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 the recent ruling, the Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the Rs. 50,00,000 penalty imposed on the appellant under Rule 26 of the Central Excise Rules, 2002.
In this case, the operating order revealed that no goods had been confiscated, making sub-rule (1) inapplicable. Regarding sub-rule (2), the invoices in question were issued by the supplier, not the appellant. Therefore, sub-rule (2) also did not apply. As a result, the penalty could not be imposed under either sub-rule of Rule 26. The two-member bench comprising Ramesh Nair(Judicial Member) and C L Mahar(Technical Member) set aside the penalty and allowed the appeal with consequential relief.
In a recent ruling, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter of LG Electronics’ incomplete application submission for a customs refund claim citing justice over procedural deficiencies.
The two-member bench comprising C J Mathew (Technical Member), and Ajay Sharma (Judicial Member) observed that the customs authority had rejected the refund claim on procedural grounds (missing documents) without adequately considering the merits of the case. Therefore, the tribunal restored the refund application to the original authority, allowing the appellate to resubmit the necessary documents and have their refund claim re-examined according to the correct tariff classification and legal precedent.
In a recent ruling, the Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed Marico Limited to avail of CENVAT credits citing that denial of credit for invoices issued before Notification No. 21/2014-CE ( NT ) violated Section 38A of Central Excise Act.
The court ruled that the appellant was entitled to the CENVAT credit on the two invoices in question. The tribunal allowed the appeal in favor of Marico Limited, setting aside the impugned order passed by the Commissioner of CGST & Central Excise (Appeals), Nashik.
In a significant case, the Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that availment of cash refund of accumulated CENVAT credit doesn’t disqualify merely because levy of education cess.
The Tribunal held that “Merely because the levy of education cess was abolished, it cannot disentitle an assessee from availing the Cenvat credit on Education Cess and Secondary & Higher Education Cess. Therefore, the accumulation of the Cenvat credit in respect of Education Cess and Secondary & Higher Education Cess was absolutely legal and correct.” The division bench of Ramesh Nair (Judicial Member) and C L Mahar (Technical Member) has observed that the abolition of Education Cess does not affect the accumulated Cenvat credit which was availed during the time when the Cenvat credit on Education Cess and Secondary & Higher Education Cess was legally available to the assessee. In view of the above, the Tribunal allowed the appeal.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directs a refund of untransitioned excess CENVAT credit amounting to Rs. 30.52 lakh.
The CESTAT bench comprising M.M. Parthiban held that the impugned order passed by the Commissioner (Appeals) is meritless as it does not stand the scrutiny of law. The bench set aside the order and allowed a refund of excess CENVAT credit of Rs.30,52,536/- payable to the appellants.
The Eastern Zonal Bench at Kolkata of the Customs, Excise and Service Tax Appellate Tribunal, ( CESTAT ) recently held that no service tax is payable by a shopping mall that provides paid car parking facility to its customers or shop owners who avail such facility.
The Eastern Zonal Bench at Kolkata of the Customs, Excise and Service Tax Appellate Tribunal constituted by Ashok Jindal, Judicial Member and K. Anpazhakan, Technical Member, relied on the decision of the Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal in the matter of Brookefields Estates Pvt. Ltd. v. Commissioner of Central Excise & Service Tax (2023) wherein it was held that “….a building or its part put up on land and which is used for car parking will get the benefit of the exclusion from levy of Service Tax under Section 65(105)(zzzz) ibid., as it stood then.” In light of the observations made and precedents considered, CESTAT set aside the impugned Service Tax Order raised against the Appellant by the Revenue, while reiterating that no Service Tax is payable by the appellant for car parking fees under the category of “renting of immovable property service”.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) New Delhi Bench dismissed the appeal filed by the department to modify the impugned order seeking revoking of the license and forfeiting of the security deposit. In accordance with law, the Department cannot appeal Customs Brokers Licensing Regulations, 2018 (CBLR) order issued by commissioner.
The CESTAT Bench comprising Justice Dilip Gupta ( President ) and P.V Subba Rao ( Technical Member ) observed that in view of the above points, respectfully following the decision of Delhi High Court in Transworld Cargo, the court dismissed the appeal filed by the revenue as not maintainable. Cross objections of respondents also stand disposed of.
CENVAT Credit Available on Input for Manufacture of Bulk Drugs: CESTAT
The Eastern Zonal Bench of the Customs, Excise and Service Tax Appellate Tribunal, Kolkata ( CESTAT ) held that Central Value Added Tax ( CENVAT ) Credit can be availed on inputs used in the manufacture of bulk drugs on which export duty has already been paid by the Appellant.
CESTAT distinguished that bulk drugs and drugs are two separate items and in light of this observation, held that the Appellant is manufacturing bulk drugs and not fulfilling Condition 2 of Notification No.12/2012-Central Excise, and therefore the bulk drugs manufactured by the Appellant are dutiable. In light of the observations made, CESTAT while allowing the Appeals held that the Appellant had rightly paid the export duties leviable on the bulk drugs and claimed rebate on the duty paid, and CENVAT Credit on the Inputs in lieu thereof.
The Kolkata bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has quashed a Service Tax demand of ₹85.9 lakh against Tata Power Company Limited, providing relief to the company.
The Tribunal referenced similar rulings from past cases, such as South Eastern Coal Fields Ltd. vs. CCE Raipur and Mahanadi Coalfields Ltd. vs. CCE. In all these matters, the absence of a consignment note was found to disqualify transportation services from being categorised as GTA services, thus exempting them from Service Tax liability under RCM basis.
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that dealer promotion expenses should not be included in the assessable value of goods for excise duty purposes when there was no direct benefit to Kirloskar Oil Engines, the manufacturer.
The Tribunal clarified that Rule 6 of the Central Excise Valuation Rules applies only when price is not the sole consideration. There was no evidence that the credit notes issued by the respondent were additional consideration flowing from the dealers to the manufacturer. Therefore, the tribunal held that the 50% sales promotion expenses shared with the dealers did not form part of the assessable value for excise purposes, aligning with previous judgments. The appeal of the Commissioner of Central Excise was dismissed.
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed a refund for the tax paid on input services used for exported goods after the implementation of the Goods and Services Tax ( GST ) citing Section 142(4) of the Central Goods and Services Tax ( CGST ) Act and Circular.
Thus, the tribunal allowed the refund of service tax paid on input services related to the export of goods. The tribunal set aside the impugned order of the Commissioner (Appeals) and directed that the refund be processed with any consequential benefits as per law. The appellant’s appeal was allowed, and the refund of the service tax was granted.
The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Kolkata has exempted the Indian Tea Association from paying Service Tax on the contributions collected from its members to cover security charges during the period from 2004-05 to 2007-08.
The Government of India had also issued a specific exemption from Service Tax for membership fees collected by clubs or associations formed to represent industry or commerce during the relevant period (16.07.2005 to 31.03.2008), submitted the appellant. The CESTAT agreed with the appellant’s contentions, noting that the Indian Tea Association, although registered as a society, primarily represents the tea industry’s interests and is therefore covered by the exemption. The Tribunal set aside the demand order
In a recent ruling, the Kolkata bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has set aside the Service Tax demand on the Industrial Promotion and Investment Corporation of Odisha Limited (IPICOL), ruling that no Service Tax is leviable on the statutory body in which amount received in compliance with government directives.
The two member bench of Ashok Jindal (Judicial Member) and K.Anpazhakan (Technical Member) observed that the entire demand falls within the extended limitation period and ruled that invoking this extended period was unjustified. Accordingly, the demand was dismissed with no penalties.
In a significant ruling, the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) in Mumbai addressed an appeal filed by Skoda Auto India Pvt Ltd against the Commissioner of Central Goods and Service Tax and Central Excise, concerning four show-cause notices that proposed the total denial of CENVAT credit amounting to Rs. 10, 63,186/-, which was availed on service tax paid for employee transportation services for pickup and drop-off between a convenient point and the factory.
The bench thoroughly reviewed the case records and submissions. It held that out of the CENVAT credit of ₹31,60,453, the appellant is entitled to avail CENVAT credit for the service tax paid on insurance premiums up to March 1, 2008. Regarding the CENVAT credit for service tax paid on transportation for employee pickup and drop services, the single bench of the tribunal, led by Anil G. Shakkarwar, referred to decisions by the Karnataka High Court in cases cited by the appellant’s counsel, such as Stan En To Otetsu India (P) Ltd. and Bell Ceramics Ltd.. These rulings classified such services as input services, and accordingly, the tribunal held that the appellant is entitled to CENVAT credit of ₹10, 63,186 for the disputed period, related to service tax paid on bus transportation used for employee transport. Ultimately, allowed Cenvat credit of ₹10, 63,186 for employee transportation and directed the appellant to consult the jurisdictional Assistant Commissioner for the quantification of permissible Cenvat credit on transit insurance from the total amount claimed.
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has allowed the refund of accumulated CENVAT Credit to Larsen & Toubro, which was accrued while rendering services to SEZ developers. The bench ruled the appellant is entitled to interest on delayed refund payment.
Thus, the CESTAT set aside the orders denying the refund claims, granted the refund of CENVAT Credit, and ruled that the appellant is also entitled to interest on delayed payments.
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) dismissed the Excise appeal on the ground that it has no discretion to condone the delay beyond the 30-day grace period.
The tribunal referred the Supreme Court ruling in the case of Re Singh Enterprises which established that appeals must be filed within 60 days, with a maximum 30-day grace period for condonation. Neither the Commissioner (Appeals) nor CESTAT can condone delays beyond this 90-day limit. Referring to the Supreme Court case, the tribunal dismissed the appeal stating that it did not have the authority to condone the delay beyond the period permitted by law. Therefore, the appellant’s appeal was dismissed.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in a recent ruling held that services utilized for setting up of an additional unit within the existing manufacturing facility qualifies to be included within the ambit of “Input Service” and thus eligible for Central Value Added Tax (CENVAT) Credit.
The Kolkata Bench of the CESTAT presided over by R. Muralidhar, Judicial Member after considering the submissions of both sides referred to Hindustan Zinc Limited vs. Commissioner of CGST, Excise Customs, Udaipur (2021) to observe that “despite the amendment of Rule 2(l) of the Cenvat Credit Rules, 2004 in 2011, ‘Any service which is used not only in manufacture but also, in relation to manufacture will also qualify as input service. The scope of input service is further enlarged with the expression whether directly or indirectly used in the definition of input service’”.CESTAT held that the newly set up Mangalam Grinding Unit is a part of the Appellant’s existing Unit and any services used in the setting up of the factory prior to its functioning would encompass any further additions made to reinforce the manufacturing capability of the existing Unit. Hence, foregoing any statutory bar under the Cenvat Credit Rules, 2004 Thus, in light of the observations, CESTAT vitiated the Department’s Demand Order and permitted the Appellant’s availment of CENVAT Credit, citing the direct nexus between the services utilized by the Appellant for setting up of the Additional Grinding Unit and the products manufactured in the existing facility.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed a partial refund of Rs. 7.83 lakh CENVAT credit despite the difference in registered address appearing in invoices.
The CESTAT bench comprising of M.M. Parthiban did not find any merit in the appeal and modified the impugned order to the extent of allowing the appeal filed by the appellants in respect of refund of Rs.7,83,480/-being found as eligible CENVAT credit.
The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has clarified that there is no legal requirement to declare the Maximum Retail Price ( MRP ) in the Bill of Entry for availing the 4% Special Additional Duty ( SAD ) exemption under Notification No. 21/2012-Cus dated 17.03.2012.
The bench of P.A. Augustian, Member ( Judicial ) and Mr. Pullela Nageswara Rao, Member ( Technical ) found that the goods were cleared based on the Bill of Entry and that the demand raised during the post-clearance audit was based on assumptions rather than physical verification of the goods. The Tribunal also noted that there is no statutory requirement under the notification to declare MRP in the Bill of Entry; the only requirement is to affix MRP on the retail packages. As such, no presumption could be made that the goods were non-compliant after clearance.
In a recent decision by the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of the Eastern Zonal Bench, Kolkata, the tribunal upheld the ruling of the Commissioner of Customs (Appeals), classifying motor controllers as “parts of electric motors” for the purposes of import valuation. This ruling effectively reaffirmed that the imported motor controllers, used in electric vehicles such as e-rickshaws, are to be classified under the Customs Tariff Heading (CTH) 8503 0090, rather than CTH 8708 9900, which pertains to parts of motor vehicles.
In their decision, the tribunal referenced a previous ruling in the case of the same assessee from August 2024, where the same classification issue was raised. The earlier judgment had concluded that motor controllers should indeed be classified under CTH 8503 0090 as parts of electric motors. In result, following this precedent, CESTAT dismissed the appeal filed by the customs authority and upheld the order of the Commissioner (Appeals).
The Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that there is no merit in the Commissioner (Appeals) and determined that storage and warehouse services are exempted from service tax.
The two-member bench, consisting of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member), found no merit in the October 20, 2016, order from the Commissioner (Appeals). The Tribunal ultimately set aside the impugned order and ruled in favor of the appellants, allowing their appeal.
In a significant ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed an appeal for refund claims on freight, banking, and financial services, as the claims were filed beyond the statutory time limit and were thus barred by Section 11B of the Central Excise Act, 1944.
The Tribunal, led by Technical Member M.M. Parthiban, noted that the Commissioner (Appeals) had already examined this issue and confirmed that the refund claims were time-barred. However, part of the refund was allowed because the service tax paid for postal services was considered a ‘deposit’ and not a ‘tax,’ thereby not subject to the one-year limit under Section 11B. As neither the revenue department nor the appellants challenged this decision, the Tribunal did not address it further. Regarding the appellants’ challenge to the refund denial for services related to freight, banking, and other financial services, the tribunal concluded that these claims were filed beyond the statutory time limit and were therefore barred by Section 11B of the Central Excise Act, 1944. Consequently, the tribunal dismissed the appeal.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that vehicle leasing activity is not considered a service and is therefore exempt from service tax, noting that the leased vehicle was under the exclusive control of the service receiver.
A two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) found no merit in the impugned order, which had upheld the adjudication demands against the appellant. Consequently, the tribunal set aside the impugned order and ruled in favor of the appellant, concluding that the activities should be classified as a deemed sale, exempted from Service Tax, given the appellant’s fulfillment of VAT obligations.
In a recent ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the investment of surplus cash in mutual funds is not considered a trading activity and is therefore exempted from service tax demands, noting that mutual fund investments do not constitute trading since there is no right to transfer units beyond redemption, and the appellant merely made investments without providing any services.
The tribunal referred to a similar case involving Cognizant Technology Solutions India Pvt. Ltd., where investments in mutual funds were not considered trading activities. As a result, the tribunal, led by Ashok Jindal, Judicial Member, found no merit in the impugned order and allowed the appeal with consequential relief.
In a significant ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Cenvat Credit Rs. 14, 67,774/- is admissible on Central Excise invoices pertaining to copper bars and ingots.
The single bench, presided over by Technical Member M.M. Parthiban found no merit in the Commissioner’s order denying CENVAT credit. Consequently, the tribunal set aside the impugned order dated September 7, 2020, and allowed the appeal in favor of the appellants, granting them relief.
In the recent ruling,the Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the value of spares and consumables, supplied under a separate contract, could not be included in the service charge for maintenance.
The two member bench comprising Ramesh Nair ( Judicial Member ) and C L Mahar ( Technical Member ) noted that the previous order dropped the Cenvat credit demand but didn’t clarify its availability when no service tax was charged. The respondent agreed to reverse the Cenvat credit on spares sold without service tax, leading the bench to conclude that this reversal was required. In conclusion,the Revenue’s appeal was dismissed. To Read the full text of the Order CLICK HERE
The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed the refund claim, clarifying that under Section 27(1B) of the Customs Act, the limitation period for filing a refund application starts from the date of re-assessment not the original bill of entry filing date.
Therefore, the tribunal set aside the order of the Commissioner (Appeals). The tribunal directed the Customs Department to process and pay the refund within two months of the order. The appellant’s appeal was allowed.
The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed the CENVAT credit claim despite the bill of entry not being in the appellant’s name, citing that the importer’s authorization was deemed a valid document.
The tribunal referred to the Ahmedabad tribunal ruling in the case of Khushboo Beauty Care where it was held that a bill of entry supported by authorization from the importer was a valid document for claiming credit by a job worker. Therefore, the tribunal set aside the impugned order. The appellant’s appeal was allowed with consequential relief.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that storage and warehouse services in relation to food are exempt from the purview of service tax.
The CESTAT bench observed that the storage of food grains has been clearly excluded from the definition of ‘storage and warehousing service’ as defined under Section 65(102) of the Finance Act, 1994. The CESTAT bench, comprising Ashok Jindal, Member (Judicial), and K. Anpazhakan, Member (Technical), held that the demand of service tax amounting to Rs. 1,33,96,302/- confirmed in the impugned order under the category of ‘storage and warehousing service’ is not sustainable.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) quashed the excise duty demand against the Indian Oil Corporation Ltd. on the manufactured Low Sulphur Heavy Stock ( LSHS ) captively consumed for electricity generation.
The CESTAT bench observed that “the department did not take any timely action on raising the demand in respect of the LSHS used for the electricity that was consumed at their township refinery, hospital, etc. Therefore, we hold that the entire demand for the period January 2007 to March 2007 is time-barred. Hence we set aside the confirmed demand even on account of limitation to this extent.” The bench, comprising R. Muralidhar, Member (Judicial), and Rajeev Tandon, Member (Technical), allowed the appeal fully on merits and partly allowed on limitation.
The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has allowed the Cash Refund of Accumulated CENVAT Credit for export of 14 input services including export of credit and debit card services.
Similarly, the tribunal referenced many past orders of the tribunal for allowing the cash refund to the 14 input services claimed by the appellant. As a result, the tribunal modified the lower authorities’ orders, allowing credit on the disputed input services and granting refunds accordingly.
Recently in a notable ruling, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Eastern Zonal Bench, Kolkata, quashed a service tax demand on the transportation of food grains, reaffirming the exemption for agricultural products under the 2010 notification no. 04/2010-S.T., upholding the appeal of a public sector corporation.
After carefully examining the facts and legal arguments, the CESTAT bench, consisting of Mr R. Muralidhar, Member (Judicial), and Mr K. Anpazhakan, Member (Technical), ruled in favor of the appellant. The Tribunal took note of the Gujarat High Court’s ruling in Gujarat Pulses Manufacturing Association, which addressed a similar issue, observing that the exemption notification had indeed caused confusion regarding the taxability of agricultural products like grains before 2010. The Tribunal concluded that the appellant had acted under a reasonable and bona fide belief that service tax was not applicable, and there was no evidence of fraud or suppression of facts.
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