This weekly summary analyses the stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) that have been published at Taxscan.in. during the previous week from September 8 to September 15 2023.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that excess amount paid in service tax can be adjusted against short payment in Education Cess/Secondary and Higher Education (SHE) Cess.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that excess amount paid in service tax can be adjusted against the short payment in Education Cess/SHE Cess. After adjustment, there was a short payment of Rs.8.95.160/- only in the month of January 2008, which has already paid by the Appellant. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and noted that the utilization of Cenvat Credit for payment of service tax on ‘import of service’ is valid.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that the utilization of Cevat Credit for payment of service tax on ‘import of service’ by the Appellant is legally tenable. Accordingly, we hold that the impugned order confirming the demand on this count is not sustainable.” The Bench further noted that an ‘Explanation’ has been added to Rule 3(4)(e) of the Cenvat Credit Rules, 2004, w.e.f.01.07.2012, to the effect that Cenvat credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient. Thus, it is amply clear that there was no such restriction in the Cenvat Credit Rules, 2004, prior to 01.07.2012. The period involved in the present dispute is 2009, which is prior to insertion of the Explanation to Rule 3(4)(e) w.e.f., 1.7.2012.
The Mumbai bench of the Customs Excise & service tax appellate tribunal(CESTAT) has held that service tax is not leviable on volume discounts/incentives received from media owners at end of Financial year for publication purpose.
A two member bench of Dr. Suvendu Kumar Pati, Member (Judicial) and Mr. Anil G. Shakkarwar, Member (Technical) held that any reward/incentive or discount received as an expression of gratitude or generosity is held consistently as not taxable.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the exemption of Customs Duty allowable as per Project Import Regulations when application for registration of Contract Prior to import of goods.
The CESTAT held that “the benefit of Project Import Regulations, 1986 may be extended to goods imported by them through Chennai port, as all the essential documents were submitted prior to the date of filing of Bill of Entry at Chennai port. Further, the sponsoring authority had issued its recommendation for registration of the contract vide letter dated 25.08.2010 which is much before the import of goods at Chennai port.” Further viewed that the appellant having made an application for the registration of the contract prior to import of goods and sponsorship letter having been issued, therfore the appellant is eligible for the exemption of duty as per the Project Import Regulations.
In the case of import of old and used worn clothing articles which restricted item as per Foreign Trade Policy, the Kolkata bench of the Customs Excise & service tax appellate tribunal(CESTAT) has dismissed the enhancement of the redemption fine.
In light of the observation of Tribunal in the case of Venus Traders Vs. Commissioner of Customs (Import), two member bench of MR. R. Muralidhar, Member (Judicial) and MR. Rajeev Tandon, Member (Technical) held that “the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld.” While dismissing the appeal, the CESTAT upheld the impugned order and the same are upheld.
As a relief to Renault Nissan Automotive India, the Chennai bench of the Customs Excise & service tax appellate tribunal(CESTAT) ruled that refund claim cannot be rejected for not opting provisional assessment.
A two-member bench comprising Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, member (technical) observed that the authorities below have not analysed the issue in the correct legal prospective for which the matter requires to be remanded to the adjudicating authority. The CESTAT set aside the impugned order and the matter is remanded to the adjudicating authority who shall consider the observations of this order and process the refund-claim denovo.
The Kolkata bench of the Customs Excise & service tax appellate tribunal(CESTAT) confirmed the penalty and redemption fine as the exact description and quantity of imported old used worn clothes not determined since no 100% examination of all containers was done at the time of clearance of goods.
A two member bench of Mr. R. Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) held that the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld.
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) remanded matter for determining value verification of prices of actually sold goods not possible in absence of evidence.
A two member bench comprising Mr C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) observed that “even though the asseese contended that values of earlier imports are clearly ascertainable, no details were furnished to the adjudicating authority or now before us. It would only be appropriate for such evidence to be furnished and for the adjudicating authority to cause verification of prices at which these were actually sold.” The CESTAT set aside the impugned order and direct fresh adjudication in the light of submissions made on behalf of appellant before us. The matter is remanded to the original authority for re- determination on the facts pertaining to earlier imports to be furnished by the appellant.
The Kolkata Bench Of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that reversal of Cenvat Credit on Naphtha sent for Job Work for electricity generation is not tenable.
The two member bench of P.K. Chaudhary (Judicial Member) and K. Anpazhakan (Technical Member) observed that both ‘RFG’ and ‘CLS’ were generated on cracking of Naphtha and were sent to M/s. HPLCL for generation of electricity and steam with an intention to bring back electricity and steam for use in the manufacture of final products. In light of the decision of the Tribunal in Maharashtra Aldehydes & Chemicalscase wherein the duty demand on the intermediate product cleared under Rule 4(5)(a) of the CCR was dropped. Since the issue is squarely covered in favour of the Appellant by the decision of the Tribunal in the Appellant’s own case,the CESTAT allowed the appeal of the Appellant on merits.
The Chandigarh bench of the Customs Excise & Service Tax Appellate Tribunal(CESTAT) has held that mere failure to declare does not amount to willful suppression and set aside the demand of excise duty as it was without suppression of fact.
It was settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. The CESTAT held that the entire demand is barred by limitation and set aside the impugned order by allowing the appeal of the appellant.
In a recent case, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the value of ‘cut and polished diamonds’ determined by the Trade Advisory Panel as it was inconsistent with Customs Valuation Rules, 2007.
It was observed that the value adopted in the impugned order has not been shown to lack the impediments enumerated in rule 9(2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is essential as the reasons that prompted the ‘trade advisory panel’ to arrive at the disputed values is not on record.
While setting aside the impugned order, the two member bench comprising Mr C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) held that “the re- determination of value is not in accordance with the law. As the penal consequences arise from confiscation based on illusory foundation, the detriment to the individual appellants lack authority of law.”
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)allowed to submit documents as assesee failed to subnit the same due to covid -19 since quantification of service tax under work contract service without extending benefit of abatement.
The appellant could not obtain such documents due to the outbreak of the Covid-19 pandemic. They have now produced filed miscellaneous application, and produced documents. A two member bench comprising of Sulekha Beevi C.S., Member (J) and Vasa Seshagiri Rao ,Member (T) held that the appellant has to be given an opportunity to put their defence on the basis of the documents furnished by them. While allowing the appeal, the CESTAT set aside the impugned order and remanded the matter to the adjudicating authority for de novo adjudication.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that service tax should be levied on actual transportation charges not on provision made for transportation charges.
A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K.Anpazhakan, Member (Technical) observed that “The demand of Rs.5,98,625/-, has been confirmed on the basis of provision made by the appellant for transport expenses payable by the appellant. The appellant was not receiving the invoices of transportation charges from the transporter and later on the transporter sent the invoices of less amount on which the service tax is paid to them.”
In those circumstances, the provision made by the appellant is adjusted at the end of the year and the said entry has been taken in the corresponding year. In those circumstances, we hold that the appellant is required to pay service tax on actual transportation charges not on the provision made for transportation charges. Therefore, the said demand is also not sustainable” the Bench noted.
The Chennai bench of the Customs Excise & service tax appellate tribunal(CESTAT) has held that service Tax is not leviable on consideration and booking of tickets for domestic travel.
A two member bench comprising Mr. P. Dinesha, Member (judicial) and Mr. M.Ajit Kumar,(Technical) observed that the appellant is not a member of or agent of IATA and that it is not the case of the Revenue that the appellant had earned any commission from IATA or any other airlines when it sold or traded in air tickets. Further held that “the demand of Service Tax on the consideration and for booking of tickets in respect of domestic travel is not a taxable event and the direction of the Commissioner (Appeals) cannot sustain.” The CESTAT set aside this part of the impugned order, by holding that the appellant is not liable to pay Service Tax on the mark-up or margin earned for booking tickets with regard to domestic travels
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted relief to Indian Oil Corporation Ltd (IOC), and noted that Chartered Accountant (CA) Certificate is sufficient to discharge obligation that incidence of excise duty has not passed on.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Without evaluation of the pricing practice of the appellant for ‘lubricant’, discard of the certification on supposition of it having been treated as ‘expense’ and, therefore, built into the manufacturing cost of products cleared after 2000 is neither logical nor consistent with obligation of appellate authorities to restrict fact finding only upon evidence.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted relief to M/s Hero Motorcorp Ltd, and ruled that Mirror Assemble and Sari Guard are ‘input’ under Rule 2(k) of Cenvat Credit Rules, 2004 (CCR).
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We find that these two items fall under the definition of ‘input’ as defined under Rule 2(k) of the Cenvat Credit Rules, 2004 because these two items were cleared along with the motor cycle from the factory by paying the excise duty on the final products. We also find that as per the Motor Vehicle Act, it is a statutory obligation of the manufacturers of two wheelers to clear the motor cycle from the factory with mirror assembly (right & left) and sari guard”.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and thereby noting that the utilisation of credit for payment of service tax is valid.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “The issue is no more res-integra as it has been decided that utilisation of credit for payment of service tax is permissible. Therefore, the demand in the present case cannot be sustained. Accordingly, the impugned order is set-aside and the appeal is allowed.”
The Ahmedabad bench of Central, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by Ref Cem Industries (the appellant) against the order issued by the Commissioner of Central Excise (the respondent) demanding excise duty at 8% or 10% of value-based exemption received under notification number 08/2003-CE and Cenvat credit.
The two-member bench consisting of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) after hearing both sides supported the submissions by Ref Cem Industries and held that the revenue had not verified the facts of the Chartered Engineer certificate and simply proceeded in confirming the duty at the rate of 8% or 10% of the value of exempted goods which is not sustainable as once the Cenvat credit availed has been reversed, it can be held that they had not taken credit as per the Supreme Court Judgement in the case of Chandpur Magnet Wires (P) Ltd vs Collector of C.Excise, Nagpur.
The bench also took note of various decisions of the Tribunal regarding the same issue; Welspun Corp. Ltd vs. CCE. The bench’s final decision was that the impugned order was without any merit and the appeal was allowed.
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that penalty under Customs Act,1962 is not imposable when fabricated DEPBS scrip purchased on bonafide belief.
A single member bench of Mr. Somesh Arora, Member (Judicial) observed that “fraud vitiates everything and it having been considered and decided that for the fake scrips, no right accrues, same holds good for the appellant in the present matter too. However, since in the decision of Division Bench from the same facts cited by the appellant, it has already been decided that there is no allegation of fraud against the importer, penalty cannot be invoked in the absence of mens-rea, therefore regarding penalty party is entitled to relief.” The Tribunal set aside the penalty imposed since there is no intention to the fraud/ forgery and allowed the appeal.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the confiscation of Betel Nuts as the assessee failed to submit evidence to prove the legitimacy of transaction.
The two-member bench comprising R. Muralidhar (Judicial) and Rajeev Tandoon (Technical) observed that the appellant failed to submit enough evidence towards legitimacy of the transaction, so they cannot take the plea that the Department has not discharged their onus. Since the Appellant has failed to discharge the onus placed on him, the CESTAT upheld the Order passed by the Appellate Authority and dismissed the Appeal filed by the Appellant.
In the case of Confiscation of Truck for Transporting Red Sander Wood, the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed to refund security deposit to successor on death of proprietor of himalayan roadways.
A two member bench comprising Mr. R. Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) held that “the Department cannot retain this amount. The Appellant’s successor would be eligible to get the refund of security deposit of Rs. 2 Lakhs. While we hold that the Appellant’s successor is eligible to get the refund of Security deposit, it is for the Adjudicating Authority to cause necessary verification in respect of the claim of the Sri Dinesh Gupta that he is the relevant successor.”
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench has upheld that royalty or technical know how fees paid by an importer to a foreign collaborator should not be considered a condition of sale of imported goods. As a result, these fees are excluded from the assessable value for calculating customs duty, as the conditions under Rule 9(1)(c) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1998, were not met.
In conclusion, the two-member bench comprising Mrs. Sulekha Beevi C.S (Judicial Member) and Mr. Vasa Seshagiri Rao (Technical Member) held that royalty or technical know how fees paid to a foreign collaborator should not be considered a condition of the sale of imported goods and, as such, should be excluded from the assessable value for customs duty calculation.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that mens rea is necessary ingredient for imposing penalty under Rule 25 of the Central Excise Rules, 2002.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We find that the revenue in the present appeal is only aggrieved by non-imposition of penalty under the above said rules. Here, we note that the penal provisions under Rule 25(1) of the Central Excise Rules, 2002 are subject to Section 11AC of the Central Excise Act, 1944 which shows that penalty is imposable if there is intention to evade payment of duty as mens rea is a necessary ingredient before imposition of penalty under Rule 25.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), set aside order demanding excise duty taking into consideration that there was a delay of eighteen years in de-novo adjudication.
A Two-Member Bench comprising CS Sulekha Beevi, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “In the present case, it is not a situation of the show cause notice transferred to call book. It is a case in which there is delay in taking up the matter for de novo adjudication after the remand by the Tribunal (earlier known as CEGAT). The department has not been able to explain the delay of about 18 years in completing the de novo adjudication.”
The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no service tax under Business Auxiliary Services on commission received from BSNL for dealing with recharge coupon/mobile connection.
It was observed that the business transaction of the appellant with the BSNL is not on principle to principle basis as the overall control/supervision of the products/services remains with BSNL, even after the sale of product to the customer, as evident from the clauses of the agreement. A two member bench Mr S S Garg, Member (Judicial) and Mr. P Anjani Kumar, Member (Technical) held that “the impugned order is not sustainable in law and therefore, we set-aside the same by allowing the appeal of the appellant with consequential relief, if any, as per law.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that no service tax can be levied when no consignment note has been issued to service recipient, thereby granting relief to M/s. Vedanta Limited, the appellant.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi , Judicial Member observed that “The Service Tax Rules under Section 2(1)(b), provides that the recipient of service is liable to pay the Service Tax. In the present case, the demand has been raised upon the appellant alleging that they are the recipient of services of goods transport agency services provided by the CHA. Admittedly, the appellant has not been issued a consignment note.”
In a recent case, the Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal, (CESTAT) upheld the penalty under Customs Act, 1962 on the illegal importation of battery and ammonium chloride through mis declaration.
A two member bench comprising Mr. R. Muralidhar Member(Judicial) and Mr. Rajeev Tandon Member (Technical) observed that “A.K. Singh by his wilful act, despite being aware of the whole factual matrix, has deliberately and consciously played alongwith the key conspirators of mis-declared imports and contributed to the illegal importation of battery and ammonium chloride by filing Bill of Entry mis-declaring the imported cargo as calcium carbonate. The appellant has this certainly rendered himself liable to penal action under Section 112(a) of the Customs Act 1962.”
The CESTAT held that “no case is made out for waiver of penalty imposed under Section 112 (a) of the Act. However, in so far as the appellants have not been made noticee for imposition of penalty under Section 114AA of the Act, no penalty on them can therefore be imposed under the said section. We therefore discharge the appellant from the penalty imposed on them under Section 114AA of the Customs Act. The aforesaid Order in Original passed by the Learned Commissioner is upheld but for the said modification and the penalty imposed under Section 112(a) calls for no interference.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed an order that denied cenvat credit on input and input services, capital goods on tower, tower material and shelter.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “By following the ratio of the decision in appellant’s own case decided by the Hon’ble High Court of Delhi cited (supra) and the various decisions of the coordinated bench of the Tribunal cited (supra), we are of the considered opinion that the impugned order denying the cenvat credit on input and input services, capital goods on tower, tower material and shelter etc. are not sustainable in law.”
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)upheld the demand of concession amount availed under customs notification as the assessee failed to maintain proper records of import under Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 (Customs Rules, 1996).
A two member bench comprising Mr. P Dinesha, Member (Judicial) and Mr. Vasa Seshagiri Rao, Member (Technical) observed that in the case of Shiv Kripa Ispat Pvt. Ltd. Vs. Commissioner of Central Excise and Customs, Nasik [2009 (235) ELT 623 (Tri.-LB)] “it was held that the goods cannot be confiscated and the redemption fine not to be imposed when they are not available for confiscation, we order to set aside the confiscation and consequently, the fine imposed.”
Further observed that imposition of penalty under Section 112 (a)(ii) of the Customs Act, 1962 for contravening the provisions of the Notification No. 21/2002- Cus. dated 01.03.2002 read with the Customs Rules, 1966 is justified but the same is reduced to Rs.3,60,000/- (Three Lakhs Sixty Thousand only).
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed a service tax demand of Rupees 17 crores and observed that the Sales promotion and Technical Pre sales support services provided by subsidiary to Oracle is export of services.
A Two-Member Bench comprising Dr DM Misra, Judicial Member and Pullela Nageswara Rao, Technical Member observed that “The activity undertaken by the appellant is canvassing for the products and services of Sun Singapore which is ultimately used by Sun Singapore for further business. There is no agreement between the prospective customers of Sun Singapore in India and the appellant. The appellant has entered into an agreement only with Sun Singapore. It is on the request and direction of Sun Singapore that the appellant carried out the marketing activities in India and it is for these services that they get the consideration from Sun Singapore in convertible foreign exchange.”
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad bench has reaffirmed the supremacy of the Special Economic Zones (SEZ) Act, 2005, over other tax laws, stating that procedural lapses or conditions in tax notifications under the Finance Act cannot negate the tax exemptions granted to SEZ units for authorised operations within SEZ.
The bench referred to decisions of Metlife Global Operations Support Center (P) Ltd. and ECLERX Service Ltd., wherein it was held that procedural requirements, such as obtaining approval from Unit Approval Committees (UACs), are not mandatory conditions that can negate the substantive benefits of tax exemptions under the SEZ Act. It was also held that the claim for refund made in terms of the notification No 9/2009-ST cannot be denied just for the reason that the taxable services in respect of which the claim has been made, are not mentioned in the list of specified services approved by the SEZ authorities. In conclusion, the two-member bench comprising Mr. P.K. Choudhary (Judicial Member) and Mr. Sanjiv Srivastava (Technical Member) set aside the order and allowed the appeal filed by the appellant.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) conversion services of ms rounds, bars and converting the same to sockets, bends based on job work not a manufacturing process.
A two member bench comprising of Mr. Ashok Jindal Member (Judicial) and Mr. k. Anpazhakan Member (Technical) held that the evidence available on record does not support the classification arrived at in the impugned order. Hence, the duty demanded from the Appellant under the Chapter heading 87089900, as ‘parts of motor vehicles’ are not sustainable.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)upheld the Redemption Fine and Penalty imposed Under Customs Act,1962 on failure to comply with import license requirements as it met end of justice.
A two member bench compriisng Mr. R. Muralidhar, Member (Judicial), and Mr. Rajeev Tandon, Member (Technical) held that “the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld.”
The Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that the show cause notice (SCN) issued by the Commissioner failed to show collusion for the export and reduced the penalty imposed under Section 114(1) of the Customs Act, 1962, to Rs. 50,000/-.
The two-member bench consisting of R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) stated that the National Agency had rendered itself liable to penal consequences and as the show cause notice failed to bring for any express and active collusion in the attempted exports of Red Sander Wood logs on the part of the National Agency, reducing the penalty to Rs. 50,000 would meet ends justice and the appeal was disposed of.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that excise duty is not leviable on mere existence of the packing machine in the factory, thereby granting relief to Godfrey Philips India Ltd, the appellant.
A Two-Member Bench comprising C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) observed that “Merely because the sealed/uninstalled packing machine is available in the factory premises is not sufficient to saddle the manufacturer with the duty liability except if it falls under Rule 18 (2) ibid which provides for Penalty for contravention etc.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that penalty under Central Excise Rule 26 in absence of malafide intention to evade duty.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed THAT “Firstly the bracelet cannot be said to be a component or part of wrist watches to be used as original equipment in the manufacture of wrist watches. Secondly, it is an admitted fact that for supply of branded bracelets the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 has not been complied with. Hence, the condition for exception provided for branded goods for extending SSI exemption 08/2003- CE has not been complied with. “
The Tribunal held that ‘the appellant is not eligible for SSI exemption Notification No. 08/2003- CE. Since there is no mala fide intention of any individual, the penalty imposed on Shri Arvindbhai M Limbasiya , the co appellant under Rule 26 is not sustainable.’
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that service tax is leviable on ‘corporate guarantee’ and ‘credit protection fee’.
A Two-Member Bench comprising Dr Suvendu Kumar Pati, Judicial Member and Anil G Shakkarwar, Technical Member observed that “The appellant having received consideration against providing guarantee to its related company M/s Lavasa Corporation Ltd in the form of ‘corporate guarantee’ and ‘credit protection guarantee’ service is liable to pay service tax and, therefore, demand raised against the appellant is justified except for the extended period since the issue remained unsettled due to divergent opinion expressed by different judicial forums.”
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by Ref Cem Industries (the appellant) against the order issued by the Commissioner of Central Excise (the respondent) demanding excise duty at 8% or 10% of value-based exemption received under notification number 08/2003-CE and Cenvat credit.
The two-member bench consisting of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) after hearing both sides supported the submissions by Ref Cem Industries and held that the revenue had not verified the facts of the Chartered Engineer certificate and simply proceeded in confirming the duty at the rate of 8% or 10% of the value of exempted goods which is not sustainable as once the Cenvat credit availed has been reversed, it can be held that they had not taken credit as per the Supreme Court Judgement in the case of Chandpur Magnet Wires (P) Ltd vs Collector of C.Excise, Nagpur.
The bench also took note of various decisions of the Tribunal regarding the same issue; Welspun Corp. Ltd vs. CCE. The bench’s final decision was that the impugned order was without any merit and the appeal was allowed.
The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that demand of service tax is not leviable in absence of contract of hire and renting of a cab between the assesee and Punjab Road Transport Corporation (PRTC).
A two member bench comprising Mr. S S Garg, Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical) observed that in the case of R.S. Travels held that when there is a contract of hire and there is no renting of a cab, there is no question of the assessee being assessed in respect of services rendered in connection with rent-a-cab as there is no renting at all. In light of the discussion, the Tribunal held that “the impugned orders are not sustainable and are liable to be set aside. We do so and allow all the seven appeals.” To Read the full text of the Order CLICK HERE
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) denied the appeal by N. M. Zackriah & Co. (the Appellant) for exemption of service tax for the payments made to foreign agents for exporting goods, against the order issued by the Commissioner of Service Tax (CST), Chennai (the respondent) as the documents showing the commissions paid to the foreign agents was not submitted on time.
The two-member bench consisting of P.Dinesha (Judicial Member) and M.AJit Kumar (Technical Member) upheld the judgment by the Commissioner(Appeals) as N.M Zackriah&Co. had not produced shipping bills, agreement/contract with the agent and the original documents showing the actual payment of commission to the agent. The bench further mentioned the judgment of the Hon’ble Supreme Court in the case of “Commissoner of Customs (Import), Mumbai v. Dilip Kumar& Company”; “Exemption notifications should be construed strictly, that is to say the appellant should strictly adhere to the conditions specified under such exemption Notification” and dismissed the appeal
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)upheld the reversal by assesee along with interest for intervening period as the discrepancy on reversal of cenvat credit for opting ssi exemption found at time of audit.
A two member bench comprising Mr.Ashok Jindal, Member (Judicial) and Mr.K.Anpazhakan, Member (Technical) viewed that the discrepancy regarding the reversal of cenvat credit while opting SSI exemption came to the Department at the time of Audit and the appellant reversed the cenvat credit along with interest for intervening period. Further held that “the proceeding against the appellant is not sustainable.Accordingly, the impugned order is set aside and the appeal is allowed by confirming reversal of cenvat credit by the appellant and the payment of interest thereof for the intervening period.”
The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax not leviable on advance amount received for construction of commercial building which in turn returned.
A two member bench comprising Mrs. Sulekha Beevi C S, Member (Judicial) and Mr. Vasa Seshagiri Rao, Member (Technical) observed that the adjudicating authority has categorically held that there is no tax liability on the advance amount of Rs.85 crores received by the appellant and returned thereafter. However, the adjudicating authority has proceeded to confirm the demand of interest on such Service Tax.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that Cenvat credit is available for clearance of dyed yarn if excise duty paid at the doubling stage.
A Two-Member Bench comprising CJ Mathew, Technical Mathew and Ajay Sharma, Judicial Member observed that “Hence subject to condition that yarn emerging therefrom is exempted from duty, it is only required that the finished goods should have been manufactured either out of duty paid ‘textured yarn’ or ‘twisted yarn’ and that Cenvat Credit on such inputs had not been availed. It is not the case of Revenue that credit had been availed.” The Bench relied on the decision in re Shreekar Polyester Pvt Ltd, wherein it was observed that “the appellants contended that even if the duty is paid at the doubling stage, Cenvat credit can be availed for clearance of dyed yarn and in effect there would be revenue neutrality. In these circumstances, the appellant’s interpretation of condition 19(ii) appears to be correct.”
The Supreme Court while upholding the decision of the same court and Customs Excise & Service Tax appellate tribunal (CESTAT) observed that Oil in the Bunker Tanks of the Engine Room/outside the Engine Room of the vessels should be considered as part of the vessel/ship.
The co-ordinate bench of the same court in the same case disposed of by order dated 05. 04. 2023, stated that in an earlier appeal Mahalaxmi Ship Breaking Corp. ETC. Vs. Commissioner of Customs, Bhavnagar, the CESTAT ruled otherwise vide order dated 29.05.2009, stating that both the articles are to be separately assessed. Having considered both the orders as well as the submissions of the parties, held that the later view expressed in the orders dated 16.02.2022 and 01.12.2022 by the CESTAT is correct. Thus, the appeal of the revenue was dismissed.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the refund claim of Cenvat Credit allowable when Input Service is related to manufacture of the finished goods and thereby upheld the refund in the absence of contrary evidence
A Two-Member Bench comprising observed that “It is seen that various input services are used in the manufacture of export goods and there is no evidence on part of the Revenue to prove that they are not used in the manufacture of export goods except for the fact that the input services did not find a place in the inclusive definition of ‘input service’ under Rule 2 of Cenvat Credit Rules, 2004.” The Bench also noted that it is also an admitted fact that for the earlier periods in the appellants own case where the Revenue had filed appeal before the Tribunal, the issue was decided in favour of the respondent. In view of the above, the question of denying the refund of accumulated credit does not arise. To Read the full text of the Order CLICK HERE
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the Penal action taken against Customs Broker as he had abated the export Consignment of Prohibited Gutkha pouches.
A two member bench comprising Dr. Rachna Gupta, Member (Judicial) and Ms. Hemambika R Priya, Member (Technical) observed that the confessional statements of the appellant clearly indicate that he was aware that actual exporter was Shri Salim Dola whereas the IEC being used was in the name of Shri Shubham Garg, proprietor of Navrang Jewel and Exports. Sh. Garg in his statement accepted that he had allowed Mehmood, alias Guddu to use his IEC for ₹50,000 per consignment. The Tribunal held that “the retraction by the appellant cannot negate the evidentiary value of his confessional statements. Further, the denial of request for cross examination, in the face of the said statement of the appellant, cannot be a violation in view of the above. It is also interesting to note that other than the appellant, none of the others investigated in this offence have retracted their statements.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Excise Duty is not leviable on Valuation under Section 4 A of Central Excise Act , 1944 on the physician sample of medicaments sold to dealers for free distribution to doctors.
The appellant have manufactured and cleared the goods i.e. Physician sample mentioning clearly on the pack that it is not for sale. Since the goods is not for sale and no MRP is affixed on the product, the goods cannot be valued under Section 4A as the same is not for retail sale. Accordingly, the correct provision for valuation of physician sample is section 4, where the Excise duty is payable on the transaction value. In view of the Supreme Court judgment in the appellant’s own case issue is finally settled in favour of the appellant. A two member bench Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) set aside the impugned orders and allowed the appeal.
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that rejection of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) scheme because of unreasonable errors is not valid. A Single member bench comprising Ms. Binu Tamta, Member (Judicial) viewed that the object with which the scheme has been introduced and the intention of the Government to make it a grand success, it is necessary that the relief sought by the appellant deserves to be allowed and penalty imposed on them needs to be set aside. The Circular issued by the department is binding on them.
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