This weekly round-up analytically summarises the key stories of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at taxscan. in, from August 13 to August 19, 2023.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that used Digital Multifunction Printing and Copying Machines were released on payment of a redemption fine of 10% and a penalty of 5% of the enhanced value of the imported goods in absence of market value.
The two-member bench comprising P. A Augustian (Judicial) and Bhagya Devi (Technical) reduced the redemption fine to 10% of the enhanced value and penalty to 5% of the enhanced value and allowed the assessee to redeem the imported goods.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no adjournment shall be granted more than three times to a party during the hearing of an excise appeal under section 35C of the Central Excise Act,1944.
A single-member bench comprising Sanjiv Srivastava (Judicial) dismissed the appeal filed by the assessee in terms of Rule 20 of CESTAT Procedure for the non-prosecution.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the demand for service tax on the ground of service tax leviable on land development activity rendered for consideration which was classified under the category of site formation and clearance service.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) upheld the demand for service tax raised by the department while dismissing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the value of raw materials not added to determine service tax liability when the contract simpliciter uses the service of commercial and industrial construction without a supply of any raw materials.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the demand for service tax and the penalty along with interest imposed by the department on the assessee was not sustainable and liable to be quashed and directed re-adjudication to the adjudication authority and the assessee would be allowed to produce any documents which may be required in the interest of justice.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the levy of service tax is only applicable to the service contractors simpliciter not to the indivisible works contract. The Bench held that the service tax levy applied to service contracts simpliciter and not to indivisible works contracts which contained both the elements of transfer of property in goods as well as labor and services and the same were brought under the service tax net for the first time on 01.06.2007.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that service tax levy applied to service contracts simpliciter and not to indivisible works contracts which contained both the elements of transfer of property in goods as well as labor and services.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Customs duty payable on the import of lawn mowers was classified under the category of harvesting or threshing machinery.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) held that the customs duty payable on lawn mowers which was classifiable under the category of harvesting or threshing machinery and quashed the re-classification made by the revenue while allowing 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 imposed on the repair and maintenance of motor vehicles on the ground of non insertion of section 65B(54) of the Finance Act,1994. The Bench held that the composite contracts for repair and maintenance of motor vehicles are leviable to service tax from 01.07.2012 onwards after the insertion of new section 65B(54) of the Finance Act.
The two-member bench comprising P.Dinesha (Judicial) and Ajith Kumar (Technical) held that the demand for service tax on repair and maintenance service was not sustainable on the assessee’s case and liable to be quashed while allowing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the ownership of land without rendering any kind of services was not a relevant condition for determining the taxable service.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) held that the land owner who rendered any service or made any land activities for consideration would be taxable under the category of ‘Site Formation and Clearance Service’ under section 65(105)(zzza ) of the Finance Act, 1994.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that conditions prescribed in the new service tax exemption notification would replace old notification.
The Two-Member Bench comprising P. Dinesha, Member (Judicial) and M. Ajit Kumar, Member (Technical) observed that “It is within the remit of Government to change a policy keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. Hence when an exemption of service tax is made under a new notification which replaces an old notification, the grant of exemption/ refund is subject to the various conditions enumerated therein.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no excise duty was leviable tools and die development charges based on the export of rough forgings. The Bench held that proceedings relate to the export of goods which was not subjected to Central excise duty.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) held that excise duty not leviable to tools and die charges based on export of rough forgings and quashed the excise duty demand raised by the department on the assessee while allowing the appeal filed by the assessee.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that service tax is not leviable on tour services for hajj pilgrimage in Saudi Arabia by Indian pilgrims.
A Two Member Bench of the Tribunal comprising Dr Rachna Gupta, Judicial Member and PV Subba Rao, Technical Member observed that “it also becomes clear that the non-registration of the appellant was due to its bonafide belief for the impugned activity/ service to not to be taxable. Question of imposition of penalty doesn’t at all arise. We rather consider it as a reasonable explanation and thus invoke section 80 of the Central Excise Act while setting aside the order of imposition of penalty upon the appellants. In view of the entire above discussion the order under challenge is hereby set aside.”
The Delhi Bench of Customs Excise & Service Tax Appellate Tribunal (CESTAT) has held that an extended period of limitation is invokable on failure to file st-3 returns with malafide intention to evade tax.
Failing to file the ST-3 returns properly infers malafide intent to evade tax and so the extended period of limitation would be invokable and interest would be recoverable, and penalty imposable under section 78 of the Finance Act. It would not be necessary to examine whether the extended period of limitation could be invoked regarding the first show cause notice dated 10.10.2014.”, the two-member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya, Member (Technical) held. The CESTAT dismissed the appeal filed by the department.
The Delhi Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax is demandable on the activity of buying and selling cargo space and the amount received for such activity is a profit earned from the sale, which cannot be attributed to be a consideration for service.
A two-member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya, Member (Technical) observed that “The assessee is acting on behalf of the shipping lines and is selling cargo space of such shipping lines instead of which amount is also collected by the assessee from the client. Thus, the assessee is a commission agent as defined under Explanation to section 65 (19) of the Finance Act and BAS is rendered in terms clause (vii) to section 65 (19) of the Finance Act to the shipping lines for a commission, which is susceptible to service tax under section 65 (105) (zzb) of the Finance Act.” Further held that Ocean freight and air freight are per se not taxable, though markup is taxable. Further, the markup on air freight is not taxable as the same does not form part of demand in the show cause notice dated 10.10.2014.” Shri B.L. Narasimhan, counsel for the appellant and Shri Rohit Issar authorised representative of the department.
The Delhi Bench of Customs Excise & Service Tax Appellate Tribunal (CESTAT) has held that snow goggles do not fall under the classification of sun glass and set aside the confiscation order under section 111(m) Customs Act 1962 on the ground that the importer classified the goods under a CTH different from the opinion of the officer.
“Wrong classification or wrong claim of an exemption notification, in the Bill of Entry even if they are found to be completely incorrect, do not attract section 111(m) or the consequential penalty under section 112 of the Customs Act 1962. “, the CESTAT held.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the commercial or industrial construction services undertaken for the government for non-commercial purposes were not liable to pay service tax.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) remanded back the matter to the adjudicating authority for re-adjudication and reconsider the entire matter based on the Judgments which were passed much after the impugned order.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the excise duty cannot be demanded on raw materials used in the manufacturing of final products once the duty was already demanded on final products.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the order and remand the matter to the Adjudicating Authority to decide the matter afresh after affording an opportunity of personal hearing to the assessee.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal,(CESTAT) has held that authorised operations of tyre manufacturing consumed outside Special Economic Zones (SEZ) are valid, service tax is not demandable.
A Coram comprising of Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) observed that there is no requirement that the impugned services should be consumed in the SEZ alone, so long as the services are being used for authorized operations and therefore, the demand raised and confirmed cannot sustain. The CESTAT set aside the impugned order and allowed the appeal.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty allowable on the railway line was outside the factory and exclusively used for handling of materials used in the manufacture of final products.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the denial of CENVAT credit availed by the assessee and held that the assessee was entitled to get the CENVAT credit while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication for the confirmation of the demand of central excise duty imposed on the clandestine clearance of dyed grey fabrics without verifying re-warehousing certificate.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the demand of excise duty and remanded the matter to the Adjudicating Authority to decide the matter afresh after allowing personal hearing to the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the capital goods used for fabricating structural support to plant and machinery used for the manufacturing of excisable goods were eligible to avail of the CENVAT credit of excise duty.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the assessee is entitled to the CENVAT credit on the goods manufactured by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for Central Excise Duty imposed on clandestinely cleared dyed grey fabrics illicitly removed on the ground of complying with the conditions of Rule 20 of the Central Excise Rules,2002.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical)quashed the impugned order and remanded the matter to the Adjudicating Authority to decide the matter afresh after affording an opportunity of personal hearing to the assessee.
The Chennai Bench of the Customs Excise & Service Tax Appellate Tribunal (CESTAT) in a recent ruling held that Service Tax exemption under section 65(105)(zzz) of the Finance Act, 1994 is allowable when a building or its part put up on land and used for car parking.
A two-member bench Mr P Dinesha, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) observed that the legislature has used the words “land” and “vacant land” by the context, wherever applicable. When “land” in a legal sense includes structures, if any, raised thereon, the same covers the land appurtenant to a building or a part of the building as well. Further held that “a building or its part put up on land and which is used for car parking will get the benefit of the exclusion from levy of Service Tax under Section 65(105)(zzzz) ibid., as it stood then.” The CESTAT set aside the impugned order and allowed the appeal. Shri Dwarakesh Prabhakaran, Advocate appeared for the assessee and Smt. Anandalakshmi Ganeshram, Superintendent appeared for the revenue.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal,(CESTAT) has held that prior to rescinding of the Central Excise circular dated 19.05.2010s, there is no liability to pay customs duty for clearance of part of the dryer.
A two-member bench comprising of Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that for the period prior to 15-5-2014 if the appellants have classified their products in question under Chapter Heading No. 8437 of CETA, no demand is sustainable in terms of the Circular No. 924/14/2010-CX., dated 195-2010. It was found that the period involved is 2011-12 to 2013-14 and during this period the circular dated 15.05.2014 was not in force but during the relevant period the Circular dated 19.05.2010 was prevailing and according to which the goods were classifiable under Chapter heading 8437. “In view of the said Circular dated 19.05.2010 the appellant was not liable to pay any duty for the clearances made prior to rescinding the Circular dated 19.05.2010.”,the CESTAT concluded by setting aside the impugned order and allowed the appeal.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the export value of goods of another country cannot be adopted as a direct basis for the determination of value under the residual method.
The two-member bench comprising Somesh Arora(Judicial) and Raju (Technical) upheld the decision of the Commissioner (Appeals) while dismissing the appeal filed by the revenue.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the redemption fine and penalty imposed for the confiscation of goods that falls under the category of ‘light oil’ on the ground of violation of policy conditions of foreign trade policy(FTP).
The two-member bench comprising Somesh Arora (Judicial) and Raju (Technical) held that the present appeal was devoid of merits both on classification issues as well as violation of foreign trade policy and penalties imposed are upheld while dismissing the appeal filed by the assessee.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Masala and Coriander Oats, Curry, Pepper Oats (Savoury Oats), and Silk Oats (Sweet Oats) are classifiable under the category of ‘Cereal Grains’ which do not attract any rate of excise duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) held that the savoury oats and silk oats were classifiable under the category of cereal grains which were not cooked or processed.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that under section 129D(3) of the Customs Act,1962, the review order had to be passed within a period of three months from the date of communication of the decision of the adjudicating authority.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) upheld the order passed by the Commissioner (Appeals) while dismissing the appeal filed by the revenue.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the muesli is classifiable under the category of the prepared food obtained by the swelling or roasting of cereal and cereal products which attracted only 6% of the rate of Excise Duty.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) held that muesli was classifiable under which covered ‘prepared food obtained by swelling or roasting of cereal or cereal products’ which attracted 6% of the rate of excise duty.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to the Dalmia Cement by upholding the sanctioning of the refund claim of Customs duty on the ground of delay In passing of review order and the delay in filing the appeal by the revenue department.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao(Technical) upheld the sanctioning of the refund claim filed by the assessee while dismissing the appeal filed by the revenue.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) delivered 3 members’ opinions on a single issue of recovery of availed CENVAT credit of service tax on common inputs services which was attributable to the trading activity by invoking the extended period of limitation. The majority of members upheld the demand for the extended period by invoking the extended period of limitation.
Sanjiv Srivastava (Technical) held that an extended period of limitation as held by the Commissioner should be invokable in the present case for demanding reversal of CENVAT credit in respect of trading activities. D.M Mishra (Judicial) held that credit availed on common inputs services attributable to the trading activity can be recoverable for the period before 01.4.2009 invoking an extended period of limitation.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that trading activities are considered as an exempted service only from 1.04.2011 after the adding of explanation to Rule 2(e) of the CENVAT Credit Rules,2004.
The two-member bench comprising Sulekha Beevi (Judicial) and Sanjiv Srivastava (Technical) delivered a difference of opinion for recovery of credit availed by invoking the extended period of limitation and also held that the trading activities can be considered as an exempted service from the date of 1.04.2011.
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