CESTAT Annual Digest 2024: Indirect Tax Cases [Part 3]

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.

Mere mention of “Food Supplement” in the description in Bill of Entry or FSSAI is not decisive of the classification of the product: CESTAT Health and Happiness (H&H) Trading India Private Ltd vs The Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 215

Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Mere mention of “Food Supplement” in the description in Bill of Entry or FSSAI is not decisive in the classification of the product.

The bench comprising Sulekha Biwi C.S ( Member, Judicial ) and Vasa Seshagiri Rao ( Member, Technical ) held that the ingredient of the product clearly shows that they are Oils of Fish and the same are rightly classifiable under CTH 15042020. The bench observed that “CTH 2106 90 99 is a residuary entry for food preparations/ supplements which are not specified under any other heading. Even assuming that products imported by the Appellant are food supplements, they would still be classifiable under CTH 1504 20 20 as it specifically provides for the classification of Fish Oil.”

Electronic Evidence cannot be accepted as evidence when there is failure to follow the Mandatory Procedure prescribed under Section 36B of Central Excise Act: CESTAT M/s. Hi Tech Mineral Industries Covai Pvt. Ltd vs The Commissioner of GST CITATION:   2024 TAXSCAN (CESTAT) 216

Customs Excise & Service Tax Appellate Tribunal( CESTAT ) has held that  failure to follow the mandatory procedure prescribed under Section 36B of Central Excise Act, 1944, the electronic evidence cannot be accepted in evidence.

The two member bench comprising Sulekha Biwi C.S( Member, Judicial ) and Vasa Sheshagiri Rao (Member, Technical ) has held that the department has failed to establish that Section 36B was complied with, while taking the printouts from the hard disk attains significance.

If One Unit of a Manufacturing Firm Claims Excessive CENVAT Credit, Credit Claims of Other Unit Cannot Be Denied: CESTAT M/s.Indo Shell Cast Pvt. Ltd. vs The Commissioner of GST & Central Excise CITATION:   2024 TAXSCAN (CESTAT) 217

The Customs Excise & Service Tax Appellate Tribunal( CESTAT ) has held that one unit of a manufacturing firm cannot be denied CENVAT credit due to another unit’s excessive CENVAT credit claims.

The two member bench comprising Sulekha Biwi C.S( Member, Judicial ) and Vasa Seshagiri Rao ( Member, Technical ) held Unit II cannot be denied CENVAT credit due to the excess CENVAT credit availed by unit I. The bench held that “Following the decisions in the appellant’s own case for the period from April 2007 to September 2011, we are of the considered opinion that demand and penalties cannot sustain and requires to be set aside.”

Attempting to Smuggle Gold of Foreign Origin without Payment of Customs Duty: CESTAT orders Absolute Confiscation Rakesh Luthra vs Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 207

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ordered absolute confiscation as there was attempt to smuggle gold of foreign origin without payment of customs duty.

A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “As per the facts of the case, the seizure of gold from the appellants, as recorded in the panchnama and admitted in their respective statements is undisputed. It is also established that the gold was of foreign origin. It is also established that the appellants were attempting to smuggle the gold without payment of duty. We also note that legal import of gold is governed by certain conditions which the appellant do not fulfil. Therefore, we are of the considered opinion that the gold recovered from the appellants is liable for absolute confiscation.”

Relief to ESSA Exports: CESTAT deems seized goods to be ‘scrap’ ESSA Exports vs The Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 206

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the confiscation of goods on the non-payment of customs duty cannot be justified solely on the basis of accusations by the Revenue. For such confiscation to stand, corroborative evidence is necessary.

The two member bench observed that the assesse’s actions did not demonstrate any intent to reuse the imported pipes and hence the pipes imported were to be considered ‘scrap’.

Works Contract don’t fall under Section 65(105) of Finance Act: CESTAT affirms Tax Exemption H P Singh Chadha vs Commissioner of CGST, Ludhiana CITATION:   2024 TAXSCAN (CESTAT) 213

The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that no tax is liable on construction contracts executed prior to 1st June, 2007.The tax exemption is applicable not to providers of commercial or industrial construction service  but to providers of works contract service.

The two member bench comprising S.S.Garg( Member, Judicial ) and Anjali Kumar( Member, Technical ) held that the contracts executed by the appellant are nothing but works contracts. The bench held that “the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material.”

No Tangible Evidence to Prove Clandestine Removal Beyond Doubt: CESTAT quashes Excise Duty on Galvanized Zinc Systematic Steel Industries Limited vs C.C.E. & S.T.-Vapi CITATION:   2024 TAXSCAN (CESTAT) 208

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed excise duty on galvanized zinc as there was no tangible evidence to prove clandestine removal beyond doubt.

A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case there is no evidence of clandestine clearance of galvanized MS wires from the factory of the appellant being a job worker. No investigation has been carried out with the transporter, not a single buyer was brought on record who allegedly purchased the clandestinely removed goods. There is absolutely no evidence of any payment received against the alleged clandestine removal.”

Proper filing of ST 3 Returns and other Statutory Returns: CESTAT sets aside Service Tax Demand on Extended Period- M/s. Avery India Ltd vs Commissioner of Central Excise, Customs & Service Tax CITATION:   2024 TAXSCAN (CESTAT) 229

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside service tax demand for an extended period as there was proper filing of ST 3 returns and other statutory returns.

A Two-Member Bench comprising R. Muralidhar, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “Hence, we hold that the confirmed demand for the extended period is legally not sustainable. Hence, we set aside the confirmed demand for the extended period. However, they are required to pay the Service Tax, if any, for the normal period. Even in the cited case of Cox & Kings relied upon by the appellant, after setting aside the demand in respect of extended period, the demand towards normal period has been confirmed.”

SCN issued beyond Normal Time-Limit: CESTAT quashes Customs Duty Demand- M/s. Blue Mount Textiles vs Commissioner of GST & Central Excise CITATION:   2024 TAXSCAN (CESTAT) 227

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand as the show cause notice ( SCN ) was issued beyond the normal time limit.

A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “We hence find that the appellant has not acted with dishonest or fraudulent intent and suppression of facts is not involved. This being so, question of invoking the extended time limit or imposing penalty does not arise. We do not go into the merits of the issue, due to a lack of challenge on the said grounds, further the appeal on time bar is answered in favour of the appellant. Since the Show Cause Notice has been issued beyond the normal time-limit, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.”

Adjudicating Authority is not Expert: CESTAT quashes Customs Duty Demand on 32mm TMT Bars DLF Southern Homes (P) Limited vs Commissioner of Customs (Imports) CITATION:   2024 TAXSCAN (CESTAT) 222

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand on 32mm TMT bars and observed that the Adjudicating Authority is not an expert.

A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “It is certain that the adjudicating authority/Revenue is not an expert nor does the appellant claim to be an expert. Hence, it was desirable for the Revenue to have got even the 32mm TMT bars analysed by the expert namely, National Metallurgical Laboratory, since the re-classification has been attempted holding that these 20mm, 25mm and 32mm TMT bars are alloys, after entertaining a fundamental doubt.”

Compliance of Condition in Excise Notification by Filing RT-12 returns Regularly: CESTAT sets aside Order Rejecting Refund- M/s. Dhelakhat Tea Estate vs Commissioner of Central Excise, Dibrugarh CITATION:   2024 TAXSCAN (CESTAT) 224

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the order rejecting refund as there was compliance of condition in the excise notification by filing RT-12 returns regularly.

A Two-Member Bench comprising R Muralidhar, Judicial Member and K Anpazhakan, Technical Member observed that “Thus, the Appellant could not have filed the refund application till confirmation of the substantial expansion condition by the department. However, we find that the Appellant has filed RT-12 returns regularly wherein they have categorically mentioned the duty paid by them from the account current. We observe the details disclosed in the RT-12 return would be sufficient to fulfil the Clause 2(a) of the Notification 33/99-CE dated 08/07/99.”

No Actual Service of Notice of Hearing by Commissioner ( Appeals ): CESTAT quashes Service Tax Demand- M/s Kansal Clinic vs Commissioner of CGST & Central ExciseLudhiana CITATION:   2024 TAXSCAN (CESTAT) 237

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand as there was no actual service of notice of hearing by Commissioner ( Appeals ).

Two-Member Bench of SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “The department has also not been able to establish the actual service of notice of hearing by Commissioner ( Appeals ). Since, the order was passed without affording an opportunity of hearing to the appellant in spite of the fact that Original Authority has allowed the claim of the appellant. In view of these facts, we are of the considered opinion that this case needs to be remanded back to the Commissioner ( Appeals ) with a direction to decide the matter afresh on merits after giving proper and adequate opportunity of hearing to the appellant.”

Ingredients for Invocation of Extended Period not Alleged: CESTAT upholds Non-Imposition of Penalty u/s 11A of Central Excise Act- The Commissioner of Central Excise vs M/s Komal Enterprises CITATION:   2024 TAXSCAN (CESTAT) 232

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the non-imposition of penalty under Section 11A of the Central Excise Act, 1944 as there was no allegation for invocation of extended period.

A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “Coming to the imposition of penalty under Section 11AC of the Central Excise Act, we find that the terms of the Section are very clear that penalty under the Section can only be imposed when duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty.”

Transport Service Cannot be Considered as GTA Service in Absence of Consignment Note: CESTAT- M/s.White N White Minerals Pvt. Ltd vs Commissioner of Central Goods & Service Tax and Central Excise CITATION:   2024 TAXSCAN (CESTAT) 242

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that transport service cannot be considered as “Goods Transport Agency” ( GTA )  service in the absence of a consignment note.

Ms Binu Tamta, Member ( Judicial ) set aside on the ground that the transport services were rendered by the individual truck or transport operators and therefore no consignment note was issued and as a result, the same would not fall within the scope of the definition of “Goods Transport Agency” as given in section 65(50 b) of the Finance Act, 1994.

Relief to BSNL: CESTAT rules Cenvat Credit cannot be Denied for Procedural Inadequacies- Batra Plywood Industries Pvt. Ltd vs Commissioner of Central Excise and Service Tax CITATION:   2024 TAXSCAN (CESTAT) 228

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat Credit cannot be denied for procedural inadequacies.

A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “In view of the above, we find that when the availment of services and admissibility of credit are not questioned at the end of the appellant or the ISD, CENVAT credit cannot be denied; substantive benefit of CENVAT credit cannot be denied just because there were some procedural infractions.”

CESTAT upholds Order of Commissioner Quashing Service Tax Demand under head SOTG- Commissioner of Central Tax Visakhapatnam vs Chandra Shipping & Trading Services CITATION:   2024 TAXSCAN (CESTAT) 225

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the order of the Commissioner quashing service tax demand under head supply of tangible goods for use ( SOTG ).

A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “Having considered the rival contentions and the facts on records, we find that the Show Cause Notice is bereft of basic facts as required and clarified by the Supreme Court in BSNL case. We further find, there is no error in the order of the Commissioner, as there is no dispute on the facts in the impugned Order-in-Original. Further, the Commissioner has rightly followed the Board Circular as aforementioned. In this view of the matter, we find no merit in the appeal of Revenue and thus the appeal is dismissed”.

Premium Amount Received cannot be considered as Rent on Immovable Property: CESTAT- Asmeeta Infratech Ltd vs Commissioner of CGST CITATION:   2024 TAXSCAN (CESTAT) 244

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the premium amount received cannot be considered as rent on immovable property.

A two-member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) observed that the one-time premium received by the appellant cannot be equated with rent since the said amount is payable by the lessee for obtaining lease of the immovable property and for various infrastructural facilities provided in that property. It was held that “Since the levy of Service Tax is on renting of immovable property, not on transfer of an interest in property from lessor to lessee, Service Tax would be chargeable only on the rent whether it is charged periodically or at a time in advance.”

Period of Limitation u/s 27(1B) shall apply when Refund Claim of Importer Duty paid under Protest: CESTAT Gold Quest International Pvt. Ltd vs Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 243

The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ruled that the period of limitation under Section 27(1B) should apply when the refund claim of importer duty was paid under protest.

a two-member bench of CESTAT tribunal M. Ajit Kumar, ( Accountant member ) and P. Dinesha, ( Judicial Member) held that the period of limitation under Section 27(1B) should apply when the refund claim of importer duty was paid under protest.

Intention to Evade Payment of Excise duty not Established: CESTAT quashes Penalty u/r 25 of Central Excise Rules- The Commissioner of Central Excise vs M/s Komal Enterprises CITATION:   2024 TAXSCAN (CESTAT) 232

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the penalty under Rule 25 of the Central Excise Rules, 2002 as the intention to evade payment of excise duty was not established.

A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “It is clear from the above that the provision under Rule 25 (1) (d) also makes intent to evade payment of duty the foremost condition to invoke this Section. As discussed above, though the intent to evade payment of duty is cursorily alleged, it is not established with evidence. Therefore, we are of the considered opinion that the conditions for imposing penalty under Rule 25 are also not satisfied and that the Commissioner was correct in concluding that no case for imposition of penalty has been made by the Revenue.”

Service Tax not Leviable on Service for Transmission of Electricity by GETCO: CESTAT- Gujarat Energy Transmission Corporation Limited vs Commissioner of Central Excise & ST CITATION:   2024 TAXSCAN (CESTAT) 245

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that service tax is not leviable on service for transmission of electricity by Gujarat Energy Transmission Corporation Limited (GETCO).

A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It can be seen that the entire period in the present appeal i.e. related to Notification No. 45/2010-ST, 11/2010-ST and also for the period when negative list under Section 66D was in force, it was held that service for transmission of electricity is not leviable to service tax. Therefore, the issue is no longer res-integra. Accordingly, in the present case also the service tax liability in respect of Erection, Commissioning and Installation Service is not sustainable.”

Failure to Verify Genuineness of Person who claims to be authorised representative of Exporter, by CB: CESTAT upholds Penalty- UDL Logistics Pvt. Ltd. vs The Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 246

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty as there was failure on part of the customs broker ( CB ) to verify genuineness of a person who claims to be the authorised representative of the exporter.

A Two-Member Bench comprising PA Augustian, Judicial Member and R Bhagya Devi, Technical Member observed that “However, the fact remains that the goods that were declared as ‘Industrial Ductile Pipes’ were found to be ‘red sander logs’ and the shipping bills were filed by the appellant. For having violated the Regulations of CBLR in not verifying the genuineness of Mr. Satishkumar who claims to be the authorized representative of the exporter will warrant penalty under CBLR 2018. Accordingly, we uphold the penalty of Rs.50,000/- (Rupees Fifty Thousand Only). The appeal is allowed partly.”

Customs Broker not Liable for Illegal Actions of Importer Firms Subsequent to Cargo Clearance from Customs Station: CESTAT- M/s R.P. Cargo Handling Services vs Commissioner of Customs (Airport & General) CITATION:   2024 TAXSCAN (CESTAT) 247

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the customs broker was not liable for illegal actions of importer firms subsequent to cargo clearance from the customs station.

A Two-Member Bench comprising Binu Tamta, Member ( Judicial ) and P.V. Subba Rao, Member ( Technical ) observed that “The appellant cannot be linked to the fraud and the same cannot be stretched to contravention of the provisions of the Regulations. We find from the records of the case that the appellant in order to verify the existence of the premises of the two importer firms had sent letters by speed post asking them to submit the requisite documents and in response thereto he received the KYC documents. It has been repeatedly held that it is not the legal requirement to physically verify the business premises or the residential premises of the importer.”

Goods cannot be classified based on content of  Material used to Manufacture, Bra Cups are part of Brassiers: CESTAT upholds Classification- Lovable Lingerie Ltd vs The Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 249

The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Goods cannot be classified based on the content of the material used to manufacture and Bra Cups are part of Brassiers.

A two-member bench of Mr P A Augustian, Member ( Judicial ) and Mrs R Bhagya Devi, Member ( Technical ) observed that the bra cups are to be classified under 6212. The only contention of the appellant is that since the chapter notes exclude woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, or coated, as per clause (h) it should be classified under Chapter 39. The exclusion cannot be read in isolation without all other factors that describe the article. As seen from the General Interpretative Rules ( reproduced below ), the goods are to be classified as per the terms of the section notes and the Chapter notes.

Therefore The CESTAT uphold the classification of the imported goods under CTH 6212 and consequently, the impugned order is upheld as far as classification is concerned and the appeal is remanded to the adjudicating authority to recalculate the duty taking into consideration the unit price for pairs as a single unit price.

Notional Surplus earned from Purchase and Sale of Cargo Space in Shipping Line not falls under Business Auxiliary Service: CESTAT sets aside Demand of Service Tax- Chinubhai Kalidass vs C.C.E.-Kutch CITATION:   2024 TAXSCAN (CESTAT) 248

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that notional surplus earned from the purchase and sale of cargo space in the shipping line does not fall under business auxiliary service and set aside the demand of service tax.

A two member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that freight is paid to the shipping line and freight is collected from client-shippers in two independent transactions.  The notional surplus earned thereby arises from purchases and sale of space and not by acting for a client who has space or slot on a vessel. Section 65 (19) of Finance Act, 1994 will not address these independent principal-to-principal transactions of the appellant and, with the space so purchases being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. The Tribunal set aside the impugned order

Two Operative CHA Licenses on One Person Obtained due to Failure in Completing Formalities, No Penalty Imposable under Regulation 18 of CBLR: CESTAT-ASIA SHIPPING SERVICES vs C.C.-KANDLA CITATION:   2024 TAXSCAN (CESTAT) 250

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that no penalty is imposable under Regulation 18 of Customs Broker Licensing Regulation ( CBLR ) when two operative Customs House Agent ( CHA ) licenses on one person obtained due to failure in completing formalities

The two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) through two operative licenses on the strength of qualification of one person i.e. Shri Harendra M Karia was obtained due to failure to complete the formalities for deletion of the name of Shri Harendra M Karia from CB license of M/s Asia shipping service and inclusion of name Shri Anil Karia therein. The impugned order concludes that this happened due to confusion and presumptions. The impugned order also holds that there is no mala fide intention of conspiracy.

Amendment on Bill of Entry u/s 149 of Customs Act made before Final Assessment of Imported Goods is Valid: CESTAT- INDIAN FARMERS FERTILISER CO OPERATIVE LTD vs C.C. KANDLA CITATION:   2024 TAXSCAN (CESTAT) 252

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) amendment on the bill of entry under section 149 of the Customs Act, 1962 made before the final assessment of imported goods is valid.

The two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the clearance of goods can only be said to have happened on 21.06.2018 when the bills of entry were finally assessed.  From that perspective, the documents presented by the appellant namely the police report dated 15.06.2018 were indeed available before the clearance of the goods and were submitted before clearance of the goods i.e. on 19.06.2018.

Cenvat Credit can be availed only on proportionate use while Renting Immovable Property: CESTAT- Deloitte Haskins & Sells vs C.S.T.-Service Tax CITATION:   2024 TAXSCAN (CESTAT) 253

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Cenvat credit can be availed only on proportionate use while renting immovable property

A two-member bench of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) set aside the order denying the entire Cenvat Credit on premises No. 602 and remanded the matter to the original adjudicating authority to ascertain. The exact proportion of the said premises which was used by the appellant and allow the credit to that extent. The other objections regarding the defective invoice and the invoices being procedural cannot come in the way of the admissibility of the credit.

Service Tax Demand cannot be clubbed with the value of food items sold during Mandap Keeper Service when both are shown separately: CESTAT- Jindal Hotels Ltd vs C.C.E. & S.T.-Vadodara-i CITATION:   2024 TAXSCAN (CESTAT) 251

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that service tax demand cannot be clubbed with the value of food items sold during mandap keeper service when both are shown separately.

he two-member bench comprising of Mr Somesh Arora, Member ( Judicial ) and Mr C L Mahar, Member ( Technical ) observed that not only the supply of food has been segregated but also appellants have discharged VAT tax on such food components and have also paid Service Tax on Mandap keeper charges extracted from the parties and paid service tax on it. The constraint of a separate contract emphasized in the impugned order remains of no legal consequence when the supplier of service and service receiver indicate through invoice by implication that the separation of both elements was agreed upon and accepted by both parties to the contract. The CESTAT held that an extended period cannot be invoked against the appellant, even if some contrary decisions existed too, as the matter involves the interpretation of the law.  While allowing the appeal, the appellant set aside the Impugned order.

Non-payment of Excise Duty as per Machinery Provision Including Designated Point of Time of Taxation Invites Penalty Proceedings: CESTAT- Ddb Mudra Pvt Ltd vs C.S.T.-Service Tax – Ahmedabad CITATION:   2024 TAXSCAN (CESTAT) 254

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that non-payment of excise duty as per machinery provision including designated point of time of taxation invites penalty proceedings.

A two-member bench comprising Mr Somesh Arora, Member ( Judicial ) and Mr C L Mahar, Member ( Technical )  remanded the matter for a relook as far as the interest and penalties are concerned by the provision of Finance Act, 1994 vis-à-vis, the scheme adopted by the appellant, by the contract/arrangement entered by them and broadcasters. Penalties likewise are to be confined to breach of machinery provisions only, if so found and not for intent to evade considering the legalities of the issue involved.

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