This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (ITAT) has set aside the re- adjudication and has confirmed the valuation of adjudicating authority in finalisation of provisional assessment using CAS-4 principle.
The Bench observe that the Order-in-Original passed by the Deputy Commissioner has taken into account all such elements at the time of finalisation of provisional assessment. The Bench set aside the re-adjudication holding that the method of valuation adopted by the adjudicating authority was as per the principles enshrined in CAS-4 and it not warrant any intervention. To Read the full text of the Order CLICK HERE
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on Customs House Agent (CHA) for improper export of steel-made kitchen tableware on the ground of non-violation of Customs House Agent Regulations (CHA),2004.
The Bench observed that the assessee acted as CHA and Clearing and forwarding agents in the export consignments and their role was restricted to filing of the documents. The two-member bench comprising Muralidhar (Judicial) and Jyothishi (Technical) quashed the penalty imposed on the assessee while allowing the appeal filed by the assessee.
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has granted relief to Vodafone by ruling that the unutilized CENVAT credit would not incur the interest liability.
the Bench found that there was ample cenvat credit lying in the cenvat credit account, therefore, no payment of interest was required to be made by the appellant in the light of the decision of Karnataka High Court in the case of Commissioner of Central Excise & Service Tax, LTU, Bangalore v. Bill Forge Private Limited which held that, Without the liability to pay duty, the liability to pay interest would not arise. The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise.” The Bench set aside the impugned order, holding that no penalty was imposable on the appellant.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Bharat Electronics by quashing the service tax demand for receiving the overhauling charges under repair and maintenance services on the grounds of limitation.
The Bench observed that the invocation of an extended period by the department was not in order and was liable to be deleted. The two-member bench comprising Dinesha (Judicial) and Ajit Kumar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed re- adjudication to the department for imposing service tax demand on technical testing and analysis services without examining the nature of the services rendered by the assessee.
The Bench observed that the department raised the demand for service tax without enquiring about the right nature of the services rendered by the assessee. The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) remanded the matter to the adjudicating authority for fresh consideration.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to East India Holdings by quashing the demand of CENVAT credit of excise duty availed on the Cast Iron (CI) molds on the ground of non-violations of CENVAT Credit Rules(CCR), 2004.
The Bench observed that there was also no provision in the CCR to reverse the CENVAT credit when they are scrapped after being put into use and the assessee was not required to reverse the CENVAT credit availed on the capital goods, CI Moulds, and the credit was not liable to be reversed and there was no liability of interest or penalty. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand of CENVAT Credit availed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the activities undertaken in the construction of the mega sports complex are not liable to service tax as the mega sports complex was not primarily meant for commercial purposes.
The Bench observed that in the case of CCE&ST Pune Vs B J Shirke Construction Technology Pvt Ltd, the court held that the construction of Mega Sports Complex by the State government was not liable for service tax under ‘Works contract Service’. The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) quashed the demand for service tax and penalty imposed on the assessee while allowing the appeal filed by the assessee.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that there was no provision in the CENVAT Credit Rules(CCR), 2004 to reverse the credit availed on capital goods after they were put into use in the manufacture of final products, even if they are worn out or damaged due to wear and tear.
The Bench observed that the CCR had provisions for reversal of credit availed on capital goods only in a situation where the capital goods are either removed as such or sold and the assessee had taken CENVAT credit correctly on the capital goods, namely C.I. Moulds and there was also no provision in the CCR to reverse the CENVAT credit when they are scrapped after put into use. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that the assessee is entitled to get the benefit of CENVAT credit on the capital goods in which they are used in the manufacture of final products.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that services should be provided to the Government, even by way of repair, maintenance, or alteration of, inter alia, any other original works, and such service should not be consumed in a commerce, industry or any other business or profession are not liable to Service Tax.
The Bench observed that according to exemption Notification No. 25/2012-Service Tax and Section 102 which was inserted with effect from 14.05.2016 vide the Finance Act, 2016 granting special retrospective exemption from payment of Service Tax to taxable services provided to the Government of India. The two-member bench comprising P. Dinesha (Judicial) and Ajit Kumar (Technical) the services provided to the government by way of repair and maintenance service were not liable to service tax.
No customs duty payable on Commercial goods imported by research institutions for research: CESTAT Hydraulic Study Dept vs Commr. of Customs (Port) 2023 TAXSCAN (CESTAT) 1298
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal as customs duty cannot be levied from research institutions for the commercial goods imported for research purpose.
The two-member bench consisting of R. Muralidhar (Judicial Member) and Rajeev Tandoon (Technical Member) after hearing both sides held that the appellants were eligible for the benefit and the exemption benefit had been inappropriately denied to the appellants. Therefore, the appeal filed by Hydraulic Study Department of Calcutta Port Trust was allowed and the appeal filed by the department was dismissed.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a new condition that does not form part of the exemption notification cannot be introduced through a Circular.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that a new condition that does not form part of the Notification cannot be introduced through a Circular and the demand of duty was against the conditions of the notification.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the transaction value of imported goods cannot be rejected only on the basis of the National Import Database (NIDB) data of similar goods because NIDB data do not show the import of comparable goods.
The Bench observed that the adjudicating authority had adopted the value of comparable goods available in NIDB data to demand duty on the goods cleared under the Bills of Entry and the transaction value cannot be rejected only based on the NIDB data because NIDB data do not show the import of comparable goods. The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that rejection of the value declared by the assessee based on NIDB data on similar goods was not sustainable.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the Central Excise Duty demand on the clearance of coal from the transferor unit on the ground of limitation.
The Bench observed that on merit the assessee was liable to pay duty, but on limitation, the show-cause notice failed. Accordingly, the demand confirmed in the order was not sustainable. The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) quashed the excise duty demand while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the excise duty is leviable on clearance of colas from the transferor unit under the Central Excise Act,1944.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the clearance of coal from the transferor unit is liable to Central Excise Duty.
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal granted relief to Hindustan Unilever Ltd (The Appellant) by quashing the order by the Adjudicating Authority in favor of the Commissioner of Central Excise (CCE) (The Appellant) which rejected the fixation of the special rate.
The two-member bench consisting of Ashok Jindal (Judicial Member) and K.Anpazhakan (Technical Member) after hearing both sides held that the rejection of the applications of fixation of special rate by the adjudicating authority was not correct and was in violation of the law, therefore the appeal was allowed.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the valuation of customs duty of Iron ore fines should be done under section 14 of the Customs Act,1962.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the assessee was eligible for the excess customs duty and allowed the refund claim filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the enhancement of value of Customs Duty on digital multi functions printers under the value estimation given by the Chartered Engineer.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) upheld the enhancement value determined by the revenue.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the importer was eligible to claim the refund of customs duty of self-assessed bills of entry defined under section 27 of the Customs Act,1962.
The Bench observed that in the case of ITC Vs CCE Kolkata, the court held that it was not open to the authority which processes the refund to make a fresh assessment on merits and to correct the assessment based on mistake or otherwise and in the present case this decision was not applicable. The two-member bench comprising Muralidhar (Judicial) and Rajeev Tandon (Technical) held that the assessee is eligible for a refund while dismissing the appeal filed by the revenue.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that filing application for amendment of the Bills of Entry for correction of an inadvertent mistake or error and consequential passing of orders for re-assessment based on modification/ amendment carried out was legal and valid and the importers are entitled to the amendment and re-assessment.
The Bench observed that the assessee had sought re-assessment upon amendment of the Bills of Entry by correcting the customs tariff head of the goods which would then facilitate the assessee to seek a claim for refund. The two-member bench comprising Muralidhar (Judicial) and Rajeev Tandon (Technical) held that the filing of an application for amendment of bills of entry was legal.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that valuation of Customs Duty of fuel oil (FO) and diesel oil (DO) used during the coastal run of the vessel should be done as per the residual method prescribed under rule 9(1) of the Customs Valuation Rules,2007.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that assessable value was to be re-determined without including freight, insurance, and landing charges while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the customs broker had a limited role of facilitating the clearance of imported goods as assessed, examined, and given clearance under section 47 of the Customs Act,1962 by the Proper Officer of Customs.
The Bench observed that the Customs Broker had a limited role in filing the bills of entry as per the instructions of the importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on the Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act. The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the Customs Broker cannot be held responsible for the violation if any committed by the importer.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that green peas which fall under the category of edible vegetables attract 10% of Basic Customs Duty (BCD) under the Customs Tariff Act,1975.
The Bench observed that both the classification of peas was in dispute thus the valuation was not proper and observed that peas attract 10% BCD in general. The two-member bench comprising Muralidhar (Judicial) and Rajeev Tandon (Technical) held that the peas are classifiable under edible vegetables and taxable under the Customs Tariff Act.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the revocation of the Customs Broker License on illegal import of food supplements on the ground of non-violation of regulation 18 of the Customs Broker Licensing Rules(CBLR),2013.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) quashed the revocation of the Customs Broker License and forfeiture of the Security Deposit while allowing the appeal filed by the assessee. To Read the full text of the Order CLICK HERE
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty for confiscation of iron or non-alloy steel on the ground of non-violation of advance license under Customs Notification.
The Bench observed that the assessee had produced the Advance Authorisation at the time of import of goods through the notified sea port Mumbai and executed the Bond along with necessary undertaking before the Customs authorities in respect of Advance License and there was no case of sale or transfer of advance authorization in this case. Thus, the assessee had fulfilled all the relevant conditions. The two-member bench comprising Mohanty (Judicial) and Parthiban (Technical) quashed the penalty imposed for the confiscation of the imported goods against the assessee.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the eligibility for refund should have been decided taking into consideration the taxability of the service and the procedures under section 11B of the Central Excise Act,1944.
The Bench observed that it was not open to the authority empowered under section 11B of the Central Excise Act to dispose of a claim for refund on grounds of such being premature in any circumstance whatsoever and as the competent authority had not considered the eligibility for refund except at the threshold, it would only be appropriate to restore the claim for fresh adjudication. The two-member bench comprising Ajay Sharma (Judicial) and C.J Mathew (Technical) held that the eligibility of refund claim by the assessee had to re- adjudicate by considering the procedures laid down under the prescribed law.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication for imposing excise duty demand on clearance of wool and polyester without examination of relevant documents submitted by the assessee.
The Bench observed that the adjudicating authority had to verify all the aspects and documents which was submitted by the assessee before raising the demand. The two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) directed re-adjudication for the excise duty demand against the assessee.
In a significant ruling, the bench of Vasa Seshagiri Rao (Technical Member) and Sulekha Beevi C.S. (Judicial Member) of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has declared that the demand for service tax on composite contracts for Commercial or Industrial Construction Services (CICS) is not sustainable, both before and after 01.06.2007.
The Tribunal relied on a previous decision by the Supreme Court, which held that the demand for WCS on composite contracts, such as construction of residential complexes, commercial or industrial construction services, erection, commissioning, and installation services, could not be sustained. This was especially applicable when the composite contract included both the supply of goods or materials and the rendering of services. The decision in M/s. Real Value Promoters Pvt. Ltd. was cited as a precedent, and the Tribunal reiterated its stance that the demand under CICS was untenable. In light of the above analysis and legal precedents, the Tribunal concluded that the demand for service tax under ‘Commercial or Industrial Construction Services’ (CICS) is not sustainable.
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on outdoor catering services on the grounds of limitation.
The Bench observed that the issuance of show cause notice by the department was beyond the time limit and thus the demand raised against the assessee was not sustainable. The two-member bench comprising Mohanty (Judicial) and Parthiban (Technical) held that the demand was barred by limitation of time and quashed the service tax demand.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on cargo handling service and held that the loading and shifting of materials from private railway siding to stacking yard is goods transport service.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that as the main activity of the appellants is transportation of goods, therefore, merits classification of the above said service in question is Goods Transport Service. Therefore, the demand under Cargo Handling Service is not sustainable, hence, whole of the demand confirmed against Appellant No 2 is set aside and consequently, the penalty imposed on the appellants are also set aside.”
The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand imposed on group life insurance schemes on the ground of benefit of closure defined under section 73(3) of the Finance Act,1994.
The Bench observed that the assessee was registered, and had regularly deposited the admitted taxes and filed periodical returns. It is further evident that the whole case is due to an interpretational issue (change of opinion) on the part of the Revenue and the benefit of closure under section 73(3)of the Finance Act had been wrongly denied to the appellant assessee, and no show-cause notice was required to be issued. The two-member bench comprising Anil Choudary (Judicial) and A.K Jyothishi (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under the category of construction service and held that no penalty can be imposed under section 76 of the Finance Act,1994 on construction service for the period before 01.06.2007.
The Bench observed that no service tax is payable by the assessee for the period before 01.06.2007 under the category of construction services, therefore no penalty can be imposed under section 76 of the Finance Act. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that no penalty was imposable on the assessee under the category of Construction service for the period before 01.06.2007 while dismissing the appeal filed by the revenue.
The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that issuance of show cause notice was not allowed under section 73(3) of the Finance Act,1994 when there was no evidence of willful short payments of service tax.
The Bench observed that in the case of CCI Logistics Pvt Ltd VS Commissioner of CGST & C.EX Kolkatta North Commissionerate, wherein it was held that show-cause notice was not required to be issued given thefraud or suppression, as the entire service tax amount was deposited along with interest immediately after short payment of tax was informed by the audit party. The two-member bench comprising Anil Choudary (Judicial) and A.K Jyothishi (Technical) held that no show cause notice was required to be issued on the assessee when there was no willful short payment of service tax
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods of castable refractory which was supplied to power projects are eligible for exemption from the central excise duty under exemption notification.
The Bench observed that once the department had accepted non-payment of duty for the previous and subsequent periods, it was not open for the Department to deny the refund, if otherwise in order, for the short period during which the assessee had paid duty under the mistaken notion of law. The two-member bench comprising S.S Garg(Judicial) and Anjani Kumar (Technical) quashed the rejection of the refund claim filed by the assessee while allowing the appeal filed by the assessee.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and held that amendment charges, container detention charges fall under the purview of Export of Service Rules and is outside service tax net.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “It follows that the place of provision of the service of transportation of goods by air/sea from a place in India to a place outside India, will be a place outside the taxable territory. In this case also, the requirement of Rule 6A of the Service Tax, 1994, as amended, stands duly satisfied. Accordingly, we hold that these charges are within the purview of the Export of Service Rules and hence outside the service tax net.” “Further, we observe that the Appellant have been paying service tax for the considerations received as Amendment Charges, Container Detention Charges, Customer Administrative Charges, DTHC Charges, Handling Fees, Seal Charges and other charges when charged on Indian customers in Indian currency. In view of the above findings, we hold that the demand confirmed in the impugned order on this count is not sustainable and accordingly, we set aside the same” the Bench concluded.
The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the central excise duty demand imposed on the clandestine production and removal of copper tubes on the ground of the absence of corroborative evidence.
The Bench observed that in the case of CCE v. Sai Iron (India) Ltd, the court held that even if the assessee fails to explain the shortages themselves, the charge of clandestine removal cannot be imputed in the absence of an independent investigation to corroborate the allegation. Here the department raised the demand for excise duty without any corroborating evidence against the assessee and that the huge quantity of sponge iron would require a large fleet of lorries/trucks for their transportation and in the end in the absence of any such evidence on record, the findings of clandestine removal cannot be upheld. A single-member bench comprising Sanjiv Srivastava (Judicial) quashed the excise duty demand while allowing the appeal filed by the assessee.
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