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 27 to December 03, 2022.

COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX EXCISE & CUSTOMS vs MITTAL PIGMENTS PVT LTD - 2022 TAXSCAN (CESTAT) 660

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that Statements recorded during the investigation to be admissible should stand test under Section 9D of the Central Excise Act. “Since Commissioner (Appeals) has placed extensive reliance on the statements recorded during the investigation without invoking speaking section (1) of Section 9 D of the Central Excise Act, the findings of confirmation of duty demand due to alleged clandestine removal are therefore liable to be set aside.”, the Coram of P V Subba Rao, Technical Member, and Dr. Rachna Gupta, Judicial Member observed.

M/s Nidhi Enterprises vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 661

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the penalty under Section 114A of the Customs Act,1962 is not permissible in the absence of evidence which proves the use of forged scripts to clear goods. The CESTAT bench of  Justice Dilip Gupta, president and Mr P V Subba Rao, member (technical)   while allowing the appeal of Jain, set aside the penalties imposed on him and the impugned order was upheld except to the extent of imposition of penalties.

M/s.New Modern Technomech Private Limited vs Commissioner of CGST&CX, Rourkela Commissionerate - 2022 TAXSCAN (CESTAT) 662

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has observed that the Buyer of inputs can’t verify all the supplier duty liability and held that CENVAT credit can be allowable to Bonafide purchasers of goods which includes a duty. While allowing the appeal, the Bench of P K Choudhary, member(judicial) observed that there is no failure and/or willful suppression of any fact of the transaction by the Appellant, having entered and recorded the transaction in its books of accounts and penalty can’t be invoked.

M/s Britt Worldwide India Pvt. Ltd vs COMMR SERVICE TAX-VII MUMBAI - 2022 TAXSCAN (CESTAT) 663

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that, the CENVAT credit claim of the appellant, Britt Worldwide India Pvt. Ltd. was rejected arbitrarily as a chance to produce relevant documents was not given and set aside the demand order of the Commissioner of Central Excise and Service Tax, Pune. The CESTAT Bench of Technical Member Sanjiv Srivastava and Judicial Member Suvendu Kumar Pati observed that,  “Commissioner could have allowed the opportunity to the appellant to produce the documents against which they intended to claim the CENVAT Credit and then decide upon the eligibility to the same”, thereby quashing the demand and subsequent penalty and interests.

M/s.Nitin Industries vs Commissioner of Goods & Service Tax - 2022 TAXSCAN (CESTAT) 664

The Delhi Bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has recently held that refund claim of appellant M/s Nitin Industries is allowable as credit claim on clearance of excisable goods during the excise regime does not amount to unjust enrichment. Subsequently, the adjudicating authority was directed to grant the refund.

N P Patel & Co vs C.S.T.-SERVICE TAX -2022  TAXSCAN (CESTAT) 665

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that works contract service for drainage and sewerage pipelines construction Municipal Corporation is non-commercial activity, no Service tax is attracted. Ramesh Nair, member (judicial), and Raju, member (technical) have viewed that in the impugned matter as regards the exemptions appellant also not produced their claim properly before the adjudicating authority with supporting documents and the Commissioner has also not examined the claim of appellant properly.

M/s. KKR India Advisors Pvt. Ltd vs The Commissioner of CGST & Central Excise, Mumbai Central - 2022 TAXSCAN (CESTAT) 666

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal has recently held that no direct correlation is required between the input and output services to avail refund of Cenvat Credit of Service Tax. It was pointed out by the Tribunal Bench of Judicial Member Ajay Sharma that, “It is settled legal position that denial of Cenvat credit can be done only by issuing notice under Rule 14 ibid and the department cannot reject refund of Cenvat credit solely under Rule 5.”

Citibank N.A. vs Commissioner of Customs - 2022 TAXSCAN (CESTAT) 667

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) at Mumbai has recently held that the penalty under Section 112 of the Customs Act, 1962 is not valid for purchase of ATMs and Controllers for ATMs for mis-declaration of description and value of goods. Judicial Member Suvendu Kumar Pati and Technical Member Sanjiv Srivastava observed that, the fact in question being a transaction concerning purchase of an item within India, is unrelated to its importation and to the importer as the said transaction is confined between the Appellant Citibank and M/s. Philips India.

Amit Nagi  vs  Principal Commissioner of Customs - 2022 TAXSCAN (CESTAT) 668

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench deleted the penalty as there was no active role for use of Import and Export (IEC) code for monetary consideration. “There is no active role played by these appellants save and except facilitating the use of IEC code of M/s Dev International by another for some monetary consideration.”, the Single Bench consisting of Anil Choudhary, Judicial Member observed.

Atul Dhawan  vs  Commissioner of Customs - 2022 TAXSCAN (CESTAT) 669

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the demand of customs duty and penalty and held that Onus is on Revenue to prove that goods are smuggled in nature. The Bench consisting of Anil Choudhary, Judicial Member observed that “It is onus of the Revenue to give evidence for allegation that the goods are smuggled in nature. I further find that Revenue has not brought any evidence on record to allege that the goods found and seized in the premises of the appellant are smuggled goods.”

C.C.E & S.T  vs  Aalidhra Textool Engineers Pvt Ltd     - 2022 TAXSCAN (CESTAT) 670

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench held that no service tax can be demanded on erection, installation and commissioning of service as entire value suffered excise duty. Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case the entire value has suffered excise duty and the buyer is under obligation to not only manufacture and supply the machinery but also to carry out activity of erection, commissioning and installation of the said machinery.”

Messrs Freshtop Fruits Ltd  vs  C.S.T. - 2022 TAXSCAN (CESTAT) 671

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Foreign based consignment agents/distributors are liable to service tax u/s 66A of the Finance Act. The CESTAT bench consisting of Mr Ramesh Nair, member (judicial), and Mr Raju, member (technical) observed that the services provided by Foreign Agents were received by the Appellant where the services were received outside India.

NAYARA ENERGY LIMITED vs C.C.E. & S.T. RAJKOT - 2022 TAXSCAN (CESTAT) 672

As a relief to Nayara Energy Limited, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) observed that the rejection of Evidence on payment of transaction without verifying is invalid and held that duty not demandable. While allowing the appeal, the Tribunal set aside the impugned order and remand the matter to the adjudicating authority for passing a fresh order after the observance of principles of natural justice.

M/s JSW Dharamtar Port Pvt. Ltd  vs  Commissioner of CGST & CX  - 2022  TAXSCAN (CESTAT) 673

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the refund of service tax paid is allowable based on challans showing the date of payment within one year. It was observed that, in the case of a person, other than the manufacturer, the date of purchase of goods would be the relevant date to determine the period of limitation.

Hng Float Glass Ltd vs C.C.E. & S.T.-Vadodara-ii - 2022 TAXSCAN (CESTAT) 674

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Materials for making foundation of machineries in factory premises are capital goods under Rule 2(a) of Cenvat Credit Rules, 2004 (CCR) are eligible for cenvat credit. A Coram consisting Of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The capital goods were parts and components used as support structure for plant and machinery erected and installed in the factory of the appellant.”

Allied Instruments Pvt Ltd vs Commissioner of Central Excise & ST - 2022 TAXSCAN (CESTAT) 675

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ordered re adjudication on the ground that no proper verification was done on reversal of credit of input service attributed on exempted goods. Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It has now been settled that if the appellant has not availed Cenvat credit in respect of input service used in exempted goods and if at all the same is availed and subsequently reversed proportionate credit, the assessee is not required to pay 5% or 10%.”

Safal Construction Pvt Limited vs Commissioner of Central Excise & ST -   2022 TAXSCAN (CESTAT) 676

A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on consideration received by developers from co-development agreement. It was observed that “In the present case it is nowhere mentioned that the appellant is a service provider to some service recipient.”

Rajesh Kumar Narula vs C.C.E. & S.T - 2022 TAXSCAN (CESTAT) 677

The Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that penalty under Rule 26 of Central Excise Rules, 2002 cannot be imposed for issuance of bogus LR when the period involved is prior to amendment. “The period involved is prior to amendment to Rule 26 effective from 01.04.2007, the penalty under Rule 26 cannot be imposed only for issuance of bogus LRs therefore, following this tribunal decision dated 25.04.2019 in the present case also, the penalty is not sustainable hence the same is set aside” the Tribunal noted.

Reliance Jamnagar Infrastructure Limited  vs  Commissioner of Central Excise & ST -     2022 TAXSCAN (CESTAT) 678

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench observed that Refund admissible on trenching pipeline installed partly in SEZ partly outside. The Coram consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “As regards refund of Rupees five thousand for the construction service received from Jay Khodiyar in relation to construction of trenching and pipelines, we find that the construction was exclusively for SEZ only. It is very obvious that a part of the same will be outside the premises of the SEZ but that does not mean that service was received for other than authorised operations of SEZ.”

J M Huber India Pvt Ltd vs C.C.E. & S.T.-Surat-ii - 2022 TAXSCAN (CESTAT) 679

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench held that Commission Agent Service is export of service, no service tax when commission is received in convertible foreign exchange. Ramesh Nair, Judicial Member and Raju, Technical Member observed that “the Commission Agent Service provided to foreign based entity for marketing their goods in India on consideration the activity of the Indian agent providing marketing, technical support, installation, commission, etc. for sale of goods of foreign based entities in India on commission basis amounts to export of service”

J B Chemicals & Pharmaceuticals Ltd  vs  C.C.E. & S.T - 2022 TAXSCAN (CESTAT) 680

A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench held that Medicament Supplies to Government Hospitals and Institutional Buyers are to be valued under Section 4 of Central Excise Act. The appellant in the present appeal is J B Chemicals & Pharmaceuticals Ltd. “The issue is no longer res-integra and in the appellant’s case value of goods is clearly governed by Section 4 of Central Excise Act and not under Section 4A therefore, the impugned order is not sustainable hence the same is set aside” the Tribunal noted.

B M Autolink vs C.C.E.-Kutch (gandhidham) - 2022 TAXSCAN (CESTAT) 681

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that no service tax on Discount from Vehicle Manufacturer by Dealer. he Bench observed that “The transaction between M/s. Maruti Suzuki India Ltd. and the dealer and subsequent sale transaction between the dealer and the customs are purely on principal-to-principal basis. The course of transaction of sale and purchase of the vehicles hence, the same cannot be considered as service for levy of service tax.”

Purna Sahakari Sakhar Karkhana Ltd.  vs  Commissioner of CGST & C.Excise - 2022 TAXSCAN (CESTAT) 682

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai has denied credit upon bagasse, pressmud and boiler ash because these are not final goods but merely a waste or by-product. The single bench Consisting Ajay Sharma, the Judicial Member observed that Rule 6(3) ibid are applicable only when a manufacturer is engaged in the manufacture of any final product.

Prabhadevi Himgiri CHSL vs The Commissioner of CGST & Central Excise - 2022 TAXSCAN (CESTAT) 683

The Mumbai Bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that service taxes are not leviable on the service provided by the society to its members prior to 2012 and deleted the penalty imposed on the appellant for delayed filing of tax return. The Tribunal Bench of Judicial Member Ajay Sharma allowed the appeal, holding that the appellant was not liable to file any tax return as the clubs or societies were not liable to pay the service tax for services to its members prior to July 1st 2012.

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