This annual round-up analytically summarizes all the Customs, Excise and Service Tax Orders of the CESTAT Benches of India reported at Taxscan.in during 2024.
In a recent ruling of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) West Zonal Bench at Ahmedabad, the tribunal confirmed the reclassification of AC remote components made by the appellant, stating that Specific mentions take priority over general ones.
The bench comprising Justice Somesh Arora and Raju observed the appellant engaged in manufacturing of remote control handset, PCB assembled after mounting are supplied to various Air Conditioner manufacturing companies.The appellants argued that the classification under CTH 85159000 of the items as sought by them is appropriate, As the “ sole and principal use” rule does not apply to parts which constitute an article covered by heading of Section Note 2, hence the same shall be classified in their own appropriate heading. The bench upheld the classification done by appellant. And the appeal was accepted with modification of classifying the silicone keypad under 84159000.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the service tax penalty was unjustified and without jurisdiction due to time-barred proceedings.
The bench further observed that, since the appellant had filed returns regularly, had cooperated with the department, and had submitted all information and documents during the audit, the intention to evade has to be a positive act to be established by the department.The bench, comprising Binu Tamta and Hemambika R. Priya, held that there was no justification for invoking the extended period to impose a penalty under Section 78 or for imposing a penalty under Section 77 of the Finance Act.
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed the appeal and held that in the period involved in the appeal no service tax was charged on composite contracts.
The CESTAT bench comprising of Mr. Justice Dilip Gupta and Ms. Hemambika R. Priya, Member (Technical), observed that on composite contracts, service tax was not levied up to 01.07.2012 and the period involved in this appeal is from April 2009 to June 2012.Due to the above reason, the bench held that the impugned order passed by the commissioner cannot be sustained. The CESTAT bench allowed the appeal.
In a major relief to Reliance Life Science Private Limited, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Mumbai has directed a cash refund of ₹49 lakh in a case involving excess reversal of CENVAT credit during the transition from the CENVAT regime to the Goods and Services Tax ( GST ) regime.
In its detailed order, the tribunal concluded that the assessee had correctly followed the procedures for reversing CENVAT credit and was entitled to a cash refund of ₹49,06,962, as the excess credit could not be utilized under the GST regime. In result, the appeal was allowed.
In a recent decision, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Mumbai granted partial relief to Godrej Consumer Products Ltd. ( GCPL ) in a dispute over the availment of CENVAT credit on advertising services. The Tribunal rejected the retrospective CENVAT credit reversal but ordered the recalculation of credits post the 2011 amendment of the CENVAT Credits Rules.
The two member bench of Mr Ajay Sharma and Mr C J Mathew, after examining the case in detail, agreed that trading could not be classified as an exempt service before April 1, 2011, thereby invalidating the demand for the reversal of CENVAT credits for the period prior to the amendment. The Tribunal upheld previous legal precedents, such as the Trent Hypermarket and Lenovo (India) cases, confirming that trading was not considered an exempt service before the legislative change. Consequently, the Tribunal ruled that the Commissioner’s demand for the pre-2011 reversal could not be upheld. However, the Tribunal concurred with the Revenue’s position regarding the period after April 1, 2011. It was observed that the assessee should have proportionally reversed the CENVAT credits based on the turnover from traded goods. Thus, the case was remanded to the adjudicating authority to recalculate the necessary reversal for the post-2011 period in line with the proportion of traded versus manufactured goods.
Recently in a ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ordered a reassessment of a ₹7 crore excise duty demand on pharmaceutical equipment prototypes, questioning the denial of an excise duty exemption claimed under a long-standing government notification. The Tribunal set aside two orders passed by the Commissioner of Central Excise, Mumbai-IV, which had imposed the excise duty demand on goods cleared between November 2008 and March 2016.
As a result, CESTAT set aside the Commissioner’s orders and remanded the case back for a fresh decision. The Tribunal instructed the excise authorities to reassess the matter, ensuring that the conditions stipulated in the exemption notification were carefully considered. In result, the case was remanded back to the Commissioner of Central Excise for a new assessment, in line with CESTAT’s instructions.
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) of Mumbai held that CENVAT credit on input services are not reversible for unsold flats after receiving completion certificate.
After carefully considering the arguments from both sides and examining the relevant case laws, the bench of Dr. Suvendu Kumar Pati, delivered its final order on September 11, 2024. The Tribunal acknowledged that judicial precedent had consistently supported the appellant’s position. It was observed that the eligibility for CENVAT Credit should be determined at the time the input services are received, and subsequent changes—such as the conversion of flats into immovable property—do not retrospectively affect that eligibility. The Tribunal also observed that the provision excluding the sale of immovable property from Service Tax, as contained in Section 65B(44) of the Finance Act, 1994, was not applicable for reversing CENVAT Credit that had already been legitimately availed. In result, the CESTAT allowed the appeal and set aside the order passed by the Commissioner of GST & Central Excise (Appeals), with consequential relief to the assessee.
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) of Mumbai held that the set-off of excess duty payments against short-payments is permissible, and remanded the case back to the lower authority for fresh consideration.
The present dispute was therefore considered by the Tribunal in light of these prior decisions. It was observed that the principle of allowing set-offs between excess payments and short-payments had already been established in earlier remand orders. Given that the original authority’s decision to disallow set-off for the period from April 2008 to September 2008 was inconsistent with previous findings, the Tribunal decided that the matter should be remanded once more. Thus, the appeal was allowed, with the decision deferred for a fresh review by the original authority.
In the recent case, the Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) granted relief to Harbinger Systems Private Limited by approving the refund of CENVAT credit for payments made under the Voluntary Compliance Encouragement Scheme ( VCES ) Scheme.
A single member of Ashok Jindal(Judicial Member) set aside the impugned order and allowed the appeal with consequential relief, based on the M/s. Oxygen Bio Research P Ltd. decision.
In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled in favour of M/s Parle Products Pvt Ltd, declaring that their product, ‘Cheeselings,’ should be classified as ‘Namkeen’ and thus exempt from excise duty under the relevant notification.
CESTAT, in its ruling, mentioned that the term ‘namkeen’ does not have a specific definition in the tariff or notification. Therefore, the classification should reflect the product’s nature and market classification rather than just its manufacturing process. The tribunal found that the adjudicating authority’s decision to classify ‘Cheeselings’ as a ‘snack food’ was not supported by a clear definition of ‘namkeen’ or a proper assessment of the product’s market classification. Accordingly, the two member bench of Ajay Sharma ( Judicial Member ) and C J Mathew ( Technical member) concluded that ‘Cheeselings’ indeed falls under the category of ‘namkeen’ and thus qualifies for the excise duty exemption.
In a recent ruling, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled in favor of Mercedes Benz India Pvt. Ltd., allowing the refund of Rs. 40,01,872 for excess CENVAT credit under the transitional provisions of Section 142(3) of the CGST Act, 2017.
The tribunal referred to a previous decision by the Supreme Court of India in the Union of India Vs. Kamlakshi Finance Corporation Limited, 1991, which emphasized the importance of judicial discipline. According to this principle, lower authorities must follow the decisions of higher appellate bodies without questioning them unless there’s a stay or appeal in place. After careful consideration, the tribunal ruled in favor of Mercedes Benz, ordering the department to refund the Rs.40,01,872 to the company. The tribunal concluded that the transitional provisions of the CGST Act clearly provided for this refund, and denying it would be unjust.
In a recent ruling, the Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside excise duty recovery on Cipla Limited stating that once the development commissioner grants permission, it cannot be challenged by revenue.
Therefore, the tribunal set aside the order demanding the duty and penalty, remanding the case back to the adjudicating authority for reconsideration. The tribunal instructed to refer to the Development Commissioner for clarification on the DTA sales entitlement, particularly concerning the interpretation of “products” and the percentage limits for DTA sales under the FTP.
In the recent case, the Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that refund claims for exported goods from April to June 2009 were not impacted by the conditions of the new notification issued on July 7, 2009.
The bench observed that the appellants refund claim was rejected because it did not meet conditions 2, 3, and 4 of Notification No. 18/2009-S.T. (July 7, 2009), which pertain to refund limits, half-yearly return submissions, and canalized items. However, the goods were not claimed as canalized items, and the refund amount was not disputed. Since the exports were completed before the new notification was issued, the conditions related to return submissions were not relevant for denying the exemption. A single member bench of M.M Parthiban (Technical Member) overturned the order dated May 18, 2018, and approved a refund of Rs.16,17,016 to the appellant.
In a significant case, the New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that service tax cannot be determined without clarifying the category of service under which the said amount can be attributed.
The single Bench of Binu Tamta (Judicial Member) has observed that the amount of Rs.25,83,338/- has been directly taken from Note 16 of the balance sheet, whereas the assessee had taken the amount as per the Ledger records. The revenue was required to clarify the service under which the differential amount of ₹56,169/- was chargeable.The Tribunal viewed that the revenue has taken the details of the valuation from the balance sheet and the profit and loss account maintained by the assessee. Since there is no suppression justifying the invocation of the extended period of limitation. The Tribunal allowed the appeal. Ankur Upadhyay appeared for assessee and Rohit Issar appeared for the respondent.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) Bench of Ahmedabad held that demand of CENVAT Credit raised which is equal to 6% of difference between the purchase price and sale price of trading goods in terms of Rule 6 (3) is not sustainable when the proportionate credit is already paid with interest.
The CESTAT Bench comprising Ramesh Nair ( Judicial Member ) and Raju ( Technical Member ) by carefully considering both the sides and persuading the record found that the demand of CENVAT Credit was raised which is equal to 6% of difference between the purchase price and sale price of trading goods in terms of Rule 6 (3).Therefore, the demand is not sustainable. Hence the impugned order is set aside. Appeal is allowed.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Chandigarh Bench observed that the Erroneous payment of Duty/Tax under mistake of law would not attract provisions of Unjust Enrichment under Section 11B of Central Excise Act, 1944 (CE Act,1944).
The CESTAT Bench comprising S.S Garg ( Judicial Member ) and P. Anjani Kumar ( Technical Member ) observed that denial of refund claim of the amount wrongly paid is in violation of Article 265 of Indian Constitution. As regards the claim of unjust enrichment, the respondent has proved that no tax has been charged from the SEZ unit. The invoices issued to SEZ units along with sample copies of tax invoice shows that no service tax was charged from the SEZ unit. The respondent has proved that the amount of refund claim has actually been borne by them and sanctioning of the refund would not amount to unjust enrichment.
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) in Ahmedabad has held that an ISO Tank used for transporting Di-Methyl Sulphate ( DMS ) is eligible for CENVAT credit, even when initially claimed as capital goods, provided the ISO Tank qualifies as an input.
The tribunal ruling establishes that durable packaging material, such as an ISO Tank used for transporting goods, can qualify for CENVAT credit under “inputs,” provided it meets the conditions stipulated under the CENVAT Credit Rules. The judgement reassures that procedural mistakes (such as claiming the credit under capital goods instead of inputs) should not deny an assessor the benefit of legitimate credit if the claim is otherwise valid.
In the recent ruling,the Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Afflatus Gravures Pvt Ltd by upholding the Service Tax exemption for their essential chrome plating process.
The bench found that chrome plating on gravure printing cylinders was essential to the manufacture of duty-paid goods by the principal manufacturer. The two-member bench comprising Ramesh Nair(Judicial Member) and C L Mahar(Technical Member) allowed the appeal of the assessee with consequential relief.
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ), Bangalore bench, has held that an importer is not required to declare the Maximum Retail Price ( MRP ) in the Bill of Entry for claiming the Special Additional Duty ( SAD ) exemption.
Therefore, the Tribunal held that the demand raised by the customs authorities was unjustified and set it aside. The Tribunal concluded by allowing the appeal with consequential relief and setting aside the penalty and duty demand against the appellant.
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ), Chennai Bench quashed a service tax demand related to reimbursable expenses.
Accordingly, the CESTAT Bench set aside the impugned order and quashed the service tax demand, allowing the appeal in favour of Sundaram Asset Management with consequential reliefs. The ruling reinforces the principle that reimbursable expenses cannot be subjected to service tax, providing clarity and relief to businesses dealing with similar tax disputes. The order was pronounced on September 11, 2024.
The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) Bangalore, in the case of M.S. Clothing Company, has set aside the penalty imposed under Section 111(m) of the Customs Act, 1962, concerning an alleged misdeclaration.
It was concluded that the appellant had not wilfully misrepresented or suppressed any facts, and the confiscation of goods and penalties under Sections 111(m) and 114A of the Customs Act were unwarranted. Consequently, the penalty and confiscation were deleted, and the appeal was partially allowed.
In a significant decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, dismissed a service tax demand of ₹51,68,799, along with associated penalties and interest, against M/s. Maple Exports Private Limited. The case revolved around foreign currency expenses that the tax authorities claimed were liable for service tax under the reverse charge mechanism.
Ultimately, the Tribunal concluded that, in the absence of substantial evidence proving that services were received against these foreign currency spends, the tax demand was unsustainable. Consequently, the Tribunal quashed the demand for ₹51,68,799, along with any penalties and interest.
The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) deleted the penalty under Regulation 22 of the Customs Broker Licensing Regulation ( CBLR ), 2013, citing that there was no allegation of the party receiving any undue financial benefits by abetting the alleged illegality from the importer.
Given that the proceedings were based on statements from employees and agents of the importer, the Tribunal concluded that the failure to allow cross-examination violated Regulation 20(4) of CBLR. As a result, the Tribunal found the Adjudicating Authority’s decision unsustainable and allowed the appeal, granting any consequential relief in accordance with the law.
In a recent case before Customs, Excise and Service Tax Appellate Tribunal of New Delhi the excise duty demand order was quashed due to non-compliance with the requirements specified in Section 36B of the Central Excise Act
The bench comprising Justice Dilip Gupta and Hemambika R. Priya observed that the Panchnama does not record that Vaibhav Goel was seen removing the hard disk from the CPU and there is nothing on the record to link the hard disk to the CPU or pen drive. Therefore it was clear that CPU did not contain the hard disk.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded Rs. 1.18 Cr Excise Order due to the issuance of the certificate by an improper officer.
The bench was of the view that in the SCN there was an allegation that the certificate was improper, then it was necessary to carry out the ascertainment of the same. The CESTAT bench, comprising Ajay Sharm and C.J. Mathew, remands for limited fresh adjudication on whether the Associate Vice President qualifies as Project Chief Executive Officer ( CEO ), and the order was set aside.
In a recent ruling,the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) held the appeal as meritless and dismissed the same filed beyond limitation period u/s 85(3) of Central Excise Act, 1944.
The CESTAT bench further observed that Therefore the order of the Commissioner (Appeals) dated 26.11.2019 rejecting the appeal on the ground that the appeal has been filed belatedly beyond the period stipulated under Section 85 of the Act does not warrant any interference and the same is accordingly dismissed. The CESTAT bench comprising of Ajay Sharma and C J Mathew, held that the appeal is meritless and that the tribunal cannot condone a delay which could not be condoned by the first appellate authority.
In a recent judgement, the Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that when the Basic Customs Duty ( BCD ) is “Nil,” the Social Welfare Surcharge ( SWS ), which is calculated at 10% of the BCD, will also be “Nil.”
The two member bench of the tribunal comprising Ashok Jinda ( Judicial member ) and K. Anpazhakan ( Technical member ) concluded that the Appellant was not liable to pay SWS since the BCD payable is zero. Accordingly, the impugned orders were set aside, and the appeals allowed with consequential relief, if any.
The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the ocean freight markup is not subject to service tax,
After evaluating the arguments from both sides, The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) noted the precedents, including a ruling from the Supreme Court concerning a similar case, EMU Lines Pvt. Ltd. v. Commissioner of GST and Central Excise, which concluded that the markup on ocean freight should not incur service tax. The tribunal ultimately decided that the Department’s demands could not be sustained and set aside the impugned orders. The appeals were thus allowed, with any consequential reliefs to be provided according to the law.
The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) ruled that Information Technology software services provided by Wipro Limited to Special Economic Zone (SEZ) units are fully exempt from service tax, and further noted that the appellant was not liable to pay any service tax under the reverse charge basis, as no services were provided to Microsoft.
The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) ruled that the remaining issues related to service tax adjustments and credits are contingent on the resolution of the primary issue. Consequently, the appeal was remanded to the Adjudicating Authority for fresh consideration of all issues in light of the findings regarding the first issue. The earlier impugned order was set aside.
In a recent ruling, the Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has provided relief to Ford India Pvt Ltd by ruling that air compressors for car AC equipment are correctly classified under Heading CTI 8414 8011 of the Customs Tariff Act, 1985, resulting in no differential duty demand.
The bench reviewed the classifications under Heading 8414 and 8415. Further the two member bench of the tribunal comprising M. Ajith Kumar (Technical member) and P. Dinesha (Judicial member) noted that while both headings could apply, Heading 8414 pertains to compressors and pumps, while Heading 8415 addresses air-conditioning machines specifically. The bench determined that the subject goods are rightly classified under CTH 8414 8011 as gas compressors used in air-conditioning equipment, referencing Note 2(a) to Section XVII of the Customs Tariff Act, 1985.
The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has overturned the assessing authority’s order imposing a 10% Countervailing Duty (CVD) on insoluble sulfur, noting that the goods is already subject to a ‘nil’ excise duty and that no additional duties are applicable, rendering the appeal sustainable on its merits.
Furthermore, the bench concluded that the Appellant had the right to appeal the assessment if they found it unacceptable. Thus, the Appellate authority should have considered the merits of the appeal rather than dismissing it due to the lack of value enhancement or classification change. In light of the facts and circumstances, the appeal is allowed, granting the Appellant consequential relief as per the law.
In a significant ruling, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT) in Chennai addressed the appeal filed by the Commissioner of Customs against M/s. K.B. Autosys India Pvt. Ltd. The case revolved around the classification of imported materials used in the manufacture of brake pads. The central legal question was whether these materials should be classified under CTH 3824 as declared by the respondent or under CTH 6813 as argued by the appellant.
Ultimately, the two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) ruled in favor of the respondent, rejecting the appellant’s classification under CTH 3824 and upholding the classification under CTH 6813. The court ordered that the demand for duty be limited to the normal period, thereby dismissing the extended period claims. This decision underscores the importance of accurate classification in customs law and the implications of misclassification for importers.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) quashed the Customs Penalty on VABL License Holders as the DGFT Licensing Authorities were unable to unveil no forgery or misuse.
The CESTAT bench held that the impugned order confirming the duty on the appellants and imposition of penalty on them is not sustainable for the three VABAL licenses, relating to the appeals before the CESTAT bench, there is no indication of such action for cancellation having been taken by DGFT authorities or any information provided by Revenue that such an action was later taken by DGFT authorities.
Recently, the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that transactions made prior to the May 10, 2008 amendment of the Service Tax Rules are not liable to Rule 6 retrospectively.
The Tribunal further noted that the firm had paid the disputed service tax in 2011, which created a revenue-neutral situation. As the firm had already complied with the tax requirement before the show-cause notice was issued, the Tribunal ruled that no penalties or interest could be levied.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), in a recent ruling ordered revised customs duty assessment in a case of customs duty evasion involving the undervaluation of imported goods through the use of fake invoices.
However, the bench of Dr Rachna Gupta and Mr Subba Rao, after hearing both sides, dismissed the appellants’ arguments, finding that the evidence—including the emails and excel sheets provided by Nitin Khandelwal—was valid and had not been properly refutedThe tribunal noted that Nitin Khandelwal’s statement contained specific details that only he could have known, further reinforcing its credibility.
In a recent case, the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of New Delhi remanded a case concerning service tax exemption claim under the 2010 notification back to the original adjudicating authority for re-examination.
As the case hinged on critical questions of fact, including the appellant’s handling of VAT and the service tax liability for GTA services, the Tribunal concluded that a thorough re-examination was necessary. Thus, the CESTAT remanded the case to the original adjudicating authority, instructing it to reassess the matter after allowing the appellant an opportunity to submit all relevant documents, including VAT returns, invoices, and contracts, to substantiate their claims. The Tribunal further directed the appellant to ensure its participation in future hearings to prevent a repeat of the previous lapses in procedure.
In the recent case, the Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the time-barred demand for service tax on SEZ security services, granting the appellant relief from the service tax demand, interest, and penalty.
The tribunal noted that the case could be disposed of on time-bar grounds. Since the appellant had declared exempted services in their ST-3 returns for April to September 2010 and had a bonafide belief that services provided in the SEZ were exempt, there was no suppression of facts or malafide intent. Accordingly, the demand was found to be unsustainable.The two-member bench comprising Ramesh Nair (Judicial Member) and C L Mahar(Technical Member) set aside the impugned order and allowed the appeal with consequential relief.
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