This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that service tax is not leviable on services like software development.
The two-member bench comprising Ashok Jindal (Judicial) and K. Anpazhakan (Technical) held that the service rendered like software development provided by the assessee was exempted from payment of Service development.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the income tax returns cannot be merely used to confirm the demand of service tax by invoking extended periods of Limitation.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) quashed the demand raised by issuing a show cause notice while allowing the appeal filed by the assessee. To Read the full text of the Order CLICK HERE
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded back matter in order to determine the cenvat credit on SS Pipes and various types of Valves as capital goods and input.
A two-member bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “the Adjudicating Authority has not considered the judgments viz-a-viz facts of the present case. Therefore, we are of the view that Adjudicating Authority must reconsider the entire matter based on the judgments which were passed much after the impugned order passed by him. Therefore, it is incumbent on the Adjudicating Authority to reconsider the whole issue in the facts of the present case equitable with various judgments delivered subsequent to the passing of the impugned order.” “Accordingly, we set-aside the impugned order and remand the matter to the Adjudicating Authority for passing a fresh order keeping in mind the observations made hereinabove. The appeal is allowed by way of remand to the Adjudicating Authority” the Tribunal concluded.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the interest on Excise Duty Refund starts from the date of delay till the sanction of refund.
A Coram consisting of Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We find that the eligibility of Cenvat Credit in the above facts was extended by retrospective amendment of Rule 16 of Central Excise Rules, 2002. Whereby, the assessee becomes entitled for the Cenvat Credit on 13.07.2006. The revenue’s contention that the Rule 5 refund is not eligible for interest as the provisions of Section 11B and 11BB are not applicable, for such refund under Rule 5 is no longer under dispute in the light of the High Court of Gujarat judgment in the case of Reliance Industries Ltd.” “Therefore, in our considered view the revenue was supposed to sanction the refund within three months from the date of retrospective amendment i.e. from 13.07.2006 however, the refund was sanctioned on 14.06.2012. Therefore, there is a delay in sanction of the refund after three months
from the date of retrospective amendment dated 13.07.2006. Accordingly, we are of the view that the respondent is entitled for the interest only for the period i.e. from the date of three months of 13.07.2006 till the sanction of refund i.e. 14.06.2012” the Tribunal noted.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that commission agent services cannot be considered as branded services and they are not liable to pay Service Tax.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the denial of the exemption passed by the Commissioner while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the demand for service tax on the ground of Limitation.
The ”Two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) quashed the entire demand for service tax raised by the department on the ground of limitation while allowing the appeal filed by the assessee.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that service tax is leviable on the real estate agent for purchase and sale of immovable property under ‘Real Estate Agent Service.
A Coram comprising CS Sulekha Beevi, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “It has to be seen that the appellant did not obtain registration under the ‘Real Estate Agent Service’ and did not pay the service tax. The same would have gone unnoticed, but for the scrutiny by the audit party.Therefore, we do not find any grounds to set aside the demand on the ground of limitation.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the Penalisation under Rule 26 of Central Excise Rules is allowed only if party is involved in various activities of handling of goods, which are liable for confiscation.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “From the reading of the Rule, it can be seen that a person can be penalized under this rule, only if he is involved in various activities of handling of goods, which are liable for confiscation”. “In the present case the entire case of the department is that there is no movement of goods but it is a paper transaction and the M/s Nitin Global Ltd, who has taken Cenvat credit, has not received the goods. When this is the case of the department as no goods is involved, consequently, none of the appellants are engaged in handling the goods which is liable for confiscation” the Tribunal concluded.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the excise duty demand in the absence of proof that compressor, battery chargers supplied by Oil Lube Systems as bought-out items, are essential for functioning of goods supplied.
The Coram comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “the Department did not even prove that the same are fitted into the system, manufactured by the appellants, at least by the use of screwdriver technology. “ “From the statements, of the experts in the field, recorded by the Department, it is clear that the said items are sold together for ease of convenience of the customers rather than the necessity of the functioning of articles manufactured. Therefore, we are of the considered opinion that the appellant’s arguments are strong and the demand of Rs.11,78,980/- disputed by the appellants requires to be set aside” the Tribunal concluded.
The Kolkata Bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the service tax demand on no proof of payment of service tax to ONGC under commercial or industrial construction service.
A Coram comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “We hold that the appellant is liable to service tax for the impugned period along with interest. As it cannot be ascertained from the documents placed before us whether the appellant has deliberately not paid the service tax to the respondent during the impugned period, in those circumstances by giving the benefit of section 80 of the Finance Act, 1994, we hold that no penalty is imposable on the appellant.”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that no service tax leviable on charges for granting use of forest land for non-forest for the purposes Like mining.
Quashing the service tax demand, a Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member held that “We hold that the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non-forest purposes, cannot be considered as a ‘Declared Service’ as defined under Section 66E€ of the Finance Act, 1944 and the charges of NPV paid by the Appellant cannot be considered as ‘Consideration’ for the said service.”
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the diffused silicon wafer considered as semiconductor device which attracts a 5% rate of Integrated Goods and Service Tax (IGST).
The two-member bench comprising P. Dinesha (Judicial) and Vasa Seshagiri Rao( Technical) held that the imported goods of the assessee were classifiable under the category of solar cells and attracts 5% of GST.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for Safeguard duty on the ground of the import of diffused silicon wafers which was not a product under consideration did not attract safeguard duty.
The two-member bench comprising P.Dinesha (Judicial) and Vasa Seshagiri Rao(Technical) quashed the demand for safeguard duty imposed on the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed for confiscation of diffused silicon wafer goods on the ground of non-adverse impact on change of classification.
The two-member bench comprising P. Dinesha (Judicial) and Vasa Seshagiri Rao (Technical) quashed the penalty imposed for confiscation on the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the reversal of CENVAT credit of excise duty on the manufacture of cotton terry towels on the ground of noninsertion of rule 11(3) of the CENVAT Credit Rules,2004.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the reversal of CENVAT credit while allowing the appeal filed by the assessee.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand on the ground that the revenue failed to prove the undervaluation of imported goods of zinc scrap to reject the transaction value in the invoice.
A single-member bench comprising Binu Tamta (Judicial) held that the revenue was unable to provide any clinching evidence to prove undervaluation by the importer to reject the transaction value given in the invoice while dismissing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re- adjudication for the rejection of transaction value or the National Import Database (NIDB) of imported goods without disclosing reports and reasons.
The two-member bench comprising Somesh Arora (Judicial) and Raju (Technical) remanded the matter to the original adjudicating authority to decide the rejection of the transaction value of the imported goods by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) declared the order of the Commissioner (Appeals) as void- abinitio on the ground of already sanctioned the refund claim in the previous order.
The two-member bench comprising Sulekha Beevi C.S (Judicial) and Vasa Seshagiri Rao (Technical) quashed the order passed by the Commissioner (Appeals) and restored the sanctioning part of the refund claim.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that System Desktops are classifiable as ‘automatic data processing machines’, thereby granting relief to M/s. Asus India Private Limited.
A Coram comprising Vasa Seshagiri Rao, Technical Member and P. Dinesha, Judicial Member observed that “Computer Systems with modifications for enhancement of gaming, by inclusion of additional audio/video devices, are being classified under CTH 8471 as ADPs. In support of his contention, the Ld. Advocate has submitted many copies of Bills-of-Entry where similar products by the same manufacturer with the latest configuration in new series of machines have been classified under CTH 8471 in various Custom Houses and Air Cargo Complexes.” The Tribunal further went on to note that these are imported from China and at the time of export, these are classified as computers being classified under Chapter Heading 8471. “Considering the differences that exist between video game console, video game machine and the imported product, we hold that the imported ‘Computer System Desktops’ are classifiable under CTH 8471 as automatic data processing machines. Consequently, we set aside the impugned order” the Bench concluded.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that on issuance of the Show Cause Notice (SCN) on a particular issue has been issued then no extended period can be invoked on the same issue for the subsequent period.
A Coram comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “it is clear that the issue has been raised earlier also by the Revenue therefore, the activity of the appellant was very much known to the department, hence, the department was not prevented to issue the show cause notice for the subsequent period within a normal time period. It is also noted that during the relevant period i.e. 2005 -2006, the board circular dated 31.10.1996 was in force and according to which the appellant was not required to pay the service tax being a sub-contractor.” Observing that the demand is clearly hit by limitation the Bench relied on the judgment in Nizam Sugars Factory vs. Collector of Central Excise, wherein it was held that once on a particular issue the show cause notice has been issued, on the same issue for the subsequent period no extended period can be invoked as demand for the extended period do not sustain being time bar.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed assessment and (Countervailing) CV duty paid on notebook computers u/s 4A of the Excise Act, 1944, thereby granting relief to M/s. Acer India Pvt Ltd, the respondent.
A Coram comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi C.S, Judicial Member observed that “The department has not doubted that the import is for sale to the RGKUT. This being so, the sale is not to an ultimate consumer and is only to institutional consumer. The view taken by the Commissioner (Appeals) that the assessment has to be made under normal transaction value under Section 4 is indeed legal and proper.”
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed re- adjudication for the imposition of service tax liability on goods transport agency service without verifying the certificate obtained from transporters.
A single-member bench comprising Ramesh Nair (Judicial) directed the adjudicating authority for re- adjudication while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service of construction of new buildings or civil structures is classifiable under the category of ‘works contract service’.
The two-member bench comprising Ramesh Nair(Judicial) and C.L Mahar (Technical) quashed the demand for service tax and held that the service of new construction or civil structure was classifiable under works contract service.
In a major relief to Adani Power Ltd, the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the Commissioner (Appeals) has power to remand matter to Adjudicating Authority u/s 35 A of Central Excise Act, 1962.
A Two-Member Bench of the Tribunal comprising observed that “In view of the above decision given by taking support of Gujarat High Court in the case of Associated Hotel Limited and Supreme Court Judgment in the case of Mil India Limited, the Commissioner (Appeals) indeed has power to remand the matter. Accordingly, there is no error in the impugned order to the extent the matter was remanded to the Adjudicating Authority.”
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the quashing of the demand of service tax on service of examining the ground of non-falling of service under ‘management or business consultant service.
The two-member bench comprising D.M Misra (Judicial) and Bhagya Devi (Technical) quashed the demand for service tax raised by the department and upheld the decision of the Commissioner (Appeals).
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the cost of material supplied free by the service recipient was includible in the gross value of works contract service.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held the demand raised was only under the category of commercial service which was not sustainable and held that the cost of material supplied free by the service recipient was includible in the gross value of works contract service.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service tax liability lies on the Indian Bank if any bank charges are paid by the Indian Bank to Foreign Banks in connection with any import or export of goods.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the demand for service tax and held that the assessee was not held to be liable for payment of service tax.
The Chennai bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that refund of the balance unutilised cenvat credit of sold factory is not allowable.
In light of the decision, a two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, member (technical) held that the refund can not be allowed. The appeal filed by the appellant is dismissed.
In a significant case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the demand for service tax. It was held that the income received by India Cements from the Board of Control for Cricket in India (BCCI) as a central right which was acquired through a franchise agreement is a revenue-sharing right.
A two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) observed that BCCI being the sole authority to manage the sport of cricket in India cannot be considered involved in business or commerce concerning the activity of developing infrastructure for such sport. “The income received by the appellant from Central rights is nothing but revenue sharing and not a consideration for services provided to BCCI-IPL.”, the bench held. While allowing the appeal, the CESTAT set aside the demand for Service Tax.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service of conducting examination falls under the category of business auxiliary service and was eligible to get exemption from service tax under exemption notification.
The two-member bench comprising D.M Misra (Judicial) and Bhagya Devi (Technical) upheld the decision made by the Commissioner (Appeals) while dismissing the appeal filed by the revenue.
In a significant case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax is leviable on reimbursement of advertisement charges in the absence of advertising agency services.
Following the decision, the two member bench comprising Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) set aside the impugned order and allowed the appeal with consequential benefits.
In a significant case, the Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that demand for an extended period is not sustainable when the entire service tax on outdoor catering with interest paid before the issue of Show Cause Notice (SCN). The decision was rendered on appeal challenging the impugned order passed by the Commissioner of Central Excise and Service Tax, which confirmed the demand of service tax amount to Rs. 55,66,971/- by invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and appropriated the whole amount paid by the appellant.
A two-member bench comprising Mr S S Garg, Member (Judicial), and Mr. P. Anjani Kumar, member (technical) observed that show cause notice was issued merely on audit objections and no suppression can be alleged merely on audit objections. The bench held that the appellants are not liable to pay penalties under Sections 77 & 78 and allowed the appeal of the appellant by setting aside the penalties on the appellant.
In the case of India Cements, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that amount received from the sale of tickets for cricket tournaments is not an exempted Service.
“The amount has been received by the appellant as the sale of a ticket for a cricket tournament which is not service, therefore, when it is not the service, it cannot be termed as service, and no service tax is required to be reversed. Further, for the period 201012, the appellant-assessee has also reversed the said amount, therefore, no demand is sustainable on that account.”, Ms Sulekha Beevi C S, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) held. Further observed that the explanation 3 to Rule 6(1) of the Cenvat Credit Rules, 2004 was amended vide notification No. 13/2016-C.E. (NT) dated 01.03.2016, wherein the “exempted service” was expanded to include “an activity which is not a service as defined under Section 65B (44) of the Finance Act, 1994” w.e.f.
01.04.2016, for which reversal of Cenvat credit is required. Hence, before this, there was no legal requirement legally binding an assessee to reverse Cenvat credit of inputs or inputs services taken on such activities which are not services under the scope of the said Finance Act, 1994.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax is payable by India Cements since the fees paid to foreign players as per contract to play in Indian Premier League.
It was a fundamental requirement that for rendering business support service, the service recipient should be an independent business entity and has to be in principal to principal relationship. From the terms of the contract with the players, the two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) that the appellant did not meet the ingredients required to fit into the category of business support services.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service received outside Special Economic Zone (SEZ) for business activities is eligible to claim a refund of service tax under the notification. The Court allowed the claim of refund claimed by the assessee.
A single-member bench comprising Ramesh Nair (Judicial) allowed the refund claim claimed by the assessee and held that the assessee was entitled to the refund in respect of all the services received by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication to the revenue for demanding the Customs Duty along with the enhancement value of imported aluminium powder. The Court held that the enhancement of the value of goods and raise of demand was without any speaking order.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) remanded the matter to the adjudicating authority for re-considering the assessment of the imported goods and held that the assessee was at liberty to furnish details of contemporaneous imports before the adjudicating authority who shall look into this evidence also and quashed the order passed by the Commissioner (Appeals).
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on the mediator acting as a broker dealing with all trading of advance license on the ground of unawareness of the assessee of fraudulently obtained license. The revenue stated that the assessee dealing with all trading of advance license which was forged or obtained fraudulently.
A single-member bench comprising Ramesh Nair (Judicial) held that the penalty imposed by the department was not sustainable and quashed 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 cannot be demanded merely based on differences in sales figures between balance sheets and excise returns. The Bench held that the mere difference between the balance sheet and excise returns was not enough to demand the excise duty.
The ”Two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) quashed the demand for excise duty made by the adjudicating authority while allowing the appeal filed by the assessee.
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