This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan from 15 December 2024 to 19 December 2024.
The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on Hyva (India) Pvt. Ltd. under Section 11AC of the Central Excise Act, 1944 citing that the appellant had voluntarily paid the differential excise duty along with applicable interest before the issuance of a show-cause notice (SCN) and had informed the Central Excise Department
The tribunal explained that Section 11A(2) of the Central Excise Act, 1944 prevents the issuance of a show-cause notice for penalty when the duty and interest have already been paid before its issuance. The tribunal ruled that the penalty imposition under Section 11AC of the Central Excise Act was unwarranted and set aside the penalty demand. The assessee’s appeal was allowed.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) imposed a penalty of Rs. 5,000 on the Customs Broker (CB) for failing to personally verify client documents and credentials which violated Regulation 10(e) of the Customs Brokers Licensing Regulations (CBLR), 2018.
The tribunal observed delays in completing the inquiry and criticized the process for taking over two years and the tribunal imposed a reduced penalty of Rs. 5,000 for failure to exercise due diligence under Regulation 10(e) and set aside license revocation and forfeiture of the security deposit.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the suspension order of the appellant’s Customs Broker (CB) license citing non-fulfillment of the procedural requirements under Regulation 17 of the Customs Brokers Licensing Regulations (CBLR), 2018.
The tribunal referenced the CBIC’s Instruction No. 24/2023 which explained that immediate suspension should only be invoked in urgent cases supported by proper reasoning and evidence.
The tribunal found that the Customs authorities acted without providing substantial evidence linking the appellant to the overvaluation of export goods. With that said, the tribunal set aside the suspension order and directed the Customs Commissioner to fully complete the inquiry proceedings under Regulation 17 within six months.
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled in favor of Coca-Cola Beverages and held that the extended limitation period under Section 11A of the Central Excise Act, 1944, could not be invoked in this case as the company had properly maintained its books of accounts.
The CESTAT comprising S. K. Mohanty ( Judicial Member ) and M. M. Parthiban ( Technical Member ) did not find any merit in the impugned order concerning the part in which the revenue passed the order by invocation of the limitation period.
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that no customs duty is applicable on the importation of pregnancy test kits, as these kits utilize “agglutinating sera” as their active component.
Also based on test reports from AIIMS Biochemistry Lab and National Institute of Immunology, the tribunal held that the goods indeed contained agglutinating sera as the main component. The tribunal upheld the Commissioner’s classification and dismissed the department’s appeal.
In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the bank can claim Cenvat credit on the service tax paid for deposit insurance premium to the Deposit Insurance and Credit Guarantee Corporation ( DICGC ).
The bench comprising Anil G. Shakkarwar ( Judicial Member ) and Ajay Sharma ( Judicial Member ) also relied on several judgements involving South Indian Bank and Bank of America, etc., and set aside the orders of the lower authorities and allowed the appeals filed by the assessee.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) clarified that a redemption fine is applicable for the re-export of goods deemed “prohibited” under the Foreign Trade Policy ( FTP ) but the tribunal reduced the fine from Rs. 3 crore to Rs. 5 lakh citing the original amount as “a bit excessive”.
While acknowledging the cited cases, the tribunal observed that the importers were guilty of importing goods classified as “prohibited” under the Foreign Trade Policy ( FTP ), making them liable for absolute confiscation. So, the tribunal confirmed the imposition of a redemption fine but it deemed the original fine of Rs. 3 crore to be excessive and arbitrary and reduced it to RS. 5 Lakhs.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter concerning the Excise Department’s disallowance of CENVAT credit distribution to a unit exclusively manufacturing exempted goods citing the need for verification of records to ensure the accuracy of the credit allocation.
So, the tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision specifically directing the verification of records for the period May 2006 to February 2007, and directed the original authority to grant a personal hearing during the fresh adjudication. The appellant’s appeal was allowed.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the timelines prescribed under the Customs Brokers Licensing Regulations, 2018, cannot be treated as a “directory” unless negligence or delay on the part of the customs broker is conclusively proven. The tribunal rejected the licensing authority’s justification of procedural delays due to officer transfers.
So, the tribunal set aside the Principal Commissioner’s order to revoke the license, forfeiture of the security deposit, and penalty. The Custom Broker’s appeal was allowed.
