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 August 13 to August 19, 2022.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata allowed Cenvat Credit on the ground that the Construction and works contract used for the renovation of an existing factory is Input Service. The bench consisting of P K Choudhary, Judicial Member, and P Anjani Kumar, Technical Member relied on the judgment in Ion Exchange (I) Ltd. Vs. Commissioner of C. Ex., Cus. & S.T., Surat-IIand held that “harmonious reading of the inclusive part of the definition and the exclusion clause mentioned at clause (a) relating to construction service of the definition of ‘input service’, it is clear that the construction service relating to modernization, renovation and repair of the factory continued to be within the meaning of ‘input service’ and accordingly, the Service Tax paid on such service is eligible to credit.”
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad bench has held that the demand for service tax by simply relying on income tax returns & profit and loss accounts is not sustainable.The Tribunal observed that taxability as a goods transport agency arises when the person provides services in ‘relation tothe transport of goods by road and issues consignment notes. In the instant case, the appellant is not an agent who books for transportation of goods by road by a goods carriage. It is the one who arranges for the transportation of goods through own trucks/trucks taken from the market.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that the contract of supply of goods can’t be classifiable under ‘Commercial or Industrial Construction’ and demand of service tax is not sustainable.Shri P K Choudhary, member(judicial) Shri P Anjani held that “the instant demand for service tax under the category of Commercial or Industrial Construction cannot be sustained and hence, set aside.”
Mobil oil obtained from the cleaning process is not a manufactured product and the central excise duty was not sustainable held by the Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT).Judicial Member Mr Ramesh Nair and Technical Member Mr Raju held that “the demand of duty is not sustainable on merit as well as on limitation. Accordingly, the impugned order is set aside.” The appeals are allowed with consequential relief.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that the charge of clandestine removal was not sustained in the absence of corroborative evidence.The Tribunal observed that there was no evidence on record to support the revenue’s case, much less any corroborative evidence. In the circumstances, we are of the considered opinion that no substantive reliance should have been placed on the said purported incriminating statements of Sri Sanjay Gadodia, Sri Sanjib Mahapatra and Sri Praharaj Swain aforesaid. In support of their argument that a retracted statement cannot form the substantive basis of the charge, when there is no corroborative evidence available.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the denial of Modvat credit was not sustainable without substantiating with corroborative evidence.It was observed that the commissioner failed to re-consider the entire matter and did not properly consider the applicability of the findings in the adjudication order dated 25.07.2006 of Manash Forgings, which was the sister concern of Mak Engineering.
The Customs, Excise and Service Tax Appellate Tribunal, Kolkata bench has held that currency is not goods liable to be seized under customs act and directs to redeem currency confiscated for violation of Foreign Exchange Management Act (FEMA) notification on payment of fine and penalty.The Tribunal observed that the activity of the appellant was an attempt to export currency over and above the limit. Therefore, the provisions of Section 113 of the Customs Act, 1962, and Section 114 of the Customs Act are attractive. Further, the individual is traveling Abroad for his work and no business dealing was indicated.
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that ‘Erection, Commissioning and Installation Services’ only cover service contracts and set-asides demand for the value of goods/material supplied under supply work orders.Further, the Tribunal observed that the levy of tax on the sale/supply of goods and provision of services are mutually exclusive, the value of goods cannot be subjected to service tax, and neither can the value of services be charged to VAT,
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata presided by Mr. P. K. Choudhary, Member (Judicial) has held that debit notes are valid documents for availing Cenvat credit of Service Tax.The Tribunal observed that as per clause (f) of Rule 9 of the Cenvat Credit Rules, 2004 an invoice issued by a provider of input service is a valid document for availing of Cenvat credit. The Tribunal further observed that the heading of the document as seen from sample copies attached with the appeal paper book though is nomenclature as debit notes but they contain all the disclosures as required in a tax invoice as per Rule 4A of the Service Tax Rules, 1994.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench has set-asides demand of service tax on composite supply of works contract.Tribunal observed that they are not providers of ‘commercial or industrial construction service’ but of ‘works contract service’, no tax is liable on construction contracts executed before 1st June 2007. The Coram of Mr. P. K.Choudhary, Member(Judicial), and Mr. P. Anjani Kumar, Member(Technical) has held that “the instant demand of service tax under the category of Commercial or Industrial Construction cannot be sustained and hence, set aside”.
The Kolkata Bench of CESTAT, Customs Excise and Service Tax Appellate Tribunal confirmed the clean chit granted by Directorate of Revenue Intelligence (DRI) to M/s. Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL) in an order quashing over-invoicing allegations against firms.Justice Dilip Gupta, President and P Anjani Kumar, Technical Member held that “The allegation of over-valuation has not been established, it is not necessary to examine this aspect.”
The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata allowed customs duty exemption under EPCG Scheme and held refractories for re-lining of furnaces is Capital Goods. The division bench consisting of PK Chaudhary, Judicial Member and P Anjani Kumar, Technical Member held that “refractories meant for re-lining of furnaces, i.e., for replacement, are covered by the “means” part of the definition of “capital goods”. The Tribunal said “Because of wear and tear, the refractory bricks and materials lining the furnaces are replaced periodically and in most cases within six months. Therefore, at the time of issue of the show cause notice, in October 2016, none of the refractory bricks imported during the period 2009 to 2013 were physically available on the premises of the Appellants. When the goods are not physically available, the law is well settled that neither can they be confiscated nor can any fine be imposed in lieu of their confiscation.
