This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered payment of demand of interest under Section 75 of Finance Act, 1994 and ruled that interest liability payable for normal period alone can be adjusted.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinehsa, Judicial Member observed that “With regard to the levy of interest, we note that the same is mandatory in nature, but however, the same has not been quantified by the adjudicating authority. In view of the facts and circumstances of the case, we hold that any interest liability payable for the normal period alone could be demanded / adjusted.” “The demand of interest under Section 75 of the Finance Act, 1994 is held to be payable for the normal period alone” the Bench noted.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on Construction Services and observed that calculation sheets are not proof to assume the collection of service tax.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “It is not clear from the case records whether the Department has challenged the certificate issued by M/s PACL. The allegation is sought to be established on the basis of loose calculation sheets. During the hearing, Counsel for the appellants has demonstrated that the said sheets cannot be corroborated with the invoices issued. Moreover, the sheets are isolated and cannot be extrapolated to assume that service tax has been collected by the appellants.”
The Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the order to set aside the demand of service tax as the reimbursement for miscellaneous activities received on an actual basis.
A two-member bench comprising Mr Ashok Jindal, Member (Judicial) and Mr K.Anpazhakan observed that Service Tax (Determination of Value) Rules, 2006, has brought in the concept of ‘Pure Agent’ to address the taxability issues of reimbursements. As per the said Rules, expenditure incurred as a ‘Pure Agent’ was excluded from the assessable value. In the present matter under dispute, a perusal of the agreements entered with the different principals reveals that there were specific amounts for remuneration to be charged as a C&F Agent.
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Employee Cost, Rent, Repairs and Maintenance Expenses are not a post importation expenses and set aside denial of deduction under the Customs Act, 1962.
“Since the disputed expenses viz employee cost, rent, repairs and maintenance and office & miscellaneous expenses are part of ‘general expenses’ relating to the direct and indirect cost of marketing the goods in question the appeal must succeed.”, Shri P. Dinesha, Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) held.
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no redemption
A two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that the confiscation of the goods is not warranted and justified. Accordingly, the redemption fine imposed is also to be set aside. The appellants have already incurred considerable financial loss on taking back the goods reprocessing and exporting goods. The CESTAT while allowing the appeal set aside the impugned order.
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) directed re-adjudication on the dispute on eligibility for refund/rebate under excise notification.
The first appellant authority further held that though he agreed that the export incentives granted to the exporter should not be denied merely on procedural lapses, the same would not bestow upon the exporters to file claims under inappropriate notifications, wrong jurisdiction and without adhering to or complying with the substantial conditions prescribed under the notifications. The bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has observed that set aside the impugned order and remitted the matters back to the file of the Commissioner (Appeals).
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed excise duty demand on ‘Tapioca Thippy’ on the ground of reversal of proportionate credit before the issuance of show cause notice (SCN).
A Two-Member Bench comprising CS Sulekha Beevi, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “In the present case the appellant has reversed the proportionate credit before the SCN. There is no evidence put forward by the department to establish that there was suppression of facts with intent to evade payment of duty. For this reason, we find that the appellant succeeds on the ground of limitation also.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded matter to calculate admissible credit in the matter regarding the confirmation of cenvat credit on Customs Clearance Services and Tour & Travels Services.
A Two-Member comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “Regarding Customs Clearance Services and Tour & Travels Services, we find that the impugned order records that the appellants have not produced invoices etc. to prove that the credit is correctly availed by them. While holding in principle that credit on these two services is admissible to the appellants, we are of the considered opinion that the issue requires to go back to the Adjudicating Authority to calculate the admissible credit on the basis of the evidence that may be produced by the appellants.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed penalty on the ground that the matter relating to constitutional validity of levy of “Taxes on lands and buildings” is pending before the Supreme Court of India.
The Tribunal of M Ajit Kumar, Technical Member observed that “. In a case where the constitutional validity of the levy is yet to be decided the dispute is interpretational in nature. Hence reasonable cause has been made out for delayed payment of duty. In fact, due to legal complexities, the appellants are in the second round of litigation before this Tribunal. I, therefore, agree with the appellant that invocation of penalty in such a situation is not justified as per section 80 of the Finance Act, 1994 due to the reasonable cause shown.”
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 Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)held that hiring of space for advertisement on the buses by Tamil Nadu State Transport Corporation does not fall under definition of advertising agency and set aside the demand of Service tax.
A two-member bench comprising Shri P. Dinesha, Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) held that hiring of space will not bring the appellant under the definition of ‘advertising agency’. “Since the issue has been decided on merits in favour of the appellant the question of interest, penalties or invoking the extended period does not arise. “, the bench held while allowing the appeal.
The Mumbai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the penalty under the Customs Act, 1962 in the case of illegal removal of seized red sanders by the Customs Cargo Service Provider (CCSP).
A two-member bench comprising Mr. S.K. Mohanty, Member (Judicial) and Mr. M. M Parthiban, Member (Technical) observed that “the appellants not only failed to fulfil the conditions and to abide by the responsibilities reposed on them as CCSP, but also failed to rectify the situation as one another attempt was made again for illegal removal of seized red sanders, which was identified by SIIB Customs on 14.08.2014. Hence, there are clear violations of the HCCAR and Section 141(2) of the Customs Act, 1962 by the appellant and thus we do not find any infirmity in the impugned order imposing penalty under Section 117 ibid on the appellants.”
The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Engineer’s services are Input Services under Rule 5 of Cenvat Credit Rules (CCR) and overruled the decision of Commissioner (Appeals) which upheld the order by the Commissioner of Service Tax (CST), Delhi (the Respondent) rejecting the refund of Cenvat Credit of Bechtel India Pvt Ltd (the Appellant).
The bench consisting of S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) after the hearing both sides held that the grounds for rejecting the refund claims by the company were not valid and the appeal by the company was allowed with consequential relief, if any, as per law.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed confiscation of rough diamonds and observed that the verification to be initiated from issuing authority when certification suspected to be faulty.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “If the certification was suspected to be faulty or not pertinent to the impugned goods, necessary verification should have been initiated with issuing authorities and taken to its logical conclusion. No such exercise was undertaken and thus the denial is to be tested solely on conformity of the re-determination with law.”
The Hyderabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) non-awareness of other contraband goods in consignment other than declared in the bill of entry is not an excuse to avoid the penalty under section 117 of the Customs Act, 1962. The bench reduced the penalty being observed that the contravention was of gross negligence.
A single member bench comprising Mr R. Muralidhar, Member(Judicial) held that “this is more like gross negligence rather than on account of any collusion in the contravention, I reduce the penalty of Rs 1,00,000/- to Rs 20,000/-. The appeal disposed of accordingly.”
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on renting of immovable property to or by religious body before 1.07.2012.
A two-member bench comprising Shri P. Dinesha, Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) observed that revenue has failed to establish that the Diocese is not a religious body and will be covered by the definition under section 65(90a) of the Finance Act 1994. Further viewed that the appellant will be subject to levy under service tax for renting of immovable property only from 01/07/2012 and not before that date. The appellant also agrees that they are liable to pay service tax from 01/07/2012. The CESTAT set aside all penalties and allowed the appeal.
In a major relief to M/s. Intas Pharmaceuticals Limited, the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that benefit of customs duty cannot be denied to loan licensee importer.
A Two-Member Bench comprising Somesh Arora, Member (Judicial) and C L Mahar, Member (Technical) relied on the judgment in FDC Limited vs. CCE, Belapur and wherein it was observed that “We are of the considered view that even though the factory is of the loan licensee but use is on behalf the appellant therefore there is no violation of condition of the Customs Rules, 1996. Since we are deciding the appeal on above discussion and merits of the case, we need not to address other issues raised by the Counsel.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed service tax refund and observed that terminal handling services is specified service.
A Single Member Bench comprising SS Garg, Judicial Member observed that “I find that as far as the Terminal Handling Services are concerned, these services have been rendered for handling the export containers at the port of exports and they fall in the nature of port services. Further, I find that the Terminal Handling Services have been held to be specified services.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the service tax demand under Business Auxiliary Services (BAS) and observed that financial hardship is not reason to avoid payment of service tax. A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is noticed that the appellant had not declared the said income in their monthly returns. Even if the appellant believe that the said income was exempted from service tax, they should have declared the same as exempted income. It is noticed that in their pleadings, they have also argued that they have not paid the service tax due to financial Hardship.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and observed that the subsequent service of order copy is date of communication of order-in-original.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We are of the view that the subsequent service of the order copy to the appellant on 22.07.2022 is the date of communication of the order-in-original to the appellant. Accordingly, the appeal filed on 19.09.2022 is well within the prescribed time limit of two months (60days), therefore, there is no delay in filing the appeal.
Accordingly, the impugned order is set-aside and the appeal is allowed by way of remand to the Commissioner (Appeals) for passing a fresh order on merits of the case.” “Our view, authorised legal representative cannot be equated with an authorised agent of the assessee. For this reason, also service of the order to authorised representative i.e. Chartered Accountant dealing with the matter before the Adjudicating Authority is not legal and proper” the Tribunal noted.
In a major relief to M/s Tata Motors Limited, the appellant, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed excise duty exemption to Chassis on projects funded by International Organization.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K.Anpazhakan, Member (Technical) observed that “As in the appellant’s own case, the benefit of exemption Notification against Notification No.108/95-CE dated 28.08.1995 as amended vide Notification No.13/2008-CE dated 01.03.2008, is given by this Tribunal, therefore, following the said decision, we allow the exemption under Notification No.108/95-CE dated 28.08.1995 as amended vide Notification No.13/2008-CE dated 01.03.2008 as the appellant has cleared the Chassis in question to the projects funded by International Organization.”
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) remanded the matter of cenvat credit reversal for verification of actual availment and substantive reversal.
A two member bench comprising Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial) observed that “the utilization of credit for cleared products is tantamount to reversal and, hence, recovery of such credit is an exercise in superfluity. These decisions were not available with the adjudicating authority then and has settled the law on recovery thereupon. Learned Authorized Representative has suggested that actual availment and corresponding substantive reversal need to be verified.” The CESTAT set aside the impugned order and remanded the matter back to the original authority for such verification and to limit recovery, if any, only to such credit as is in excess of that availed on procurement of the three products.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)refused to release 26 gold biscuit seized under Customs Act,1962 as the gold was smuggled using fabricated challan.
A two member bench comprising Mr. R Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) observed that Supreme Court in case of KL Pavanny v. Asstt. Collector (HQ), has had held that “a mere general corroboration is sufficient and each of the detail was not required to be gone into. It even upheld the validity of the statement, containing wealth of information that was retracted in close proximity of making it and therefore disallowed the said retraction.” The CESTAT held that no case is made out by the appellants, calling for interference in the impugned order passed by the Commissioner. The Tribunal upheld the order and dismissed the appeals filed.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside demand of proportionate cenvat credit as assessee reversed the same along with interest.There is no need to demand of proportionate cenvat credit when the assessee itself reversed the same as per the amendment on Section 73 of the Finance Act, 2010.
A two member bench comprising Shri Ashok Jindal, Member(Judicial) and Shri k. Anpazhakan, Member(Technical) held that “proportionate reversal of cenvat credit will suffice to meet the end of justice in the proceeding before us. Therefore, no demand is sustainable against the appellant. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) remanded the Payment of Cenvat credit on inputs used in exempted goods under Rule 6(3)A of Cenvat Credit Rules,2004 as the matter was pending in Supreme Court decision.
The two member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) held that “ it will be in the interest of justice that this matter maybe finally decided only after the Apex Court delivers its judgment in Dharamsi Morarji chemical Co. Ltd. (Supra) case.” The CESTAT set aside the impugned order and remanded the matter to the Adjudicating Authority for passing a fresh order after the decision of the Supreme Court in the case Dharamsi Morarji chemical Co. Ltd.
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that benefit of excise notification not allowable in absence of commencement of commercial production of aluminium.have been able to produce ingots on such a large scale and certainly they could not have extruded . The appellant’s submission that it was manufacturing products in the moose furnaces, which were essentially karahais with fire under them are not convinced by the CESTAT as it was impossible that those furnaces would produced aluminium extruded products, such as, aluminium sections. While dismissing the appeal, the CESTAT upheld the impugned order. To Read the full text of the Order CLICK HERE
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service of manufacture of excisable goods in terms of section 2(f) of Central Excise Act ,1944 does not falls under definition of business auxiliary service.
The two member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) held that “since the plant machinery equipment used for the purpose of production belongs to the appellant, the service is not classified under Management, Maintenance & Repair Service. Further, the activities carried out by the appellant are undoubtedly production of goods on job work basis on behalf of GCL”. “As per the definition of business auxiliary service manufacture of excisable goods in terms of section 2(f) of the Central Excise Act, 1944 is clearly excluded from the definition of business auxiliary service. For this reason also, the demand of service tax is not sustainable.”, the Tribunal observed. The CESTAT set aside the impugned order and allowed the Appeal.
The Delhi High Court quashed the revocation of Customs Broker Licence by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and observed that there is no necessity that every contravention of the Customs Brokers Licensing Regulation, 2013 (CBLR) be visited with extreme punishment or revocation of license.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “There is a range of punishment that can be imposed by the Commissioner of Customs and it is not necessary that every contravention of the Regulations be visited with the extreme punishment or revocation of license, which in effect would deprive the custom broker of his livelihood.” The Court noted that the CESTAT had failed to consider whether the punishment imposed was disproportionately high, as contended by the appellant and was of the view that the punishment of revocation of appellant’s CB License, is disproportionately excessive.
In the case of Videocon Industries, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the interest of refund is allowable even if refund was granted after 3 months from date of Commissioner’s order. As per Section 27A of the Customs Act, 1962,an assessee is entitled for the refund if the same is not refunded within three months from the date of receipt of application under sub section(1) of Section 27 of the act.
In light of the judgements, the two member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) held that “the appellant is legally entitled for interest on the refund granted to them after three months from the date of the application i.e. 22.07.2003 till the grant of refund i.e. 25.06.2012 as per the rate of interest as prescribed under the Customs Act, 1962.” The CESTAT set aside the impugned order and allowed the appeal.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Service Tax not leviable on construction of complex service under Section 65(91a) of the Finance Act, 1994 for construction of houses under Jawaharlal Nehru National Urban Renewal Mission (JnNURM ).
In view of the various judgments, the two member bench comprising Ramesh Nair, Member (Judicial) and C L Mahar, Member (Technical) observed that in respect of construction service provided to the service recipient M/s. GSPHCL and Surat Municipal Corporation under Jawaharlal Nehru National Urban Renewal Mission are non- taxable. While allowing the appeal, the CESTAT set aside the impugned order.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax demandable on reimburseable expense in absence of evidence to prove collection of higher charge in electricity charge.
A two member bench comprising Mrs. Sulekha Beevi C S, Member (Judicial) and Mr. Vasa Seshagiri Rao, Member (Technical) set aside the demand of Service Tax on the reimbursable expenses.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Sensur Rubefacient and Herbyl Skin Ointment is classifiable as ayurveda medicaments when active ingredient are ayurvedic.
The two member bench comprising of Ramesh Nair (Judicial Member) and Raju (Technical member) viewed that “to classify medicament as Ayurvedic medicament, the following criteria to be satisfied. 1.The medicament should be manufactured out of Ayurvedic ingredient specified in Ayurvedic Grantha or Ayurveda authoritative books. 2.The medicament is sold as ayurvedic medicine in the trade parlance etc. In the present case some of the ingredients such as Boric acid, Lanoline Anhydrous, White Soft Paraffin, Essence of Jasmine, Salicyclic Acid, and Bees wax have been used were claimed by the department as other than ayurvedic ingredients.”
It was important to examine whether they are active or non-active and whether they are also covered under Ayurvedic authoritative books. The CESTAT set aside the impugned order and remanded the matter to the adjudicating authority for passing a fresh order.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that compression of natural gas amount to manufacture under Central Excise Tariff Act and service tax is not leviable under Business Auxiliary Service(BAS).
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) held that “The Commissioner has rightly dropped the proceeding of the show cause notice, therefore, we do not find any infirmity in the impugned order. Hence the same is upheld, Revenue’s appeal is dismissed. Cross Objection also stands disposed of.”
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