This weekly round-up analytically summarizes the key stories of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reported at taxscan.in, from April 20, 2024 to May 3, 2024.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the service tax demand and held that the value of services provided free of cost to engineers and staff of service provider is not includable in gross amount charged.
A Two-Member Bench of Ramesh Nair, Judicial Member and CL Mahar, Technical Member relied on the judgment of the Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Limited vs. UOI has held that “The quantification of the value of the service can therefore never exceed the gross amount charged by the service provider for the service provided by him. Even if the rule has been made under Section 94 of the Act which provides for delegated legislation and authorises the Central Government to make rules by notification in the official gazette, such rules can only be made “for carrying out the provisions of this Chapter” i.e. Chapter V of the Act which provides for the levy, quantification and collection of the service tax.”
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) dismissed revenue appeal as the expenses incurred by the petitioner was included in the gross transaction value which has already suffered service tax.
A Two-Member Bench of DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “In the Review Order, only the statutory principle of law has been reiterated and no evidence has been adduced to negate the specific findings of the adjudicating authority holding that the service tax on all these expenses, by including the same in the gross transaction value has been discharged by the respondent. In the result, the impugned order is upheld and the Revenue’s appeal being devoid of merit, accordingly dismissed.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed to submit relevant documents in the matter concerning exemption under threshold limit of exemption for small scale service providers.
A Single Member Bench of Binu Tamta, Judicial Member observed that “Normally, the present appeal needs to be rejected considering the conduct of the appellant in not submitting the required documents at any stage, however with all fairness and in the interest of justice, I feel that an opportunity to produce all the relevant documents in support of the submissions made, needs to be granted to the appellant.” “The appellant is once again directed to produce the VCES-2 and VCES-3 as the burden of proof is on the appellant. The appellant may also produce the documents in support of his submissions that he is exempted under the threshold limit of exemption for small scale service providers and that the services rendered by them are classifiable as ‘works contract services’ where discharge of 50% of service tax liability under reverse charge by JVVNL is in consonance with the notification” the Tribunal noted.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand as the agreement between service provider and recipient not for supply of man power.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member relied on the judgment in Dhanashree Enterprise vs CCE Pune-I, wherein it was observed that “We find from the show cause notice that though the department has proposed the service of the appellant as classifiable under Manpower Recruitment or Supply Agency service but no evidence was adduced to conclusively hold that the service is of Manpower Recruitment or Supply Agency service. The figure of the service tax was retrieved from the bank account which does not show what is the basis of the service charge by the appellant to the service recipient. Therefore, we do not find any material evidence in the show-cause notice to hold that the appellant are providing Manpower Recruitment or Supply Agency service.”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods transportation documents would not absolve liability that inputs against which credits availed were not valid.
A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical) observed that “This being so, we have got no hesitation to come to the conclusion that goods were imported in sealed condition, taken to M/s. J.G. Spices Ltd., Meghalaya and kept therein also in sealed conditions and again returned back to different traders including the Appellant in sealed conditions affixing transit permit, railway freight invoices and in the process additional Excise Duty which was VAT component of State’s tax collected by Union and Central Excise duty both were realized at both the points by the supplier and purchasers respectively causing loss to the State exchequer.”
The Allahabad bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that Transporters/contract Services in mines cannot be GTA in the absence of a consignment note and service Tax not leviable. The tribunal found that the essential requirement is the issuance of consignment notes to be covered under the definition of GTA and in the absence of the same, the transporters/contractors rendering transport services in mines cannot be said to be GTA.
A two-member bench of Mr P K Choudhry, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) held that the demand of Service Tax confirmed in the impugned order cannot sustain and set aside the same.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that an extended period of limitation under the Excise Act cannot be invoked when the assesee disclosed credit availed in monthly ER-1 returns.
A two-member bench of Dr D M Misra, Member ( Judicial ) and Mrs R Bhagya Devi, Member ( Technical ) found that the duty paid by a 100% EOU is an Excise duty, though the measure adopted in computing the Excise duty is aggregate applicable duties of Customs, payable by a 100% EOU; it cannot be the criteria, in determining the nature of duty.
The Ahmedabad Bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded matter to Commissioner as the necessary documents were provided to cross examine Government approved valuer on SHIS ( Status Holder Incentive Scheme ).
A Two-Member Bench comprising observed that “We hold that all necessary documents have been provided to the appellant. In the interest of justice, we give one last opportunity to the appellant to cross-examine Shri N J Lalwani. From the record, it is apparent that there was a deliberate delay on the part of the appellant to cross-examine the Shri N J Lalwani. The reasons why shri N J Lalwani change his strance will be helpful in reaching proper conclusion in this case. In this background, in the interest of justice we set aside the order and remand the matter back to the Commissioner. The commissioner will give two dates for cross-examination of Shri N J Lalwani and the appellant can avail any one of the dates.”
The New Delhi Bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the benefit under drawback and Rebate of State and Central Taxes and Levies ( ROSCTL ) scheme cannot be denied due to procedural lapse as under the Central Board of Excise and Customs ( CBEC ) Circular.
A Two-Member Bench comprising Binu Tamta, Member ( Judicial ) and P.V. Subba Rao, Member (Technical) observed that “In the facts of the present case, we find that the export goods is not in dispute and therefore, the entitlement of the appellant to claim the benefit under the scheme is clearly admissible and the same cannot be denied on account of any procedural lapse as provided in the circular. We also find that the examination level of Drawback Scheme and that of Drawback along with ROSCTL Scheme is the same and therefore, there is no reason to deny the benefit of the scheme.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand thereby holding that heavy water attracts nil rate of duty and hence are classifiable as excisable goods.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We take note of the fact that the consideration which were received by the appellant were for operating the Heavy Water plant and production of Heavy Water which was the main activity and the other activities carried out by the appellant were incidental to the main activity and are undertaken for smooth functioning of Heavy Water plant. We find that the appellant has acted in operation and maintenance of Heavy Water plant for generation of Heavy Water which falls under CETH 28.45 Central Excise Tariff Act, 1985 and attracts nil rate of duty.”
In a recent case, the Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held the assessee eligible for the refund of Service Tax which was rejected on the ground of limitation. The government extended the time limit to file refund claims of service tax on exported goods. It was viewed that the beneficial notification can be applied retrospectively to allow the refund applications filed within six months from the quarter ending.
A two-member bench of Shri Ashok Jindal, Member ( Judicial ) and Shri K Anpazhakan, Member ( Technical ) observed that the Government has realized the difficulty of the exporters and issued Notification No.32/2008-ST dated 18.11.2008 extending the period for filing the refund claim from “60 days” to “six months”. It was viewed that this beneficial notification can be applied retrospectively to allow the refund applications filed within six months from the quarter ending.
The Ahmedabad bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that nutrition/dietary supplements attract Integrated Goods and Service Tax ( IGST ) at rate of 18 %. The Tribunal viewed that the appellants have correctly declared their goods under Serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) which attracts 18% of IGST.
A two-member bench of Mr Ramesh Nair , Member (Judicial) and Mr Raju Member, (Technical) viewed that the appellants have correctly declared their goods under Serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) which attracts 18% of IGST. Therefore, the impugned order is not sustainable. While allowing the appeal, the Tribunal set aside the impugned order. Shri Pramod Kedia, Chartered Accountant appeared for the Appellant and Shri Rajesh Nathan, Assistant Commissioner (AR) appeared for the Respondent.
The Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that the excise duty is not applicable on imported Zinc Oxide used in manufacturers of Pre-Calcined Ferrite Power ( Spray Dried ) ( PCFP ). The Tribunal viewed that the benefit of Notification No.25/1999-Cus dated 28.02.1999 as amended by Notification No.26/2002-Cus dated 01.03.2002 exempts Basic Customs Duty on imported Zinc Oxide which has been used in the manufacture of PCFP.
A two-member bench of Shri Ashok Jindal, Member( Judicial ) and Shri K Anpazhakan, Member( Technical ) held that the appellant is entitled to claim the benefit of Notification No.25/1999-Cus dated 28.02.1999 as amended by Notification No.26/2002-Cus dated 01.03.2002, which exempts Basic Customs Duty on imported Zinc Oxide which has been used in the manufacture of PCFP.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Hyderabad Bench held that the Adjudicating Authority lacks jurisdiction when no show cause notice ( SCN ) is issued under Section 124 of the Customs Act, 1962.
A Single Bench of Anil Choudhary, Judicial Member observed that “I further find that the impugned order is vitiated for lack of jurisdiction, which is a primary requirement and I hold that the Adjudicating Authority lacks jurisdiction to pass the order, as admittedly no SCN was served in accordance with section 124 of the Customs Act.”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand and held that the technical assistance for manufacture of aircraft and engines is not IPR-Services.
It is undisputed that the aforesaid activity of repairs and maintenance was carried out within the jurisdiction of India and therefore was liable for tax under Section 65(105)(zzg) as “management, maintenance or repair” service and was liable for payment of duty in terms of Rule 3(1)(ii) of the Export of Services Rules, 2005. The Commissioner vide the impugned order has categorically held that the provision of service having took place in India, there is a breach of Rule 6A of the Service Tax Rules, 1994 and Rule 3(1)(ii) of the Export of Services Rules, 2005. To this extent, we are fairly in agreement with the findings of the Commissioner on the aspect” the Tribunal noted.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no service tax is leviable on online ticketing platform under support of Book My Show not receiving consideration from the card companies.
A Two-Member Bench comprising Anil G. Shakkarwar, Member (Technical) and Dr. Suvendu Kumar Pati, Member (Judicial) observed that “As per the agreement, card companies were required to reimburse the appellant all the amounts that were being offered by the card companies to their customers through the ticket booking platform. Appellant had entered into agreements with cinema houses for payment of tickets booked through their platform. For booking of tickets through their platform, appellant collected convenience fee and paid service tax on the same.”
The Ahmedabad bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held domestic manufacturers cannot be expected to comply with conditions that are required to be imposed on importers and set aside the demand of duty alleging wrongful availment of exemption.
A division bench of Mr Ramesh Nair, Member ( Judicial ) and Mr C L Mahar, Member ( Technical ) held that the Appellant are eligible for exemption under Central Excise Notification under Notification No. 12/2012 –CE upon fulfilling all conditions stipulated therein, thus sufficiently establishing that the goods dealt with by the Appellants qualify for exemption.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the remunerations paid to directors are not “commission’ under the service tax category.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju Technical Member observed that “We also consider the submissions made by the Learned Counsel with regards to clarification issued by the Central Board of Excise and Customs vide Circular No. 115/09/2009 – ST dated 31.07.2009 that states that the remunerations paid to such Directors would not be considered “commission’ as envisaged under Service tax category.”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that construction is not taxable under Section 65(105)(zzzza) of the Finance Act, 1994 for building not used for commerce or industry.
A Two-Member Bench comprising Justice Dilip Gupta, President and CJ Mathew, Technical Member observed that “It is not possible to accept this finding recorded by the Commissioner as the words ‘primarily for commerce or industry’ obviously mean that the renovation or restoration has to be mainly for the purpose of commerce or industry. If the building is not used primarily for commerce or industry, the construction would not be taxable under section 65(105)(zzzza) of the Finance Act.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded matter in the question regarding work of site formation and erection of windmills not ‘commercial and industrial construction service’.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case we are of the considered view that the main issue is with respect to classification of the services provided by the Appellant under appropriate head. The Appellant’s claim is that they have carried out the work of site formation and erection of windmills and by that reason will not fall under the category of ‘commercial and industrial construction service’.”
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the benefit of cenvat credit cannot be availed for anyone outside India.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “It is not in dispute that the goods have been imported and therefore were manufactured outside India. The CENVAT Credit Rules, 2004 or CENVAT Credit Rules, 2002 are framed under the Central Excise Act, 1944. This Act applies to the whole of India but not beyond. When the Central Excise Act itself does not extend outside India, neither will the CENVAT Credit Rules. Therefore, it is impossible for anyone outside India to avail the benefit of CENVAT credit. Therefore, in respect of imports, it is impossible that the condition of CENVAT credit not being availed is not fulfilled.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that remelted zinc classifiable as zinc alloy and customs duty is leviable at 7.5%.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We observe that there was no foul in the department’s reliance on the test reports in furtherance of ascertaining the classification of the goods in dispute. Therefore, the adjudicating authority was not wrong in re-classifying the disputed goods under CTH 7901 20 90. The classification of the goods by the Department is proper and needs no interference. The judgments cited by the Appellant in support of their claims are based on facts and circumstances entirely different from that in the present case therefore cannot be relied upon.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that confirmation of differential duty not proposed in show cause notice ( SCN ) cannot be sustained.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member observed that “Moreover in present case, the allegation raised in the Show Cause Notice is that the appellant has wrongly availed benefit of Notification 21/2002 Cus at serial no. 357B (ii) in regard to BCD. There is no mention of wrong availment of CVD under Notification No.6/2006. However, the impugned order has denied the exemption of CVD available @ serial no. 59 (i) of Central Excise Notification No. 6/2006. The argument of the Counsel that the impugned order has travelled beyond the scope of the Show Cause Notice is not without substance. The confirmation of the differential duty which has not been proposed in the Show Cause Notice cannot be sustained. For this reason also the demand of differential duty cannot sustain.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed excise duty demand as the burden of differential duty not passed on to customer.
A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “After the differential duty was paid and after the customer declined to pay the differential duty, the appellant had written it off in its books of accounts as certified by the Chartered Accountant. Thus, we have no manner of doubt and that the appellant had borne the burden of the differential duty and had not passed it on to its customer or to anyone. Thus, the appellant’s case falls squarely under Clause (e) of the third proviso to section 11B of the Central Excise Act, 1944, i.e., the duty of excise and interest paid on such duty were borne by the appellant manufacturer and it had not passed on the incidence of such duty and interest to any other person.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that cenvat credit can be availed when input and input services received up to place of removal of manufactured goods.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It can be seen from the above definition of the place of removal that if the goods are actually sold to an independent buyer from depot of the consignment agent, the place of removal of the excisable goods will be such premises of the consignment agent or depot of the manufacturer. We are of the view that since all the cost incurred up to the place of removal will be integral part of the price and therefore, all the input and input services which are received up to the place of removal of the manufactured goods, the assessee becomes entitled for credit of the same as per the provisions of the CENVAT Credit Rules.”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that no confiscation can be made on taking prior permission from the customs department for storage of non-bonded goods in bonded warehouse.
A Two-Member Bench comprising SK Mohanty, Judicial Member and MM Parthiban, Technical Member observed that “In view of the statutory provisions regarding the warehoused goods and the instructions issued by the CBEC, it is amply clear that movement of goods within the bonded warehouse is permissible, subject to the condition that such activities should be within the knowledge of the department and necessary approval for such activities should be obtained by the warehouse licensee. In the present case, as discussed herein above, it is amply clear that the appellants have complied with such statutory provisions in carrying out the activities within the warehousing station(s). Therefore, it cannot be said that the goods dealt with by the appellants are liable for confiscation and accordingly, the appellants cannot be exposed to penal consequences provided under the statute.”
The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) dismissed an appeal regarding the conversion of shipping bills from the Drawback Scheme to the Advance License Scheme after availing Drawback benefits. The decision highlights the intricacies of export promotion schemes and the importance of adherence to prescribed procedures.
In result, the single bench of Mr. Somesh Arora (Judicial Member) dismissed the appeal affirming the principle that once benefits under a particular export scheme have been availed, conversion to another scheme cannot be permitted, in line with Circular No. 36/2010-Cus and relevant legal precedents.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has overturned a penalty imposed under Section 114(ii) of the Customs Act, 1962, on an exporter for allegedly attempting to export semi-finished leather disguised as finished leather.
In result, the two-member bench comprising Ms. Sulekha Beevi C.S. (Judicial Member) and Mr. Vasa Seshagiri Rao (Technical Member) ruled in favour of the appellant, setting aside the penalty of Rs. 70,000/- imposed under Section 114(ii) of the Customs Act, 1962 along with consequential reliefs, if any. However, the bench upheld the redemption fine of Rs. 70,000/-. The ruling highlights the importance of intention and cooperation in cases involving alleged customs violations, emphasising that penalties should be commensurate with the offence committed and the intent behind it.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) ruled that services provided to recipients outside India, with payment received in foreign exchange, qualify as exports and are exempt from service tax. The decision marks a significant victory for businesses engaged in providing services to overseas clients.
The two-member bench comprising Mr. Ramesh Nair (Judicial Member) and Mr. Raju (Technical Member) referred to its previous ruling in the appellant’s case, where it had held that services provided to recipients outside India and payment received in foreign exchange qualified as exports under Rule 3(1) of the Export of Service Rules, 2005, and were exempt from service tax.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has overturned a demand for Service Tax levied solely based on disparities between ST-3 Returns and Trial Balance figures. The judgment highlighted the fundamental principle that the burden of proving tax evasion rests squarely on the revenue authorities.
In result, the single bench of Ms. Hemambika R. Priya (Technical Member) set aside the impugned order and allowed the appeal filed by M/s. South Eastern Coalfields Limited.
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