This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
In a recent judgement, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has the remanded issue, arising out of limitation, to the Commissioner (Appeals).
With Rudraksh Detergent and Chemicals Pvt ltd, the assessee, having challenged the order of the Commissioner (Appeals), whereby he had remanded the matter to the Adjudicating Authority to keep the matter in abeyance till recredit orders were issued by the Jurisdictional Assistant Commissioner and then to adjudicate the show cause notice, a Coram comprising of Mr Ramesh Nair, the Member (Judicial) and Mr Raju, the Member (Technical) observed that the Commissioner (Appeals), instead of remanding the matter to the Jurisdictional Assistant Commissioner could have decided the matter finally at his end.
The Tribunal further held: “The Commissioner (Appeals) ought not to have remanded the matter to the Adjudicating Authority, particularly when the appellant has raised the ground on limitation and the matter should go back to the Commissioner (Appeals) for deciding the appeal before him finally without remanding the matter to the Adjudicating Authority.”
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has held that service tax does not apply to the service of advertising.
With M/s Kusum Healthcare Pvt. Ltd, challenging the order dated 1st of December 2016, passed by the Commissioner of Central Excise & Service Tax, Alwar, by which the demand of service tax of Rs. 4,58,38,070/- had been confirmed with interest and penalty, it was so argued by appellant that by virtue of the amendment of clause (g) of section 66D of the Finance Act, the sale of slots in an advertisement in print media did not attract service tax liability and also that the appellant had discharged its service tax liability on the expenses for non- print media advertisements.
Hearing the contentions, the two-member bench of Justice Dilip Gupta, the President, along with Hemambika M. Priya, the Technical Member, while setting aside the impugned order, observed:
“The services of advertisement in respect of print media are exempted in terms of the negative list of services under section 66D(g) of the Finance Act. Thus, the appellant is not liable to pay service tax on the service of advertisement in print- media”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed excise duty demand on non-maintenance of separate account for input services for final exempted service.
A Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “we hold that the demand on account of non-maintenance of separate account for input or input services for final exempted service does not arise and the reversal of cenvat credit on input and proportionate credit on input service is sufficient to meet the ends of justice.” The Bench also held that the appellant is required to reverse proportionate cenvat credit on inputs cleared as such and proportionate input services used for providing trading activities i.e. trading of coal, therefore, there is no requirement of payment of 6%/10% of the value of trading activity provided by the appellant.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded matter in the matter of non-production of country-of-origin certificate from foreign supplier due to Covid-19 pandemic.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member observed that “It is explained by the respondent that they could not obtain it from the foreign supplier due to Covid-19 pandemic. On this fact, we are of the opinion that a lenient view has to be taken and the delay in producing the certificate has to be condoned. Ordered accordingly. However, the eligibility of the concessional rate of duty on the basis of the COO certificate produced by the respondent has to be examined. We hold that the matter has to be remanded to the original authority to re-assess and reconsider the eligibility of the notification on the basis of the COO certificate.”
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Service Tax Demand cannot be raised beyond 5 5-year period of limitation. The tribunal set aside the order imposing penalty which was barred by limitation.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed that the show cause notice was issued on 19.10.2012 for the period covered 2007-08 to 2011-12, which is clearly beyond the normal period of limitation. Therefore, demand is time-barred and cannot be sustained. For the same reason, the penalties imposed upon the appellant also cannot be upheld.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that customs duty payable in advance for days of new retail price.
A two member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) observed that the Tribunal dealing with the same issue even against the impugned order for the portion of demand confirmed, the Tribunal has set aside the demand and allowed the appeal of the respondent.
Therefore, there is no substance in the revenue’s appeal. The CESTAT upheld the order to the extent of demand involved in the present revenue’s appeal. The revenue’s appeal is dismissed accordingly.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on cargo handling service and held that the loading and shifting of materials from private railway siding to stacking yard is goods transport service.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that as the main activity of the appellants is transportation of goods, therefore, merits classification of the above said service in question is Goods Transport Service. Therefore, the demand under Cargo Handling Service is not sustainable, hence, whole of the demand confirmed against Appellant No 2 is set aside and consequently, the penalty imposed on the appellants are also set aside.”
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on management, maintenance, and repair services on the grounds of limitation.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) deleted the demand raised under Management, Maintenance & Repair Services on the ground of limitation.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the warranty and Annual Maintenance Contract (AMC) service provided by a common service provider as common input service for both manufacturing unit and corporate offices are entitled to CENVAT credit of excise duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) quashed the CENVAT credit demand while allowing the appeal filed by the assessee.
The Chandigarh Bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) set aside the penalty in the absence of intention to evade tax as the service tax was paid by the assessee after availing abatement of 67 % along with interest.
A two-member bench of Mr S S Garg, Member (Judicial) And Mr P Anjani Kumar, Member (Technical) found that the substantial demand is barred by limitation because the department has not been able to establish that the appellant had intended to evade the payment of service tax which is essential ingredients to invoke the extended period of limitation. “Since the Audit, the appellant paid the service tax after availing the abatement of 67% alongwith interest and therefore, it can safely be said that there was no intention to evade the payment of service tax, the penalties under Section 77 and 78 are not liable to be imposed on them. “, the Tribunal held. The CESTAT allowed the appeal.
The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that service tax demand based on Form 26 AS from the Income Tax Department without Investigation is Invalid.
A two-member bench of Shri Ashok Jindal, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the show cause notice has been issued to the appellant by invoking an extended period of limitation and some of the demand pertains to beyond five years and in this case, the demand has to be calculated in terms of Valuation Rules, 2006. The CESTAT held that an extended period of limitation is not invocable and demand based on Form-26AS is not sustainable
Limited vs Commissioner of CGST & CX, Bhubaneswar-I Commissionerate 2023 TAXSCAN (CESTAT) 1538
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) comprising Muralidhar (Judicial) and Anpazhakan (Technical)
quashed the denial of CENVAT credit of excise duty on the manufacture of High Carbon Ferro Chrome (HCFC) on the ground of CENVAT credit eligibility.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the demand confirmed in the impugned order was not sustainable and quashed while allowing the appeal filed by the assessee. To Read the full text of the Order
The Bench observed that the CENVAT credit on capital goods would be admissible in the hands of the factory and the denial of CENVAT credit on input services and capital goods was not sustainable.
A two-member bench of the New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) comprising Binu Tamta (Judicial) and Subba Rao (Technical) quashed the confiscation of replica firearms on the grounds of non-falling goods under the category of firearms( defined under the Arms Act, 1959).
Windlass Online Stores Pvt. Ltd, the appellant assessee filed a Bill of Entry for clearance of goods imported from an Overseas supplier – Denix S.A. C/Dels Bijuteers, Spain. The description, quantity, and value of the goods declared by the importer in the said Bill of Entry as per invoice.
The assessee appealed against the order passed by the adjudicating authority for confirming the customs duty demand and for the confiscation of goods under section 112(a) of the Customs Act,1962.
The bench held that since the impugned order does not reflect any application of mind, it would be appropriate to remand the appeal to the Commissioner (Appeals) to discuss the issues on merit and quashed the confiscation of goods.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that there is no prohibition or restriction, either under the Customs Act, 1962, or the Foreign Trade Policy, regarding the import of replica firearms. The two-member bench comprising Binu Tamta (Judicial) and Subba Rao (Technical) held that the assessee was not liable to pay the customs duty demand imposed against the assessee.
Windlass Online Stores Pvt. Ltd., the appellant assessee, submitted a Bill of Entry for the clearance of goods imported from an overseas supplier, Denix S.A. C/Dels Bijuteers, Spain, specifying the description, quantity, and value of the goods as per the invoice.
The assessee challenged the order issued by the adjudicating authority, which confirmed the customs duty demand and ordered the confiscation of goods under section 112(a) of the Customs Act, 1962.
The tribunal noted that the certificate/declaration from the supplier/manufacturer stated that the imported goods were classifiable under CTH 83062900, and therefore, there was no prohibition or restriction under the Customs Act or the Foreign Trade Policy for importing “Replica Firearms.”
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that the order confirming the issue beyond the scope of show cause notice is invalid and set aside the order rejecting the CENVAT credit.
A single member bench of Mr Ajay Sharma, Member (Judicial) viewed that show cause notice is the foundation on which the department has to build up its case and the allegations in the show cause notice have to be specific as opposed to vague or lacking details. The CENVAT credit has been denied by the Commissioner merely based on assumption and presumption which is arbitrary and not as per law. It was settled that the authorities under the Act cannot travel beyond the show cause notice. Since the impugned order has travelled beyond the show cause notice and has been passed on new ground, the same is not sustainable. While allowing the appeal, the Tribunal set aside the impugned order.
In the case of Hindustan Petroleum Corporation Ltd about the irregularities in reversal of Cenvat Credit, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) remanded the matter for computation of interest liability for premature availment of credit on capital goods.
A two-member bench of Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial) observed that “Nonetheless, owing to premature availment of credit, interest liability may arise by the decisions cited supra. Furthermore, it is on record that the original authority, while confirming the recoveries proposed in the show cause notice, had also made it a point to note that the reversal of credit has not been verified. “ The Tribunal viewed that ascertainment of the reversal of CENVAT credit as well as computation of interest liability for premature availment of credit on capital goods that were procured need to be verified. The CESTAT set aside the impugned order and remanded the matter to the original authority for those limited purposes.
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 Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no adjournment shall be granted more than three times to a party during the hearing of an excise appeal under section 35C of the Central Excise Act,1944.
A single-member bench comprising Sanjiv Srivastava (Judicial) dismissed the appeal filed by the assessee in terms of Rule 20 of CESTAT Procedure for the non-prosecution.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the demand for service tax on the ground of service tax leviable on land development activity rendered for consideration which was classified under the category of site formation and clearance service.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) upheld the demand for service tax raised by the department while dismissing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the value of raw materials not added to determine service tax liability when the contract simpliciter uses the service of commercial and industrial construction without a supply of any raw materials.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the demand for service tax and the penalty along with interest imposed by the department on the assessee was not sustainable and liable to be quashed and directed re-adjudication to the adjudication authority and the assessee would be allowed to produce any documents which may be required in the interest of justice.
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in a recent case has held that operational surplus is subject to the levy of service tax and cannot be excluded in reimbursable expenses.
It was observed that only the actual amounts which have been received by the appellant from the client for the expenses incurred have been included for raising the demand. The appellant has mentioned “operational surplus” in their financial statements. This is the amount collected from the client over and above the actual expenses incurred by them. It was alleged that the said operational surplus is subject to the levy of Service Tax and cannot be excluded like reimbursable expenses. However, the Counsel has been fair enough to submit that the said circular was superseded by Master Circular No. 96/7/2007-ST dated 23.08.2007 wherein it was clarified by the Department that services provided by sub-contractors are taxable even though the main contractor is discharging the tax liability. The Larger Bench had noted that before 2007, the Trade Notices / Instructions and Circulars had been issued exempting the sub-contracting CHA from payment of Service Tax on the bills raised on the main CHA. The period of dispute in the appeal was before 2007, a two-member bench of Ms Sulekha
Beevi C S Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that that based on the Trade Notice which is binding upon the Department, the demand raised cannot sustain and requires to be set aside.
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) allowed interest for period after 3 months refund of 19 crores of cenvat credit.
A two member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that The Appellants have claimed interest as per Section 11BB. As per Section 11BB interest is to be paid after expiry of three months from the date of filing the claim to the date of claim. In the present case refund claim was filed on 27.12.2012 the period of three months will be over on 26.03.2013. They would be entitled to the interest for the period beyond 26 March, 2013 to the date of payment i.e. 21.05.2013, which is about 55 days. To that extent appeal is allowed in favour of the appellant.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that no service tax can be levied when no consignment note has been issued to service recipient, thereby granting relief to M/s.Vedanta Limited, the appellant.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi , Judicial Member observed that “The Service Tax Rules under Section 2(1)(b), provides that the recipient of service is liable to pay the Service Tax. In the present case, the demand has been raised upon the appellant alleging that they are the recipient of services of goods transport agency services provided by the CHA. Admittedly, the appellant has not been issued a consignment note.”
In a recent case, the Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal, (CESTAT) upheld the penalty under Customs Act, 1962 on the illegal importation of battery and ammonium chloride through mis declaration.
A two member bench comprising Mr. R. Muralidhar Member(Judicial) and Mr. Rajeev Tandon Member (Technical) observed that “A.K. Singh by his wilful act, despite being aware of the whole factual matrix, has deliberately and consciously played alongwith the key conspirators of mis-declared imports and contributed to the illegal importation of battery and ammonium chloride by filing Bill of Entry mis-declaring the imported cargo as calcium carbonate. The appellant has this certainly rendered himself liable to penal action under Section 112(a) of the Customs Act 1962.”
The CESTAT held that “no case is made out for waiver of penalty imposed under Section 112 (a) of the Act. However, in so far as the appellants have not been made noticee for imposition of penalty under Section 114AA of the Act, no penalty on them can therefore be imposed under the said section. We therefore discharge the appellant from the penalty imposed on them under Section 114AA of the Customs Act. The aforesaid Order in Original passed by the Learned Commissioner is upheld but for the said modification and the penalty imposed under Section 112(a) calls for no interference.”
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
