CESTAT Weekly Round-Up

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 30 to October 06 2023.

Iron Content in Iron Ore Fines to be Calculated on Wet Metric Ton Basis for assessments before May 1, 2022, All Impurities Including Moisture Deducted for Customs Duty Determination: CESTAT M/s Bagadiya Brothers Private Limited vs Commissioner of Customs  2023 TAXSCAN (CESTAT) 1227

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that the calculation of iron (Fe) content in iron ore fines for customs duty determination must be done on a Wet Metric Ton (WMT) basis.

The two-member bench comprising Mr. P. K. Choudhary (Judicial Member) and Mr. Rajeev Tandon (Technical Member) directed the assessing officers to determine iron content on a WMT basis by deducting the moisture specified in the test reports from NABL-accredited government-approved private laboratories. It further emphasised the application of the universally recognised formula for converting the percentage of iron content from DMT to WMT basis.

Sale of Customized Software on CD as part of DCS is not service: CESTAT quashes Service Tax Demand Yokogawa India Limited vs Commissioner of Central Excise & Service Tax, Bangalore 2023 TAXSCAN (CESTAT) 1228

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and observed that the sale of customized software on CD as part of the Distributed Control Systems (DCS) is not service.

Quashing the service tax demand a Division Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “In the present case, the Purchase Orders placed by the customers on the appellant reveal that the transaction between the appellant and their customers are not for supply of software as that of a ‘service’, but it is sale of the customized software on a CD as part of the DCS; accordingly, the same should be considered as ‘excisable goods’ and not as ‘service’, precisely, ITSS.”

Maximum Depreciation allowable on Imported Second-Hand Machines is 70%: CESTAT M/s. India Potteries Ltd. vs Commissioner of Customs (Port) 2023 TAXSCAN (CESTAT) 1238

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the maximum depreciation that was allowable on second-hand machines that are imported is 70% in the appeal by India Potteries Ltd (the Appellant) against the order for enhancement of the declared value, by the Commissioner of Customs (Port) (the Respondent)

The two-member bench consisting of R.Murlidhar (Judicial Member) and Rajeev Tandoon (Technical Member) after hearing both sides held that “The Appellant in his submissions has not brought in any evidence to rebut the valuation certified by the Chartered Engineer.” And dismissed the appeal.

Service Tax Demand cannot be raised beyond 5 year period of limitation: CESTAT Yash Corporation vs Commissioner of Central Excise & ST  2023 TAXSCAN (CESTAT) 1245

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Service Tax Demand cannot be raised beyond 5 5-year period of limitation. The tribunal set aside the order imposing penalty which was barred by limitation.

A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) observed that the show cause notice was issued on 19.10.2012 for the period covered 2007-08 to 2011-12, which is clearly beyond the normal period of limitation. Therefore, demand is time-barred and cannot be sustained. For the same reason, the penalties imposed upon the appellant also cannot be upheld.

Customs Duty payable in Advance for days of New Retail Price or Closed Production, Claim to be filed later: CESTAT C.C.E.-Ahmedabad vs Zest Packers Pvt Ltd  2023 TAXSCAN (CESTAT) 1244

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that customs duty payable in advance for days of new retail price.

A two member bench comprising Mr. Ramesh Nair, Member (Judicial) and  Mr. C L Mahar, Member (Technical) observed that the Tribunal dealing with the same issue even against the impugned order for the portion of demand confirmed, the Tribunal has set aside the demand and allowed the appeal of the respondent. Therefore, there is no substance in the revenue’s appeal. The CESTAT upheld the order to the extent of demand involved in the present revenue’s appeal. The revenue’s appeal is dismissed accordingly.

Loading and Shifting of Materials from Private Railway Siding to Stacking Yard is Goods Transport Service: CESTAT quashes Service Tax Demand on Cargo Handling service M/s Usha Martin Limited vs Commissioner of Central Excise, Customs & Service Tax 2023 TAXSCAN (CESTAT) 1252

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on cargo handling service and held that the loading and shifting of materials from private railway siding to stacking yard is goods transport service.

A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that as the main activity of the appellants is transportation of goods, therefore, merits classification of the above said service in question is Goods Transport Service. Therefore, the demand under Cargo Handling Service is not sustainable, hence, whole of the demand confirmed against Appellant No 2 is set aside and consequently, the penalty imposed on the appellants are also set aside.”

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