This weekly round-up analytically summarizes the key stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the previous week from July1 to July8, 2022.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai held that No Service Tax on Ocean Freight Charges under the head Business Auxiliary Service.The Bench consisting of Sulekha Beevi C.S., Judicial Member and P. Anjani Kumar, Technical Member observed that “This issue has been considered in various decisions of the Tribunal wherein the Tribunal has held that ocean freight charges are not subject to levy of Service Tax under Business Support Services or Business Auxiliary Services.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that extended limitation claimed by the department is not valid in the absence of suppression of fact by the duty payer.As there was no suppression of fact with intent to evade payment of duty on the part of the appellant the Tribunal observed that the demand for the period 15.04.2004 to February 2008 was raised by the show cause notice dated 06.04.2009 and the entire demand was hit by limitation as it was prior to the normal period of one year.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai has set asides an order for recovery of duty since no evidence, other than conjecture about the conspiracy to disassemble branded products.The Tribunal observed that the goods have been imported, and presented, separately and independently; no evidence, other than conjecture about the conspiracy to disassemble branded products. No judicial decisions approve the contrived combining of separate imports in circumstances of lack of evidence of admitted conspiracy. There is nothing on record to demonstrate that each, or all, of these actions, before arrival in India, or presumed as intended to be undertaken after clearance, are in breach of any provision of the Customs Act, 1962.
While deleting a penalty against Customs Broker, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Delhi bench has held that the Regulations does not mandate that the Customs Broker shall physical verify the address of the Client and such verification based on the Government documents including GSTIN was sufficient and any omission on the part of the Client to amend such address on the Government document cannot be attributed to the Customs Broker.
While allowing cenvat credit on account of C&F Agent service, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that such services are C&F Agent service is “input service” for the purpose of Rule 2(l) of Cenvat Credit Rules, 2004.CESTAT reversed the order of the department and held that “Accordingly, I am of the view that the C&F Agent Service is admissible input service in the terms of Rule 2(l) of Cenvate Credit Rules, 2004. Hence, the impugned order is set-aside and the appeal is allowed.”
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai hold the revaluation of goods not subject to BIS specifications invalid as the value adopted is arbitrary and a violation of natural justice.The Bench consisting of Sulekha Beevi C.S., Judicial Member, and P. Anjani Kumar, Technical Member held that “Valuation of the goods was made in an arbitrary manner without giving any cogent reasons whatsoever. The lower authorities have also not adhered to the principles of natural justice. The revaluation of goods was done at the back of the importer. Though the original authority cursorily states that he has gone through the various sequential Customs Rules for valuation, there is no evidence to that effect to indicate such diligent application of rules by the lower authorities. The reason for the rejection of the declared value is also not brought out clearly. The value adopted was arbitrary on the basis of the report claimed to have been submitted by SIIB. Thus, we find that revaluation of goods by the lower authorities do not show any application of own mind.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) New Delhi has held that deeper tariff concessions under Customs Notification are available unconditionally to all goods under tariff heading 851190 imported from the Association of Southeast Asian Nations (ASEAN) countries.The Coram of Mr. Justice Dilip Gupta, President Hon’ble Mr. P.V. Subba Rao, Member (Technical) has held that “the appeal is partly rejected by upholding the classification of the imported goods and partly allowed by allowing the benefit of notification no. 46/2011-cus (S.No. 1335). The impugned order is modified accordingly and the matter is remanded to the original authority for re-determining the duty liability accordingly”.
Customs, Excise & Service Tax Appellate Tribunal New Delhi has upheld the Department order as the proposed transactional value was expressly accepted by the importer.The Tribunal further observed that the Commissioner (Appeals) completely failed to advert to the crucial aspect that the importers had themselves in writing accepted the enhanced value. The respondent is not justified in asserting that the transaction value has been determined based on NIDB data as it was their acceptance of the value that formed the basis for the determination of the value.
In a relief to taxpayers who are waiting for the refund of balance in the personal ledger account (PLA) after the introduction of GST, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the balance amount maintained in PLA is not in the nature of “excise duty” and therefore, the limitation under the provisions of section 11B of the Central Excise Act, 1944 is not applicable.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench in the issue of misdeclaration of the country of origin to evade Anti-Dumping Duty (ADD) had quashed customs penalty without evidence.Mr. Ramesh Nair, Member (Judicial), and Mr. Raju, Member (Technical)by relying on the decision in Amrit Foods V. Commissionerhave held that “the impugned order to the extent it is against the present appellants is not sustainable, hence the same is set aside”.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai directed Assessing Officer to grant deduction adjustment made by CA in revised form No.29B while computing revised book profits u/s.115JB is in order.Hence, the adjustment made by the statutory auditor in the revised form No.29B while computing revised book profits u/s.115JB of the Act is in order. Accordingly, we direct the ld. AO to grant deduction of Rs.5,51,89,912/- while computing book profits u/s.115JB of the Act. Accordingly, the grounds raised by the assessee are allowed.”
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that Central Value Added Tax (CENVAT) credit cannot be denied on free warranty service through third parties.The Coram of Mr. Ramesh Nair, Member (Judicial), and Mr. Raju, Member (Technical) has held that the issue was finally settled based on the Tribunal’s decision in the appellant’s case and set aside the impugned order.
Department bound to accept description of goods in import documents and sale invoice to be same, on statement issued by Statutory Authority (Chartered Accountant), so was held by the Customs, Excise and Service Tax Appellate Tribunal, Mumbai.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai allowed refund on the ground that payment of CVD (Countervailing Duty) and SAD (Special Additional Duty) for imports made prior to 30. 06.2017.Sulekha Beevi, Judicial Member said “After appreciating the facts and evidence as well as applying the principles of law laid in the above decisions, I am of the view that the rejection of refund claims cannot be justified.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad set aside demand of duty on the ground that buyer’s premises is not included under place of removal under the Central Excise Act.Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is seen that the above decision of Hon’ble Apex Court covers all the aspects of this issue, holds that the buyer’s premises cannot, in law, be a “place of removal” under Section 4. In this matrix of facts, the decision of Commissioner holding buyer’s premises as “place of removal” cannot be upheld. The impugned order upholding the demand of duty is therefore set aside. Since the demand of duty is set aside, the demand of interest as well as penalty cannot be sustained.”
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has quashed a demand for excise duty holding that the empty packaging drums of cenvatable input are “non-excisable goods” for the purpose of the Excise law.Allowing the claim of the appellants, the Tribunal observed that “From the above judgment it can be seen that the very identical issue has been considered and categorically held that empty packaging material of cenvatable input is not liable for payment either as excise duty or as cenvat credit under Rule 6(3) of Cenvat Credit Rules, 2004. Considering the above judgment, I hold that the appellant is not liable to make any payment on clearance on empty drums. Hence, the impugned order is set aside, appeal is allow.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) New Delhi, while deleting a penalty order, held that the Company involved in manufacturing and clearing dutiable goods can claim cenvat credit of service tax payable under reverse charge mechanism.After hearing both the sides the Tribunal came to the conclusion that the Company involved in manufacturing and clearing dutiable goods can claim cenvat credit of service tax payable under reverse charge mechanism and set aside penalty imposed on Appellant Company. The penalty imposed was found to be excessive and hence reduced to Rs 5000/-.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai held that providing trained manpower to overseas customers is not an intermediary and allowed refund claims under the provision of CENVAT Credit.Dr Suvendu Kumar Pati, Judicial Member viewed that the Appellant was not an intermediary since it provided trained manpower to its overseas customer who recruited them and engaged them in the ship owned by others through a separate Ship Management agreement and held that the appellant was entitled to get the refund of CENVAT credit claimed.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai bench held that penalty for reversed credit after a claim of loss received from insurance company is not sustainable. In light of precedent Justice Dilip Gupta, president Mr C J Mathew, Member (technical) viewed that loss in transit was not includible for computation of ‘assessable value’; conversely, inclusion therein implies higher value per unit and consequent absorption of higher liability of tax and allowed the appeal by setting aside the impugned order.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench held that malafide misclassification of goods to evade duty and upheld the penalty and confiscation.Mr Ajay Sharma, member (judicial) observed that the appellant had misclassified the goods to evade payment of appropriate Custom duty and are liable for confiscation under Section 111(m) of the Customs Act, 1962. The Tribunal upheld the penalty under Section 112(a) and dismissed the appeal filed by the appellant.
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