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.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the goods even if there is remote possibility of being found prohibited or restricted at time of adjudication, cannot be subjected to non release under Section 110A of Customs Act, 1962.
The two-member Bench comprising Somesh Arora, Judicial Member and Hemambika R Priya, Technical Member observed that “Therefore, We are of the view that goods even if there is any remote possibility of being found prohibited or restricted at the time of adjudication is there, cannot be subjected to non release in terms of Section 110A. In view of foregoing, we allow the provisional release of 26 Gold Dore weighing 5 kg plus more.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that no service tax can be levied on ONGC on the consideration received for the right to use natural resources.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “The demand raised is indeed on the basis of Sl.No.61 of the exemption notification. Para 15 of the SCN also would show that the demand has been raised on the basis that the royalty which is paid periodically is not exempted from service tax. The argument put forward by the Counsel that the liability is derived on the basis of an exemption notification and not charging provision is not without substance.”
In a recent judgement, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the penalty under the Customs Act, 1962 which was imposed on the Customs Broker. The Penalty proceedings were initiated on an attempt to export 19650 kg Red Sanders which was Violative of Foreign Trade Policy (FTP).
A two-member bench comprising Mr Ashok Jindal Member (Judicial) and Mr Rajeev Tandon Member (Technical) held that the department case falls woefully short of substantiating the invocation of penalty under Section 114(i) of the Customs Act and set aside the order passed by the Adjudicating Authority. The appeal of the assessee was allowed.
In a significant case, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that excise duty exemption on packing materials procured from the domestic market cannot be denied when the assessee complied with procedures under exemption notification.
A two-member bench of Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the appellant had complied with the procedures laid down under Notification No.43/2001-CE(NT) dated 26.6.2001 in procuring the packing materials which are being used in the manufacture of readymade garments and the finished goods are ultimately exported under the scheme. “Denying the benefit of Notification No.43/2001-CE(NT) dated 26.6.2001 in procuring the packing materials duty-free alleging violation of Condition 8 of the Notification No.94/2004-Cus. dated 10.9.2004, in our view cannot be sustained.”, the CESTAT viewed while setting aside the impugned order.
In the case of concealment of foreign currency, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal( CESTAT ) remanded the matter for adjudication on confiscation of currency under the Customs Act, 1962.
A two-member bench comprising of Mr P A. Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the Order-in-Original passed by the Deputy Commissioner was set aside by CESTAT and therefore, the Orderin-Original had become null and void. Accordingly, the CESTA allowed the appeal of the Revenue and remanded the matter to the Commissioner to decide the issue of confiscation of foreign currency and vehicle having Registration No.KRM-1911 as proposed in the show cause notice. To Read the full text of the Order CLICK HERE
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has observed that the CTC machine for tea leaf cutting cannot perform versatile functions beyond leaf cutting and it does not fall under Tariff Heading of ‘Other Machines’. The two-member bench allowed the exemption as per the Excise Notification.
The bench comprising Mr R Muralidhar, Member (Judicial) and Mr K Anpazhakan, Member (Technical) observed that the Department had failed to bring in any evidence to the effect that the CTC machine was capable of multiple functions. The letter issued by the Tea Board and the Chartered Engineer confirms that the CC machine is used for Cutting Tea Leaves only. The Department has not rebutted these letters with any cogent documentary evidence. The CESTAT held that the confirmed demand for the extended period is not legally sustainable and set aside the same while allowing the appeal. To Read the full text of the Order CLICK HERE
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that reimbursable expenses incurred by Customs House Agent (CHA) on behalf of the service recipient are not includible in the gross value of CHA service. The CESTAT set aside the service tax demand on reimbursable expenses.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) viewed that as per the provisions of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, the reimbursable expenses also need to be included in the value of taxable services rendered. In view of the Apex Court judgment in the Intercontinental case and the Board circular, the CESTAT held that the reimbursable expenses incurred by the appellant on behalf of the service recipient are not includible. While allowing the appeal, the impugned order was set aside.
In the case of concealment of foreign currency, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) set aside Penalty under section 114 of the Customs Act, 1962 in the absence of evidence other than the statement of the co-accused.
A two-member bench comprising of Mr P A Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that any additional evidence other the statements of the co-accused produced by the Revenue other than those that have been placed before the trial court based on which the trial court has acquitted the appellant. The CESTAT set aside the impugned order only to the extent of the penalty imposed on the appellant under Section 114 of the Customs Act, 1962.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) classification of goods under CTH based on CRCL test report is not valid as there is no facility to test calcite powder.
The two member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) has held that when a particular laboratory does not have the testing facilities, the test report of the said laboratory without having facilities of testing the goods cannot be relied upon to decide the classification of the goods. In this regard the relevant judgment in the case of Gaurav Lubricants Industries Pvt. Ltd
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that mere assumptions that entering into two separate contracts was intentionally to evade service tax is not tenable unless it is proved.
The two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the finding of the adjudicating authority in this regard is not correct. For levy of service tax individual contracts have to be taken into account. Accordingly, the service tax demand can be determined.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) dismissed the plea for extended period of limitation as the value for purpose of Countervailing Duty ( CVD ) available in the bill of entries.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that an extended period of limitation has been involved to raise this demand. The show cause notice has been issued on 13.04.2018 whereas, the bill of entries is dated 26.07.2016 to 13.08.2016. It is seen that all the data required for the notice except the MRP was available in the bill of entry filed by the appellant. In these circumstances, we do not find any reason to hold that anything was suppressed by the appellant for the purpose of evasion.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the amount of refund when shown as service tax receivable under the asset side of the trial balance sheet is not hit by unjust enrichment.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is also fact on record that as per books of account for the year 2013-2014, the amount of refund shown as service tax receivable under asset side of trial balance sheet, this also proves that the amount of service tax has not been passed on to any other person. Accordingly, we are of the clear view that the amount of refund has not been passed on to any other person. Hence, the same is not hit by unjust enrichment.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted benefit of import as there was compliance with Transitional Arrangement prior to when the watermelon seeds were placed under the restricted category from free category.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The aforesaid documents were admittedly submitted before restriction imposed in import of “watermelon seeds” brought vide DGFT Notification No. 3/2015-20 dated 26.04.2021. From the above documents it is undisputed that the appellant had complied with the stipulation of Transitional Arrangement as per Foreign Trade Policy as the appellant had paid the entire amount of the consignment in question much prior to watermelon seeds being placed under restricted category from free category. Therefore, in our considered view the appellant is eligible for consequential benefit of import qua FTP provisions.
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that denatured alcohol and CO2 manufactured by distillery are duty exempted and Cenvat credit is not available on the same.
A two-member bench comprising Justice Dilip Gupta, President And P V Subba Rao, Member ( Technical ) that all assessees are required to self-assess and pay duty. If duty is paid more than what is due or paid when it is not due, the assessee can claim the refund. There is no mechanism to refund suo moto the duty paid under the Central Excise law. There is also a mechanism of issuing a Show Cause Notice under section 11A to recover duty not levied, not paid, short levied, short paid or erroneously refunded
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand on printing papers and noted that the statements cannot be relied without cross-examination of witness
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is seen that prima facie no significant evidence has been gathered from the searches made in premises of the appellants. From the above said all evidence, it is apparent that the SCN is largely based on the statements recorded during investigations. It is apparent that the statements cannot be relied upon without cross-examination of the witnesses.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Ahmedabad Bench directed re-adjudication as there was non-compliance with cost accounting standards as per CAS-4.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We also find that the appellant has vehemently argued about the demand being time barred on the basis that the appellant has not suppressed any fact from the department mainly for the reason that the goods manufactured by the appellant was not cleared from the factory but was available in the factory. This aspect also needs to be reconsidered in detail.”
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that confiscation of goods cannot be made when the assessee submits e-BRC certifying repartition of foreign exchange for FOB Value.
A two-member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) observed that the impugned order upholding the order of original authority in confirmation of adjudged demands, confiscation of goods and imposition of penalty on appellants, is not legally sustainable and hence the same is set aside.
The Mumbai bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) viewed that evidence from panch witnesses without allowing cross examination is not valid and set aside the penalty under the Excise Act, 1944.
A two-member bench comprising Mr C J Mathew, Member ( Technical ) and Mr Ajay Sharma, Member ( Judicial ) viewed that the seizure had not been affected by the central excise officers. Further, other than the statements of the appellant herein and few others, no effort had been made by the central excise authorities to link procurement of raw materials and channelizing of the finished product with the appellant herein. In the absence of such corroborative evidence, statements that may have, otherwise, supported circumstantial evidence are of no relevance
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for adjudication on the determination of the eligible amount of drawback on change in rate while exporting.
for the limited extent of determination of eligible amount of drawback, arising on account of change in drawback rate alone and not on account of redetermination of the FOB value, the two-member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) remanded the case back to the original authority. The Tribunal allowed the appeals filed by the appellants by setting aside the impugned order.
A Two-Member Bench of the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that residential complexes are built for self-use and remain outside service tax net.
The Bench of Ramesh Nair, ( Judicial Member ) and Raju, ( Technical Member ) observed that “In light of above, it is apparent that when the residential complex is built for self-use then it remains outside the service tax net. In light of the above decisions, the demand on the construction of road and residential premises cannot be sustained and the same is set aside.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the Construction of School Rooms not classifiable under Commerce or Industrial Construction Service and held that unjust enrichment is applicable in the present case.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the instant case, there is no dispute that the said rooms were not used for commerce/ industry and therefore, the appellant’s service could not be classified under the head of Commerce or Industrial Construction Service. In view of the above, it is clear that the tax has been paid wrongly.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench quashed service tax demand as the difference in receipts towards exempted services was shown in ST-3 return.
Read More: A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The appellant has given detailed reconciliation of the difference in the figures in ST-3 vis-a-vis actual receipt. The appellant has claimed that the variation is on account of inclusion of amount in service tax gross value/ VAT amount/booking of TDS/ declaration of receipt entry. We do not find any mention of these facts in the impugned order nor does the impugned order contain any examination of this data.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the activity of construction of roads is beyond service tax net.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is apparent from the above Circular that construction of road is excluded from service tax net. In light of the above Circulars, it is apparent that the activity of construction of roads is beyond the service tax net and therefore, demand of service tax on construction of roads cannot be sustained. The same is set aside and appeal to that extent is allowed.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the excise duty demand and observed that the allegation that notice is not aware cannot be decided in adjudication order.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the adjudication order the demand of Rs, 1,20,80,589/- was confirmed on the ground that the said amount was lying in the balance as on 07.12.2008 when the appellant have opted for the exemption and according to Rule 11 (3) of Cenvat Credit Rules, 2004, as the said amount has lapsed. Thus the adjudication order has clearly travelled beyond the scope of show cause notice. It is a settled law in various judgments that when with regard to any charge/allegation the notice is not put to notice that issue cannot be decided in the adjudication order.”
Reversal of entire Cenvat Credit attributed to Input and Input Services used in Exempted Goods: CESTAT quashes demand of 10% of value of Exempted Goods- Faze Three Limited vs C.C.E & S.T.-Silvasa CITATION: 2024 TAXSCAN (CESTAT) 186
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench quashed the demand of 10% of value of exempted goods on the reversal of entire cenvat credit attributed to input and input services used in exempted goods.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that the demand of 10% of value of exempted goods wherein the common cenvatable input services were used in the exempted as well as dutiable goods. In the present case, earlier a show cause notice dated 29.08.2013 was issued wherein the cenvat credit of Rs. 35,82,694 attributed to input and input services used in the exempted product was proposed.”
A two member bench of CESTAT has held that liability of the service tax under reverse charge mechanism will arise only w.e.f. 18.04.2006 in case the services are provided by a person located outside India to a person located in India.
The bench observed that “ the Board has clarified the issue vide its Circular dated 26.09.2011 declaring that the liability of the service tax under reverse charge mechanism will arise only w.e.f. 18.04.2006 in case the services are provided by a person located outside India to a person located in India. Further, we find that the service received by the appellant from the Foreign Service Provider is clearly an Input Service under the provisions of the Service Tax Rules.”
In a major relief to M/s. Acer India Pvt Ltd, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the classification of video projector and held that they are eligible for customs exemption.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesh, Judicial Member observed that “We are inclined to follow the line of reasoning expressed by the Coordinate Bench above and hold that the video projectors are classifiable under Heading 85286100, they thereby become entitled to exemption under Notification No. 24/2005- Cus. dated 1.3.2005 The impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chennai Bench observed that service tax is not leviable on advertising materials like glow sign boards, flex printing etc, on which VAT is paid.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “We are inclined to hold that the advertising materials like glow sign boards, flex printing, broachers, stickers, tags, posters, hand bills, signages, etc., which cater to the requirements of the specific customers, on which VAT is paid, is not leviable to Service Tax. We are also of the view that Service Tax cannot be demanded in respect of cloth banners and wall painting transactions without first analyzing the nature of work undertaken by the appellant in detail.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the eligibility to avail credit of Service tax paid by advertising agency as input services.
A Two-Member Bench comprising Vasa Sesha Giri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “Regarding dis-allowance of CENVAT credit we find that the Appellant, in the case of advertisement through FM/Visual media, at the behest of their clients were availing the services of FM and TV channels including satellite channels who charged service tax along with charges for broadcasting the advertisements. As it is a part of their advertisement work, it is an input service”.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that flanges are part of Wind Operated Electricity Generators ( WOEG ), under Notification No. 12/2012-Central Excise, dated 17.03.2012.
The bench comprising Vasa Sheshagiri Rao ( Member, Judicial ) and Sulekha Biwi C.S ( Member, Technical) held that flanges are parts of WOEG and are classifiable under 8503 and not CTH 7307 as claimed by the department. It was also held that the flanges are eligible for the exemption as per notification no. 12/2012.
The Chennai bench of (CESTAT) Customs, Excise and Service Tax Appellate Tribunal has held that in order to receive reimbursement on expenses incurred as Customs House Agent, the nomenclature used by the Agent has to be decisive. The expenses would have to satisfy the conditions mentioned in the Rule 5(2) of the Service Tax Rules, 2006.
The bench comprising P. Dinesha (Member, Judicial) and M. Ajit Kumar(Member, Technical) held that “In the light of the above discussions, we deem it appropriate to set aside the impugned order and remit the case back to the file of the adjudicating authority for de novo adjudication”.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the definition of manpower service shouldn’t be limited only to the ‘manufacturing activity’ and not to any other activities outside the factory premises. The two member bench observed that many services which are provided by the service provider outside the manufacturing factory premises, such as advertising or sales promotion, market research, as accounting, auditing, financing, etc could be categorized as manpower services and CENVAT credit can be availed on them.
The two member bench comprised of R.Muralidhar ( Member, Judicial ) and Rajeev Tandon( Member, Technical ) found merit in assessee’s argument that Depot management, Sales and other activities are not directly connected to manufacturing activity. The bench held that “We find that the Adjudicating Authority has taken a very narrow view holding that the Manpower Service should be relatable only to the ‘manufacturing activity’ and not to any other activities outside the factory premises. We find this view to be grossly erroneous. Had he taken care to go through the definition of input service in a harmonious way, he would have found that there are many services which are provided by the service provider outside the manufacturing factory premises, which are all eligible for CENVAT Credit. Therefore, we set aside the OIO on merits and allow the Appeal.”
In a major relief to HSBC Electronic Data Processing India, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand on back-office support services.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “With regard to accommodation services, which is sought to be roped in post 01.07.2012, under Rule 5 of POPS, the same is identically worded as in the case of short-term accommodation for the period prior to 01.07.2012, where the Commissioner vide First Order ( Para 23 ) for the previous period up to 30-6-2012 has dropped the demand. On the same basis, the demand for the subsequent period also ought to have been dropped.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that Cost Petroleum and Profit Petroleum cannot be said to be a consideration flowing from the Government of India to the assessee and that the components of “Cost Petroleum” and “Profit Petroleum” are inherent and embedded part of the Production Sharing Contract( PSC ).
The two member bench of CESTAT has held that such components cannot be treated as “consideration” for the “services rendered” by the appellant.
The Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that taxes paid on Goods Transport Agency Services would be eligible for CENVAT credit. The two member bench observed that the entire situation is revenue-neutral and in such situations, the extended period cannot be invoked by Revenue.
The bench comprising M.S. Sulekha Biwi C.S( Member, Judicial ) and Vasa Sheshagiri Rao( Member, Technical ) held that the demand, interest and penalties in regard to ‘GTA Service’ is set aside for the extended period. The details as to whether GTA services were used only for export is not before us. Therefore, the appellant is liable to pay the tax on GTA services for the normal period along with interest. The bench also pointed out that Service Tax Paid on Goods Transport Agency Service Eligible For CENVAT Credit.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
