T]his yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the longer period of limitation not available when the entire information on service tax liability is in the knowledge of the Revenue.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “The appellant has maintained proper books of accounts in the normal course of business. It is pertinent to note that the entire case of the department on merit is that since appellant have availed Cenvat Credit, they violated the condition of abatement notification No. 01/2006-ST. As discussed above the facts that availment of Cenvat Credit and payment of Service Tax on the abated value were declared in the ST-3 return.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), set aside order of Commissioner of Customs (Appeals) for not serving Order-in-Original under Section 153 of the Customs Act, 1962.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and P Dinesha, Judicial Member observed that “We have to conclude that the provisions of Section 153 of the Customs Act, 1962 are not complied with in these appeals as proof of receipt of these orders by the appellant could not be produced by the Revenue, though entries in the dispatch register evidenced dispatch of the impugned Orders-in-Original.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that third party inspection charges are not includable in assessable/transaction value of goods and thereby quashed the excise duty demand.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “The appellant is not otherwise involved in the said third party inspection. It is only for the convenience purpose of the customer, the appellant coordinates such third party inspection for which the payment for such third-party inspection is though initially paid by the appellant but subsequently and finally incurred by the customer. Therefore, in this fact, in our considered view, the third party inspection charges cannot be included in the assessable value/ transaction value of the excisable final product i.e. transformers manufactured by the appellant.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the demand for extended period not sustainable on no suppression of fact or malafied intention to evade payment of service tax.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “since there is no suppuration of fact or malafied intention to evade payment of service tax, demand for the extended period shall not be sustainable also on the ground of limitation. Therefore we set aside the demand not only on merit but also on limitation for the period which is beyond normal period of limitation.”
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax is not leviable on arranging and conducting station camps and other programs for educational purposes.
The two-member bench consisting Ramesh Nair (Judicial member) and C.L. Mahar (Technical member) after considering the submissions from the revenue stated that the activities provided by the National Edu Venture Institution is nothing but outdoor educational activities and outdoor games and activities are very much part of curriculum of education.
The bench further stated that in the present era all educational institution does not have in house facility to provide extra curriculum of education therefore they outsource to get the best possible result in low cost.Outsourcing such activities do not cease to be educational activity. Therefore, the activities carried by the National Edu Venture Institution is related to education and is not leviable for service tax.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) service tax is not demandable on GTA service in absence of over charges other than actual freight charges.
It was viewed that the first appellate authority has accepted the fact that the appellant had only collected the freight charges which were merely reimbursement and without any margin. The Two member coram 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.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax demand issued for one year period beyond the date of the Show Cause Notice is not valid.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed that in the case of Service Tax liability on the sub-contractor demand for the extended period cannot be sustained in the light of the larger bench judgment in the case of M/s Melange developers Pvt. Ltd. The CESTAT held that the entire demand being issued for an extended period i.e. beyond one year from the date of show cause notice shall not sustain on limitation alone and set aside the impugned order while allowing the appeal.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed excise duty exemption to pre laminated bagasse board and observed that no compulsion should be given to opt for notification which has higher duty liability.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “However, we note that there is no dispute that the appellant is manufacturing bagasse board which is covered by Sl. No. 82 of Notification No. 6/2006. No evidence and reason have been produced by the department regarding the dispute that as to why the product manufactured by the respondent cannot be called as bagasse board.”
In a major relief to M/s. Vedanta Ltd, the appellant, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the rebate sanctioned on exported anode slime and that excise duty demand not is not sustainable.
A Two-Member Becnch comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “From the facts narrated above, it can be seen that the Board vide Circular dated 14.07.2015 has clarified that duty is payable on anode slime. Being so, the rebate sanctioned in regard to anode slime exported is legal and proper. The demand confirmed by the adjudicating authority cannot sustain and requires to be set aside, which we hereby do.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit on sugar cess paid on import of raw sugar and noted that Section 11D of the Central Excise Tariff Act, 1985 (CETA), can be invoked only if excise duty is collected.
A Two-Member Bench comprising of Raju, Technical Member and Somesh Arora, Judicial Member observed that “In view of the forgoing and also the fact that Section 11D can be invoked only if duty is collected, but not paid, whereas in the instant case, same was paid from accumulated CENVAT Credit, we find the case of department has no legs to stand. Further, when levy i.e. Sugar Cess in this case has not been done away with, but has only been exempted vide Notification No. S.O. 102 (E), dated, 07.01.2009 by Ministry of Consumer Affairs, party always has the right to avail or not to avail exemption, as per the trite law relied upon by appellants.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the suspension of registration as authorized courier on observing that there is no role of courier service in smuggling gold.
A Two Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “The appellant has cooperated with the investigation so as to bring out the truth. On appreciation of the evidence, we do not find grounds to hold that the appellant had played any role in the incident. In such circumstances, the order of revocation of the license cannot be sustained and requires to be set aside.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that once the License authority having been satisfied about fulfilment of export obligation, the Customs authorities are bound to accept it.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member relied on the judgment of the Bombay High Court in Bhilwara Spinners v. Union of India, wherein it was held that “Once the licencing authority has found that the licencing conditions have been fulfilled, it would not be open to the customs authorities too contend that the imports under the licence are contrary to law and take action against the licence holder.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), imposed penalty of Rs 10 lakhs for smuggling gold and observed that a person who causes to make, sign or use any declaration or document liable under Section 114AA of Customs Act, 1962.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “On investigations, it was revealed that there is no such person in the given address. These are nothing but paper transactions. The imports were made only for the benefit of appellants and their allies. A person who causes to be made, signed or used any declaration or document is also liable under Section 114AA of Customs Act.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered fresh adjudication as there was willingness to pay excise duty as per normal process of debonding at the time of exit from Export Oriented Units (EOU) scheme.
The Tribunal of M Ajit Kumar, Technical Member observed that “The appellant has showed his willingness to pay the duty as per the normal process of debonding at the time of exit from EOU scheme. Hence, I feel that in the light of the development the matter needs to be remanded to the adjudicating authority to examine the facts and decide all the issues raised by the appellant regarding depreciation, destruction of obsolete goods etc. and arrive at the duty payable along with interest, afresh.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that extended period of limitation cannot be invoked unless there is evidence of fraud or collusion or wilful misstatement.
The Bench noted that intentional and wilful suppression of facts cannot be presumed because (a) the appellant was operating under self-assessment or (b) because the appellant did not agree with the audit and claimed that CENVAT credit was admissible; or (c) because the appellant did not seek any clarification from the Revenue; or (d) because the officer did not conduct a detailed scrutiny of the Returns and the availment of CENVAT credit which is alleged to be inadmissible and was discovered only during audit.
In a major relief to M/s. Fourrts (India) Laboratories P. Ltd, the appellant, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that physician samples are to be assessed under Section 4 (1) (a) of Central Excise Act, 1944.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “Similar view was taken in the case of Meghdoot Chemicals Ltd. After considering the facts, and following the above decisions, we are of the considered view that the demand cannot sustain. The impugned orders are set aside.”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that Customs Broker cannot be held responsible for exporters found non-existent during subsequent verification.
A Two-Member Bench comprising R Muralidhar, Judicial Member and Rajeev Tandon, Technical Member observed that “The responsibility of the Customs Broker as held by judicial bodies does not require then to maintain vigil and continuous surveillance on the client to ensure that they continue to operate from the address as given in the various KYC documents and in case of change as such get the documents amended. “The Customs Broker has not failed in discharging his responsibilities under Regulation 10(n) of CBLR, 2018 Under the circumstances, the Customs Broker cannot be held responsible for the exporters found to not exist during subsequent verification undertaken, by the officers or there has been unrealized IGST, availed of by the untraceable exporters.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the manufacturing of drugs like tetracycline, and neocycline are exempted from excise duty and does not fall under Business Auxiliary Service (BAS).
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed that the Revenue while demanding the service tax also took support from the exemption Notification No. 08/2005-ST contending that since the appellant’s manufacturing activity is exempted from excise duty, the exemption Notification No. 08/2005- ST is also not available. “The activity does not fall under the definition of business auxiliary service since the same is excisable manufacturing activity in terms of Section 2 (f) of Central Excise Act, 1944 the Notification 08/2005 – ST is irrelevant in the present case. It is noteworthy that the said notification is only relevant when the service is taxable under Finance Act, 1994 which is not the case here as per our above discussion.”, the CESTAT held.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that penalty for service tax evasion under Section 76 and 78 of The Finance Act cannot be imposed simultaneously.
The two-member bench consisting of Ramesh Nair (Judicial member) and CL Mahar (Technical member) after considering the submissions made by AR and the grounds of appeal and penalties stated that as regard for the first ground of appeal, MD Engineers have provided manpower but when as per contract if they were supposed to provide manpower service then the activity is clearly qualified as Manpower Requirement and Supply Agency Service. Therefore, the demand by the CCE is sustainable.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and observed that activity of fabrication of tugs and barges out of raw material not to be classified under Manpower Recruitment or Supply Agency Service.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We also find that appellant have also argued that from 01.03.2011, Central Excise duty was levied on the manufacturing of tugs and barges and the appellants have started paying excise duty on the same activity. This further reinforce the claim of the appellant that the activity of fabrication of barges is a manufacturing activity and the appellant are indeed a manufacturer. If the contention of the Revenue is assumed to be correct then the appellant cannot be treated as manufacturer but in such case, their client shall be held as manufacturer which is not a case here.”
A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench observed that the payment for manufacturing activities undertaken on job work basis is not Manpower Recruitment or Supply Agency Service.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CK Mahar, Technical Member observed that “it can be seen that even though manpower was deployed by the service provider but the job is for specific activity such as manufacture, processing etc. and charges is paid on the basis of job and not on the basis of manpower, the activity was held not to be classifiable under Manpower Recruitment or Supply Agency Service. The ratio of the above judgments is directly applicable in the facts of the present case.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted customs duty exemption and observed that Inference as to certificate of origin cannot be merely drawn from bill of lading.
A Two Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We find that the department, when made an allegation about the country of origin did not follow the procedure prescribed under Rule 9 of Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and Malaysia) Rules 2011. Therefore, merely on the basis of the bill of lading whereby, it was inferred that the goods were originated from China cannot be accepted.”
The Bangalore Bench of the Customs, Excise and Service Tax (CESTAT), imposed customs duty demand and held that second-hand goods are restricted for import under Foreign Trade Policy.
A Two-Member Bench comprising Dr DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “The items imported were also found to be used ETL Liners which are categorised as second- hand goods fall under the category of restricted items. As per Para 2.17 of the Foreign Trade Policy, all second- hand goods are restricted for import and by importing used ETL liners, the importer had violated the provisions of Foreign Trade Policy thereby rendering the goods liable for confiscation.
In a major relief to M/s Reebok India Company, the appellant the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that technical know-how not registered in India cannot be taxable in India under the head of Intellectual Property Rights (IPR).
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Memberbobserved that “We find that the taxability of technical know-how, at the hands of Indian companies receiving the same from overseas entities, was subject matter of various judgments of the Tribunal. Tribunal has been taken a consistent stand that transferring of technical know-how cannot be equated to transfer of Intellectual Property Right and that as long as the said Intellectual Property Rights not registered or patented in India.”
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Management, Maintenance and Repair (MMR) Service will be Treated as Exempted Service When the Service Provider did not Receive full Convertible Foreign Exchange within the Time Period Provided under Statute.
A two-member bench comprising Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) observed that it is not as though there was a serious error for which reason the certificate of the chartered accountant was not considered. Coming to a conclusion based on assumptions and presumptions is not proper. The CESTAT while remanding the matter for re-adjudication, directed the authority to follow the principles of natural justice by affording reasonable opportunities to the appellant to produce necessary documents and evidence in support of their stand and the appellant shall also cooperate with the adjudicating authority without seeking unnecessary adjournments. The appeal is allowed by way of remand.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in the case of JSW Steel Limited has held that permitting expansion of manufacturing facilities and complying with process design of supplier technology does not result in the manufacture of export gas and set aside the excise duty demand.
A two-member bench comprising Justice Dilip Gupta, president and Ms.R Bhagya Devi, Member (Technical) observed that Top gas is refused and has not been manufactured. Merely because impurities have to be removed to comply with the conditions set out in the letter granting permission to the appellant to ensure the protection of the environment, the refuse will not change its character and will continue to be refused. It cannot be urged that a new product having a distinct name would emerge after removal of impurities and the product will continue to be refused.
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Loading and unloading of Goods at a Port are classifiable under Cargo Handling Service since the appellant has been paying service tax on the same service under cargo handling service and discharged the service tax.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that the appellant’s service is correctly classifiable under cargo handling service as claimed by the appellant and not under manpower recruitment or supply agency service as alleged by the Revenue.
In a recent case, the Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that denial of cenvat credit merely on non – non-registration/delayed registration as ISD is not valid.
A two-member bench comprising Mr. Ashok Jindal, Member (Judicial) and Mr. K Anpazhakan, Member (Technical) observed that the Central Board of Excise and Customs has issued Circular No. 1063/2/2018-CX dated 16.02.2018, wherein the various decisions of the High Court have been accepted to reduce litigation and dispose of the cases on similar questions of law or identical case on facts pending with the department.
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that transaction of vessels/vehicles to customers with right of possession and effective control is not liable to service tax under the category of “Supply of tangible goods for use” service as VAT Paid to State Government.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that the appellant has discharged the VAT liability considering the same as a ‘deemed sale’ under the provisions of Gujarat Value Added Tax Act, 2003, hence no service tax can be demanded on the said transaction. Further viewed that since the appellant has admittedly paid the VAT to the state VAT department, the transaction is not liable to service tax under the category of “Supply of tangible goods for use” service. The CESTAT set aside the impugned and allowed the appeal.
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Job Fabrication service does not fall under the category of Manpower Recruitment or Supply Agency Service and set aside the demand of Service tax.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that since the demand was not raised under ‘Business Auxiliary service’, the demand will not sustain for this reason alone. The appellant submitted that their service recipient is paying excise duty on their final product for this reason the appellant’s activity is otherwise exempted under Notification No. 08/ 2005-ST.
In a recent judgement, the Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal( CETSTAT) has held that conversion from DEPB scheme to another scheme under section 149 of the Customs Act, 1962 is allowable.
A coram comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) observed that the request for conversion was made within six months from the date of export whereas under Circular No.
36/2010 conversion is allowed if the request for the same is filed within three months from the date of let export order. Further viewed that the said condition of the prescribed time limit of three months has been set aside by various courts including the Jurisdictional High Court of Punjab and Haryana in the case of Commissioner of Customs Vs. Mrs Bectors Food Specialities Ltd. It was observed that in many judgements the court allowed the conversion from one scheme to another scheme under Section 149 of the Customs Act, 1962 and by relying on that the CESTAT set aside the impugned order.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai has held that pre-2007 construction services provided to the Tamil Nadu Police Housing Corporation Limited (TNPHCL) should be classified as “Composite Works Contract” rather than “Construction of Residential Complex Service” and hence Service Tax shall not be levied on these services.
The two-member bench comprising M Ajit Kumar (Technical Member) and P Dinesha (Judicial Member) concluded that the period in question, being prior to June 1, 2007 and the nature of the services provided is a works contract, Service Tax should not be demanded for the construction contracts executed during this time.
The bench, quoting the Supreme Court’s observation that the Finance Act, 1994 referred to taxable services as “service contracts simpliciter” without including composite works contracts, held that the order of the Commissioner (Appeals) could not be sustained.
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