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 September 17 to September 23, 2022.
Hindustan Petroleum Corporation Limited vs Commissioner of Central Excise – 2022 TAXSCAN (CESTAT) 480
The Hyderabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the condonation of losses up to 1% is permissible without scrutiny and quashed the duty demanded on Hindustan Petroleum. The Tribunal while allowing the appeal held that “the appellant is entitled to remission of the losses as claimed and consequently the demand of duty on the appellant cannot be sustained.”
Hira Ferro Alloys Limited vs Principal Commissioner – 2022 TAXSCAN (CESTAT) 481
The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowed CENVAT Credit on the inputs used in the production of electricity supplied free of cost. The Tribunal observed that the inputs or input services qualify for Cenvat when they are being used for the manufacture of the final product. Since part of the electricity is transferred to the sister unit, the inputs used in generating it to that extent are an input for the sister unit and not for the respondent.
The Andhra Sugars Limited vs Commissioner of Customs– 2022 TAXSCAN (CESTAT) 482
The single-member bench of the Hyderabad Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the duty remission under section is applicable only on imported goods and since the appellants are not proven as imported goods lost or destroyed the claim of refund is not sustainable. Mr. P Venkata Subba Rao, member (technical) viewed that self-assessment of duty by the appellant has attained finality and a refund cannot be sanctioned to modify the assessment by reducing the number of goods as claimed.
Steel Strips Wheels Ltd. vs Commissioner of GST & Central Excise – 2022 TAXSCAN (CESTAT) 483
The Customs, Excise& Service Tax Appellate Tribunal (CESTAT), Chennai, has on Friday ruled that CENVAT credit is to be allowed on structural items in the nature of MS sheets, angles, etc. “There is no dispute that the MS items were used for fabricating and installing the paint plant within the premises of the appellant, and that the said paint plant is also integral to the appellant’s manufacturing activity. After appreciating the facts and applying the decision in the case of India Cements Ltd., I hold that the credit availed on MS items has to be allowed to the appellant and that the impugned order disallowing the credit be set aside” – Ms Sulekha Beevi C.S., Member (Judicial) CESTAT, observed, allowing the appellant’s appeal with consequential relief.
HLPL Global Logistics Pvt. Ltd. vs Commissioner of Customs – 2022 TAXSCAN (CESTAT) 484
The Principal Bench of New Delhi Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Customs broker license revocation proceedings based on an invalidated earlier offense report are not sustainable. The Tribunal observed that the appellant had filed only one Shipping Bill No. 5199084 dated 25.09.2014 in respect of M/s. Dwarka Trading Company and this Shipping Bill were considered in the earlier show cause notice dated 02.02.2016, which had been quashed by the Delhi High Court and thereby set aside the impugned order dated 30.09.2022 passed by the Commissioner. The appeal was allowed.
LALIT JAIN vs C.C.-AHMEDABAD – 2022 TAXSCAN (CESTAT) 487
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench set aside a penalty of 50 lakhs imposed under Section 112(b)(i) of the Customs Act, 1962. The Bench consisting of Ramesh Nair, Judicial Member, and Raju, Technical Member held that “We find that role of the Appellant in the whole episode has been derived only from oral statements of Ms. Divya Kishore Bhundia and Shri Jignesh Savalia. Statements of above said persons remain uncorroborated during the investigation. The statement of co-accused cannot be relied upon, particularly when the appellant has denied his involvement in respect of the goods in question.”
Satya Power & Ispat Ltd. vs Commissioner of Central Excise – 2022 TAXSCAN (CESTAT) 488
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi disallowed the demand of CENVAT Credit on contents of coal fines and held that contents of coal fines are not inputs under Rule 3(5) of Cenvat Credit Rules, 2004. A Single Bench consisting of Ajay Sharma, Judicial Member held that “It can safely be concluded that the fines, etc are a by-product or incidental product which cannot be said to be input as such which by any stretch of imagination cannot be said to attract the provisions of Rule 3(5).”
Miraj Products Pvt. Ltd. vs Commissioner – 2022 TAXSCAN (CESTAT) 485
The Customs Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi set aside a demand of Rs. 163,06,00,000/- under Rule 19 of the Chewing Tobacco Rules read with Section 11A of the Central Excise Act, 1944 holding that demand cannot be made based on assumptions and presumption. A Coram consisting of Anil Choudhary, Judicial Member, and P V Subba Rao, Technical Member observed that “The Income Tax Department has not drawn any adverse conclusion with regard to the receipt of defective packing material from M/s Uma Polymers, which is one of the basis for drawing adverse assumption and the presumption against the appellant. We further find that the appellant has given a cogent explanation with regard to the sheet/ survey report found from the premises of Sh. Purohit, which have been arbitrarily rejected by the Adjudicating Authority.”
M/s. Oceanic Enterprises India Pvt. Ltd. vs Commissioner of Customs – 2022 TAXSCAN (CESTAT) 486
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, has recently in an appeal filed before it, ruled that the penalty imposed on a customs broker under section 112(a) of the Customs Act, should not be so exemplary that it fails to meet the ends of justice. “From the discussions made above, I am of the view that there are no grounds to set aside the penalty imposed under sec. 112(a) of the Customs Act, 1962 on the appellant. I do note that penalty of Rs.50,000/- has been imposed on the appellant as per Order in Original dated 8.9.2020 under CBLR, 2018, and taking this into consideration, I am of the view that the penalty of Rs. 5,00,000/- imposed under section 112(a) of the Customs Act, 1962 is high, and requires to be reduced. I hold that reducing the penalty to Rs.1,50,000/- (Rupees one lakh fifty thousand only) would meet the ends of justice, and hence, the impugned order is modified to the extent of reducing the penalty to Rs.1,50,000/- (Rupees one lakh fifty thousand only)” –Ms. Sulekha Beevi C.S., the Judicial member of CESTAT, Chennai, commented, allowing the appeal in part.
M/s. KEC International Ltd vs Commissioner of CGST – 2022 TAXSCAN (CESTAT) 491
The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal has held that the tax exemption is available on services rendered for transmission of electricity and quashed the demand for service tax. A Coram comprising Justice Dilip Gupta, president Mr. P Anjani Kumar, member (technical) held that the appellant is entitled to the benefit of both the notifications dated 20.07.2010 and 27.02.2010 and set aside the impugned orders dated 31.01.2013 and 10.09.2013 passed by the Commissioner.
Ms. Shree FlavourLlp vs C.C.E. & S.T – 2022 TAXSCAN (CESTAT) 489
The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal has held that compounded levy scheme is not applicable on Tin packing machine pouches that are manually packed. A Coram consisting of Mr. Raju, member (technical), and Mr. Ajay Sharma member (judicial), observed that the tin packing was packed manually with the help of hand-operated fillers or similar manually operated device and sealed with heat sealers/band sealers/candles/hot iron and the like.
Ingersoll-Rand Technologies and Services Private Limited vs Commissioner– 2022 TAXSCAN (CESTAT) 490
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal has held that trading is not an exempted service before 01.04.2011 and the demand for tax on the credit of input services used in trading activity is not sustainable. A Coram comprising Mr. Justice Dilip Gupta, president, and Mr. P Anjani Kumar, member (technical) observed that trading was not an exempted service and set aside the demand confirmed in the impugned order being not sustainable.
Shri Rahul Chauhan vs Commissioner– 2022 TAXSCAN (CESTAT) 492
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) of the Allahabad bench has ruled that Rule 26 of the Central Excise Rules does not apply to non-functional directors and held that the penalty is not sustained. A Coram comprising Mr. Anil Choudhary, member (judicial), and Mr. P V Subba Rao, member (technical) held that the appellant is also not liable to penalty under Rule 26 of Central Excise Rules as he has not done nor has been concerned in transporting, removing, depositing, keeping, concealing, etc., of excisable goods and set aside the penalty imposed on this appellant.
M/s Micky Metals Limited vs Commissioner of CGST & Excise – 2022 TAXSCAN (CESTAT) 494
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench authority cannot mechanically impose a penalty for short levy or non-levy of duty u/s 11AC of Central Excise Act, 1994. A Coram consisting of P K Choudhary, Judicial Member observed that” Thus, in the absence of any such specific allegation in the show cause notice, the authority cannot mechanically impose a penalty under Section 11AC of the Act. The provisions of Section 11AC of the Act are attracted in the event of establishing fraud, collusion, or suppression of facts or making any wilful misstatement with an intent to evade payment of duty. This has not been done in the present case. Moreover, the duty itself has been remitted on 26.03.2015 even prior to issuance of show-cause notice.”
M/s. Van Shah Fragrance Pvt. Ltd vs Commissioner of Central Excise – 2022 TAXSCAN (CESTAT) 495
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench disallowed the benefit of Small Scale Industries (SSI) Exemption. The Bench consisting of Sanjiv Srivastava, Technical Member, and P Dinesha, Judicial Member observed that “Without any evidence to show how the appellants claim bonafide belief in the matter to the effect the goods manufactured by them do not attract any excise duty, the argument made in this regard cannot be accepted. Thus, in absence of any such bonafide belief, the appellants’ reliance on the decision of the Apex Court in the case of Continental Foundation and Nirlon Ltd. is farfetched.”
M/s. Krishna Construction Co vs The Commissioner of Central Goods and Service Tax – 2022 TAXSCAN (CESTAT) 496
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench held that question of unjust enrichment would not arise when a refund claim is time-barred. The Bench consisting of Justice Dilip Gupta, President, and P Anjani Kumar, Technical Member observed that “The contention of the Counsel for the appellant that since the limitation period of one year contemplated under section 11B of the Central Excise Act 1944 provides for filing of the claim within one year from the date of payment of tax, the refund claim filed by the appellant should be treated to have been filed within time as it was filed within one year cannot also be accepted for the reason that section 102 (1) of the Finance Act itself provides for a limitation period of six months for filing a refund claim.’’
M/s Som Flavour Masala Pvt Limited vs C.G. & S.T-C.C.E. &S.T – 2022 TAXSCAN (CESTAT) 497
Changing the classification of goods without proper evidence is not valid, the Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the demand for excise duty is not sustainable. A Coram comprising Mr. P V Subba Rao, member (technical) Mr. Ajay Sharma, member (judicial) held that the Revenue has not produced any material evidence on record to support the change of classification by them from „Chewing Tobacco‟ under heading 24039910 to „Jarda Scented Tobacco‟ under heading 24039930 and set aside the impugned order. The appeals filed by the appellants were allowed.
M/s BenQ India Pvt. Ltd vs Additional Director General– 2022 TAXSCAN (CESTAT) 498
The Customs, Excise & Service Tax Appellate Tribunal, New Delhi, has, by its order in an appeal filed by the appellant, held that no penalty under section 114A can be imposed when there is no mis-declaration of import by the assessee. “when there is no mis-declaration, penalty under section 114A of the Customs Act could also not have been imposed. The Department has filed appeals as penalties under section 114AA of the Customs Act have not been imposed. As the appellant has correctly availed the benefit of the exemption notification, the appeals filed by the Department deserve to be dismissed”.
M/s. Emaar MGF Construction Pvt. Ltd vs Principal Commissioner of Central Goods & Service Tax – 2022 TAXSCAN (CESTAT) 499
In a Setback to Emaar MGF Constructions, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench disallowed interest on refund of amount towards pre-deposit. The Bench consisting of Justice Dilip Gupta, President, and PV Subba Rao, Technical Member held that “In the present case, as noticed above, the amount was deposited by the respondent pursuant to the directions issued under the unamended provisions of the 35F. Such being the position, interest on delayed refund of the amount would continue to be governed by the unamended provisions of section 35FF. The Cross Objections filed by the respondent seeking a higher rate of interest would have to be rejected since interest itself is not payable to the appellant.”
M/s.Karaikal Chlorates vs Commissioner of GST & Central Excise – 2022 TAXSCAN (CESTAT) 500
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench held that denial of credit alleging that invoices mention the name of the original importer is too technical and cannot be accepted. A Coram consisting of Sulekha Beevi CS, Judicial Member observed that “The original importer had engaged various service providers for import of the goods and clearance of the goods. After the purchase of the goods by the appellant, these service providers provided services to the appellant for clearances of the goods. However, the invoices were issued in the name of the original importer M/s.Mitsubishi Corporation India Pvt. Ltd. It is clear from the records that the appellant had paid service tax for the services availed. I find that denial of credit alleging that invoices mention the name of the original importer is too technical and cannot be accepted.”
Shree Hari Sponge Private Limited vs Commissioner of Central Excise & Service Tax– 2022 TAXSCAN (CESTAT) 493
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench held that reports from external agencies cannot be the sole basis to allege clandestine manufacture and removal of excisable goods. The Bench consisting of P K Choudhary, Judicial Member, and Raju, Technical Member observed that “We find that the entire basis of the instant demand is the reports of external agencies. No efforts have at all been made to find out whether there was any unaccounted production and clearance of goods. In the present case, we do not find any evidence, much less any corroborative evidence, to show that there is production and clearance of the quantity of final products which have been arrived at in the notice by comparing the external reports and the quantity of production disclosed by the Appellant in their excise returns.”
M/s Reliance Commercial Dealers Ltd vs Commissioner of Customs – 2022 TAXSCAN (CESTAT) 501
As a relief to Reliance Commercial Dealers, the Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the duty exemption on the use of aircraft for non-scheduled (passenger) services. The Tribunal while allowing the appeal, held that the use of the aircraft was within the scope of non-scheduled (passenger) services and there is no violation of the undertaking to use the aircraft for non-scheduled (passenger) services and set aside the impugned order dated 31.08.2010.
PEGASUS PHARMACO INDIA PVT LTD vs COMMISSIONER, CENTRAL GOODS & SERVICE TAX, DEHRADUN– 2022 TAXSCAN (CESTAT) 502
The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that duty exemption can’t be allowable when a slum sale agreement is made only to transfer the benefits exemption beyond 10 years. A Coram consisting of Justice Dilip Gupta, president, and Mr. P V Subba Rao, member (technical) held that the order passed by the Commissioner is correct in denying the benefit of exemption under notification No. 49/2003 and confirming the demand of duty under section 11A along with interest from the assessee under section 11AA of the Central Excise Act, 1944. The Tribunal observed that the benefit of exemption did not apply to the assessee as the only thing which changed with the slump sale agreement is the claim of the benefit of the exemption by Balaji and its transfer to the assessee to extend the benefit of the exemption to the pharmaceuticals manufactured by it beyond 10 years.
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