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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 Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on Hyva (India) Pvt. Ltd. under Section 11AC of the Central Excise Act, 1944 citing that the appellant had voluntarily paid the differential excise duty along with applicable interest before the issuance of a show-cause notice (SCN) and had informed the Central Excise Department
The tribunal explained that Section 11A(2) of the Central Excise Act, 1944 prevents the issuance of a show-cause notice for penalty when the duty and interest have already been paid before its issuance. The tribunal ruled that the penalty imposition under Section 11AC of the Central Excise Act was unwarranted and set aside the penalty demand. The assessee’s appeal was allowed.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) imposed a penalty of Rs. 5,000 on the Customs Broker (CB) for failing to personally verify client documents and credentials which violated Regulation 10(e) of the Customs Brokers Licensing Regulations (CBLR), 2018.
The tribunal observed delays in completing the inquiry and criticized the process for taking over two years and the tribunal imposed a reduced penalty of Rs. 5,000 for failure to exercise due diligence under Regulation 10(e) and set aside license revocation and forfeiture of the security deposit.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the suspension order of the appellant’s Customs Broker (CB) license citing non-fulfillment of the procedural requirements under Regulation 17 of the Customs Brokers Licensing Regulations (CBLR), 2018.
The tribunal referenced the CBIC’s Instruction No. 24/2023 which explained that immediate suspension should only be invoked in urgent cases supported by proper reasoning and evidence.
The tribunal found that the Customs authorities acted without providing substantial evidence linking the appellant to the overvaluation of export goods. With that said, the tribunal set aside the suspension order and directed the Customs Commissioner to fully complete the inquiry proceedings under Regulation 17 within six months.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled in favor of Coca-Cola Beverages and held that the extended limitation period under Section 11A of the Central Excise Act, 1944, could not be invoked in this case as the company had properly maintained its books of accounts.
The CESTAT comprising S. K. Mohanty ( Judicial Member ) and M. M. Parthiban ( Technical Member ) did not find any merit in the impugned order concerning the part in which the revenue passed the order by invocation of the limitation period.
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that no customs duty is applicable on the importation of pregnancy test kits, as these kits utilize “agglutinating sera” as their active component.
Also based on test reports from AIIMS Biochemistry Lab and National Institute of Immunology, the tribunal held that the goods indeed contained agglutinating sera as the main component. The tribunal upheld the Commissioner’s classification and dismissed the department’s appeal.
In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that the bank can claim Cenvat credit on the service tax paid for deposit insurance premium to the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The bench comprising Anil G. Shakkarwar ( Judicial Member ) and Ajay Sharma ( Judicial Member ) also relied on several judgements involving South Indian Bank and Bank of America, etc., and set aside the orders of the lower authorities and allowed the appeals filed by the assessee.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) clarified that a redemption fine is applicable for the re-export of goods deemed “prohibited” under the Foreign Trade Policy ( FTP ) but the tribunal reduced the fine from Rs. 3 crore to Rs. 5 lakh citing the original amount as “a bit excessive”.
While acknowledging the cited cases, the tribunal observed that the importers were guilty of importing goods classified as “prohibited” under the Foreign Trade Policy ( FTP ), making them liable for absolute confiscation. So, the tribunal confirmed the imposition of a redemption fine but it deemed the original fine of Rs. 3 crore to be excessive and arbitrary and reduced it to RS. 5 Lakhs.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter concerning the Excise Department’s disallowance of CENVAT credit distribution to a unit exclusively manufacturing exempted goods citing the need for verification of records to ensure the accuracy of the credit allocation.
So, the tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision specifically directing the verification of records for the period May 2006 to February 2007, and directed the original authority to grant a personal hearing during the fresh adjudication. The appellant’s appeal was allowed.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the timelines prescribed under the Customs Brokers Licensing Regulations, 2018, cannot be treated as a “directory” unless negligence or delay on the part of the customs broker is conclusively proven. The tribunal rejected the licensing authority’s justification of procedural delays due to officer transfers.
So, the tribunal set aside the Principal Commissioner’s order to revoke the license, forfeiture of the security deposit, and penalty. The Custom Broker’s appeal was allowed.
In a recent ruling, the Bangalore bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the online technical support rendered to M/s. Microsoft Corp., USA and Microsoft Mobile, Finland by Microsoft India are ‘Export of Service’ not Intermediary. It allowed CENVAT Cash refund of Rs. 16.8 crores.
The two-member bench of D M Misra (Judicial) and Bhagya Devi ( Technical ) of the tribunal concluded that the appellant provided services directly to Microsoft Corp, received payment in convertible foreign exchange, and met the conditions for “export of services.” Consequently, the appellant is entitled to the refund of accumulated cenvat credit.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has set aside the service tax demand as it is not applicable on training and coaching services provided outside India. The bench held that the appellants were exempt from paying service tax since the training and coaching services were provided outside of India, since this is not covered by Rule 3(1)(ii) of the Rules.
In various decisions the Tribunal held that there cannot be any Service Tax on technical know-how. The CESTAT held that the appellants were exempt from paying service tax since the training and coaching services were provided outside of India, since this is not covered by Rule 3(1)(ii) of the Rules. The bench set aside the impugned order and allowed the appeal.
In a ruling in favour of Intel Technology Ltd, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) ruled that conversion of drawback shipping bills to DFIA shipping bills is allowable as there is no time limit mentioned under Section 149 of the Customs Act, 1962.
It was viewed that the appellant is legally entitled for conversion of Drawback Shipping Bills to DFIA Shipping Bills in respect of 184 Shipping Bills as per the list provided in appeal along with the appeal memo. The respondent Commissioner is directed to issue necessary certificate enabling appellant to get the DFIA licenses revalidated.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) granted a refund of pre-GST CENVAT credit. It ruled that Rule 9(1)(bb) of the CENVAT Credit Rules, 2004, was inapplicable to payments made under the reverse charge mechanism ( RCM ) since such payments were not based on supplementary invoices.
The tribunal held that the appellant was eligible for the refund and set aside the Commissioner’s order citing it was beyond the scope of the show cause notice and the order-in-original. The appellant’s appeal was allowed.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that employees of principal manufacturers cannot be penalized for excise duty-related lapses by job workers unless there is direct involvement.
The tribunal explained that the confusion regarding duty liability at the time was genuine and that the transactions conducted by Paras Trading Company were legitimate and documented. The tribunal also found no evidence of any mala fide intention by the job worker.
The Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ), on denial of CENVAT Credit to Ambuja Cements, recently observed that long adjournment during pandemic could have ensured justice.
CESTAT concluded that the principles of natural justice were not upheld in this case. It allowed the appeal by remanding the matter for fresh adjudication, setting aside the previous order.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that credit lying in stock on Returned goods had to be reversed in terms of SSI Notification read with Rule 11 of Cenvat Credit Rules, 2004( CCR ). The bench upheld the impugned order confirming the demand of cenvat credit of Rs.3,47,656/- and education Cess of Rs.6,953/- under Section 11A of the Central Excise Act, 1944 along with interest.
While dismissing the appeal, the bench upheld the impugned order confirming the demand of cenvat credit of Rs.3,47,656/- and education Cess of Rs.6,953/- under Section 11A of the Central Excise Act, 1944 along with interest.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed Bharat Sanchar Nigam Limited ( BSNL ) to avail cenvat credit of service tax paid by private operators on interconnectivity usage charges.
The Tribunal viewed that there has not been any utilisation of credit involved because of the entire credit taken at one location was taken in one office making it easy for Revenue to conduct verification as may be necessary. The argument of the appellants that the premises where the equipments are used belong to BSNL and not to any other party and it is also used for completion of services originating from Salem also are strong arguments in favour of the appellants.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) classified Siapton 10L and Isabion as fertilizers under Central Excise Tariff Item No. 3101 00 99, citing their primary nutrient-based composition.
The tribunal held that bio-stimulants were fertilizers under Tariff Item No. 3101 00 99 because they were nutrient providers. It further analyzed the Fertilizer Control Order amendment in 2021, which categorized bio-stimulants as fertilizers.
The Tribunal set aside the excise duty demands under Tariff Item No. 3808 93 40 and ruled that the Revenue’s classification was incorrect. The appellant’s appeals were allowed with granting relief.
The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that service tax refund claims are non-maintainable unless the underlying assessment order or classification is first challenged.
The tribunal pointed out that refund claims are like execution proceedings and cannot substitute for an appeal or review of an assessment order. It explained that once an assessment order stands, the duty is payable as per that order unless successfully challenged through proper appellate mechanisms. The appellant’s appeal was dismissed.
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Chettinad Builders Private Limited ( CBPL ) was a “related party” as the appellant failed to prove it an “associate” under the Central Excise Act, 1944. It upheld the differential duty demands imposed on the appellant.
The tribunal rejected the appellant’s claim about AS 18 and pricing issues. Considering that the appellant failed to prove that the CBPL was not a related party but an associate, the tribunal dismissed the appeal of the Chettinad Cement and held that the excise duty calculation was correct.
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that connectors imported for use in Printed Circuit Board Assemblies (PCBAs) of mobile phones were correctly classified under CTH 85177090. The tribunal allowed the Basic Customs Duty (BCD) exemption under Sl. No. 6A of Notification No. 57/2017-Cus.
The two-member bench, comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the department had already accepted the earlier favorable order without challenging it which showed inconsistency in their argument. It observed that the appellant’s alternative claim under Notification No. 57/2017-Cus had merit, as the connectors qualified as parts or inputs of PCBA.
The Customs Excise & Service Tax Appellate Tribunal (CESTAT) has held that loading and unloading cement does not fall under ‘Clearing and Forwarding Agent’ services. The bench set aside the impugned order and allowed the Appeal.
A division P. A. Augustian (Judicial) and Mr. Pullela Nageswara Rao, Member (Technical), viewed that the loading and unloading cement does not fall under ‘Clearing and Forwarding Agent’ services. The bench set aside the impugned order and allowed the Appeal.
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the cost of parts supplied by the principal manufacturer is excluded from the job worker’s assessable value citing the principal manufacturer clears the final products on payment of duty.
The tribunal set aside the impugned order and ruled that the cost of parts supplied by the principal manufacturer is not includible in the assessable value of goods manufactured by the job worker. The appellant’s appeal was allowed.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that an employee cannot be held liable for a company’s inadvertent error in claiming CENVAT credit unless malafide intent was proven
So, the tribunal ruled that penalties under Rule 26 of the Central Excise Rules, 2002 cannot be used in cases of inadvertent errors without malafide intent. The tribunal explained that penal action against an employee for a corporate error especially when the company was not found guilty of misconduct was unsustainable.
The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded BSNL’s CENVAT credit claims for re-verification focusing on allegations of double credit availed for the same supply of goods or services.
The tribunal remanded the issue to the original adjudicating authority, directing a thorough re-verification of the appellant’s claims with supporting documentation. The tribunal also invoked Section 80 of the Finance Act, 1994, to waive penalties, considering the appellant company’s status as a public sector undertaking and the absence of malafide intent.
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