This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
The Chennai bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the Commissioner of G.S.T. and Central Excise (the respondent) was not justified in issuing an order for levying Service Tax as Johnson Lifts Pvt Ltd (the appellants) had paid value added tax (VAT).
The two-member bench consisting of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) followed the decision by the Supreme Court and held that the impugned order could not be sustained and allowed the appeal with consequential benefits if any was available as per law.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded the issue regarding the appeal filed by the Municipal Council, Gidderbaha (the Appellant) against the order by the Commissioner of GST & Central Excise, Ludhiana (the Respondent) as non-payment of mandatory pre-deposit cannot be the sole reason for dismissal of the appeal.
The bench consisting of S. S. Garg (Judicial Member) after hearing both sides held that “I find that the Commissioner (Appeals) has entertained the appeal without raising the objection of mandatory pre-deposit and the appeal was listed for hearing on merits and it was heard on merits and thereafter the Commissioner (Appeals) has wrongly rejected the appeal for non-compliance of Section 35F”. The bench further stated that the Commissioner (Appeals) had not bothered to obtain the report from the lower authority with regard to the deposit. Therefore, the order passed by the Commissioner (Appeal) was set aside and the matter was remanded back to the Commissioner (Appeals). The Commissioner was further directed to dispose of the matter within three months.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal allowed the appeal by the Punjab Cricket Association (PCA) for exemption of service tax for the Club or Association like services rendered by them to its members as the Commissioner of Central Excise (CCE) (the respondent) could not provide sufficient evidence to support their arguments.for providing services to its members and in the view of the fact that the PCA was registered under the Society
The two-member bench consisting of S.S. Garg (Judicial Member) and P. Anjani Kumar, after hearing both sides held that the Revenue had not adduced any evidence to demonstrate that the PCA had collected the charges .Registration Act, the PCA are not liable to pay service tax under the heading “Club or Association Service”. Therefore, the impugned order was set aside and the appeal was allowed.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by K. Natrajan (the Appellant) against the penalty imposed on him by the Commissioner of Customs, Chennai (the Respondent) for importing Chinese phones, as the grounds for the penalty could not be established.
The two-member bench consisting of Sulekha Beevi C.S (Judicial Member) and Vasa Seshagagiri Rao (Technical Member) supported the findings of K. Natrajan and held that Natrajan had only assisted in filing the documents on behalf of the importer as required of a CHA Firm and not in personal capacity. The bench further held that as there was no allegation that Natrajan had committed any act in helping the import of the illegal goods, the penalty imposed was not warranted or justified and the appeal was allowed.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Cenvat Credit can be utilized for payment of excise duty either on finished goods or indigenous inputs.
A single member bench comprising Mr. Ramesh Nair,Member (Judicial) held that “the cenvat credit can be utilized for payment of excise duty either on the finished goods or on the indigenous inputs. However, in case of imported inputs the additional duty of custom has to be paid in cash and not by debiting cenvat credit account in terms of Rule 3 of CCR, 2004.” “(i)In case of imported inputs/raw material, the additional duty of custom shall be paid from cash and not from cenvat credit. (ii)In case of duty liability on indigenous raw material and finished goods, since the duty is of excise the same shall be paid from cenvat account. (iii)In case of payment of duty in cash as against the debit in cenvat account already made, the appellant is at liberty to recredit the same in their cenvat account and approach the department for refund in cash in terms of Section 142 of CGST Act and the same shall be disposed of in accordance with law.”, the Tribunal held. The CESTAT set aside the impugned order and allowed the appeal by way of remand to the Adjudicating Authority.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that merely classifying services under an incorrect head does not amount to fraud or suppression of fact.fraud or collusion or willful misstatement or suppression of facts.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed that “Mere omission or merely classifying its services under an incorrect head does not amount to extended period of limitation.”
In the case of Larsen & Toubro dated 20 August, 2015, prior to which there was no clear ruling that services which involved supply or deemed supply of goods could only be classified under Works Contract Service. Therefore, demand is time barred and, therefore, cannot sustain. The CESTAT set aside the impugned order and allowed the appeal.
The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no direction to treat period of interest starting after 3 months from date of filing refund, denial of interest on refund of cenvat credit not legal.
A single member bench comprising Shri Anil Choudhary, Member (Judicial) that since there is clear direction by the Commissioner (Appeals) to pay interest and there was further direction to treat the period of interest starting after three months from the date of filing of refund claim i.e. 9.5.2019, the denial of interest subsequently by the Adjudicating Authority is highly illegal a While allowing the appeal, the impugned order is set aside and the Adjudicating Authority is directed to grant the interest starting from 9th August, 2019 till the date of disbursement i.e. 30th December, 2020.
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable under commercial or industrial construction service for construction service based on work contracts before 1.06 .2007.
Since there is no evidence to suggest that the service rendered by the appellant was not under works contract and the two-member bench comprising Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) held that there is no liability to pay tax under “Commercial or Industrial Construction Service” during the period under dispute which is before 01.06.2007. The CESTAT set aside the order and allowed the appeal.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai bench has quashed the recovery of Central Value Added Tax (CENVAT) credit from ACC Limited, an Input Service Distributor (ISD).
The single bench of Dr. Suvendu Kumar Pati (Judicial Member) affirmed that Rule 14 of the CENVAT Credit Rules, 2004 can only be applied against the manufacturer, service provider or the entity that availed the allegedly sustainable in law. Moreover, the bench noted that the disputed credits in question were admissible. In result, the bench allowed the appeals and set aside the order passed by the Commissioner of GST & Central Excise (Appeals-Thane), Mumbai granting consequential relief, if any clarifying that Rule 14 of the CENVAT Credit Rules, 2004 cannot be invoked against ISDs.
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that cenvat credit is allowable on inputs used for fabrication of capital goods for plant and machinery.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “The Appellant have maintained proper records and have declared the Cenvat credit taken and/or availed regularly in the returns filed with the Department. Thus, there is no case of any concealment, mis-statement or fraud on the part of the Appellant/assessee.” “We further find that as regards the capital goods fabricated out of the inputs, there is no allegation that such capital goods have been sourced from any other manufacturer by the Appellant/ assessee. We further find that under the facts and circumstances, the court below failed to consider the eligibility of Cenvat credit disputed as inputs, as defined in rule 2(K) of CCR” the Bench concluded.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that service tax is demand not leviable on unauthenticated data as there was failure in the part of Investigating Officers to comply with conditions of Section 36B of the Central Excise Act, 1944 (CEA).
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “Electronic records being more susceptible to tempering, alteration, transposition, excision etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. The provisions of Section 65B of Indian Evidence Act and Section 36B of Central Excise Act, 1944 of the Act are pari-materia. It is evident from the panchanama, and the appeals records that the investigating officer had failed to follow the safeguard as mandated under Section36B of the Act.” “In the present matter the investigating officers failed to comply with the conditions of Section36B of the Act in respect to relying upon this computer printout. In view of the above we hold that service tax demand based on such unauthenticated data is not sustainable and hence are set aside” the Bench concluded.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on erection, commissioning and installation of windmills as there was consistent declaration of services under works contract.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “Since the appellant consistently declared the services under ‘works contract’ and paid tax accordingly, we are of the opinion that the impugned orders reclassifying the impugned service under erection, commissioning and installation cannot sustain and resultantly, the same are set aside.”
The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by Niterra India Private Limited, formerly known as NGK Spark Plugs Pvt. Ltd (the Appellant) against the order by The Commissioner of Central Excise, Delhi (the respondent) demanding the Cenvat Credit availed by NGK Sparkplugs Pvt Ltd with interest and penalty under section 11AC of the Central Excise Act, 1944.
The two member bench consisting of S.S Garg (Judicial Member) and P. Anjani Kumar (Technical Member) heard both sides and supported the submissions made on behalf of the company and held that the credit availed by the company could not be denied as their activities can be classified as Input Services in relation to the business activity of the company and the appeal was allowed.
The Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that upgrading existing plants can be considered Input Services under Cenvat Credit Rules, 2004 (CCR) and allowed appeal by General Motors Pvt Ltd (the Appellant) against order by the Adjudicating Authority confirming the order issued by The Commissioner of Central Excise (CCE), Vadodara (the Respondent)merit which was reversed by the appellant is maintained, without expressing any view on merit.” And the appeal was allowed.
The two member bench consisting of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) after hearing both sides supported the submissions made on behalf of the company and held that, “From the definition of input service under Rule 2(l) before and after 01.04.2011, the services in relation to modernization, renovation and repairs of factory premises was clearly covered under the inclusion part of the definition” and allowed the Cenvat Credit claim regarding construction services. The bench further held that, “The credit on insurance for staff/ directors is admissible input service. However, the appellant have admittedly reversed the Cenvat credit in respect of insurance service for the period post 01.04.2011. Accordingly, the demand of Cenvat credit on insurance service which was reversed by the appellant is maintained, without expressing any view on
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the benefit of excise duty exemption allowable on molasses captively consumed for the manufacture of rectified spirit and quashed the duty demand.
A two-member bench comprising Ms Sulekha Beevi C.S, Member (Judicial) and Mr Vasa Seshagiri Rao, Member(Technical) in light of the judgement held set aside the impugned order and allowed the Appeal.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Waiver of Penalty under section 80 of the Finance Act, 1994 allowable in the absence of Evidence Establishing Suppression of fact with Intention to Evade Tax.
A two-member bench comprising Mr. Ashok Jindal, Member (Judicial) and Mr. K. Anpazhakan, Member (Technical) observed that “if the Appellant has any intention to evade payment of tax, they could not have declared more tax liability than what was demanded in the Notice, on their own volition. Thus, we hold that there is suppression of fact with an intention to evade payment of tax has been not established in this case.
Accordingly, we observe that it is a fit case to invoke the provisions of Section 80 of the Finance Act, 1994 and waive the penalty and we do the same.”
The Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) directed re-adjudication as the Live Consignment was pending without Justiciable Reason.
A two-member bench comprising Mr. P. K. Choudhary, Member (Judicial) and. Mr. Rajeev Tandon, Member (Technical) observed that the live consignment is pending with the Department and there are no justifiable reasons recorded on merits in the matter. Further noted that besides incurring detention and other charges, any delay in the matter is only adding to the loss of prestige and credibility before the foreign buyer. As there is no appropriate order passed by the Department on merits, the CESTAT remanded the aforesaid matter to the Jurisdictional Commissioner of Customs concerned with a direction that the case of the appellant assessee exporter be disposed of within 10 days from the date of receipt of the Order. The appeal was allowed by way of remand for a fresh decision in the matter.
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the transaction value of silk yarn can’t be rejected without cogent reason and set aside the demand of excise duty on the enhanced value.
A two-member bench comprising Ms Sulekha Beevi C.S., Member (Judicial) and Shri Vasa Seshagiri Rao Kumar, Member (Technical) observed that there aren’t any proper reasons given by the department to reject the transaction value. It was also not brought out in evidence as to the comparison of the various parameters about quality, and quantity of the goods imported. “Merely because the value declared for the goods in a single Bill of Entry dated 25.11.2010 is 28 USD, the department has rejected the transaction value. It is not established that the commercial parameters as to the quality, quantity, and manufacturer are similar.”, bench viewed. The CESTAT held that “the demand of duty, confiscation, imposition of redemption fine and penalty imposed cannot sustain and requires to be set aside, which we hereby do.”
The Delhi bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the demand for excise duty on Waste rubber granules beyond the period of normal limitation is not valid.
A two-member Mr. Justice Dilip Gupta, President and Mr. P V Subba Rao, Member (Technical) observed that “If differential duty was chargeable but was not paid and it is later discovered by audit and it gets time-barred under Section 11A, the responsibility for it rests squarely on the officers mandated to scrutinize the returns in time and raise a demand in time.” Since the entire demand is beyond the normal period of limitation, the CESTAT set aside the demand in the impugned order and allowed the appeal.
The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a rebate is not allowable without proving the correlation between exported services and Foreign Inward Remittance Certificate (FIRC). The CESTAT remanded the matter to the original authority with a direction not to raise any other issue and examine receipt of convertible foreign exchange against individual invoices or set of invoices covered by the rebate claim and if such foreign exchange is received, then to that extent to allow the rebate.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that excess amount paid in service tax can be adjusted against short payment in Education Cess/Secondary and Higher Education (SHE) Cess.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that excess amount paid in service tax can be adjusted against the short payment in Education Cess/SHE Cess. After adjustment, there was a short payment of Rs.8.95.160/- only in the month of January 2008, which has already paid by the Appellant. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and noted that the utilization of Cenvat Credit for payment of service tax on ‘import of service’ is valid.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that the utilization of Cevat Credit for payment of service tax on ‘import of service’ by the Appellant is legally tenable. Accordingly, we hold that the impugned order confirming the demand on this count is not sustainable.” The Bench further noted that an ‘Explanation’ has been added to Rule 3(4)(e) of the Cenvat Credit Rules, 2004, w.e.f.01.07.2012, to the effect that Cenvat credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient. Thus, it is amply clear that there was no such restriction in the Cenvat Credit Rules, 2004, prior to 01.07.2012. The period involved in the present dispute is 2009, which is prior to insertion of the Explanation to Rule 3(4)(e) w.e.f., 1.7.2012.
The Mumbai bench of the Customs Excise & service tax appellate tribunal(CESTAT) has held that service tax is not leviable on volume discounts/incentives received from media owners at end of Financial year for publication purpose.
A two member bench of Dr. Suvendu Kumar Pati, Member (Judicial) and Mr. Anil G. Shakkarwar, Member (Technical) held that any reward/incentive or discount received as an expression of gratitude or generosity is held consistently as not taxable.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the exemption of Customs Duty allowable as per Project Import Regulations when application for registration of Contract Prior to import of goods.
The CESTAT held that “the benefit of Project Import Regulations, 1986 may be extended to goods imported by them through Chennai port, as all the essential documents were submitted prior to the date of filing of Bill of contract vide letter dated 25.08.2010 which is much before the import of goods at Chennai port.” Further viewed that the appellant having made an application for the registration of the contract prior to import of goods and sponsorship letter having been issued, therfore the appellant is eligible for the exemption of duty as per the Project Import Regulations.
In the case of import of old and used worn clothing articles which restricted item as per Foreign Trade Policy, the Kolkata bench of the Customs Excise & service tax appellate tribunal(CESTAT) has dismissed the enhancement of the redemption fine.
In light of the observation of Tribunal in the case of Venus Traders Vs. Commissioner of Customs (Import), two member bench of MR. R. Muralidhar, Member (Judicial) and MR. Rajeev Tandon, Member (Technical) held that “the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld.” While dismissing the appeal, the CESTAT upheld the impugned order and the same are upheld.
As a relief to Renault Nissan Automotive India, the Chennai bench of the Customs Excise & service tax appellate tribunal(CESTAT) ruled that refund claim cannot be rejected for not opting provisional assessment.
A two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, member (technical) observed that the authorities below have not analysed the issue in the correct legal prospective for which the matter requires to be remanded to the adjudicating authority. The CESTAT set aside the impugned order and the matter is remanded to the adjudicating authority who shall consider the observations of this order and process the refund-claim denovo.
The Kolkata bench of the Customs Excise & service tax appellate tribunal(CESTAT) confirmed the penalty and redemption fine as the exact description and quantity of imported old used worn clothes not determined since no 100% examination of all containers was done at the time of clearance of goods.
A two member bench of Mr. R. Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) held that the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld.
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) remanded matter for determining value verification of prices of actually sold goods not possible in absence of evidence.
A two member bench comprising Mr C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) observed that “even though the asseese contended that values of earlier imports are clearly ascertainable, no details were furnished to the adjudicating authority or now before us. It would only be appropriate for such evidence to be furnished and for the adjudicating authority to cause verification of prices at which these were actually sold.” The CESTAT set aside the impugned order and direct fresh adjudication in the light of submissions made on behalf of appellant before us. The matter is remanded to the original authority for re- determination on the facts pertaining to earlier imports to be furnished by the appellant.
The Kolkata Bench Of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that reversal of Cenvat Credit on Naphtha sent for Job Work for electricity generation is not tenable.
The two member bench of P.K. Chaudhary (Judicial Member) and K. Anpazhakan (Technical Member) observed that both ‘RFG’ and ‘CLS’ were generated on cracking of Naphtha and were sent to M/s. HPLCL for generation of electricity and steam with an intention to bring back electricity and steam for use in the manufacture of final products. In light of the decision of the Tribunal in Maharashtra Aldehydes & Chemicalscase wherein the duty demand on the intermediate product cleared under Rule 4(5)(a) of the CCR was dropped. Since the issue is squarely covered in favour of the Appellant by the decision of the Tribunal in the Appellant’s own case,the CESTAT allowed the appeal of the Appellant on merits.
The Chandigarh bench of the Customs Excise & Service Tax Appellate Tribunal(CESTAT) has held that mere failure to declare does not amount to willful suppression and set aside the demand of excise duty as it was without suppression of fact.
It was settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. The CESTAT held that the entire demand is barred by limitation and set aside the impugned order by allowing the appeal of the appellant.
In a recent case, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the value of ‘cut and polished diamonds’ determined by the Trade Advisory Panel as it was inconsistent with Customs Valuation Rules, 2007.
It was observed that the value adopted in the impugned order has not been shown to lack the impediments enumerated in rule 9(2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is essential as the reasons that prompted the ‘trade advisory panel’ to arrive at the disputed values is not on record.
While setting aside the impugned order, the two member bench comprising Mr C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) held that “the re- determination of value is not in accordance with the law. As the penal consequences arise from confiscation based on illusory foundation, the detriment to the individual appellants lack authority of law.”
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