This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for service tax which was imposed on the marketing services on the ground of non-specific mentioning of service category in the show cause notice. The Bench held that the show cause notice does not have enough details about the service category which was not specific. The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the demand for service tax 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) quashed the denial of CENVAT credit of excise duty on the ground of genuine disclosure of the transporter’s copy of the invoice. The Bench granted relief to Tata Motors Limited by quashing the denial of the credit and also quashing the penalty and interest imposed on them.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) quashed the denial of the CENVAT credit of excise duty and allowed the credit to the assessee while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the redemption fine imposed for the confiscation of excess quantities of a master batch of the polypropylene woven sacks goods on the ground of the absence of satisfactory explanation on the part of the assessee.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) held that the explanation offered by the assessee was also not satisfactory and upheld the confiscation of the excess quantity of master batch and the redemption fine imposed in the impugned order.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty was allowable based on the original copy of the invoice if there was no dispute about receipts of goods in the factory under rule 57(G)(6) of the Central Excise Rules,1944.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) held that the denial of CENVAT credit in the impugned order was not sustainable and allowed the CENVAT credit while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that customs duty was leviable on twin vision scanners which were considered as a part of the data processing unit classifiable under the category of scanner products. The Bench held that the import of the goods by the assessee can be classified in the category of scanner products.
The two-member bench comprising Somesh Arora (Judicial) and Raju (Technical) held that the twin vision scanner can be classified in the category of scanner products while dismissing the appeal filed by the revenue.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty is allowable even when 5% of the value of exempted goods is reversed in terms of rule 6(3)(i) of the CENVAT Credit Rules,2004. The Court quashed the demand of excise duty raised on the ground of the assessee had violated the condition of notification.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the assessee by reversing 5% of the value of exempted goods in terms of Rule 6(3)(i) fulfilled the condition of Notification and the assessee are legally entitled to exemption Notification, thus the demand was not sustainable and quashed the demand.
In a significant case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)upheld the demand for service tax since the non-payment of service tax for broadcasting of SS Music and Sur Sangeeth Channel through sham document amounts to tax evasion.
A two-member bench comprising of Ms Sulekha Beevi C S, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) observed that the appellant had suppressed and misrepresented the facts of providing broadcasting service by deliberately declaring that they were undertaking only uplinking facility and also resorting to misclassification of the service as ‘BSS’ to evade payment of service tax. The appellant entered into back-to-back agreements with the above broadcasting companies for undertaking uplinking services and these broadcasting companies were also registered with the service tax authorities under the category of Broadcasting Service. These broadcasting companies (M/s.Fortune Media Pvt. Ltd. and M/s.Mindscape
showed that M/s.Fortune Media Pvt. Ltd. is owned and operated by the appellant itself and the agreement entered by the appellant contending that they provide uplinking services for the ‘SS Music’ channel is only a sham document. “The agreement entered by M/s.Coxswain Technologies Ltd. with M/s.Fortune Media Pvt. Ltd. and M/s.Mindscape Creations Pvt. Ltd. has to be considered as a sham document to cover up the ‘broadcasting service’ rendered by the appellant. Proceedings before quasi-judicial authority are not tied up in the heavy shackles of the Procedures and Evidence Act. The same should not be taken advantage of by parties to misrepresent facts and furnish fabricated and sham documents.”, the bench held. The CESTAT upheld the demand invoking an extended period and imposition of penalties and dismissed the appeal.
In a recent ruling, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that benefits of segregation can be allowed only if imported scrap contains impurities.
The two-member Coram comprising Raju, Member (Technical) and Somesh Arora, Member (Judicial that even the revenue believes that “honey grade” scrap also contains iron, steel, etc., as impurities and the circular dated 10.05.2016 was not produced before the original or first appellate authority and consequently there is no examination of the circular. Further held that “the original Adjudicating Authority will examine the applicability of the circular dated 10.05.2016, and any other circular issued on the subject to the remand directions given in the impugned order and decide the issue afresh.”
In a significant case, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that refund cannot be rejected when the assessee produced sufficient documents to prove payment of service tax.
A single member coram comprising Mr Pullela Nageswara Rao, Member (Technical) observed that the first appellate authority rejected the refund claim was that the appellants did not produce the documents namely invoices/bills evidencing that they have paid service tax through KINFRA and non-availment of Cenvat credit. Since the appellant produced sufficient documents to prove that they have paid the service tax and have not availed or passed on the Cenvat credit, the CESTAT set aside the impugned order and allowed the appeal.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not demandable under ‘auctioneer’ service’ on the commission received by the cooperative society in operative Marketing Society Limited.
A two-member bench comprising Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) set aside the imposition of penalty under Section 76 of the Finance Act, 1994. The CESTAT sustained the proportionate penalties on GTA service, imposed under Section 77(1)(a) and 77(2) for non-obtaining Service Tax Registration as stipulated under Section 69 and for non-furnishing of statutory ST-3 returns as required under Section 70 respectively. Shri M.N. Bharathi appeared for the appellant and Shri N. Satyanarayanan, Assistant Commissioner appeared for the respondent.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) issued an order on 9th August 2023 directing the members to Pass Detailed Order of Decisions Pronounced in Open Court within 3 weeks.
The order was in pursuance with the circular number F. No. 01(05)Circular/CESTAT/2023. Thus, it has made clear that the member should pass the detailed order as earliest, however, preferable 3 weeks. If it doesn’t pass within 2 weeks, the stenographer has to inform the CESTAT Members.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Charges received for supervising construction work for the allottees by Tamil Nadu(TN) Housing Board falls under Business Auxiliary Services and set aside the demand of Service Tax.
A two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) held that “unless a specific charge/service is alleged, put across in the Show Cause Notice and the scope of the services alleged to have been rendered by the appellant stands examined in the context of such service, mere allegation alone is not sufficient to fasten with tax liability.” The CESTAT set aside the demand of BAS in the impugned order.
In a significant case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 112(a) of the Customs Act, 1962 is not imposable in the absence of misdeclaration of brand or country of origin on import document.
A two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) viewed that the only reason for rejecting the transaction value is on account of noticing higher values of the contemporaneous imports. However, while determining a particular import to be considered as a contemporaneous import for enhancement, it is necessary to match all commercial-level details like quality, quantity, type whether under a contract, physical characteristics, brand, reputation, country of origin, time of import, stock lot sale, manufacturers sale, etc. Further observed that there was no allegation that the importerhas mis-declared the description of goods or whether any excess quantity was found or whether there is any mis-declaration of brand or country of origin or type or as to any other aspect about imported goods.
The CESTAT held that enhancement resorted to is not legally justified and so unsustainable. We also find that redemption fine and penalty imposed on the appellant are disproportionately high when compared to the declared value of the impugned goods at Rs.27,93,043/- which was enhanced to Rs.48,59,847/-. While allowing the appeal, the Tribunal set aside the impugned order.
The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that mere purity being equivalent to the purity of foreign gold is wrongly held to be criteria to hold melted gold as the gold of foreign origin.
A single-member bench comprising Dr Rachna Gupta, Member (Judicial) held that “since department, despite query raised, was unable to inform about any other proceedings/prosecution with respect to the said recovery of 5514.8 grams of gold, an intimation was given to the Chairman, Central Board of Indirect Taxes and Customs (CBIC) to enquire about the proceedings, and to take appropriate action about the recovery of that huge quantity of gold, if no action found taken. “
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the revocation of the Customs Broker License since it created financial distress for Customs Broker and upheld the forfeiture of the security deposit and penalty.
A two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) held that “the violation of the CBLR, 2013 though stands established, the revocation of Customs Broker Licence is too harsh a punishment and hence, the revocation is set aside considering the fact that the appellant’s Customs Broker Licence was suspended and so, was out of business for more than six and a half years. “ The CESTAT upheld the forfeiture of the security deposit as well as the penalty of Rs.50,000/- imposed by the adjudicating authority on the appellant and set aside the order of revocation. Further directed the Commissioner of Customs to restore the Customs Broker Licence.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Water charges collected by the Tamil Nadu Housing Board from tenements for the supply of water does not attract service tax under Management, Maintenance or Repair (MMR) service and directed to adjudication on the issue with the submission of the document.
The two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) remitted the issue to the file of the adjudicating authority for fresh consideration. The appellant, if so advised, can file the supporting documents before the lower authority.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the refund as the value of goods was assessed correctly and duty was paid. It was observed that the freight charges are included in the sale of goods on a Freight on Road(FOR) basis. If goods are ordered on FOR basis, the goods will be transported by road and the client does not need to pay the freight cost. The goods will be transported from the supplier to the client without any transportation charges.
A two-member bench comprising Shri Ashok Jindal, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the appellant has correctly assessed their goods and paid duty thereon in cash and rightly taken the refund thereof. The CESTAT set aside the impugned order and allowed the appeal with consequential relief.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that penalty under the customs act is not imposable when the misdeclaration of values of imported goods is not established conclusively.
A two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) held that “order of lower appellate authority is not required to be interfered with. As such, there is no need to discuss the confiscability of impugned goods. Neither there is any justification for the imposition of penalty when misdeclaration of the values of impugned goods is not established conclusively.”
R“One has to see the nature of the service in total. Segmenting the series of actions involved in the provision of a particular service, would result in ridiculous propositions.
A two-member bench comprising Mr S S Garg, Member (Judicial), Mr. p. Anjani Kumar, member (technical) observed that the Revenue has picked up some activities, from the bundle of services rendered by the appellants, in a convenient manner. “One has to see the nature of the service in total. Segmenting the series of actions involved in the provision of a particular service would result in ridiculous propositions.”, the CESTAT
viewed. Further viewed that “the Department has not viewed the service rendered by the appellants in a holistic manner, ignoring the very fact that the services rendered by the appellants are not complete just by loading of the goods on a vessel or on an aircraft. They go beyond.”
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacturer of chewing tobacco and unmanufactured tobacco is required to pay the compounded central excise duty for the periods during which manufacturing machines are in operation.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that one of the machines of the manufacturer was not engaged in the manufacture of notified goods for more than 15 days and the assessee is entitled to an abatement of the duty which had been deposited by them in advance at the beginning of the month.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no service tax leviable on the penalty or compensation for the breach of contract which was not a consideration for any service. The Bench held that when there was any consideration for any service it will be taxable under the prescribed law.
The two-member bench comprising S.K Mohanty (Judicial) and M.M Parthiban (Technical) held that the compensation for breach of contract was not a consideration for any service and the assessee was not liable to pay the service tax.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the abetment of central excise duty was allowable when the machines of the manufacturer were not engaged in the manufacturing of branded and unmanufactured tobacco for more than 15 days.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that since one machine of the assessee had not worked for 17 days and the assessee was legally entitled to a refund of the amount deposited by them in advance while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the penal interest and bouncing charge received as consideration from the borrower are leviable to service tax under section 66E(e ) of the Finance Act,1944. The Bench held that activity of appellants in tolerating the act of ‘default and non-payment and late payment in payment of EMI by the borrowers and customers and dishonor of payment instruments given by them towards repayment of loan installments’ as ‘Declared Service’ and taxable under the prescribed law.
The two-member bench comprising S.K Mohanty (Judicial) and M.M Parthiban (Technical) held that penal charges and bounce charges are like consideration for having agreed to tolerate an act or a situation and thus it was a declared service of ‘agreeing to tolerate an act or a situation’ and leviable to service tax.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax attracts when there is value addition and the presence of an element of service and upheld the demand for service tax on Rental service against Tamil Nadu Housing Board.
A two-member bench comprising of Mr P Dinesha, Member (Judicial)and Mr Vasa Seshagiri Rao, Member (Technical) held that the appellant cannot escape the Service Tax liability under the head of rental income and dismissed the appeal on this ground.
In a significant case, the Chandigarh Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on the amount collected by Cargo Handling firm from clients in India towards delivery order charges, customs duty since it does not fall under Business Auxiliary Service(BAS).
A two-member bench comprising Mr S S Garg, Member (Judicial), and Mr. P. Anjani Kumar, member (technical) observed that “the legal fiction of treating a service rendered outside India to be a service rendered in India cannot be introduced by way of rules. That too would partake the character of an essential legislative function, which cannot be delegated to the Central Government. Such service cannot be brought to tax without amending Section 64(3) of the Finance Act.” While allowing the appeal, the CESTAT set aside the demand of service tax on the amount collected by cargo handling firms from clients in India confirmed vide the impugned order.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is payable on bill discounting under banking and other financial services (BFS)only when service is rendered by the banking company. The two-member bench Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) upheld the order and dismissed the appeal.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand of service tax in respect of the amount collected as bouncing of cheques on the ground of the penal nature of amount and are not towards consideration for any service and granted relief to the Bajaj Finance.
The two-member bench comprising S.K Mohanty (Judicial) and M.M Parthiban (Technical) quashed the demand of service tax on the assessee on the ground of the penal nature of the amount received by the assessee from the borrowers.
The High Court of Madhya Pradesh has imposed a cost of Rs.25,000 on the importer for concealing crucial information regarding the final confiscation order passed by the Customs Excise and Service Tax Appellate Tribunal (CESTAT).
In result, the division bench comprising Justice Vivek Rusia and Justice Pranay Verma dismissed the writ petition and posed a cost of Rs. 25,000 on the petitioner for failing to disclose the final order of confiscation during the filing of the petition. The cost was directed to be deposited with the M.P. State Legal Services Authority.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax is not leviable on composite contracts for the maintenance and repair of vehicles which entails both the supply of goods and services before the period of 01.07.2012.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) held that the composite contracts for repair and maintenance of motor vehicles are leviable to service tax from 01.07.2012 onwards and the assessee was not liable to pay the service tax while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re- adjudication to the adjudication authority for the imposition of demand for service tax for the use of JCB and Tractors on the rental basis which falls under the service of supply of tangible goods for use without verifying relevant documents.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Judicial) quashed the demand for service tax for the use of JCB and tractors on a rental basis and directed re-adjudication to the adjudication authority.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the metal finishing chemical or electroplating salts fall under the category of ‘consumables’ and are entitled to benefit of exemption under exemption notification.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the demand of Central Excise Duty while allowing the appeal filed by the assessee.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed for revocation of permission granted for operating as ship chandlers on the ground of non-violation of section 89 of the Customs Act,1962.
The two-member bench comprising P. A Augustian (Judicial) and R.Bhagya Devu (Technical) quashed the penalty imposed for revocation of permission granted for operating as ship chandlers while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax is leviable on the sale of vehicles subjected to Value Added Tax (VAT).
The Tribunal in a similar case held that “even in the worse situation in various cases where the parts and components were used in repair and maintenance of motor vehicle even then merely because the part so used in repairs and maintenance were separately billed and VAT was paid thereon, the Tribunal held that on the value of such parts, though used for repair and maintenance service of the vehicle will not be liable to service tax as the same was suffered VAT.” “When there is sale of goods and VAT is paid no service tax can be demanded. In the present case, it is undisputed that the element i.e. amount towards Handling and Forwarding charges, the appellant has shown as part of the sale value of the goods and VAT was paid”, the two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) held.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the benefit for exemption from excise duty not applicable to goods in respect of which the CENVAT credit of duty on inputs was already taken under the provisions of CENVAT credit rules.
The two-member bench comprising Sulekha Beevi C.S (Judicial) and Vasa Seshagiri Rao(Technical) upheld the order passed by the Commissioner (Appeals) while dismissing the appeal filed by the department.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service performed by the foreign service provider outside India was not liable to pay service tax on a reverse charge basis.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the order passed by the Commissioner while allowing the appeal filed by the assessee.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that commercial and industrial construction services are exempted from service tax under the exemption notification.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee.
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