri Rao, the Technical Member observed: “The Authorized Representative for the Department has not been able to counter the submission made by the Learned Counsel for the appellant that the Department has not appealed against the Order passed in the case of the associate- company viz. M/s. ACL.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT ), has recently , set aside revocation of Customs Broker License, on the ground of show cause notice ( SCN ) being vague and there being no relevance for denial of Non Objection Certificate ( NOC ).
Setting aside the revocation, the Bench observed that the evidence available on record in the form of verification reports relied upon in the SCN were vague and that ,in some cases, even the name of the exporter,who they were enquiring about was not indicated in them.
“The reports state either NOC denied which is not required by any Customs Broker or exporter or that the exporters did not exist at the time of verification which does not prove that they did not exist at the time of verification or that IGST refund may be denied which is irrelevant to the present proceedings. None of the reports establish that the appellant had violated Regulation 10(n)” the Tribunal noted.
Demand of Tax on extended period not valid when entire Service Tax paid even period before its levy (Chiron Behring Veccines Private Limited vs C.C.E. & S.T.-Surat-ii, 2023 TAXSCAN (CESTAT) 170)
In a significant case, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the demand for tax on an extended period, is not valid when the entire service tax is paid even period before its levy.
With the appellant having paid the entire service tax, even for the period before its levy and also having filed ST- 3 returns wherein details of payments have been declared, a Coram comprising of Mr Ramesh Nair, the Member (Judicial) and Mr Raju, the Member (Technical) observed that the appellant has made a submission about limitation and sought the benefit of section 73 (3) and Section 80 of the Finance Act, 1994.
Subsequently, the Tribunal set aside the demand of service tax for an extended period along with the penalties, thereby allowing the appeal of the assessee.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has recently, while allowing an appeal filed before it, held that the Construction new jetty for expansion of the existing Jetty includes an Input service, and service tax credit can be availed.
Allowing the appeal while setting aside the impugned order, a Coram comprising of Mr Ramesh Nair, the Member (Judicial) observed: “even though setting up of a new factory, construction of the building of service provider is not excluded from the definition of Input service. In this case, the construction of the Jetty is clearly like the expansion of the existing Jetty therefore, credit is admissible.”
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