This weekly round-up analytically summarises the key stories of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at taxscan. in, from July 08 to July 14, 2023.
The Chennai bench of the Customs, Excise, And Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit should be allowed even if the premises of the service exported are not registered under rule 5 of the CENVAT credit rules, 2004.
The two-member bench comprising P. Dinesha (Judicial) and M. Ajit Kumar (Technical) held that the appeal filed by the revenue does not contain any merit and is dismissed.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the levy of the service tax on “renting of immovable property services” was constitutionally valid.
The two-member panel comprising P. Dinesha (Judicial) and M. Ajit Kumar (Technical) quashed the interest and penalties confirmed in the impugned order while allowing the appeal filed by the assessee.
The Hyderabad bench of the Customs, Excise, And Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the adjudicating authority for rejecting the CENVAT credit on invoices due to non-falling of service rendered within the definition of rule 2(l) of the CENVAT credit Rules, 2004.
The two-member bench comprising R. Muralidhar (Judicial)and A.K. Jyotishi (Technical) quashed the penalty and interest imposed by the adjudicating authority and allowed the appeal filed by the assessee.
The Hyderabad bench of the Customs, Excise, And Service Tax Appellate Tribunal (CESTAT) held that no service tax can be levied on the activities of the service which do not fall under the category of “Business Auxiliary Services”.
The two-member bench comprising R. Muralidhar (Judicial) and A.K. Jyotishi (Technical) held that the assessee was providing Business Auxiliary Services to the print media cannot legally sustain while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the charge of clandestine removal of goods computed on mere differences of the audit report and the production and clearance in central excise statutory returns in form Excise Return (ER-1) was not sustainable.
The two-member bench comprising Ashok Jindal (Judicial) and K. Anpazhakan (Technical) held that in the absence of any statement or investigation against the appellant with corroborative evidence, the impugned order was not sustainable and quashed the order while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the order of dropping the demand of CENVAT duty from the assessee on the ground of the genuine disclosure of the input-output ratio.
The two-member panel comprising Ashok Jindal (Judicial) And K. Anpazhakan (Technical) upheld the order of dropping the demand of duty from the assessee by the adjudicating authority.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the appeal before the Commissioner (Appeals) lies only against the decision or order made by any officer of the custom under section 128 of the Customs Act, 1962.
The two-member bench comprising Ramesh Nair (Judicial) and C.L. Mahar (Technical) directed the Commissioner (Appeals) shall pass a fresh order on merit within four weeks from the date of this order while allowing the appeal filed by the assessee.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the availment of CENVAT credit based on Railway Receipts (RR) authenticated certificates photocopy issued by railways are valid documents under rule 9 of the CENVAT credit rules,2004.
The two-member bench comprising Dilip Gupta (President) and Hemambika R. Priya (Technical) allowed the assessee to avail of the CENVAT credit which had been held inadmissible in the impugned order while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no service tax can be charged if the assessee was not a service received from the foreign banks under section 66A of the Finance Act, 1994.
The two-member bench comprising Ramesh Nair (judicial) and C.L Mahar (Technical) held the issue was no longer res-Integra and quashed the impugned order while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no penalty can be imposed when the entire service tax discharged along with interest immediately before the issuance of show cause notice under section 78 of the Finance Act,1994.
The single-member bench comprising Muralidhar (Judicial) quashed the penalty imposed by the adjudicating authority for nonpayment of educational cess before the issuance of show cause notice while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods are not liable for confiscation even if the bulk packages did not contain any details of the manufacturer under section 2(v) of the Prevention of Food Adulteration Act, 1954.
The two-member bench comprising Sulekha Beevi C.S (Judicial) and Vasa Seshagiri Rao (Technical) held that the redemption fine and penalties imposed are required to be quashed while allowing the appeal filed by the assessee.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the interim order passed by the Commissioner (Appeals) for rejecting the claim of refund of educational cess on the ground of non-inclusion of refund in the area-based exemption notification.
The two-member bench comprising S. S. Garg (Judicial) and P. Anjani Kumar (Technical) upheld the rejection of the claim of refund while dismissing the appeal filed by the assessee.
The Chandigarh bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) held that the collection of adda fee or bus stand fee by the transport corporation cannot be equated to “Business Support Service” as they are discharging their functions as a statutory authority.
The two-member bench comprising S. S. Garg (Judicial) and P. Anjani Kumar (Technical) held that the penalties imposed cannot be sustained and liable to be deleted while allowing the appeal filed by the assessee.
The Chandigarh bench of the Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed for the non-payment of service tax on the commercial or industrial construction service on the ground of barred by limitation.
The two-member bench comprising S. S. Garg (Judicial) and P. Anjani Kumar (Technical) quashed the order passed by the Commissioner while allowing the appeal filed by the assessee.
The Kolkata bench of the Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the post facto production of the certificate by the assessee was entitled to get the exemption under the exemption notification.
The two-member bench comprising Ashok Jindal (Judicial) and K. Anpazhakan (Technical) held that the assessee was entitled to take benefit of exemption notification while allowing the appeal filed by the assessee.
The Bangalore bench of the Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed for the nonpayment of service tax on the ground of wrongful categorization of service rendered as franchise service.
The two-member bench comprising D. M. Misra (Judicial) and R. Bhagya Devi (Technical) held that the penalty imposed was not as per the law and liable to be deleted while allowing the appeal filed by the assessee.
The Chennai bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) held that the imported pre-packaged goods should be intended for retail sale to avail the benefit of Special Additional Duty (SAD).
The two-member bench comprising P. Dinesha (Judicial) and Vasa Seshagiri Rao (Technical) did not find any infirmity in the impugned order and dismissed the appeal filed by the revenue.
The Chennai bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the adjudicating authority for rejecting the refund claim of educational cess on the ground of barred by limitation and unjust enrichment.
The two-member bench comprising Sulekha Beevi C.S (judicial) and M.Ajith Kumar (Technical) quashed the order passed by the adjudicating authority for rejecting the refund of the claim while allowing the appeal filed by the assessee.
The Chandigarh bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Small Scale Industry (SSI) exemption cannot be denied on the ground of usage of the surname of the family in the separate entity by the assessee.
The two-member bench comprising S. S. Garg (Judicial) and P. Anjani Kumar (Technical) held that the assessee was eligible to get the benefit of small-scale industrial exemption while allowing the appeal filed by the assessee.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that duty exemption benefits under Special Economic Zones (SEZ), 2005 cannot be denied merely on procedural lapse.
A two-member bench comprising Ramesh Nair, member (judicial) and C L Mahar, Member (Technical) observed that “even though the sub-contractor provided the service as sub-contractor to the main contractor but it is not under dispute that the service was provided in the SEZ which prima-facie show that services were provided by the appellant as sub-contractor which was ultimately received by the SEZ developer or unit in SEZ.’ The CESTAT set aside the impugned order and allowed the appeal by way of remand to the Adjudicating Authority to pass a fresh order
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax was leviable on charges for activating software inbuilt into the telecom system of electronic private automatic branch exchange (EPABX), when sales tax on same was paid.
A two-member bench comprising Ramesh Nair, member (judicial) and C L Mahar, Member (Technical) held that “the appellant is not a facilitator or a service provider to customers, but is a seller to customers. Hence, a pure and simple sale/purchase transaction has been misconstrued to be a service under Section 65(19) of the Finance Act 1994 by the Department in this matter”. The CESTAT allowed the appeal.
The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that toll collection on behalf of the National Highway Authority of India (NHAI) cannot be considered as a business auxiliary service.
A two-member bench comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) held that the impugned order is not sustainable in law and set-aside the impugned order by allowing the appeal of the appellant with consequential relief.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that cutting and filing resin in marble slabs carried out before 1-3-2006 would not amount to manufacture and allowed the benefit under exemption notification.
A two-member bench comprising Ramesh Nair, member (judicial) and C L Mahar, Member (Technical) observed that the appellant have made the submission that they had paid the duty on 30th June 2010 for the period April 2010 to June 2010 as a differential duty. However, the adjudicating authority may verify the said claim of the appellant and arrive at a correct computation of demand.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 26(2) of the Central Excise Rules, 2002 does not apply to transactions made before 01.04.2007.
A single-member bench comprising Mr Ramesh Nair, Member (Judicial) found that penalty was imposed under Rule 26(2) of Central Excise Rules, 2002 which has come into force with effect from 01.04.2007. Therefore, for all the transactions made before 01.04.2007, the Penal Provision Rule 26(2) cannot be applied retrospectively. Therefore, in respect of the transactions only made after 01.04.2007 the penalty under Rule 26(2) of Central Excise Rules, 2002 shall be applicable. Further held that some of the transactions made after 01.04.2007 by the appellant are liable to penalty under Rule 26(2) of Central Excise Rules, 2002. Accordingly the penalty of M/s. Goodluck Empire is reduced from Rs. 8,20,000/- to Rs. 2,00,000/- and partly allowed the appeal.
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Rule 6(3) of Cenvat Credit Rules is inapplicable if wrongly taken credit was reversed subsequently
A two-member bench comprising Ramesh Nair, member (judicial) and C L Mahar, Member (Technical) observed that the appellant has complied with the condition prescribed under Rule 6(3)(II) read with sub-rule (3A) of Rule 6 of Cenvat Credit Rules, therefore demand of huge amount of Rs. 24,71,93,529/- of the total value of the vehicle amounting to. Rs. 494,38,70,577/- sold In the market cannot be demanded. Further viewed that Rule 6 of the Cenvat Credit Rules Is not enacted to extract an Illegal amount from the assessee. The main objective of Rule 6 Is to ensure that the assessee should not avail of the Cenvat Credit in respect of Input or input services which are used in or In relation to the manufacture of the exempted goods or for exempted services. If this is the objective then at the most amount which is to be recovered shall not be in any case more than Cenvat Credit attributed to the input or input services used in the exempted goods. It was also observed that in either of the three options given in sub-rule (3) of Rule 6, there are no provisions that If the assessee does not opt for any of the options at a particular time, then the option of payment of 5% will automatically be applied. It was held that “when the appellant have categorically by way of their Intimation opted for option provided under sub-rule (3)(1), how Revenue can Insist that option (3)(i) under Rule 6 should be followed by the assessee” The CESTAT set aside the impugned order and remanded the matter to the adjudicating authority for passing a fresh de novo adjudication.
The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty under the Customs Act is not invokable in the absence of evidence of tax evasion.
A two member bench Dr Rachna Gupta, Member (Judicial) and Hemambika R Priya, Member (Technical) held that “the entire case made out against the appellant is therefore, held to be an act of misunderstanding and the findings are nothing but the result of presumptions and assumptions. Once there was no intent to evade the customs duty and the required duty has already been paid by the appellant. Once, there is no evidence of alleged misdeclaration and undervaluation for the reasons discussed above, there arises no question of imposition of penalty either on the importing firm or on its director. Hence, the orders under challenge cannot be sustained.”
The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax leviable on wireline logging, perforation and data processing services under “technical testing and analysis(TTA)” services.
A two-member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya, Member (Technical) observed that the appellant had repeatedly informed the department from 23.12.2004 that before 01.06.2007 it had not been discharging service tax on wireline logging, perforation and data processing services under the category of TTA services and by a letter dated 25.10.2007 the appellant had also informed the department that it had started paying service tax on mining services when it was introduced w.e.f. 01.06.2007. Yet, the show cause notice was issued to the appellant only on 23.10.2008. Thus, the extended period of limitation could not have been invoked in the facts and circumstances of the case. While allowing the appeal, the CESTAT set aside the impugned order dated 28.08.2012 passed by the Commissioner.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a slight reduction in the value of the machine found due to replacing of an important part of the machine sold with a less advanced component not violative of Valuation Rules.
The two-member bench comprising Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao held that “the appellant carried out the required process of quality inspection and replaced the Servo Driven Filler with a Pneumatic Driven Filler. Further, the original machine that was made was sent to the exhibition, which was brought back and after elapsing for some time, the machine was sold and cleared like any other excisable goods. That being the case, we do not find any contravention of the Valuation Rules by the appellant, as an important part of the machine sold has been replaced with a less advanced component, a slight reduction in the value of the machine sold is found to be normal.” While allowing the appeal, the CESTAT set aside the order and penalty.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service of charting of ships and tugs does not fall under the category of steamer agent service and service tax demand without considering documents is not valid.
The two-member bench comprising Ramesh Nair, member (judicial) and C L Mahar, Member (Technical) remanded the matte back for fresh adjudication with the direction that all the documents submitted by the appellant need to be considered and a fresh order needs to be passed
The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the interest on refund since the claim of service tax was filed after one week of passing the order.
A single-member bench comprising Dr Rachna Gupta, Member (Judicial) observed that the ground of rejecting the amount is that the same cannot be an amount covered under section 35F of Central Excise Act. Hence, section 11 B of the Act shall be applicable for a refund of the amount. The department is held liable to refund the said amount also alongwith the interest. In light of decisions in the case of Parle Agro Pvt. Ltd and Dugger Fibers Pvt Ltd the Department is directed to grant interest on the said amount at the rate of 12% from the date of deposit till the date of payment.
The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the demand of service tax under the Reverse Charge Mechanism (RCM) on legal charges and non-payment of service tax due to service providers in non-taxable territory.
The two-member bench comprising Dr Rachna Gupta, Member (Judicial) and Mrs Hemambika R Priya, Member (Technical) observed that the service recipient who is located in the taxable territory is made liable to pay 100 per cent service tax The appellant as a service provider was liable under Reverse Charge Mechanism to discharge the said liability, the recipient in the present case being situated in a non-taxable territory. Apparently and admittedly, the liability on this count stands already discharged by the appellant. There is no evidence on record about the discharge of said liability beyond the reasonable time. Since there is no evidence of any positive act on the part of the appellant proving that the appellant had the intention to evade the payment of duty. In these circumstances, the order of imposition of penalty is held unreasonable. The CESTAT held that there was no shortcoming as were pointed out against the appellant (3 in number). The order confirming the demand based on alleged said shortcomings was set aside and allowed the appeal.
The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that subcontractors were liable to pay service tax on erection, commissioning and installation service and upheld the demand of Service Tax on a normal period.
The bench held that a penalty cannot be imposed as there was no intention to evade payment of service tax. The CESTAT partly allowed the appeal and remanded back to the original authority for determining the tax liability of the appellant for the normal period along with interest.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that refund of excise duty paid under mistake cannot be denied when it was filed within the time prescribed under section 11B of the Central Excise Act,1944.
It was observed that duty has been paid under mistake of law because they followed the pattern of the earlier exemption Notification No. 41/2007 dated 6.10.2007, but when they realized their mistake, they have claimed a refund of duties paid. The refund of the same paid under a mistake, cannot be denied to them, when the claim is filed within time as per section 11B.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the allegation of removal of clandestine without corroborative evidence is not valid.
No investigation was carried out after intimation letters were received in the Range office even though these were addressed from time to time, much before the audit objection, no verification was carried out. Therefore, it is difficult to accept the allegation of the department that the quantity of goods as shown in the purchase invoices were brought into the factory, processed, converted into finished goods and removed clandestinely without payment of duty.”, held the Judicial Member Dr D M Misra.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the mere omission to give correct information was not s suppression of fact unless it deliberately stop payment of duty.
The two-member panel comprising Sulekha Beevi C.S (Judicial) and Vasa Seshagiri Rao (Technical) quashed the order passed by the Commissioner (Appeals) due to limitation while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Special Additional Duty (SAD) exemption benefits were allowable if the imported pre-packed form of goods meant for the retail sale by the assessee.
The two-member bench comprising P. A. Augustian (Judicial) and R. Bhagya Devi (Technical) upheld the penalty on the ground of the importer had violated the conditions of import policy and did not comply with the conditions of the notification while dismissing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the demand for service tax by the Commissioner (Appeals) under section 73(1) of the Finance Act, 1994 on the ground of Limitation.
The two-member bench comprising Dilip Gupta (President) and Hemambika R. Priya(Technical) quashed the order passed by the Commissioner (Appeals) while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no separate demand of service tax was made to an individual service of transportation under the category of ‘Cargo Handling Service’.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anbazhakan (Technical) held that individual services in the contract of transportation cannot be vivisected to demand service tax from the assessee under the category of ‘Cargo Handling Service’ while allowing the appeal filed by the assessee.
The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the refund of a claim by adding invoices of the previous quarter which were not used for claiming during the previous quarter was a valid claim and allowable.
A single-member bench comprising R. Muralidhar (Judicial) held that there was no violation of the conditions imposed under the notification and refund claimed by the assessee while allowing the appeal filed by the assessee.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacturer of final products was entitled to take credit of excise duty on capital goods received in the factory for the production of final products.
The two-member bench comprising Dilip Gupta (President) and Hemambika R Priya (Technical) held that the assessee was entitled to take the credit of excise duty of the final products while dismissing the appeal filed by the revenue.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal held that the invoices or challan issued by the provider of input services was a relevant document for availing CENVAT credit under rule 9 of the CENVAT Credit Rules,2004.
The two-member bench comprising Rachana Gupta (Judicial) and R.Priya (Technical) held that the substantial benefit of availing of CENVAT credit cannot be denied on the grounds of procedural lapse while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise, and Services Tax Appellate Tribunal (CESTAT) quashed the order of demand of central excise duty on the ground of the inclusion of Waste Pickle Liquid (WPL) as the category of the waste component.
The two-member bench comprising Ajay Sharma (Judicial) and Anil.G. Shakkatvar (Technical) held that the waste or rubbish, which is thrown up in the course of manufacture, cannot be said to be a produce of manufacture and cannot be said to be eligible to excise duty and quashed the order of demand while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise and Services Tax Appellate Tribunal quashed the penalty imposed on excess recovery demand on boiler ash and sludge which was categorized as products or waste which does not fall within the purview of Rule 6(3) of CENVAT Credit Rules, 2004.
A single-member bench comprising Ajay Sharma (Judicial) quashed the penalty imposed by the Commissioner (Appeals) while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the payment of the license fee which was not a condition of sale cannot be included in the transaction value under rule 10(1)(c ) of the Customs Valuation Rules,2007.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) the order passed by the Commissioner (Appeals) does not require any interference and is liable to be sustained while dismissing the appeal filed by the revenue.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand of duty on the ground of the manufacturing of sugar syrup was not marketable and not liable to pay duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) quashed the demand of duty passed by the adjudicating authority while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by denying the CENVAT Credit of duty paid on rough castings on the ground of short payment of duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) held that the denial of credit cannot sustain and is liable to be quashed while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the Commissioner (Appeals) for reversing the CENVAT credit under rule 3(5B) of the CENVAT Credit Rules, 2004 without considering the documentary evidence.
A single-member bench comprising Ajay Sharma (Judicial) held that quashed the order and remand the matter back to the Commissioner (Appeal) for a fresh decision after giving sufficient opportunity to the assessee for placing on record the documentary.
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