CESTAT Weekly Round-Up

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 October 1 to October 7, 2022. Star India Pvt Limited vs Commissioner of Service Tax -2022 TAXSCAN (CESTAT) 508 In a significant case of Star India, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the taxable services of foreign entities cannot determine without a test of taxation of Service Rules. A Coram of Mr C J Mathew, member (technical) Mr Ajay Sharma, member (judicial) observed that the impugned order has failed to identify the ‘taxable service’ that the erstwhile foreign entities had obtained from the foreign service provider without which the test of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 was not applied. Creative Travels Pvt Ltd vs Commissioner of Service Tax - 2022 TAXSCAN (CESTAT) 509 In a major relief to Creative Travels Pvt Ltd, the Principal Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi held that the amount expended for tour operation activities conducted outside India is not taxable while deciding on two cross appeals between the assessee and revenue. The Tribunal comprising Justice Dilip Gupta and technical member C J Mathew held that the entirety of performance in India is the criterion for subjecting the consideration to tax. It was also observed that, the scheme of taxation of exports in terms of the enumeration of ‘taxable service’ is given in the Section 65(105) of Finance Act, 1994 and that the adjudicating authority has, instead, dilated Section 65(115) which was held to be erroneous. Deciding the issue of taxability in favour of the assessee, the appeal of the assessee was allowed, simultaneously rejecting the appeal of the revenue as the issue of liability of interest no longer remained. Asmaco Industries Limited vs Commissioner of Central Excise - 2022 TAXSCAN (CESTAT) 510 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai bench has directed the Central Board of Indirect Taxes and Customs (CBIC) to take appropriate measures to take care of issues relating to non-following of judicial decisions by the excise department. Regarding the rate of duty applicable, the Tribunal bench comprising Justice Dilip Gupta, President and Mr C J Mathew, Member (Technical) observed that “The goods impugned in this dispute are ‘masking tape (crêpe paper)’ which, but for its size, remained in the same form and retained all the characteristics of utility as before. The applicability of these decisions, relying upon the last of the ‘four category test’ to the exclusion of the other three, to the issue before is just the reverse and in favour of the appellant. The earlier decisions of the Tribunal, referred supra, in the very same dispute of the same assessee for different periods are emphatic in holding that the process of slitting jumbo rolls does not amount to manufacture within the meaning of section 2(f) of Central Excise Act, 1944. There are no fresh developments that induce us to consider any proposition to the contrary.” Commissioner of Central Tax vs M/s. Arcelor Mittal Nippon Steel India Ltd. - 2022 TAXSCAN (CESTAT) 513 In a major relief to ArcelorMittal Nippon Steel India Pvt. Ltd. (Formerly Essar Steel India Ltd.), the Hyderabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that, Cenvat credit is attributable to the inputs used in manufacture of goods exported under bond from a Domestic Tariff Area (DTA) to a Special Economic Zone (SEZ) unit and dismissed the appeal of the Commissioner of Central Tax. The Appellate Tribunal, looked into rule 5 of the CCR, 2004 and found that it was sufficiently complied with by the assessee. It was also pointed out that Section 2(m)(ii) of SEZ Act, 2005, ‘export’ means supplying goods, or providing services, from the Domestic Tariff Area (DTA) to a Unit or Developer in the same or in the different SEZ and that as per the Central Government Notification No. 11/2002-Central Excise (N.T.), dated 1st March, 2002, the refund of Cenvat credit shall be allowed in respect of final products cleared to SEZ. M/s. Kutty Impex vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 514 The Customs, Exercise And Service Tax Appellate Tribunal (CESTAT), Chennai, has recently, while deciding an appeal filed before it by the Revenue, held that when the goods imported are not prohibited, then no confiscation u/s 111(d) is possible.“When goods are held not confiscatable under Section 111(d) of the Act, then it can be reasonably held that the import was not prohibited.” M/s. Singhania & Sons Private Limited vs Commissioner of CGST & CX - 2022 TAXSCAN (CESTAT) 515 The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata East Zonal Bench held that the payment for services paid by M/s. Singhania & Sons Private Limited from A B Commercial is taxable as Goods Transport Agency (GTA) and not Cargo Handling Service and allowed the refund under rule 4(2) of the Cenvat Credit Rules, 2014. In the light of the ruling in Rungta Projects Ltd. Vs. CCE & ST, the loading and unloading was analysed as to whether it forms a part of the service provided by the assessee. It was held to be an essential part in the services of the GTA and thus held liable to be taxed as GTA and not Cargo Handling Service, as the activity of loading and unloading of goods was instantly for transportation and not the movement of goods otherwise. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.

CESTAT Weekly Round-Up

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