CESTAT Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the previous week from November 20 to November 26, 2022.

M/s Nidhi Enterprises vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 638

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the importer is liable for making forged imports and penalty under section 114 A was charged against the importer. The principal bench comprising justice Dilip Gupta(president) and Mr.P.V. Subba Rao (technical member) found that Nidhi had not even obtained a physical copy of any of the licences or scripts nor had any idea of the licence. The tribunal set aside the penalty imposed on the partner and upheld all other penalties.

Shreno Ltd vs C.C.E. & S.T.-Vadodara-i - 2022 TAXSCAN (CESTAT) 639

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that excise duty is not demandable on scrap cleared on which CENVAT credit is not availed. A Coram of Mr Ramesh Nair(Judicial Member) and Mr Raju(Technical Member) held that “it is clear that the appellant has cleared the scrap which is neither generated from the manufacturing nor generated from the cenvatable input or capital goods. Therefore, the same is not liable to any duty.”

TDK India Private Limited vs Commissioner of CGST & Excise - 2022 TAXSCAN (CESTAT) 641

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Kolkata bench has observed that the notification applying the service tax on works contract services under the reverse charge mechanism (RCM) is not applicable to corporate-assessee. Shri P. K. Choudhary, Judicial Member observed that in the impugned order that w.e.f 01.07.2012, vide Notification No.30/2012- ST, the reverse charge mechanism for Works Contract Service was introduced.

Shree Simandhar Shipping Service vs Principal Commissioner of Customs - 2022 TAXSCAN (CESTAT) 640

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that regulation 10(n) of Customs Broker Licencing Regulations is not violative In the absence of evidence which proves delay in the duty of the customs broker. While allowing the appeal the CESTAT viewed that the revocation of the licence and other detriments have no foundation on which they can be sustained and set aside the impugned order.

N R Engineering & Contractors vs C.S.T.-Service Tax – Ahmedabad - 2022 TAXSCAN (CESTAT) 642

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered re-examination on the ground that there was proper disclosure of cost of material and labour in invoice. The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The condition in the Notification is only production of documentary proof indicating the value of the goods and materials supplied. This does not in any manner mean that the goods have to necessarily be supplied under invoices. Therefore, evidence was produced before the authority and the sufficiency of it has to be examined.”

Rajasthan Small Industries Corporation Ltd. vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 643

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), set aside demand of cost recovery charges by Commissioner under 5(2) and 6(1)(o) of Handling of Cargo in Customs Area Regulations 2009.The Bench consisting of Justice Dilip Gupta, President and P V Subba Rao, Technical Member held that “The Commissioner committed an illegality in ordering recovery of the cost recovery charges under the aforesaid provisions of the 2009 Regulations. The penalty that has been imposed is also liable to be set aside.”

GUJARAT POWER CORPORATION LTD vs C.C.E. & S.T.- AHMEDABAD-III - 2022 TAXSCAN (CESTAT) 644

A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld demand of service tax under Reverse Charge Mechanism (RCM) on payments made to foreign entities. The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The defence is mainly on the ground that the demand is barred by limitation as credit of the said service tax was admissible to the appellant.

Babulal Gurjar vs Commissioner - 2022 TAXSCAN (CESTAT) 646

The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi invalidated Show Cause Notice (SCN) as classification of service under Works Contract by the Commissioner (Appeals) was beyond the scope. A Bench of Anil Choudhary, Judicial Member observed that “I find that Clause (f) of Section 66D provides that services by way of carrying out any process amounting to manufacture or production of goods, falls under the negative list and is exempted from the levy of service tax.I further find that the classification of service under Works Contract Service by the Commissioner (Appeals) is beyond the scope of show cause notice, and is held to be bad.”

M/s Bright Clearing & Carrier Pvt. Limited vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 645

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), set aside revoking of Customs Brokers Licences on the ground of No proof of non fulfilling obligations under Regulation 10(n) of Customs Broker Licensing Regulation (CBLR), 2018. “The orders revoking the Customs Brokers licences of the appellants forfeiting their security deposits and further imposing penalty on the appellants cannot be sustained and need to be set aside” the Tribunal ruled.

M/s. APL Apollo Tubes Ltd vs Commissioner of CGST - 2022 TAXSCAN (CESTAT) 647

A Single Bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), held that Rule 6(3) of Cenvat Credit Rules, 2004 has no application on zinc scrap produced from manufacture of Galvanised pipes. The Bench of Ajay Sharma, Judicial Member observed that “In view of decisions of different Benches of the Tribunal deciding the issue in favour of the assessee, even after considering the amendment made in Rule 6 of CCR, I am inclined to set aside the impugned order and the same is accordingly set aside.”

CAPITAL ISPAT LTD vs COMMISSIONER, CGST-ALWAR - 2022 TAXSCAN (CESTAT) 648

The Principal Bench of the Delhi Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a refund is allowable if service tax is paid in excess of the amount payable. While allowing the appeal, the CESTAT held that the amount in question is eligible for a refund on merits as well as on account of limitation and set aside the impugned order.

M/s Jaisawal Neco Industries Ltd vs Principal Commissioner of Central Tax & Central Excise - 2022 TAXSCAN (CESTAT) 649

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the reversal of CENVAT Credit on the non-moving inventory under general provision is not valid. It was observed that the appellant has only created a general provision for slow/non-moving inventory and has admittedly not written off the inventory from the inventory or the asset account.

Bright Clearing & Carrier Pvt. Limited vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 650

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Customs Brokers Licensing Regulations (CBLR, 2018)regulations do not mandate Customs Brokers to check whether exporters are entitled to Input Tax Credit (ITC) under GST. The CESTAT bench consisting of Justice Dilip Gupta, President and Mr P V Subba Rao, member (technical)set aside the impugned orders revoking the Customs Brokers licences of the appellants forfeiting their security deposits.

M/s.Ramesh Flowers Pvt. Ltd. 100% EOU vs The Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 654

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Refund Claim of utilised CENVAT Credit returned for rectifying the deficiencies cannot be held as time-barred. The CESTAT bench observed that the procedure to file a refund claim for a quarter is only to make the filing and processing easier. The last month which is included in the quarter would have to be reckoned for computing the period of one year.

M/s Forgings (India) Iron & Steel Limited vs Commissioner of CGST & Excise - 2022 TAXSCAN (CESTAT) 652

The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that waste and Scrap are not manufactured goods and no provisions exist for reversal of credit taken on duty-paid inputs for clearance of waste and scrap. While allowing the appeal, the CESTAT bench set aside confirmation of demand of duty, interest and imposition of penalty upon the Appellant by holding that the Appellant was under no obligation to pay duty on waste and scrap used at the job worker’s end.

ITC Sonar vs Commissioner of CGST & CX - 2022 TAXSCAN (CESTAT) 653

The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Rule 4(1) of CENVAT Credit Rules has the prospective effect that the assessee can take CENVAT Credit after receipt of the relevant documents without any limitation. The CESTAT Bench of Shri P K Choudhary, member(judicial) observed that at the time of issuance of invoices, no time limit was prescribed and a limitation of six months cannot be made applicable. While allowing the appeal, the impugned orders were set aside.

Vriddheshwar SSK Ltd vs The Commissioner of CGST & C.Ex, Nashik II - 2022 TAXSCAN (CESTAT) 655

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed Cenvat Credit on parts for efficient functioning of machines for manufacturing Sugar and Molasses. A Bench consisting of Ajay Sharma, Judicial Member observed that “The parts in issue herein have been used for smooth and efficient functioning of the machinery which has been used for manufacturing Sugar and Molasses and therefore there is no reason not to allow the credit in issue to the Appellants.”

Kohler India Corporation Private Limited vs C.C.E. & S.T - 2022 TAXSCAN (CESTAT) 656

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered re adjudication for inclusion of services for setting up and modernization of factories under input services. A Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The definition of input services as existed at relevant point of time includes the Services for setting up and modernization of factory and therefore, the appellant are eligible to claim Cenvat Credit of such services.”

M/s. GP Petroleums Ltd vs Commissioner of CGST & Central Excise - 2022 TAXSCAN (CESTAT) 658

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that legality of Service Tax Credit can only be questioned to the Input Service Distributor (ISD) by jurisdictional authority.A Coram consisting of Ajay Sharma, Judicial Member observed that “In view of the aforesaid decision of the Tribunal, since the basis of the initiation of the current proceedings by the department for the period in issue itself has gone, the current proceedings can’t survive. Therefore in the peculiar facts of this case, following the aforesaid decision of the Tribunal, I am inclined to set aside the impugned order.”

New Modern Technomech Private Limited vs Commissioner of CGST & CX - 2022 TAXSCAN (CESTAT) 659

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed disallowance of credit on the ground that no adverse inference against availment of CENVAT Credit. “No adverse inference has been drawn against the CENVAT Credit availed and no cogent evidence contrary to the above submission has ever been established. In view of the above discussions, it is my considered view that the impugned orders cannot be sustained.”, the Tribunal observed.

M/s.Nitin Industries vs Commissioner of Goods & Service Tax - 2022 TAXSCAN (CESTAT) 657

A Single Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that No bar of unjust enrichment on accumulation of credit on clearance of excisable goods during Excise Law Regime. A Coram consisting of Anil Choudhary, Judicial Member observed that “The appellant is entitled to refund in terms of Section 142(3) read with Section 54 read with Section 49(6) of the CGST Act. the credit has been accumulated due to clearance of excisable goods, during the Excise Law Regime for export, the bar of unjust enrichment is not attracted.”

M/s. Minvesta Infotech Ltd vs Commissioner of GST & Central Excise - 2022 TAXSCAN (CESTAT) 651

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Tribunal at the Appellate stage cannot club the refund claims of different quarters. The CESTAT bench of Ms Sulekha Beevi C.S, Member (Judicial) observed that the appellant has not filed one claim clubbing different quarters and there has been no clubbing of different quarters on the part of the appellant while filing the refund claims and held that, “the Tribunal being a creature of the statute cannot grant reliefs extraneous to the adjudication.”

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