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 15 to October 21, 2022. Kalpataru Power Transmission Ltd 101 vs C.C.E. & S.T.-Ahmedabad-iii - 2022 TAXSCAN (CESTAT) 545 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that handling of export cargo is not taxable under the cargo handling service and set aside the demand of service Tax. A Coram of Ramesh Nair, member (judicial) and Raju, member (technical) observed that such a service tax could not have been levied on the cargo handling services availed by the Appellants for export purposes and the Board vide Circular No. 11/1/2002-TRU, dated 1- 8-2002 as regards the cargo handling service had also clarified that all goods meant for export are excluded from the scope of this levy. Bagadiya Brothers Pvt Ltd, vs Commissioner of Customs, Central Excise & Service Tax - 2022 TAXSCAN (CESTAT) 546 The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that imposing penalty under section 114A is not permissible in the absence of collusion, wilful misstatement, suppression of facts or even any duty liability. A Coram of Mr Anil Choudhary (judicial) and Mr P Venkata Subba Rao, member (technical) observed that section 114A provides for imposing a penalty for short levy or non-levy of duty because of collusion or any wilful misstatement or suppression of facts by the person who is liable to pay the duty or interest. Metal Gems vs C.C.E. & S.T.-Daman - 2022 TAXSCAN (CESTAT) 544 Duty Demand on clandestine removals based on the confessional statements without corroborative evidence is not permissible, the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held as above. A Coram of Ramesh Nair, member (judicial) and Raju, member (technical) found that the department has failed to prove the allegations against the appellant and viewed that the confirmation of duty demand along with interest and penalty against the appellant without any cogent basis is invalid. KPR Fertilizers Ltd vs Commissioner of Customs, Central Excise & Service Tax- 2022 TAXSCAN (CESTAT) 548 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad held that micronutrients manufactured for plant growth not plant growth promoters under Central Excise Tariff Act, 1985. The Bench consisting of Anil Choudhary, Judicial Member and P Venkata Subba Rao, Technical Member held that “We find nothing in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorous and Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. We do not find any reason to go merely by the assertion of the learned Authorized Representative in this regard. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The alternative classification as plant growth regulators is not sustainable.” Ravi Techno forge Pvt Ltd vs C.C.-Kandla - 2022 TAXSCAN (CESTAT) 547 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Alloy Steel Forging Rings which require a further operation to be ready to use are classifiable as ‘Other Articles of Iron or Steel’ under the Customs Tariff Act,1975. The Tribunal held that the goods require further operation and such goods when not fit for being ready to use, would appropriately be classifiable under Tariff item 7326 and set aside the impugned order while allowing the appeal. INFINIUM MOTORS GUJ PVT LTD vs C.S.T.-SERVICE TAX - 2022 TAXSCAN (CESTAT) 549 The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad held that price of spare parts and lubricants not includable in value of Authorized Service Station services. The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that “The spare parts and lubricants sold and VAT thereupon was paid the value of such spare parts and lubricants would not attract Service Tax. Hence, the demand of Service Tax on the value of spare parts and lubricants is not sustainable in the present case.” Commissioner of Central Excise And Central Goods And Service Tax vsM/s Hathway Sukhamrit Cable & Datacom Pvt. Ltd. - 2022 TAXSCAN (CESTAT) 551 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh held that Multi System Operator (MSO) liable to pay service tax only on gross amount received by them from Local Cable Operators (LCO). The Bench consisting of observed that “In view of Section 67 ibid as interpreted by the Supreme Court and as well as the agreements entered into between the LCOs and MSO and also the Board Circulars issued from time to time we have no hesitation in deciding this issue in favour of respondent and against the revenue-appellant by holding that the respondent is liable to pay service tax only on the gross amount received by them from LCOs.” SHUBHLAKSHMI POLYSTERS LTD vs C.C.E., BHARUCH - 2022 TAXSCAN (CESTAT) 553 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad remanded back matter for fresh adjudication as there was no finding on the nature of input services. The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “On perusal of the case records, we find that the nature of use of the disputed services as explained by the appellant was not properly addressed by the adjudicating authority in the impugned order passed by him. Hence, we are of the considered view that the matter should be remanded to the original authority for a proper fact finding on issue of eligibility of Cenvat credit on the disputed services.” Siba International vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 550 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai set aside penalty imposed for improper export of buffalo meat. It was, therefore, put to show-cause notice for exporting 3392.737 MT of meat in excess of its production capacity and to refund the drawback received along with interest and penalty under Section 114 for improper exportation of buffalo meat. Order-in-Original confirmed the demand but, in the Order, -in-Appeal, the Commissioner (Appeals) had dropped the demand for return of drawback on the ground that no provision exist in the Customs Act for such recovery but confirmed the penalty under Section 114 of the Customs Act by reducing it from Rs.20,00,000/- to Rs.15,00,000/-, with appropriation of the said amount which was deposited by the Appellant during investigation. A Single Bench consisting of Dr Suvendu Kumar Pati, Judicial Member observed that “Since nowhere during adjudication, the Appellant had ever averred that it had exported only frozen meat and as Note 6 has not kept the category of export of meats to frozen one only, there is no basis in the claim made by the Department. This being facts on record and having regard to the fact that the Department had not taken into consideration the entire production capacity of M/s. Al-Azlan Frozen Foods and confined it to 62 MT meat to presume such mis-declaration though it is only in respect of frozen buffalo meat only, imposition of penalty on the basis of mathematical variation is unsustainable in law and facts.” ALKEM LABORATORIES LTD vs C.C.E. & S.T. DAMAN - 2022 TAXSCAN (CESTAT) 556 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently held that, no excise duty shall be levied on samples cleared for testing and quality control on grounds of Cenvat Input Tax Credit (ITC) from the appellant-assessee, Alkem Laboratories Ltd. Observing that the said products made by the assessee were used for testing and quality control and that the said products were disposed of within the factory thereafter, the bench comprising Ramesh Nair and Raju held that no excise duty shall be levied on samples cleared for testing and quality control. V.V. Titanium Pigments Pvt. Ltd vs Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 559 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)has ruled that the date of original submission has to be considered on computing the period of one year for a Claim of Refund. A Coram of Ms Sulekha Beevi C.S., Member (Judicial) held that the date of original submission has to be taken for computing the period of one year as it was the date on which the appellant has filed the claim initially. The claim has been returned and not processed and rejected by the department. When the claim is returned for resubmission, the appellant is allowed to make the required rectification. Patidar Products vs C.C.E. & S.T - 2022 TAXSCAN (CESTAT) 557 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad set aside clandestine removal of Zafrani Zarda and Gutkha on lack of evidence. The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “There is no record/ evidences to show that the appellant was working for manufacture of alleged Gutkha in the factory premises or any other premises. There is no evidence of additional employees having been employed to enhance the production, nor is there any evidence of excess wages having been paid to the existing employees. there is no evidence of purchase of main raw materials „Betel Nuts‟, Tobacco, Perfume, Lime, etc. in cash, brought to factory, and used in unaccounted manufacture of Pan Masala/Guthka in the factory premises, there being no further investigation of unaccounted purchases of supari, main ingredient. M/s.Sakthi Sugars Ltd. vs The Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 554 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai set aside penalty imposed on duty liability of input tax credit availed in respect of Electricity Cogeneration plant. A Single Bench consisting of Sulekha Beevi CS, Judicial Member observed that “I am of the view that the appellant cannot be burdened with the guilt of suppression of facts with intent to evade payment of duty. The issue being interpretational in nature and as the department had collected all the details of availment of credit from the accounts maintained by the appellant, the penalty imposed in this regard is unwarranted. I hold that penalty imposed with regard to duty liability of the input tax credit availed in respect of electricity (Cogeneration plant) requires to be set aside which I hereby do so.” Pidilite Industries Ltd. vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 558 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai confirmed interest on delayed sanction of refund claim, under benefit of section 27A of Customs Act. A Single Bench consisting of C J Mathew, Judicial Member observed that “It is seen that the first appellate authority has interpreted the time limit in section 27A of Customs Act, 1962 according to the letter of the law which mandates liability of interest for any delay in sanction of refund beyond three months from date of claim. It is on record that there has been delay beyond the stipulated period of three months.” M/s Prasad Explosive & Chemicals vs Commissioner of Central Excise & Service Tax - 2022 TAXSCAN (CESTAT) 552 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), CESTAT set aside demand of cenvat credit of One lakh on manufacture of Emulsion Matrix. A Single Bench consisting of P K Choudhary, Judicial Member observed that “the Adjudicating Authority has relied upon the Larger Bench decision of the Tribunal in the case of Vandana Global for dis-allowance of cenvat credit as claimed by the Appellant, which is not at all applicable to the facts of the present case. I am of the view that the impugned demand cannot sustain and accordingly, the same is set aside.” Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.

CESTAT Weekly Round-Up

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