This weekly round-up analytically summarises the key stories of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at taxscan. in, from January 30th to February 5th, 2023.
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has observed that no service tax can be levied for ‘Business Auxiliary Services’, on consideration towards commission on sub-contracts.
With the Counsel for the appellant vehemently contending that the appellant was not in any way rendering Business Auxiliary Services for promoting or marketing the services provided by the sub-contractor, and that the proposal of payment of service tax on the said ground and confirmation thereof, therefore need to be set aside, the Bench comprising PV Subba Rao, the Technical Member and Dr Rachna Gupta, the Judicial Member, relying upon its earlier decision in the case of M/s Dwaraka Constructions v. Commr. Of Customs & Central Excise observed: “The appellant only was deducing said amount of commission for himself and was making payment to the subcontractor in whose favour the execution of work was outsourced by the appellant. Hence, we hold that no service tax can be charged from the appellant under the head ‘Business Auxiliary Services’.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has in its recent ruling, held that the interest on refund is allowable when authority fails to refund on service tax sanctioned within three months from the date of filing of the application.
With the Coram comprising of Mr Ramesh Nair, the Member (Judicial) and Mr Raju, the Member (Technical) observing that “if the refund is not sanctioned within three months from the date of filing, the appellant is entitled to the interest on the refund sanctioned.”, allowing the appeal while setting aside the impugned order, the Tribunal held: “the appellant is thus, legally entitled to the interest on refund “.
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has confirmed the service tax demand for providing taxable or commercial coaching services, against Vikas Educational Institutions Ltd (VEIL), the respondent.
With the Counsel for the appellant (Revenue), contending that the Commissioner has apparently failed to appreciate the fact that both VEIL & Vikas Educational Society (VES) are one and the same and that they have merely forged bills in order to evade the payment of duty, the Bench comprising PV Subba Rao, the Technical Member and Dr Rachna Gupta, the Judicial Member observed : “The demand of service tax for providing taxable/commercial coaching services against VEIL has wrongly been dropped by the Commissioner.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that 100% Cenvat Credit can be taken on Input Service under the head of Management or Business Consultancy Service.
The appellant having raised the question as to whether 100% credit of service tax paid by Indian Hotel Co. Ltd. (IHCL), under Management or Business Consultancy Services is admissible, given specific coverage of the said service under Rule 6(5) of CCR, even though said services were used for taxable as well as non-taxable/exempt services, a Coram comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that the appellant have correctly taken 100% credit in respect of such input service.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, has recently in an appeal filed before it, observed that freight charged for delivering cement to buyers’ premises , is not to be included in the assessing value for the payment of central excise duty.
The appellants being the manufacturers of cements and clinkers, who were also availing the facility of CENVAT Credit scheme for the purpose of payment of central excise duty on their finished goods during the period from April 2016 to June 2017, the present appeal has been filed to assail the order vide which the demand of differential duty was confirmed, on the basis of inclusion of freight charges in the assessable value for payment of the central excise duty.
Hearing the contentions of either sides and relying upon the decision of the Apex Court in the case of Ispat Industries, the CESTAT Bench observed: ““Following the said ‘ratio decidendi’, we hold that the value of freight charged by the appellant for delivering the cement to their buyers’ premises is not to be included while assessing the value for the purpose of payment of central excise duty. Appellant has rightly excluded the same. The differential duty confirmed by the order under challenge is therefore wrong.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has observed that Mixing of Thermol and Mixed Oil doesn’t change the nature of the product and that it attracts 32 % of Excise Duty which need to be considered elaborately by the adjudicating authority.
The aforesaid observation was made when Shah Petroleums, the appellant via their appeal raised the question as to whether Super Mix Oil (first final product), is classifiable under CET 27101990, as claimed by the appellant or under CET 27101190 as claimed by the department, and also as to whether Super C-9 Plus (second final product) is classifiable under CET 27079900 as claimed by the appellant or under CET 27101190 as claimed by the department.
With the Coram comprising of Mr Ramesh Nair, the Member (Judicial) and Mr Raju, the Member (Technical) observing that “the classification will come into the picture only once the manufacturing was established.”, and that “ It was evident that the department itself contended that by the entire process of mixing thermol and mixed oil and any other product and thermol and C-9 Plus, there is no change in the product”, the Tribunal found that once a case was made out against the partnership firm, no separate penalty can be imposed on the partner of such firm , thus setting aside the impugned order while allowing the appellant’s appeal.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has recently observed that redemption fine of 10% and penalty of 5% of value of imported goods is appropriate for imports violating Exim Policy Provisions.
With M.P.Toppo, the Authorized Representative on behalf of the Revenue submitting that the redemption fine and personal penalty merits are to be increased in the view of the fact that the respondent is a frequent importer of worn , who used garments in violation of ITC Regulations, he added that a high amount of redemption fine and penalty will act as a deterrent for such imports by unscrupulous persons.
The Tribunal of consisting of PK Choudhary, the Judicial Member observed: “Redemption fine of 10% and penalty of 5% of the value of the imported goods, would be appropriate in case of imports violating Exim Policy Provisions. I find no reason to interfere with the findings of the Commissioner (Appeals) on the basis of such decision.”
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