CESTAT Annual Digest 2024: Indirect Tax Cases [Part 9]

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.

Excise Duty Refund Rejected Without  Verifying Invoice Showing Double Duty Payment: CESTAT upholds Commissioners Order Allowing Refund Commissioner of Central Excise vs M/s. Tata Growth Shop CITATION: 2024 TAXSCAN (CESTAT) 464

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) upheld the commissioners order allowing refund as the excise duty refund rejected without  verifying invoice showing double duty payment. The Tribunal found that the Commissioner(Appeals) passed the order after verifying all the issues regarding the clearance of the goods in question and payment of duty thereof and considering the Affidavits filed by the customers as well as transporters’ gate passes etc., It was evident that the respondent has paid duty twice for the same goods.

The Tribunal found that the Commissioner(Appeals) passed the order after verifying all the issues regarding the clearance of the goods in question and payment of duty thereof and considering the Affidavits filed by the customers as well as transporters’ gate passes etc., It was evident that the respondent has paid duty twice for the same goods.

Excise Duty Not Imposable When Excess Clearance of Waste and Scrap made after Payment of Full Duty: CESTAT DEEP RECYCLING INDUSTRIES & ORS vs C.C.E & S.T-RAJKOT CITATION: 2024 TAXSCAN (CESTAT) 465

The Ahmedabad bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) held that excise duty not imposable when excess clearance of waste and scrap made after payment of full duty.

A two-member bench of Mr Somesh Arora, Member (Judicial) and Mr Raju, Member (Technical) observed that for material consumed over and above the SION notification issued by the DGFT, the Department views that duty or at least penalty is liable to be charged in case excess wastage comes into play.

No Service Tax leviable by Clubbing all Activities undertaken under “Cargo Handling Service”: CESTAT M/s Krati Enterprises vs Commissioner of Central Excise & Service Tax CITATION: 2024 TAXSCAN (CESTAT) 466

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that there is no service tax leviable by clubbing all activities undertaken under “Cargo Handling Service”.

It was also submitted that the C & F Agent and Transportation Services are two independent services and were rendered under two separate contracts, and therefore, the consideration for both the services cannot be clubbed together to levy Service Tax under the single service category of C & F Agency service. This will be contrary to the principle of classification of services as provided under Section 66 F of the Finance Act, 1994.

Top Stories Charter Services for Transportation of Senior Executive Officials to attend Business Meeting in relation to Manufacture and Sale of Finished Goods is Input Service: CESTAT Commissioner of Central Excise & CGST vs M/s Jubilant Life Sciences td CITATION: 2024 TAXSCAN (CESTAT) 467

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the charter services for transportation of senior executive officials to attend business meeting in relation to manufacture and sale of finished goods is input service.

A Two Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava observed that “In the present case, Commissioner (Appeals) have concluded that charter services were raised for transportation of the senior executive officials of the company for attending the business meeting in relation of the manufacture and sale of finished goods. We do not find any reason to differ with the findings recorded in the impugned order by Appellate Authority and the same is upheld. Appeal is dismissed.”

 Classification of Service on Basis of Non-Existing Provision is Bad in Law: CESTAT quashes Service Tax Demand M/s Indus Valley Partners vs Principal Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 468

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Allahabad Bench quashed service tax demand as held that the classification of service on basis of non-existing provision is bad in law.

“The demand in the instant case pertains to April,13 to June,17 when the definition provided under section 65 was not in existence. The classification of service on the basis of a non-existing provision is bad in law. With effect from 01.07.12, all services except services mentioned in negative list were made taxable. Contrary to that, definition of „intermediary‟ was available even after 01.07.12 and nature of impugned services were within four corners of intermediary services. We therefore find that observation of the Pr. Commissioner is not sustainable and liable to be set aside” the Tribunal held.

Burden of Payment of Excise Duty passed on to Customers: CESTAT upholds Rejection of Refund Claims M/s Meghdoot Gram Udyog Seva Sansthan vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 469

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the rejection of refund claims as the burden of payment of excise duty passed on to customers.

A Division Bench of Justices PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Thus if on examination of facts and documents the conclusion is that burden of the duty has been passed on to the customers the refund could not have been directed to the appellants but would have to be credited to the consumer welfare fund. In view of the discussions as above, we do not find any merits in this appeal.”

Mere Procedural Violation for complying with Condition of Notification not Suppression for Invoking Extended Period of Limitation: CESTAT M/s LG Electronics India Pvt. Ltd vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 470

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that mere procedural violation for complying with condition of the Notification is not the act of suppression for invoking extended period of limitation.

A Two-Member Bench of PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “As all the information which was necessary to determine eligibility under Notification No.18/2009- ST was available with the Revenue and the prescribed Return/Form was filed by the appellant they could not have suppressed any fact from the Department for which extended period of limitation could have been invoked. Where merely a procedural violation in respect of complying with a condition of Notification cannot be said to be an act of suppression for invoking extended period of limitation. No justification for invoking extended period of limitation is forthcoming from the show cause notice, order in original or the impugned order.”

Service Tax leviable on Bus for Carrying Passengers, not Means of Transport of Goods: CESTAT M/s. Rajasthan State Road Transport Corporation vs Commissioner of Central Excise and Service Tax Commissionerate CITATION: 2024 TAXSCAN (CESTAT) 471

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that service tax is leviable on bus for carrying passengers and hence is not means of transport of goods.

“It was, therefore, concluded that the bus, which is primarily meant for carrying the passengers from one place to another, cannot be called the means of transport of goods and therefore, the appellant is not eligible to claim exemption under Clause 22 (b) of the notification. The said findings are unsustainable” the Tribunal noted.

Service Tax Not Applicable on Freight Margin Recovered from Customer on Outbound Shipment: CESTAT Vishal Tansukhbhai Gohel vs Commissioner of Central Excise & ST CITATION: 2024 TAXSCAN (CESTAT) 472

The Ahmedabad Bench of Central Excise and Service Tax Appellate Tribunal ( CESTAT ) held that service tax is not payable on freight margin recovered from customers in cases of outbound shipment. In the case of outbound shipment, both by aircraft and vessel, the destination of goods shall be outside India, therefore there will be no service tax on the freight margin recovered by the applicant from the customer.

The two-member bench of Somesh Arora (Judicial Member) and C.L. Mahar (Technical Member) observed that the place of provision of service or transportation of goods shall be the place of destination of the goods, as per Rule 10 of the POP Rules. The tribunal held that the appellant would enter into an agreement with the carrier for the transportation of cargo, i.e., the airline /shipping line. The CESTAT has held that, in the absence of a specific exclusion, services provided by the applicant cannot be excluded from the scope of Rule 10 of the POP Rules.

Combined MRP of Combo Pack cannot be Basis for determining Assessable Value u/s 4A of Central Excise Rules: CESTAT M/s Videocon Industries Ltd vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 473

The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) combined MRP of combo pack cannot be the basis for determining assessable value under Section 4A of Central Excise Rules, 1944. The Court viewed that sub-section (2) of Section 4 along with the Explanation thereto that the MRP mentioned is to be the sole consideration in arriving at the transaction value at which the excise duty is payable.

A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that Rule 15 of the SWM Rules refers to the “combination pack” of dissimilar items that are packed in a bigger pack on which MRP is required to be declared. It was clear from the reading of sub-section (2) of Section 4 along with the Explanation thereto that the MRP mentioned is to be the sole consideration in arriving at the transaction value at which the excise duty is payable.

CESTAT Dismisses Appeal Applying Res Judicata After Service Tax Dept Withdraws Writ Petition for Recalculation of Interest M/s Yamuna Prasad & Brothers vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 474

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has dismissed the Service tax appeal applying Resjudicata. It was found by the tribunal that the writ petition was dismissed as withdrawn due to rework needed on interest Calculation.

A two-member bench of  Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) held that “when this issue was raised and abandoned in the first writ petition which was dismissed as withdrawn, the principles of constructive res judicata which is laid down under Order 23 Rule 1 of the Code of Civil Procedure, 1908, and which principles are extendable to writ proceedings as well as held by this Court in “Sarguja Transport Service v. State Transport Appellate Tribunal, M.P., Gwalior and Others”  would be applicable.”

Misdeclaration of Description of Goods invite Extended Period of Limitation: CESTAT AEG Power Solutions (India) Private Limited vs The Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 475

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Bangalore Bench held that the misdeclaration of description of the goods invite extended period of limitation.

A Two Member Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “On going through one of the sample ER-1 return, filed with the Department, for the period February 2014, we find that under the heading ‘Description of Goods’, the item is mentioned as “power”, “ELE”, “Solar”. Thus, there is no correct declaration of the description of the goods mentioned in the ER-1 Returns which have been manufactured and cleared by them by raising invoices mentioning a different description.” “Therefore, the judgments cited by the appellant are not applicable to the present case. On the other hand, mis-declaration of the description of the goods would invite extended period of limitation in view of the judgment of the Supreme Court in the case of CCE, Ahmedabad Vs. Urmin Products P. Ltd. & others” the Bench noted.

Duty is cast on Customs Broker to advise Clients to comply with Provision of Law: CESTAT quashes allegation on Violation of Regulation of 10(d) of CBLR M/s. Ajay Overseas Shipping vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 476

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the allegation of violation of Regulation 10(d) of the Customs Broker Licensing Regulation, 2018 ( CBLR ) and observed that the duty is cast on the Customs Broker to advise clients to comply with the provision of law.

A Two-Member Bench comprising P.A. Augustian, Member (Judicial) and Pullela Nageswara Rao, Member (Technical) noted that “The responsibility of Customs Broker is only to advise the importer regarding concerned provisions only when it is brought to the notice of the Customs broker that the goods imported by the passenger or importer is imported or being exported in violation of any provision of law. In the present case, there is no way for the Customs broker to find out whether the baggage brought by the passenger belongs to them or any other person.” “If the overseas agency had induced the passenger to carry the goods belongs to other NRIs though unaccompanied baggage of a passenger by offering any amount, in the absence of any knowledge regarding such offer till the filing of baggage declaration, the proceedings initiated against the appellant is unsustainable. Thus, the finding regarding alleged violation of the provision of Regulation of 10(d) of the CBLR 2018 is unsustainable” the Tribunal noted.

Provisions of Section 11B of Central Excise Act not Applicable for Pre-Deposit made u/s 35F: CESTAT M/s. Alba Industries Limited vs Commissioner of GST and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 477

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that provisions of Section 11B of the Central Excise Act, 1944 not applicable for pre-deposit made under Section 35F of the Central Excise Act, 1944.

A Single Member Bench of Vasa Seshagiri Rao, Technical Member observed that “he nature of payment as a pre-deposit would not undergo any change to become excess payment of tax as contended by the lower Adjudicating Authorities. This contention is totally unjustified and has to be termed as patently illegal. There cannot be any doubt as to the payment made being a pre-deposit may be vide their Head Quarter’s Service Tax Registration at Chennai.” “In view of the above findings and in compliance to judicial discipline and appreciating the decisions cited supra, I am of the considered view that the amount paid by the appellant towards pre-deposit cannot be treated as an excess payment of duty and the provisions of Section 11B of the Central Excise Act, 1944 cannot be made applicable in the facts and circumstances of this case. I find that the appellant is eligible for refund of pre-deposit of Rs.4,80,000/- paid for filing of an appeal under Section 35F of Central Excise Act, 1944” the Tribunal held.

CESTAT upholds Penalty levied on  misdeclaration of goods  in order to avail ineligible drawback M/s Jayant Vikram @ Vikram Bihari VS Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 478

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty levied on the misdeclaration of goods in order to avail ineligible drawback. The Appellant Jayant Vikram had filed benami shipping bills with mis-declared quantities and values at the behest of Shri Ashok Sharma.These information getting from  Directorate of Revenue Intelligence who said that certain exporters were mis-declaring the description quantity and value of export consignments in order to avail ineligible drawback.

Further the bench observed that  this section provides for a penalty for willfully mis-declaring facts in any declaration before the customs authorities which the appellant did. A Two-Member Bench comprising Justice Dilip Gupta, (President) and P.V. Subba Rao, (Technical Member) upheld the penalty levied on the misdeclaration of goods in order to avail ineligible drawback.

Rejecting Appeals without deciding issue on Classification of imported Insoluble Sulphur: CESTAT directs Re adjudicationM/s. Midas Treads (India) Pvt vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 479

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed readjudication after finding that the appeal was rejected without deciding the issue on  classification of imported insoluble sulphur.

A Two-Member Bench comprising D.M. Misra, Member ( Judicial Member ) and R. Bhagya Devi, (Technical Member) set aside the assessment order and remanded to Commissioner(Appeals) to decide the issue of classification on merit, after affording an opportunity of hearing to the appellant.

No Service Tax on commission received from Sun Direct TV for installing dish antenna and TV connections: CESTAT

The Chennai Bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) held that no service tax on commission received from the Sun Direct TV Private Limited for installing the dish antenna and TV connections.

Further Sun Direct TV Private Limited had already paid service tax on such amounts paid by customers. The amount is inclusive of service tax and the appellant does not receive any amount from the customer while carrying out the activity of installation and activation of TV connection..

A Two-Member Bench comprising Sulekha Beevi ( Judicial Member ) and Vasa Seshagiri Rao (Technical Member) held that no service tax on commission received from the Sun Direct TV Private Limited for installing the dish antenna and TV connections.

Self Assessment cannot be modified during Refund Proceedings: CESTAT dismisses Appeal M/s. Kalyan Toll Infrastructure Ltd. vs Commissioner Central Excise CITATION: 2024 TAXSCAN (CESTAT) 481

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) while dismissing the appeal filed by the appellant held that self assessment could not be modified during refund proceedings .

A Two-Member Bench comprising Dr. Rachna Gupta ( Judicial Member ) and P.V. Subba Rao, Technical Member held that “Since the appellant had self-assessed service tax without applying the notification and the assessment has not been modified, it cannot be modified now in the refund proceedings.”

Permissions Obtained for De-bonding Burnt Capital Goods under Customs Procedures Amid Riots, No Basis for Extended Limitation: CESTAT M/s. Mineral Enterprises Limited vs The Commissioner of Central Excise and Customs CITATION: 2024 TAXSCAN (CESTAT) 482

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the appellant had obtained permission for de-bonding the burnt capital goods under the customs procedures hence there is no basis for the extended limitation.

A Two-Member Bench comprising D.M. Misra, Member ( Judicial Member ) and R. Bhagya Devi, Technical Member observed that the appellant had obtained permission for de-bonding the burnt capital goods under the customs procedures hence there is no basis  for the extended limitation.

Rent-free Accommodation provided to CISF personnel not Additional Consideration: CESTAT quashes Service Tax Demand Central Industrial Security Force vs Commissioner of Central Tax Visakhapatnam CITATION: 2024 TAXSCAN (CESTAT) 483

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and held that the rent-free accommodation provided to CISF personnel is not additional consideration.

Quashing the service tax demand a Two-Member Bench comprising R Muralidhar, Judicial Member and AK Jyotishi, Technical Member observed that “It can be observed from the above decisions that in the case of other units of the same Appellant, identical issues were raised by the Appellant and in all these cases it has been held that the reimbursement expenses are not to be added to the gross value for arriving at the Service Tax payable. The Rule 5 of the Service Tax (Determination of Value) Rules has been held as ultra vires by the High Court and Hon’ble Supreme Court. Similarly, in these cases, it has also been held that the rent free accommodation provided to the CISF personnel cannot be taken as additional consideration. Therefore, we find that cited case laws are squarely applicable to the facts of the present case.”

Unjust Enrichment in relation to refunds claimed pursuant to finalization of Provisional Assessments: CESTAT upholds order of Commissioner (Appeals) Commissioner of Central Excise vs J.K. Tyre and Industries Limited CITATION: 2024 TAXSCAN (CESTAT) 484

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the respondent passed the Unjust Enrichment in relation to the refunds claimed pursuant to finalization of the Provisional Assessments. Hence the bench upheld the order of Commissioner (Appeals).

It was observed by the tribunal that in the respondent’s own case, J.K. Tyre & Industries Ltd.’s case the High Court Karnataka considering more or less similar arguments and scrutiny of the claims from the angle of applicability of unjust enrichment and the refund sanctioned by the Revenue to the respondent from time to time, A Two-Member Bench comprising Dr. D.M. Misra (Judicial) and R Bhagya Devi (Technical Member) upheld the order of Commissioner (Appeals). To Read the full text of the Order CLICK HERE

Cenvat Credit on Individual Items cannot be Denied merely because it was used for Fabrication of Immovable Property: CESTAT M/s. Mangalore Refinery vs The Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 485

The Bangalore  Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that Cenvat Credit  on individual items could not be denied merely because it was used for the fabrication of immovable property

Accordingly the appellant’s own case, this Tribunal viewed that  because the items are used for fabrication in the erection of storage tank which affixed to earth and become immovable property, cenvat credit availed on individual items cannot be denied being capital goods as defined under Rule 2(a) of the CCR, 2004 . A Two-Member Bench comprising Dr. D.M. Misra (Judicial) and R Bhagya Devi (Technical Member)  set aside the order of lower authorities   and allowed the appeal filed by the appellant.

No Service Tax payable under Business Auxiliary Service, Technical Inspection and Certification Service for export of Hosiery Garments to Non Resident Company: CESTAT M/s. K. Shethra Exports vs Commissioner of Central Excise and Service Tax CITATION: 2024 TAXSCAN (CESTAT) 486

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that no service tax payable under Business Auxiliary Service, Technical Inspection and Certification Service for the export of Hosiery Garments to Non Resident Company .

It was observed by the tribunal that  the identical facts in the cases of Original Knit Exports, Harini Colours and Veera Creations where the Service Tax demands were confirmed under BAS and TIC and where M/s. JPS Trading Company, Dubai was the buying agent and garments were exported by these appellants to M/s. Bon Prix, Germany, the Tribunal Chennai have set aside the Service Tax demands raised and also imposed a penalty imposed in favour of the exporters of the garments. Therefore the Two-Member Bench comprising Sulekha Beevi C.S ( Judicial Member) and Vasa Seshagiri Rao(Technical Member) held that confirmation of the demand of Service Tax and the imposition of penalties cannot be sustained.

Top Stories Unjust Enrichment is not applicable for Duty Paid under Provisional Assessment during Period under Dispute: CESTAT allows Appeal M/s. K.G.Denim Ltd. vs The Commissioner of GST CITATION: 2024 TAXSCAN (CESTAT) 487

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that Unjust Enrichment is not applicable for duty paid under  the Provisional Assessment during the period under dispute.

It was observed that “it is a settled position in law that the principle of unjust enrichment is not applicable to the refund claims arising out of the finalization of the provisional assessment prior to 25.06.1999.” A Two-Member Bench comprising Sulekha Beevi C.S. (Judicial) and Vasa Seshagiri Rao (Technical Member)  held that Unjust Enrichment is not applicable for duty paid under  the Provisional Assessment during the period under dispute .Hnece the tribunal allowed the appeal.

Service Tax Leviable on Service Received by Samsung India Electronics from Associate Enterprises on Taxable Value u/s 67 of Finance Act: CESTAT Samsung India Electronics VS Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 488

The Allahabad Bench of Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that service tax leviable on service received by Samsung India Electronics from associate enterprises on taxable value under section 67 of the Finance Act, 1994.  It was directed to furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority.

A two-member bench of Mr P K Choudhary, Member (Judicial) And Mr Sanjiv Srivastava, Member (Technical) held that the appellant is required to pay Service Tax on the service received by them from their associate enterprises on the taxable value as determined in terms of section 67 of the Finance Act, 1994. The appellant should furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority. The service tax liability is to be discharged by the appellant in the manner and at the time as determined in terms of Rule 6 of the Service Tax Rules, 1994 read with Rule 7 of Point of Taxation Rules, 2011. For any delay in payment of Service Tax from the due date interest at the appropriate rate should be paid by the appellant in terms of Section 75 of the Finance Act, 1994 for period of delay in payment of tax.

CESTAT upholds Excise Duty Demand on Scraps, made within 5 years from Date of Knowledge M/s. Deccan Mining Syndicate Pvt. Ltd vs The Commissioner of Central Excise and Customs CITATION: 2024 TAXSCAN (CESTAT) 489

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Bangalore Bench upheld the excise duty demand on scraps, made within 5 years from date of knowledge.

A Two-Member Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “With regard to limitation, it is an admitted fact that the shortage was detected by the Department only on 25.08.2011 and the show-cause notice was issued on 29.01.2014 which is within 5 years of the date of knowledge. In fact, no return was filed explaining the shortages and it was noticed only after visiting the unit and the return was filed at a later date.” “Based on the above the demand is within 5 years from the date of knowledge and therefore the claim of the appellant that it is time barred is unacceptable. Accordingly, we uphold the demand of duty but extend the benefit of the Notification No.23/2003-CE dated 31.03.2003 without extending the benefit of SAD since the appellant has not proved that VAT has been discharged on these shortages. The matter stands remanded for redetermination of duty after extending the benefit of Notification 23/2003-CE dated 31.03.2003” the Tribunal held.

Service Tax not leviable on Renting of Immovable Property Service by Religious Body to Religious Body: CESTAT Church of South India Trust Association vs Commissioner of CGST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 490

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service tax is not leviable on renting of immovable property service by religious body to religious body.

A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member observed that “After considering the facts of the case before us and also appreciating the documents produced, in nature of Memorandum of Association, we are of the considered opinion that the assessee fits in to the category of ‘religious body’. As per the definition of Renting of immovable property service, such service rendered by a religious body or to a religious body is excluded from the levy of service tax. We hold that the assessee herein is not liable to pay service tax under the category of renting of immovable property services up to 30.06.2012. Therefore, the demand for the period prior 30.06.2012 cannot be sustained and require to be set aside.”

Order-in-Original not Served: CESTAT quashes Order rejecting Customs Refund M/s.Doowon Electronics India Pvt. Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 491

The Chennai Bench of the Customs, Excise and Service Tax ( CESTAT ) quashed order rejecting customs refund as the order-in-original was not served.

A Single Member Bench of P Dinesha, Judicial Member observed that “Thus, it is clear that none of the communications to the appellant indicates date of actual communication of the order in original dated 29.04.2015. Hence, the prima facie burden on the revenue to adduce proper evidence to show the actual date of communication of the Order in Original, not to speak of the date of dispatch, remains un-discharged. Even from the said Order in Original, I find that the authority passing the order has nowhere indicated about providing an opportunity of being heard, before passing the said order. Even this therefore appears to be an order passed by violating the principles of natural justice.”

Broomsticks made of Plastic without a Vegetable Material alone are taxable w.e.f 22.09.2017: CESTAT RAJAT INTERNATIONAL vs COMMISSIONER OF CUSTOMS-MUNDRA CUSTOMS CITATION: 2024 TAXSCAN (CESTAT) 492

The Ahembadad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that broomsticks made up of plastic without using vegetable material alone are taxable with effect from September 22, 2017.

The two-member bench of Somesh Arora (Judicial Member) and Raju (Technical Member) has held that broomsticks are made up of plastic and do not use a vegetable material alone are taxable w.e.f. September 22, 2017 as per the Notification No. 01/2017. After amendment, the broomsticks fall under Serial No. 260 of Notification No. 01/2017 and have to be of other than Chapter Heading No. 96031000 and therefore have to be broomsticks of other than twigs and vegetable materials. The bench held that the Commissioner (Appeals) while deciding classification, should keep the discussion in mind while working into the demand period and related statutory changes. It should first decide about the nature of broomsticks and brooms and their classification with statutory changes. The court remanded the matter back to decide the nature of the goods.

Customs Duty Exempted as Export Obligation under Advance Authorisation Scheme has Complied: CESTAT M/s Jewel Utensils Industries vs C.C. - Mundra CITATION: 2024 TAXSCAN (CESTAT) 493

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that customs duty exempted as an export obligation under the advance authorisation scheme has complied. It was found that the goods were cleared under the advance authorization scheme, according to which all the duties are exempted by way of debiting in the advance licence scheme.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the adjudicating authority has denied the exemption on the ground that export obligations have not been fulfilled. The Export Obligation (EODC Certificate) shows that the export obligation under the advance authorization scheme has been complied with accordingly. The sole ground for denying the exemption by the adjudicating authority does not exist.

Omission to Appoint Authorized Person for Courier Bill of Entry under Courier Imports and Exports Regulations Not Ground for Harsh Penalties: CESTAT M/S. Pigeon International vs COMMISSIONER OF CUSTOMS CITATION: 2024 TAXSCAN (CESTAT) 494

In a recent case, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that omission on the part of the appellant to engage the executive as an authorized person to file courier bills of entry as per Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 cannot be reason to invoke harsh proceedings including revocation of courier license and enforcement of bond and bank guarantee executed in connection with registration/license as an authorized courier.

A two-member bench of Mr P.A. Augustian, Member (Judicial) and Mr Pullela Nageswara Rao, Member (Technical) found that there was an omission on the part of the appellant to engage the executive M. Elias as an authorized person to file courier bills of entry as per Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.

Service Tax Demand Alleging Tax Suppression without Evidence: CESTAT remands for Denovo Adjudication M/s Span Structure vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 495

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in the matter where the demand of service tax alleging tax suppression without evidence, remanded the matter for denovo adjudication. It was evident that the reporting of income in the P &L being irrelevant for the determination of service tax payable, the basis of the impugned assessment is erroneous.

The respondent relied upon the P and L accounts to conclude that the amounts reflected therein have not been offered for service tax. The reporting of income in the P &L being irrelevant for the determination of service tax payable, the basis of the impugned assessment is erroneous. A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) remanded the matter to the original authority to undertake the exercises of re-conciliation.

Motorola India Claimed Ineligible Credit: CESTAT orders Recovery of wrongly taken Credit, Allows Reversal of Proportionate Credit with Interest Commissioner of Central Tax vs M/s. Motorola Mobility India CITATION: 2024 TAXSCAN (CESTAT) 496

The Bangalore Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed to recover credit taken wrongly by allowing to reverse proportionate credit along with interest Ineligible Credit Availed by Motorola Mobility India.

High Courts of Telangana and Rajasthan emphasized the fact that the authorities were entitled to recover the credit taken wrongly by allowing them to reverse the proportionate credit along with interest. A two-member bench of Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member(Technical) upheld the Commissioner’s order concerning the confirmation of service tax demand of Rs.1,14,64,277/- only. The Revenue’s appeal concerning the demand of interest was upheld and accordingly, interest is to be paid on the above demand of Rs.1,14,64,277/- in terms of Rule 6(3A) of the Cenvat Credit Rules, 2004.

Deduction claim of Gross Value of Service on “Supply of Tangible Goods Service” for Period before 16.05.2008: CESTAT directs Denovo Proceedings M/s Sagar Road Lines vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 497

The Allahabad Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed denovo proceedings on the deduction claim of gross value of service on “Supply of Tangible Goods Service” for Period before 16.05.2008. The Tribunal remanded the matter back to the original authority for reconsideration of the issue to the extent of allowing deduction claim received against the services of “Supply of Tangible Goods Service” before 16.05.2008, the date from which the service was made taxable.

The Tribunal comprising Mr P K Choudhary, Member (Judicial) And Mr Sanjiv Srivastava, Member (Technical) remanded the matter back to the original authority for reconsideration of the issue to the extent of allowing deduction of Rs. 84,17,327.67/- which appellant claim was received by them against the services of “Supply of Tangible Goods Service” before 16.05.2008, the date from which the service was made taxable. The appeal was partly allowed to the extent of remanding the matter to the original authority to the extent. As the matter is quite old adjudicating authority should in de novo proceedings adjudicate the matter within three months from the date of receipt of the order, following the principles of natural justice.

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