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 November 5 to November 11, 2022.

Dinesh Chandra Dubey vs Commissioner of Central Goods & Service Tax - 2022 TAXSCAN (CESTAT) 603

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has recently, in an appeal filed before it, held that bonafide non-payment of service tax does not attract penalty. Rachna Gupta, the Judicial Member of the Tribunal observed that, “since there was the scope and belief with the appellants for entertaining the doubt about no liability of theirs to pay the service tax that the application of Section 73(1) of the Finance Act, 1994, the proviso thereof gets ruled out” and resultantly, the extended period of limitation was held to have wrongly invoked by the department.

M/s. Shahi Food Product vs Commissioner of CGST & Central Excise - 2022 TAXSCAN (CESTAT) 602

The Delhi Bench Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has in a recent appeal filed before it, held that input service credit cannot be denied on the ground that it was availed by contract manufacturing unit. The tribunal bench observed that, the input service credit distributed by M/s. Parle Biscuits Pvt. Ltd. to M/s. Shahi Food Product, cannot be denied on the ground that credit could be distributed by Parle only to its own manufacturing unit under rule 7 of the CENVAT Credit Rules, 2004, and not to the appellant which is not a manufacturing unit of Parle.

M/s Damani Shipping Pvt. Ltd vs Commissioner of Customs (Import-I) - 2022 TAXSCAN (CESTAT) 541

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that allowing benefit U/s 28(6)(i) of the Customs Act,1962 to importer company & MD and denying the same to CHA is not permissible. It was observed by the Judicial Member Suvendu Kumar Pati that, the proceeding against the then Managing Director of the importer by invoking the said provision contained in Section 28(6)(i) of the Customs Act but had not extended the same benefit to the Appellant despite the fact that both were charged under the same provision of the Customs Act.

Maheshwari Texturisers Limited vs Commissioner of Central Excise & ST - 2022 TAXSCAN (CESTAT) 414

The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad held that a demand to pay National Calamity Contingent Duty (NCCD) for Partially Oriented Yarn under the proviso to the Section 11AC not sustainable for an entire period beyond one year. The Tribunal Bench consisting of Ramesh Nair, Judicial Member, and Raju, Technical Member observed that the issue involved is the levy of NCCD in respect of Partially Oriented Yarn falling under Chapter 5402 consumed captively for the manufacture of Polyester Texturised Yarn in respect of the entire demand which is for the period from 01.07.2003 to 31.07.2004 and held in favour of the assessee.

M/s. Emami Paper Mills Limited vs Commissioner of CGST & CX, Bhubaneswar Commissionerate - 2022 TAXSCAN (CESTAT) 605

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench held that detection of contravention during audit is insufficient justification for invoking extended period of limitation. The bench of Judicial Member P K Choudhary observed that, “there being no clear and explicit allegation against the appellant in the show cause notice with regard to suppression of facts or fraud or wilful mis-representation or intentional evasion of duty, it automatically follows that the purported show cause proceedings against the appellant were barred by limitation.”

Steel Authority of India Limited vs Commissioner of CGST & CX - 2022 TAXSCAN (CESTAT) 606

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench has held that the re-issue of the Show Cause Notice ( SCN ) demanding duty which once dropped by the department is not valid. A Coram of Shri P K Choudhary, member(judicial) observed that in the case of Nizam Sugar Factory v. Collector of Central Excise, A.P it was held that ”the Show Cause Notice has been adjudicated in favour of the Appellant and has attained finality in the absence of any challenge by the Department, the subsequent notice cannot be issued beyond limitation.”

IPCA LABORATORIES LTD vs C.C.E. & S.T - 2022 TAXSCAN (CESTAT) 607

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench held that no duty can be demanded on semi-finished goods lying at time of debonding of 100% EOU (Export Oriented Units Scheme).The bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that “The issue has been decided that no duty can be demanded on semi-finished goods/ work in process, lying at the time of debonding of 100% EOU.

M/s. Indian Additives Limited vs Commissioner of G.S.T. and Central Excise - 2022 TAXSCAN (CESTAT) 609

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed credit on Computer Server and Housekeeping Services and thereby deleted the penalty. The Bench of Sulekha Beevi C S, Judicial Member observed that “The definition of “capital goods” after 01.04.2016 does not exclude ‘any equipment or appliance used in an office’. For this reason, I hold that the credit availed by the appellant on the said computer server after 01.04.2016 would be eligible.”

M R PATEL & SONS vs C.S.T. SERVICE TAX - 2022 TAXSCAN (CESTAT) 608

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench ordered fresh adjudication as there was change in legal position via judicial decision on classification of nature of clearing and forwarding agent service. A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that “Since the facts are also need to be compared and verified between this case and the case of Coal Handlers, we are of the view that the matter should be remanded back to the Commissioner (Appeals) to decide afresh.”

Dinesh Chandra Dubey vs Commissioner of Central Goods & Service Tax - 2022 TAXSCAN (CESTAT) 603

The Delhi bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax was not paid due to confusion about the nature and taxability of services, Demand for extended period of limitation is not permissible. The Bench observed that since there was the scope and belief with the appellants for entertaining the doubt about no liability of theirs to pay the service tax that the application of Section 73(1) of the Finance Act, 1994 the proviso thereof gets ruled out and resultantly, the extended period of limitation was held to have wrongly invoked by the department.

C.C.E. & S.T vs Modest Infrastructure Ltd - 2022 TAXSCAN (CESTAT) 615

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad reduced demand of Customs Duty as the Disputed goods found within registered and bonded Public Bonded Warehouse (PBW) on date of search. A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The said facts clearly lead to conclude that permission was indeed granted for the additional land even though the specific sections were not specifically mentioned therein. Since the disputed goods were found within the registered and bonded PBW on the date of search, Commissioner correctly dropped the demand. “

Ponni Sugars (Erode) Ltd vs Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 611

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the refund claim as there was reversal of credit under protest. “I am of the view that the allegation that the refund claim is hit by time-bar cannot sustain and requires to be set aside” the Tribunal Bench of C S Sulekha Beevi, Judicial Member ruled.

M/s. Sriroz Consultants Pvt. Ltd vs Commissioner of CGST & CE, Pune-I - 2022 TAXSCAN (CESTAT) 614

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered fresh adjudication to identify if supply of raw material and installation of green house amounts to manufacture. A Division Bench consisting of Sanjiv Srivastava, Technical Member and Ajay Sharma, Judicial Member observed that “All these facts need to be ascertained and final view needs to be taken in the matter for ascertaining whether the activities undertaken by the appellant amounted to manufacture of prefabricated building – green house” and remanded the matter for fresh adjudication.

Shree Keshariyaji Metal Impex vs C.C.-Kandla - 2022 TAXSCAN (CESTAT) 613

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench reduced redemption fine and penalty as no finality on classification of goods was arrived. A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “Considering the prima facie view about the goods and in the facts and circumstances of the present case, we are of the view that the redemption fine and penalty imposed by the lower authorities are very excessive and the same deserves to be reduced.”

Amar Cold Storage vs C.C.-Jamnagar - 2022 TAXSCAN (CESTAT) 612

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench ruled that Clarification given by Directorate General of Foreign Trade (DGFT) prevails over allegations made by Customs Department.The Coram consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that, “by way of clarification issued by the DGFT and withdrawal of the show cause notice, there was no scope for adjudicating authority to deviate from the decision taken by the DGFT.”

Variety Lumbers Pvt Limited vs Commissioner of Customs, Kandla - 2022 TAXSCAN (CESTAT) 610

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Refund claim is not hit by limitation when filed within one year from the relevant date under Section 27 of Customs Act. The tribunal bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that, “he appellant admittedly filed the refund claim within one year from the date of the Supreme Court judgment. Hence refund claim was filed well within the stipulated time period of one year from the relevant date in terms of Section 27 of the Customs Act, 1962.

Arkkays National Engineering & Foundry Co. vs The Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 616

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Mere allegation in Show Cause Notice (SCN) cannot be ground to deny credit. A Coram consisting of CS Sulekha Beevi, Judicial Member observed that “I am of the view that the denial of credit on the ground that appellant has not taken Input Service Distributor registration in respect of Bank charges cannot sustain.”

The Chennai Bench also set aside Denial of credit on Chartered Accountant services on the ground of Allegation of non-issuance of bills on appellant, M/s. Arkkays National Engineering & Foundry Co. Unit-I. It was observed that “On perusal, it is seen that these bills are addressed to the appellant-company and not in the name of an individual. After mentioning the name of the company, the name of the Kartha has also been mentioned. Denial of credit alleging that these bills are issued in the name of individual and in the name of other units of the appellant is factually incorrect.”

M/s.Sai Exports vs The Commissioner of Customs - 2022 TAXSCAN (CESTAT) 617

The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench directed re adjudication and set aside rejection on ground of time-bar and premature refund claim. The coram consisting of CS SulekhaBeevi, Judicial Member held that “I hold that rejection of refund claim on the ground of time-bar and premature is set aside. The department is directed to complete the re-assessment and then process the refund claim.”

M/s. Indian Additives Limited vs Commissioner of G.S.T. and Central Excise - 2022 TAXSCAN (CESTAT) 609

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held Service rendered at an integral place of business is eligible to avail CENVAT Credit. The Coram of Sulekha Beevi C S, Member (Judicial) observed that the Mumbai office is an integral part of the business of the appellant and is doing administrative work in respect of the appellant’s factory. The CESTAT thus held the appellant eligible for the avail CENVAT Credit on Housekeeping Services at their Mumbai office.

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