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 July 30 to August 5, 2022.
The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Chennai dismissed allegation of export duty evasion on samples sent for certification as finished goods on grounds of lack of evidence. P Dinesha, Judicial Member held that “The facts coupled with the fact that the Mahazar did not witness drawing of any samples, throws sufficient doubts about the allegation of switching of samples and, in any case, the Revenue has not explained anywhere as to the source of the sample which was sent to the CLRI for testing/report. Hence, the demand of confiscation apart from demand of duty liability and the various penalties levied on the appellants cannot sustain, since the very basis on which the case of the Revenue rests is not well founded.”
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi held Show Cause Notice as bad in law on the ground that the show cause notice issued by the officers of Directorate General of Central Excise Intelligence (DGCEI), who are not proper officers under Section 28(1) of the Customs Act. Anil Chaudhury, Judicial Member held that” In the facts and circumstances, I also hold that the show cause notice is bad as the same has been issued by the Officers of DGCEI, who are not the proper officer as required under Section 28(1)/28(4) of the Customs Act.”
The Customs Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi dismissed the appeal on the ground that pre-deposit cannot be waived for financial grounds. The bench consisting of Justice Dilip Gupta, President, and P V Subba Rao, Technical Member observed that “In the decision of the Delhi High Court in Dish TV India Limited vs. Union of India &Orswherein the requirement of pre-deposit under section 129E of the Customs Act, came up for consideration. The High Court held that when the Statue itself provided a wavier of pre-deposit to the extent of 90% or 92.5% of the duty amount and made it mandatory to deposit 7.5% or 10% of the duty amount, the Courts cannot waive this requirement of a deposit.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai allowed the provisional release of Dinesh Bhabootmal Salecha on depositing five crores in an iPhone smuggling case. The Bench consisting of C J Mathew, Technical Member, and Ajay Sharma, Judicial Member held that “the impugned order declining provisional release is modified to allow provisional release upon execution of bond for the value of impugned goods and furnishing revenue deposit of ₹ 5,00,00,000 not later than seven days of service of this order.”
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held penalty imposed not sustainable on the ground that demand of service tax on basis of TDS/26AS statements/3CD statements not sustainable. The Tribunal observed that “We find that Commissioner (Appeals) examined the respondents appeal against confirmation of demand and allowed the same mainly on the ground that income-tax return cannot be the basis for demanding Service Tax. Departmental authority at Jaipur has no jurisdiction to proceed against the respondent for demanding Service Tax without any evidence of taxable service being provided within their jurisdiction.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi presided by Mr. Anil Choudhary, Member (Judicial) has held that excise duty demand for clandestine removal based on third party evidence and quashed Demand for want of cross-examination. The Tribunal while allowing the appeal observed that third party record and the statement of the Director of M/s PIL cannot be used against the appellant both for non-joinder of the parties and also a failure on the part of Revenue to examine Mr. Pankaj Agarwal as its witness in the adjudication proceedings.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Allahabad held the demand of additional service tax invalid on the ground that service tax liability under the reverse-charge mechanism on rent-a-cab services. The bench consisting of Justice Dilip Gupta, President, and Raju, Technical Member held that “additional demand of service tax is claimed on the amount on which service tax has already been paid by the appellant. This demand has been computed by wrongly interpreting an internal ledger item.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has held that no central excise duty on freight charges paid for the transport of goods from factory premises to buyer’s premises. The Coram of Mr. Justice Dilip Gupta, President, and Mr. P.V. Subba Rao, Member (Technical) set aside the demand and held that “in terms of section 4 of the Central Excise Act, the value of the goods is the transaction value of the goods for delivery at the time and place of removal. The freight incurred from the place of removal to the buyer’s premises cannot, therefore, be includible in the assessable value”.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench, has quashed a service tax demand due to mismatch in the form 26AS and Service Tax returns considering the fact that the assessee has paid the service in the succeeding years. Quashing the demand and penalty, Mr. Anil Choudhary, Member (Judicial) observed that “I find that there is no case of short payment of service tax as the appellant has paid the service tax in the next financial year.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata has held that transportation services within mines constitute goods transport agency (GTA) services. The Tribunal by relying on the decision of the Supreme Court in Singh Transporters observed that the transport activities have been performed within the mining area of TSL, and the confirmation of demand for such activity by treating the same as mining service cannot be sustained. The Coram of Mr. P. K. Choudhary, Member(Judicial) and Mr. P. Anjani Kumar, Member(Technical) has held that “we are of the considered view that the transport charges cannot be included in the valuation for mining services and thus the order of the Ld. Adjudicating authority is correct in the eyes of law”.
The Customs, Excise, and Service Tax Appellate Tribunal (ITAT), Kolkata has held that blending, bottling, and packaging of Indian-made foreign liquor (IMFL) are not subject to service tax as ‘Business Auxiliary Service’. The Tribunal observed that in view of draft Circular F.No. 249/1/2006-CX.9, the Commissioner has held that the processes undertaken would not amount to a taxable service under the category of ‘Business Auxiliary Service’. The Tribunal further observed that the respondent acted throughout under the instruction and vigil of the service receivers for the production of IMFL. HTB has no control over the prices of IMFL products which is determined by the clients who are the actual owner of the IMFL products. HTB has raised bills of different charges/expenses such as bottling charges, manufacturing charges, etc. incurred by them for production of IMFL on behalf of clients and have been paid also.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that services relating to modernization, and renovation are input services and set-asides demand for Cenvat credit availed. The Tribunal observed that the expression ‘modernization, renovation or repairs of a factory’ was appearing in the definition of ‘input service’ both before and after 01.07.2012. It has not been denied by the department that the Coke Oven Project of the appellants was towards modernization and renovation of their existing plant/factory.
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