This weekly round-up analytically summarises the key stories of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at taxscan.in, from April 30th to May 6th 2023.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), denied invoking a larger period of limitation in the matter of demand of service tax on sub-contractor for cargo handling service.
The Coram of P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The appellant, as a sub-contractor, was duty bound to discharge the tax liability, perhaps the communication issued by the main contractor i.e., M/s. Aspinwall & Co., prompted them to believe that the tax had indeed been remitted. The villain appears to be M/s. Aspinwall & Co. who misled the appellant or made the appellant believe that it had remitted tax and in turn, made the appellant rely on the letter issued by it in response to Show Cause Notice issued by the Department.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the rejection of refund claim on the ground that no document was filed to show that the Deficiency Memo was wrongly issued.
The Tribunal of Rachna Gupta, Judicial Member observed that “The Deficiency Memo was issued at the time of scrutiny of said refund claim. But the appellants never replied to the said Deficiency Memo despite a subsequent Memo nor even after the issuance of the Show Cause Notice which proposed the rejection of refund claim for it to be incomplete and barred by time. Appellant even failed to appear before the respective Original Adjudicating Authorities when opportunities of personal hearings were given to them.”
In a major relief to the Saubhagya Tilak Hotels Pvt Ltd, the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the demand of service tax on mandap keeper service.
The Tribunal of Justice Dilip Gupta, President and Hemambika R Priya, Technical Member observed that “It is clearly a case where the appellant had suppressed material facts on the department in order to evade payment of service tax and, therefore, the extended period of limitation was correctly invoked under the proviso to section 73(1) of the Finance Act.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that there is no Service Tax liability on developers of residential projects for the period prior to 01.07.2010. The appellant in the present matter is M/s. Jamals.
The Coram comprising P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “it is clear that no Service Tax could be levied on construction of residential complex on the appellant. The period of dispute here, as observed by us in the earlier paragraphs, is from April 2009 to June 2010 and hence, we are of the view that no Service Tax was eligible on the appellant.”
In a major relief to M/s. BCD Travels India Private Limited, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand on commission received on fuel surcharge.
The Coram comprising P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “An airline may pay commission inter alia on various items, apart from the basic fare, which are indicated clearly in the ticket issued to a traveller. The basic fare is clearly indicated, followed by various other charges in such ticket. Hence, when the basic fare is so specifically indicated, the authorities cannot add or delete anything to the same to say that the basic fare should also include those other things.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), sets aside the Revenue’s Demand for Extended Period in the absence of a malafide act for the service tax evasion.
The Tribunal of Ramesh Nair, Member (Judicial) and C L Mahar, Member (Technical) observed that “Since the same facts and legal issue of the appellant’s case involved in the above decision, the Tribunal held that the demand for the extended period is not sustainable on the ground that there is no malafide act to evade service tax.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the re-determining value based on contemporaneous values of imports available in the National Import Database (NIDB) as the imported guar gum was of food grade.
The Bench concluded that “We find that the impugned order is correct in rejecting the transaction value and re-determining the value based on the contemporaneous values of imports available in NIDB.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the customs duty demand in the matter of diversion of imported/indigenous goods procured customs duty free.
The Tribunal of SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We find that adjudicating authority was not correct in extending the benefit of Notification No. 2/95-CE dated 04.01.1995 to the respondents without verifying the relevant facts. The appeal is partly allowed, confirming the duty of Rs. 5 crores against M/s Punjab Exports along with interest and equal penalty; maintaining the redemption fine of Rs. 25 lakhs imposed on M/s Punjab Exports.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the central excise duty on pan masala as the commencement or discontinuation of retail sale price made only once in a particular month.
The Bench consisting of Ramesh Nair, Judicial Member and CL Mahar, Technical Member concluded that “We are of the clear view that since in the present case appellant have changed retail sale price either by commencement or discontinuation only once in the month of January, 2012 and April, 2012 it cannot be said that the appellant has not discontinued or commenced the new retail sale price permanently in the respective months.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the service tax demand on ‘Manpower Recruitment and Supply Services’ provided on a piece-rate basis.
The Tribunal of Raju, Technical Member and Somesh Arora, Judicial Member observed that “However if it is seen that the bills are raised on the number of persons supplied then the demand may be confirmed under the head of ‘Manpower Recruitment and Supply Services’. The appeals are allowed by way of remand to the original adjudicating authority.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), dismissed the appeal on the ground of non- impleading of necessary interested parties in the matter of anti-dumping duty on flat rolled products of aluminium.
The Bench concluded by noting that the appellants had not appeared before the designated authority. In such circumstances, the appellants would not qualify to be interested parties, in view of the decision of the Tribunal in Marino Panel Products Ltd. vs. Designated Authority.
In a major relief to M/s Trinetra Cement Limited, the New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed the cenvat credit on the event management services and mandap keeper services.
The Bench observed that “When one hires a service provider, he may not always indicate in detail the programme which is being organized. Instead, he indicates the services which he provided and the name of the client. In our considered view, the services rendered towards the annual awards or other programmes for the dealers have a direct nexus to sales promotion and CENVAT credit is admissible on such services.”
In the case of Bharat Heavy Electrical Limited (BHEL), the Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on receipt of liquidated damages.
In light of various judgments, the two-member tribunal bench comprising of Mr P Dinesha,(Judicial) and Mr Vasa Seshagiri Rao,(Technical) has concluded that the view of the Principal Commissioner therein that the penalty amount, forfeiture of earnest money deposit and liquidated damages received by the appellant therein towards “consideration” for “tolerating an act” as being amenable to Service Tax under Section 66E (e) of the Finance Act, was not sustainable. The CESTAT set aside the impugned order and allowed the appeal with consequential benefits.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on commission is paid to foreign agents under service tax exemption notification.
The two-member tribunal bench comprising Mr P Dinesha,(Judicial) and Mr Vasa Seshagiri Rao,(Technical) observed that liaising with customers and getting export orders is itself a ‘procurement of service’ within the meaning of (a) under Notification No. 14/2004 (supra) and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the purchaser and re-seller of land cannot be treated as a real estate agent and set aside the demand of service tax.
It was held that “since the specific remuneration has not been fixed in the deal for the acquisition of the land we are of the view that both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore we are of the view that taxable value itself has not acquired finality in this case.”
In a significant judgement, the Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that CENVAT credit cannot be denied on the ground that the supplier was not liable to pay duty on goods supplied.
The Tribunal held that “where even if the duty is not payable by the supplier but the same was paid, Cenvat credit cannot be denied at the recipient end.” Further, the CESTAT set aside the impugned orders and allowed the appeal.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the refund amount in the consumer welfare fund since the assessee recovered service tax from customers and the incidence of tax passed.
The CESTAT held that the lower authorities have rightly credited the refund amount to the Consumer Welfare Fund. The Court upheld the impugned order and dismissed the appeals.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activity of unloading milk cans & bottle crates to pre-pack machine services does not fall under ‘Cargo Handling Service’ and set aside the service tax demand.
The two-member bench comprising Mr Ramesh Nair, (Judicial)and Mr C L Mahar, (Technical) observed that the entire activity undertaken by the appellant is a stage before the goods become cargo. While allowing the appeal, the CESTAT set aside the impugned order.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on royalty charges for music directors/companies.
The two-member tribunal bench comprising Mr P Dinesha,(Judicial) and Mr Vasa Seshagiri Rao,(Technical) observed that the Revenue could not have proposed and confirmed the demand under Section 67 of the Act read with Rule 5 Service Tax (Determination of Value) Rules, 2006.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reduced the redemption fine to 4 lakhs since it was imposed without market inquiry.
A two-member bench of Mr Raju, (Technical) and Mr Somesh Arora(Judicial) observed that the facts of the matter indicate a wrong dispatch, but the goods were eventually cleared at the behest of the appellants who agreed to take the release of goods even at the enhanced value, indicates that margin of profit even after paying duty was present.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)has held that there is no penalty under section 114A of the Customs Act, 1962 on goods imported as per declaration in the bill of entry.
A two-member bench comprising Mr S S Garg, (Judicial) and Mr P Anjani Kumar,(Technical) observed that no redemption fine has been imposed and the goods were allowed to be re-exported, imposing a penalty under section 114 A has been imposed.
In a significant ruling, the Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable from owners of flats constructed for personal use.
The two-member tribunal bench comprising Mr P Dinesha,(Judicial) and Mr Vasa Seshagiri Rao,(Technical) observed that there is no Service Tax liability as and when the construction of the flat is for the personal use of the service recipient.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that it allowed the duty exemption under customs duty exemption notification since the aircraft was not used for private purposes in breach of undertaking.
The Court observed that the department has proceeded on the basis that the use of aircraft, post importation was in breach of an undertaking given by the appellant, the confiscation of the aircraft and demand of duty and imposition of penalties is on the footing that the appellant has contravened post import conditions.
The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that explosive material for blasting sites falls under “works contract” services and set aside the service tax demand.
A two-member bench comprising Dr Rachna Gupta,(Judicial) and Mrs Hemambika R Priya,(Technical) observed that though the assessee was not selling the explosive to the mine blaster and was issuing the same for the execution of mining works there is no simultaneous denial to the fact that the assessee was issuing bills to the customer in which they were charging for the explosive material and blasting service separately and that the assessee was paying applicable VAT on the explosive material.
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a company is not liable to pay excise duty if job workers are independent contractors/manufacturers.
The two-member bench of P.K Choudhary (Judicial) and K. Anpazhakan (Technical) has observed that the job workers of the assessee company were independent contractors/manufacturers and hence, the assessee company and/or its directors cannot be saddled with any liability of payment of excise duty and/or consequential penalty concerning the goods so manufactured by the said job workers.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the penalty under Section 11AC of the Central Excise Act, 1944 (CETA) and observed that the demand of the extended period is not sustainable in the absence of proof of suppression of fact.
The Coram comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member noted that “Since there is no suppression of fact, demand of extended period is not sustainable. The penalty imposed in the impugned order is held to be not warranted accordingly, the same was set aside.”
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that importer must pay Countervailing Duties (CVD) at the time of import of goods for availing of Special Additional Duty (SAD) refund under customs notification
A two-member bench comprising Ms Sulekha Beevi C S,(Judicial) and Mr M Ajit Kumar,(Technical) observed that one of the conditions that have to be fulfilled for claiming a refund under Notification No.102/2007 is that the importer has to pay the CVD at the time of import of the goods. The assessment, therefore, is in order and does not require reassessment. There is no excess duty paid.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the customs department cannot reject the price in the Memorandum of Association (MoA) and set aside the provisional Assessment on clearance of imported vessel.
A two-member bench comprising Mr Raju, (Technical) and Mr Somesh Arora, (Judicial) observed that the Revenue cannot reject the price mentioned in the MoA dated 22.11.2012 since it is not incorrect or fabricated and there was a variation in the specification of the goods imported. The CESTAT set aside the impugned order and allowed the appeal.
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has viewed that reversal of Cenvat Credit can be made even at the stage of appeal and set aside the order demanding differential excise duty.
A two-member bench comprising Mr Ramesh Nair (judicial) and Mr C L Mahar (technical) viewed that the reversal of credit and payment of interest thereon can be adjusted from the payment of Rs. 2 lacs already made by the appellant.
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the assessee can either claim Cenvat credit or claim refund under excise notification and set aside the penalty for wrong availment of Cenvat credit.
A two-member bench comprising Ms Sulekha Beevi C S, (Judicial) and Mr M Ajit Kumar, (Technical) held that “ the appellant is entitled to avail Cenvat credit in respect of commission paid to the commission agent based abroad and the impugned order is liable to be set aside and we allow the appeal by setting aside the impugned order with consequential relief, if any.”
In a recent case, the Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) allowed the refund of the excess amount of Customs duty paid due to an error in the EDI system.
While allowing the appeal, the Tribunal held that the authorities below have wrongly decided that the refund claim was made by the appellant on 29.04.2019 and the same was barred by time, being beyond the period of one year from the date of reassessment on 24.02.2018. The impugned order was set aside and allowed the appeal.
The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that assisting registration of vehicles with the Regional Transport Office (RTO) cannot be considered a declared service under section 66E(e) of the Finance Act, 1994 and set aside the demand of service tax.
A Two member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya,(Technical) has held that “Apart from the fact that the demand could not have been confirmed under section 65B(44) of the Finance Act for the reason that the activity cannot be considered as a declared service under section 66E(e) of the Finance Act, a demand cannot also be confirmed on an allegation other than an allegation contained in the show cause notice.”
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the excise dept cannot make the computation of tax liability afresh since past liability on Deposit Insurance and Credit Guarantee Corporation, Mumbai (DICGC), was clarified by Central Board Of Indirect Taxes & Customs(CBIC) notification.
Further held that “the first appellate authority shall verify the various claims of the appellants DICGC, with documentary proof that may be submitted by the appellants DICGC, and give due allowance to the same if found otherwise in order as per law while computing the interest for delay in payment of service tax liability.”
The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has viewed the misdeclaration of the brand on import documents of paper cup machine due to erroneous dispatch by the supplier and set aside the Confiscation under the Customs Act,1962
On the allegation of sending money to the Chinese supplier of a differential amount through Hawala, the single-member bench comprising Mr Anil Choudhary, (Judicial) observed that Revenue failed to examine Shri Tarun Baid in the adjudication proceedings and also failed to offer its witnesses for cross-examination. The CESTAT allowed the appeal and set aside the impugned order.
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) overturned the imputed order and directed the adjudicating body to re-adjudicate the case following a reconciliation exercise.
The bench noted that because if the entire case was revenue neutral and no differential demand arose following the reconciliation exercise regarding the total amount of duty payable and the availability of Cenvat credit, the demand would not be upheld.
In a recent ruling, the Chandigarh Bench of Customs, Excise and Service Tax Tribunal (CESTAT) held that conference halls for meetings and other functions were a complementary service and are not liable to Mandap Keeper Service tax.
The bench observed that it is unambiguous that no separate consideration was charged for the provision of conference facilities based on the breakdown of the corporate billing that the respondent provided on the record.
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