CESTAT Weekly Round-Up

This round-up analytically summarises the key stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during October 28 to November 3, 2023.

No Excise Duty Demand can be Raised from Data Received on Pen Drive which is Not a Reliable Evidence: CESTAT Attitude Alloys (P) Ltd. vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1345

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the data received from the pen drive cannot be admitted as evidence, and demand of excise duty cannot be raised from the date received from the pen drive. 

The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that no demand for excise duty can be raised from the data received from any pen drive and computer printouts. 

No Demand of Duty for Clearing Goods as per Rule 8 of Central Excise (Valuation) if Report of Deputy Director (Cost) is not provided: CESTAT M/s Avon Steel Industries Pvt. Ltd vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1346

The Chandigarh bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that the demand of duty for clearing goods as per Rule 8 of Central Excise (Valuation) Rules, 2000 is not justifiable if the report of Deputy Director (Cost) is not provided and allowed the appeal by Avon Steel Industries Pvt. Ltd (The Appellant) against The Commissioner of Central Excise (CCE) (The Respondent).

The two-member bench consisting of S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) after hearing both sides held that “we are of the considered opinion that the impugned order is not sustainable and is liable to be set aside. It is to make it clear that we are not going, at this juncture, into the issue of limitation or revenue neutrality as we find that the appeal survives on merits. In the result, the impugned order is set aside and appeal is allowed” and the appeal was allowed.

CESTAT Quashes Service Tax Demand on Receiving Incentive Amount on ground of Non-inclusion of Activity under ‘BAS’ M/s. Jaika Motors Ltd vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1347

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on receiving incentives amount on the ground of non-inclusion of activity under ‘Business Auxiliary Service’ (BAS). 

The Bench observed that in the case of Sai Service Station Ltd, the court held that the incentives were paid in connection with the sale of excisable goods by the manufacturer to the dealer which were held as ‘trade discount’ and cannot be considered as any payment to any taxable services.  The two-member bench comprising Suvendu Kumar Pati (Judicial) and Anil G. Shakkarwar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee. 

CENVAT Credit of Excise Duty allowable even if Final Products are Destroyed during Course of Testing: CESTAT M/s Maruti Suzuki India Ltd vs The Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1348

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT Credit of Excise Duty is allowable even if the final products are destroyed during testing. 

The Bench observed that in the case of Flex Engineering Ltd, the court held that there was no provision under the CENVAT Credit Rules,2002 to deny CENVAT credit just because the final products were destroyed during testing and for the reason that no export proceeds had been realized for such exports of prototypes.  The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) held that the assessee was eligible for the availment of CENVAT Credit even if the final products were destroyed during testing. 

Relief to Karnataka Golf Association: CESTAT Quashes Service Tax Demand on Club or Membership Association Service on ground of Violation u/s 65B of Finance Act Karnataka Golf Association vs The Commissioner of Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1349

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to the Karnataka Golf Association by quashing the service tax demand on club or membership associations services on the ground of violation of section 65B of the Finance Act,1944. 

The Bench observed that in the case of the State of West Bengal & Ors. Vs. Calcutta Club Association, the court held that the amount collected as an advance fee for membership of the club was not liable for service tax and the demand itself was not sustainable.  The two-member bench comprising D M Misra (Judicial) and Pullela Nageswara Rao (Technical) quashed the service tax demand while allowing the appeal filed by the assessee. 

CESTAT quashes Rejection of Refund claim of SAD on Import of Shoes on ground of Non-inclusion of Allegation in SCN M/s. Katyal Metal Agencies vs Commissioner of Customs CITATION:   2023 TAXSCAN (CESTAT) 1350

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the rejection of the refund claim of Special Additional Duty (SAD) on the import of shoes on the ground of non-inclusion of allegation in the show cause notice (SCN). 

The Bench observed that the rejection of the refund claim was not sustainable in the eyes of the law as the same had not been alleged in the show cause notice when it was issued after filing the refund applications by the assessee.  The two-member bench comprising Ashok Jindal (Judicial) and Rajeev Tandon (Technical) held that the refund claim could not be rejected as time-barred as there was no allegation in the show cause notice and quashed the rejection of the refund claim while allowing the appeal filed by the assessee.

Kronos 4500 Touch ID Terminal Chips are Classifiable under Category of ‘Electrical machines and Apparatus: CESTAT The Commissioner of Customs vs Kronos Systems India Pvt. Ltd CITATION:   2023 TAXSCAN (CESTAT) 1351

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Kronos 4500 touch ID terminal chips are classifiable under the category of electrical machines and apparatus. 
The two-member bench comprising A Augustian (Judicial) and Bhagya Devi (Technical) allowed the classification made by the revenue and rejected the classification made by the Commissioner (Appeals) while allowing the appeal filed by the revenue. 

CESTAT quashes Excise Duty Demand on Clearance of Hydraulic Excavators on ground of Absence of Evidence regarding Removal of Goods L & T Construction Equipment Ltd vs Principal Commissioner, Central Tax CITATION:   2023 TAXSCAN (CESTAT) 1353

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on clearance of hydraulic excavators on the grounds of absence of evidence regarding the removal of goods. 

The Bench observed that there was no finding given by the Adjudication Authority and the demand was confirmed on the presumption that the machinery may be removed after the completion of the project.  A single-member bench comprising P A Augustian (Judicial) held that due to the absence of any evidence regarding the removal of the goods before the completion of the project, the benefit of the notification could not be denied and the demand against the assessee was unsustainable. 

Payment of Premium or Salami for Transfer of Interest in Property are Exempted from Service Tax: CESTAT M/s. Luxmi Township Limited vs Commissioner of CGST CITATION:   2023 TAXSCAN (CESTAT) 1354

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that Salami or Premium received in respect of a lease of immovable property was not eligible for service tax. 

The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that the assessee was not liable to pay the service tax on the salami or premium received by the assessee. 

No Penalty u/s 78 of Finance Act not impossible on absence of evidence relating to evasion of tax: CESTAT Bharat Aluminium Company Limited vs The Commissioner CITATION:   2023 TAXSCAN (CESTAT) 1355

The New Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the penalty under section 78 of the Finance Act 1994, was impossible as there was no evidence relating to evasion of tax and allowed the appeal by Bharat Aluminium Company Ltd (The Appellant) against The Commissioner of Central Excise, Customs, and Service Tax.

The two-member bench consisting of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) held that “We are not inclined to remand the matter as it is evident from the impugned order that the only reason the Principal Commissioner confirmed the demand on the payment made to Pual is that the employment contract and other evidence were not produced before him” The bench further held that “Having considered the rival submissions on this issue, we find that to impose penalty under section 78 of the Finance Act elements of fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules made thereunder with an intent to evade payment of tax must be established. In the absence of evidence of such an intent, no penalty under section 78 can be imposed. In this case, not only is there “no evidence” of such an intent but the entire payment is revenue neutral at the hands of the appellant” and the appeal was allowed.

Top Stories Relief to Lufthansa German Airlines: CESTAT Quashes Service Tax Demand of Approx. 6 crores on PSF on ground of Non- violation of Rule 6 of Service Tax Rules M/s Lufthansa German Airlines vs The Commissioner of Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1356

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Lufthansa German Airlines by quashing the service tax demand of approximately 6 crores imposed on the Passenger Service Fee (PSF) and airport tax on the ground of non-violation of Rule 6 of the Service Tax Rules,2006. 

The Bench observed that the Passenger Service Fee (PFS) and Airport Tax are not includible in the assessable value of the services provided by them. Therefore, the impugned order deserves no merit and is liable to be deleted.  The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee. 

CESTAT quashes Revocation of CB License on Illegal Import of Sodium Benzoate on ground of Non-violation of Provisions of Customs House Agents Licensing Regulations M/s Mishra & Mishra (Agency) Enterprises vs Commissioner of Customs CITATION:   2023 TAXSCAN (CESTAT) 1357

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the revocation of the Customs Broker (CB) license on illegal import of sodium benzoate on the ground of Non-violation of provisions of Customs House Agents Licensing Regulation (CHALR), 2004. 

The Bench observed that As there was no direct involvement of the CHA and for merely having filed the import documents as per the instructions of the importer, forfeiture of the security deposit was indeed too harsh a punishment that indeed was not called for in the given circumstances and the assessee cannot be subjected to penal liabilities at a drop of a hat without expressly bringing to fore their direct involvement/mens rea.  The two-member bench comprising Ashok Jindal (Judicial) and Rajeev Tandon (Technical) quashed the revocation of the license. 

CESTAT quashes Recovery of CENVAT Credit of Excise Duty Paid on Manufacture of Fork lift truck parts on ground of Non-violation of section 2(f) of Central Excise Act Maini Precision Products Pvt Ltd vs Commissioner of Central Excise, Bangalore-II CITATION:   2023 TAXSCAN (CESTAT) 1358

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the recovery of CENVAT credit of excise duty paid on the manufacture of forklift truck parts on the ground of non-violation of section 2(f) of the Central Excise Act,1944. 

The Bench observed that in the case of Flex Engineering Ltd, the court held that the processes carried by the assessee in their premises resulted in manufacture, and accordingly, CENVAT Credit availed on the duty paid on inputs received was admissible to the assessee.  The two-member bench comprising D M Misra (Judicial) and Bhagya Devi (Technical) quashed the recovery of CENVAT Credit against the assessee. 

Refund of Swachh Bharat Cess of Service Tax Allowable u/s 119(5) of Finance Act on Export Service of Basic Grade Pig Iron: CESTAT MMTC Limited vs Commissioner of CGST CITATION:   2023 TAXSCAN (CESTAT) 1359

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the export services of basic grade pig iron are eligible for a refund of Swachh Bharat Cess (SBC) of service tax under section 119(5) of the Finance Act, 1994. 

The Bench observed that as per Notification No.41/2012 of Service Tax grants refund of service tax paid on the taxable services used for the export of goods by an exporter and since SBC had been treated as service tax, they are eligible for the refund also.  The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that the assessee was eligible for the refund claim of SBC while allowing the appeal filed by the assessee.

Nutritional Supplements used for preparations of Creatine, Nitrates, Glutamine and Amino Acids Attracts 18% of IGST Rate under GST Notification: CESTAT NEUVERA WELLNESS VENTURES P. LTD vs C.C.MUNDRA CITATION:   2023 TAXSCAN (CESTAT) 1360

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Nutritional Supplements imported by the assessee which are used for preparations of substances such as Creatine, Nitrates, Glutamine, and Amino Acids attract 18% Integrated Goods and Service Tax (IGST) rate under Goods and Service Tax (GST) Notification. 

The Bench observed that there was no dispute that the physical assessment of the bill of entry was made by the proper customs officer and the assessee had declared the goods correctly as per the documents and claimed the exemption of IGST rate in terms of Serial No. 23 and 453 of Schedule III of Notification 1/2017.  The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that the nutritional supplements would attract an 18% IGST rate. 

CESTAT quashes Penalty u/s 112A of Customs Act on Undervaluation of Import of Artificial flowers and Photo frames on ground of Absence of Corroborative Evidence N.S. Mahesh vs Commissioner of Customs (Appeals)Mr. M. S. Sanjeev Kumar CITATION:   2023 TAXSCAN (CESTAT) 1361

The Bangalore bench of the Customs , Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under section 112A of the Customs Act,1962 on the undervaluation of the import of artificial flowers and photo frames on the ground of the absence of corroborative evidence. 

The Bench observed that in the case of Gajraj Singh Baid V/s Commissioner of Customs, the court held that when there was nothing against the assessee to allege that he was doing any of the act of omission/commission about the goods under import to render the same liable for confiscation, the penalty imposed by the adjudication authority was unsustainable.  A single-member bench comprising P A Augustian (Judicial) quashed the penalty imposed against the assessee while allowing the appeal filed by the assessee. 

Customs dept failed to prove delay in Receiving Order from Review Cell: CESTAT dismisses Appeal Commissioner of Customs vs M/s. HCL Info Systems CITATION:   2023 TAXSCAN (CESTAT) 1362

The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) dismissed the appeal filed by the Customs Department against the order which rejected the time-barred appeal of the Customs Department. The Department failed to prove the delay in receiving an order from the review cell.

A two-member bench of Ms Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) observed that both review orders, the date of receiving the Order-in-Original by the Reviewing Cell is not mentioned. When Sub Section (3) of Section 129 D prescribes a time frame of three months from the date of receiving the order passed by the adjudicating authority, it is necessary and would be convenient to mention it in the review order.  “no evidence was placed before him as to the date on which the Orders-in-Original was received by the reviewing authority, despite repeated requests. Revenues actions should be beyond suspicion. Hence the strong inference that can be drawn is that there was no evidence available to establish the date on which the order-in-original was received by the Review Cell and there was a delay in passing the review order.”, the Tribunal viewed. The CESTAT held that the appeal filed by the department was without merits and dismissed the appeal.

Provision of Unjust Enrichment will not apply When Assessee paid Duty during Investigation on Post clearance of Goods: CESTAT allows Refund to Hindustan Coca Cola Beverages Ltd Hindustan Coca Cola Beverages Pvt. Ltd vs Commissioner of CGST & Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1363

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) in the case of Hindustan Coca-Cola Beverages Pvt. Ltd had allowed the refund claim as the provision of unjust enrichment will not apply when the assessee paid duty during the investigation on post clearance of goods.

A single member bench of Mr Ajay Sharma, Member (Judicial)  held that “Since the Chartered Accountant’s certificate (supra) has certified that the appellant has not recovered the duty amount of Rs.6,02,000/- from their customers, the same is not hit by the bar of unjust enrichment. The appellant is therefore entitled to refund claimed and the appeal filed by the appellant is accordingly allowed by setting aside the impugned order.”

Service Utilized by a company situated outside India falls under Export Service under Export Service Rule: CESTAT The Commissioner of Central Excise and Service Tax vs Glaxo SmithKline Asia Pvt. Ltd CITATION:   2023 TAXSCAN (CESTAT) 1364

The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that the service utilized by a company situated outside India falls under export service under the Export of Service Rule, 2005.

In view of the facts and circumstances of the case and the judgments of the Tribunal, the two-member bench of Mr S S Garg, Member (Judicial) and  Mr P Anjani Kumar, Member (Technical) held that “the services rendered by the respondents to M/s SB Plc, UK constitute export of service as the services are utilized by a company situated outside India and used outside India. To that extent, we find that the Department has not made any case for intervening with the impugned order. We find that the impugned order is proper and legally sustainable. Accordingly, we dismiss the appeal filed by the Department.” 

CESTAT Quashes Customs Duty Demand on Import of Tractor Parts on ground of Non-Suppression of Transaction Value M/s Himalaya Tractor Co vs Commissioner of Customs (Port.), Kolkata. CITATION:   2023 TAXSCAN (CESTAT) 1365

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the Customs duty demand on the import of tractor parts on the grounds of non-suppression of the transaction value. 

The Bench observed that there was no evidence available on record to reject the transaction value declared by the assessee and hence the differential duty arrived by the adjudicating authority based on the value available on contemporaneous import of similar goods was not sustainable and since the demand was not sustainable, the penalty imposed on the assessee on this count was also not sustainable.  The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) quashed the customs duty demand and penalty imposed on the assessee. 

Supplier of Rotogravure Printing Cylinder are Eligible to Avail CENVAT Credit of Wrongly paid Excise Duty: CESTAT MODERN PACKAGING COMPANY vs C.C.E CITATION:   2023 TAXSCAN (CESTAT) 1366

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the supplier of rotogravure printing cylinders is eligible to avail of the CENVAT Credit of wrongly paid excise duty. 

The Bench observed that the jurisdictional officer of the assessee has no jurisdiction to question the assessment or correctness of the payment of duty and the assessee had correctly availed the CENVAT credit on the Rotogravure Printing Cylinder supplied by Accuprints System. Hence the demand was not sustainable.  The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand of CENVAT Credit which was availed by the assessee on wrongly paid excise duty while allowing the appeal filed by the assessee. 

Relief to Koch Chemical Technology: CESTAT Quashes Excise Duty Demand on Extraction of Petroleum Fuels Goods on ground of Absence of Speaking Order KOCH CHEMICAL TECHNOLOGY GROUP INDIA PVT LTD vs C.C.E. & S.T. CITATION:   2023 TAXSCAN (CESTAT) 1367

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to the Koch Chemical Technology Group by quashing the excise duty demand imposed on the extraction of petroleum fuel goods on the ground of the absence of a speaking order. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) remanded the matter for re-adjudication after giving exact reasons along with evidence for reaching the conclusions arrived at therein and quashed the excise duty demand while allowing the appeal filed by the assessee. 

CESTAT Upholds Dismissal of Appeal by Commissioner on ground of Limitation of Prescribed period u/s 128 of Customs Act Smt. Suparna Karmakar vs Commissioner of Customs (Prev.), Kolkata CITATION:   2023 TAXSCAN (CESTAT) 1368

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the dismissal of the appeal by the Commissioner (Appeals) on the ground of the limitation of the prescribed period defined under section 128 of the Customs Act,1962. 

The Bench observed that according the Section 128 of the Customs Act the aggrieved party can file an appeal before the Commissioner (Appeals) within sixty days and the assessee filed an appeal beyond the condonable period.  A single-member bench comprising Ashok Jindal (Judicial) upheld the dismissal of the appeal by the Commissioner (Appeals) while dismissing the appeal filed by the assessee. 

No Reversal of CENVAT Credit of Excise Duty when Imported Goods used in Manufacture of Final Products u/r 3(5B) of CCR Prior to 01.03.2013: CESTAT HAVER IBAU INDIA PVT LTD vs C.C.E. & S.T.-VADODARA-II CITATION:   2023 TAXSCAN (CESTAT) 1369

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the imported goods are used in the manufacture of the final product, the CENVAT credit cannot be denied or reversed under rule 3(5B) of the CENVAT Credit Rules (CCR),2004 before the period of 01.03.2013.

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that the recovery provisions for the amount recoverable under Rule 3(5B) of CCR was introduced only with effect from 01.03.2013 and the present case was not involved in the date and quashed the demand for reversal of CENVAT credit while allowing the appeal filed by the assessee. 

Customs Exemption Benefit on wind operated Electricity Generator not allowable in absence of Certificate from MNRE: CESTAT The Commissioner of Customs vs Gamesa Wind Turbines P. Limited CITATION:   2023 TAXSCAN (CESTAT) 1370

The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) Customs Exemption Benefit on Wind Operated  Electricity Generator not allowable in absence of Certificate from Ministry of New and Renewable Energy (M.N.R.E).

A two-member bench of Sulekha Beevi C S Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) observed that one of the conditions for availing the benefit of the exemption from S.A.D at the time of import of the impugned goods is that the importer has to produce a certificate from the Ministry of New and Renewable Energy, Govt. of India. The respondent has not furnished the certificate while filing the Bills of Entry. There is nothing stated in the notification that the said condition can be condoned even if the respondent does not have the required certificate and has furnished only an office memorandum issued by the M.N.R.E.  The CESTAT held that the order passed by the Commissioner (Appeals) was not legal and proper.  Further held that the direction to remand the matter to recall and reassess the bills of entry cannot therefore sustained. The Tribunal set aside the impugned order and restored the order passed by the original authority.

Cenvat Credit on Input or Capital Goods cannot be Denied merely for Showing Tubes and Flaps Separately in Invoices: CESTAT Goodyear India Ltd vs The Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1371

The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that Cenvat Credit on Input or Capital Goods cannot be denied merely for showing tubes and flaps separately in invoices.

A two-member bench of Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) held that “the appellants are eligible to avail CENVAT credit on flaps and tubes cleared in a set packing along with the tyres manufactured by them. We further find that the Department’s objection that the assessable value of tubes and flaps is separately shown in the invoices and therefore, CENVAT credit is not available, is not acceptable in view of the various decisions.” The CESTAT set aside the impugned order and allowed the appeal.

CENVAT Credit of Excise Duty Allowable on Sale of Carburetors Falls under ‘Input of Service’: CESTAT M/s Keihin Fie Private Limited vs The Commissioner of Central Excise, Delhi-III CITATION:   2023 TAXSCAN (CESTAT) 1372

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the sale of the carburetors that fall under the category of input of service are eligible to avail of CENVAT Credit of Excise duty. 

The Bench observed that the Construction Services which was availed by the assessee before December 2008 for modifying the facilities related to production are covered in the definition of “Input Service” as provided under Rule 2(l) of the CENVAT Credit Rules, 2004.  A single-member bench comprising S.S Garg (Judicial) quashed the denial of CENVAT credit of excise duty which was filed by the assessee. 

Order confirming issue beyond the Scope of Show Cause Notice is invalid: CESTAT sets aside Order Rejecting Cenvat Credit Axis My India Ltd. vs Commissioner of CGST CITATION: 2023 TAXSCAN (CESTAT) 1373

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that the order confirming the issue beyond the scope of show cause notice is invalid and set aside the order rejecting the CENVAT credit.

A single member bench of Mr Ajay Sharma, Member (Judicial) viewed that show cause notice is the foundation on which the department has to build up its case and the allegations in the show cause notice have to be specific as opposed to vague or lacking details.  The CENVAT credit has been denied by the Commissioner merely based on assumption and presumption which is arbitrary and not as per law. It was settled that the authorities under the Act cannot travel beyond the show cause notice. Since the impugned order has travelled beyond the show cause notice and has been passed on new ground, the same is not sustainable. While allowing the appeal, the Tribunal set aside the impugned order.

Irregularities in Reversal of Cenvat Credit against Hindustan Petroleum: CESTAT Remands Matter for Computation of Interest liability for Premature Availment of credit on Capital Goods Hindustan Petroleum Corporation Ltd vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1374

In the case of Hindustan Petroleum Corporation Ltd about the irregularities in reversal of Cenvat Credit, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) remanded the matter for computation of interest liability for premature availment of credit on capital goods.

A two-member bench of Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial) observed that “Nonetheless, owing to premature availment of credit, interest liability may arise by the decisions cited supra. Furthermore, it is on record that the original authority, while confirming the recoveries proposed in the show cause notice, had also made it a point to note that the reversal of credit has not been verified. “ The Tribunal viewed that ascertainment of the reversal of CENVAT credit as well as computation of interest liability for premature availment of credit on capital goods that were procured need to be verified. The CESTAT set aside the impugned order and remanded the matter to the original authority for those limited purposes. 

Utilisation of CENVAT Credit of Excise duty of Defaulted period without any wilful avoidance: CESTAT Quashes penalty u/s 11AC of Central Excise Act KALP CORPORATION vs C.C.E. & S.T.-AHMEDABAD-III CITATION:   2023 TAXSCAN (CESTAT) 1375

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under section 11AC of the Central Excise Act,1944 for utilizing the CENVAT Credit of Excise duty of defaulted period without any wilful avoidance. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that penalties under Section 11AC of the Act, Rule 25 of Central Excise Rules, and Rule 15(2) of CENVAT Credit Rules are not sustainable and liable to be deleted while allowing the appeal filed by the assessee. 

Transfer of Technical Knowhow Not subject to Service Tax as ‘Intellectual Property Service’: CESTAT INTAS PHARMACEUTICALS LTD vs C.S.T.-SERVICE TAX, AHMEDABAD CITATION:   2023 TAXSCAN (CESTAT) 1376

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service tax was not leviable to the transfer of technical know-how which falls under the category of ‘Intellectual Property Service’. 

The Bench observed that in the case of Munjal Showa Ltd, the court held that to qualify as an Intellectual Property Right, the said right should be protected by some law for the time being in force within India and it was seen that Revenue had not pointed out any law under which the said technical knowhow being transferred to Sicgen Singapore was protected and in absence of any clear evidence of the said knowhow being protected by any law, the same cannot qualify as an ‘Intellectual Property Right ’ and is not liable to pay service tax.  The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee. 

Rejection of refund claim for importing Anhydrous Ammonia of Malaysian origin as the certificate is not as per format under exemption notification not justified: CESTAT Paradeep Phosphates Limited vs Commissioner of Central Excise, Customs & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1377

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CSTAT) held that the rejection of refund claim for importing Anhydrous Ammonia of Malaysian Origin just because the certificate was not according to the format prescribed in the exemption notification was not justifiable and allowed the appeal by Paradeep Phosphates Limited (The Appellant) against The Commissioner of Central Excise, Customs & Service Tax (The Respondent).

The two-member bench consisting of Ashok Jindal (Judicial Member) and Rajeev Tandon (Technical Member) after hearing both sides held that “In view of the circumstances, the benefit of Notification No.53/2011-Cus dated 01.07.2011, cannot be denied to the appellant as the appellant has complied the subsequent condition of the Notification” and the appeal was allowed.

Service Tax Demand on Fabrication works for Indian Railway without any corroborative Evidence : CESTAT Directs Re-adjudication Commr. of CGST & Central Excise, Haldia vs M/s. Calcutta Springs Ltd.(Unit-II) CITATION:   2023 TAXSCAN (CESTAT) 1378

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication to the adjudicating authority for the imposition of service tax demand on fabrication works for Indian Railway without any corroborative evidence. 

The Bench observed that there was no evidence brought to the effect that the assessee had acted deliberately to evade payment of Service Tax.  The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) remanded the matter back to the adjudicating authority to determine net Service tax payable during the period 01/04/2008 to 31/12/2008. 

Statutory functions of IDCO are taxable under heads Real Estate Agent’s Service, Consulting Engineer’s Service, Technical Testing and Analysis Service, etc.: CESTAT M/s Orissa Industrial Infrastructure Development Corporation vs Commissioner of Central Excise,Customs & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1379

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the statutory functions of Orissa Industrial Infrastructure Development Corporation (The Appellant), a statutory corporation established under IDCO Act, 1980 are under various heads namely, Real Estate Agent’s Service, Consulting Engineer’s Service, Technical Testing and Analysis Service etc. and dismissed the appeal against The Commissioner of Central Excise, Customs & Service Tax.

The two-member bench consisting of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) after hearing both sides held that “the appellant is liable to pay the service tax on income from Ekama Hat under heading “Mandap Keeper Service”, the charges under the category of “Maintenance”.

Relief to DLF Home Developers, Mere Registration, non payment of Service Tax cannot be a reason to allege Suppression: CESTAT sets aside Penalty on Preferential Location Services DLF Home Developers Limited vs The Commissioner of Central Excise & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1380

In a ruling in favour of DLF Home Developers, the Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that mere non-registration, non-payment of service tax cannot be a reason to allege suppression and set aside the penalty on Preferential Location Services.

It was held that “Courts and Tribunals have been consistently holding that mere non-obtaining registration, nonpayment of service tax and non-filing of ST-3 Returns cannot be a reason to allege suppression etc. and that a positive act on the part of the assessee with intent to evade payment of tax has to be established.” The extended period is not invocable and hence, the penalty cannot be imposed on the service tax which stands paid before the issuance of show-cause notice.”, the Tribunal held. The CESTAT set aside the penalty and allowed the appeal.

CESTAT is not competent to Condone Delay in filing of Appeal before First Appellate Authority beyond 30 Days: CESTAT Dismisses Appeal Jai Maa Durga Engineers vs The Additional Commissioner of Central Excise & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1381

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT)has held that the Tribunal is not competent to condone delay in filing of appeal before the first appellate authority beyond 30 days.

A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that from the application for condonation of delay, it appears that the appellant has categorically accepted that on receipt of the order, the same was immediately handed over to the consultant for filing an appeal. If that is so, the plea that because of lack of experience in business, there was delay does not stand to be reason.  The CESTAT held that the Tribunal is not competent to condone the delay in filing the appeal before the first Appellate Authority beyond the condonable period, and dismissed the appeal.

Ship Demurrage Charges Cannot be Included in Transaction Value of Imported Goods: CESTAT  rules in favour of Reliance Industries C.C. AHMEDABAD vs RELIANCE INDUSTRIES LIMITED CITATION:   2023 TAXSCAN (CESTAT) 1382

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) in the case of Reliance Industries Limited held that ship demurrage charges cannot be included in the transaction value of imported goods.

A two-member bench of Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) observed that the demurrage charges cannot be included in the transaction value of imported goods.  Further found that as per the order in original, the entire case of the Revenue is that as per the explanation added to Rule 10 of Custom Valuation Rules, 2002, the cost of transportation of imported goods should be included in the transaction value. This Provision was not provided in the Customs Act, 1962 about the Valuation of goods.  However the same was brought under the rule by way of explanation.  The CESTAT viewed that the explanation to Rule 10 to Customs Valuation Rules was held ultra virus, the entire basis of the Revenue case falls.  The Tribunal held that the impugned order passed by the Commissioner is just and proper and the same does not suffer from any infirmity.  The Revenue’s appeal was dismissed. 

Delay in Drawal of Sample changes level of Carotene in Vegetable Oil, Test Report of Customs Revenue Laboratory cannot be relied on: CESTAT upholds order of Commissioner The Commissioner of Customs vs INU Exports Private Limited CITATION:   2023 TAXSCAN (CESTAT) 1383

The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT)while upholding the order of the Commissioner of Customs held that delay in the drawal of the sample changes the level of carotene in vegetable oil, test report of customs revenue laboratory cannot be relied on.

A two-member bench of Dr D M Misra, Member (Judicial) and  R Bhagya Devi, Member (Technical) observed that “since there was inordinate delay in drawal of samples and receiving the test reports, the carotene level of vegetable oils reduces with time, hence, the test reports of the Customs Revenue Laboratory cannot rely and accordingly, he has confirmed acceptance of the test report of the goods at the load port by the adjudicating authority.” The Bench upheld the order of the adjudicating authority and dismissed the Revenue’s appeal.

No Change in Classification of Denim Fabric As per CRCL Report: CESTAT set aside Penalty under Customs Act in absence of Misdeclaration S. K. Enterprises vs Commissioner of Customs CITATION:   2023 TAXSCAN (CESTAT) 1384

The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) set aside the Penalty imposed under the Customs Act, 1962 in the absence of misdeclaration as there was no Change in the Classification of Denim Fabric as per the Central Revenues Control Laboratory (CRCL) Report.

Since the fabric is classifiable under the CTH 52113190, the demand for differential duty of customs in the impugned order is not sustainable. Since there is no misclassification of the goods imported, the confiscation of the goods is not warranted. The CESTAT set aside the penalty imposed on the Appellant and the impugned order.

Market Survey report Based on Contemporaneous Import Data is not Valid: CESTAT Sets Aside Penalty under Customs Act for MisDeclaration River Side Impex vs Commissioner (Preventive) CITATION:   2023 TAXSCAN (CESTAT) 1385

The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT)has held that the market survey report based on contemporaneous import data is not valid and set aside the penalty under the Customs Act for misdeclaration.

A two-member bench of Dr Ms Rachna Gupta, Member (Judicial) and Ms Hemambika R Priya, Member (Technical) viewed that “Authority is sufficient for us to hold that the Department has not followed the statutory procedure nor has produced cogent evidence while confirming the allegations of under-valuation and while confirming the differential duty.”

Rule 6(3) of CCR not applicable on cenvat credit attributable to non-excisable goods not availed at initial stage: CESTAT M/s Hindustan Colas Pvt. Ltd vs Commissioner of CGST & Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1386

The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) Rule 6(3) of CCR not applicable on cenvat credit attributable to non-excisable goods not availed at the initial stage.

The CESTAT held that “the demand confirmed in the impugned order is not sustainable and hence we set aside the same. Since the demand itself is not sustainable there is no question of demanding interest or imposing penalty.” The Tribunal set aside the impugned order and allowed the appeal filed by the Appellant.

CENVAT Credit allowable on tax paid towards utilization of GTA Service on period before Amendment on rule 2(l) of CCR: CESTAT ruled in Favour of Reliance Industries Commissioner of Central Excise & Service Tax vs Reliance Industries Ltd CITATION:   2023 TAXSCAN (CESTAT) 1387

In a significant ruling in favour of Reliance Industries Ltd, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) held that CENVAT Credit allowable on tax paid towards utilization of  Goods Transport Agency (GTA) service on the period before amendment on Rule 2(I) OF CENVAT Credit Rules, 2004 (CCR).

A two-member bench of Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial)  held that “It is not open to the show cause notice issuing authority or the adjudicating authority to level an allegation without evidence in support of ineligibility for shifting the onus of establishing fulfilment of the conditions on the assessee. “  The CESTAT held that the appeal of Revenue lacks merits and was dismissed.  

Excise Notification has to be Interpreted in Language Written: CESTAT grants Exemption on Investment in Plant and Machinery Samridhi Ply Boards Pvt Ltd vs C.C.E CITATION:   2023 TAXSCAN (CESTAT) 1388

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted exemption on investment in plant and machinery and observed that the excise notification has to be interpreted in language written.

The Bench further noted that the Commissioner (Appeals) seems to have imported condition of serial no. (ii) in serial No. (i) of notification No. 01/10- CE dated 06.02.2010 which is not legally permissible. The appellant’s case is covered vide Sr. No.(i) of the Notification. “In view of these facts and circumstances, we are of the considered opinion that the appellant is entitled to the benefit of exemption Notification No. 01/10-CE and denial of the same by the Commissioner (Appeals) is set aside by allowing the appeal of the appellant with consequential relief, if any” the Bench concluded.

Sufficient Evidences adduced to allege Clandestine Removal: CESTAT upholds Penalty u/r 26 of Central Excise Rules Shri Pintu Tyagi vs Commissioner of Central Excise & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1389

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the penalty under Rule 26 of the Central Excise Rules, 2002 on the proof that sufficient evidences adduced to allege clandestine removal.

A Two Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration.” “His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified” the Bench concluded.

Documentary Evidences on Legitimate Ownership of seized gold and cash: CESTAT quashes confiscation under Customs Act Shri Anshul Jain vs Commissioner of Customs, Noida CITATION:   2023 TAXSCAN (CESTAT) 1391

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed confiscation under Customs Act and observed that documentary evidences on legitimate ownership of seized gold and cash.

A Two-Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Since documentary evidence has been presented in favour of the gold showing the Appellant’s legal ownership and acquisition, we hold that tenets of Section 123 Customs Act are satisfied and the Appellant has discharged the burden of proof. The Appellant’s statement also reiterates the same. On the other hand, the Department has not been able to provide any iota of evidence to show that the seized gold bar was smuggled.” “There can be no confiscation of the seized gold bar and currency under the Customs Act, 1962 and it is accordingly quashed. Imposition of penalty on the Appellant is also untenable and is set aside. Since the impugned order qua the Appellant cannot be sustained, it is set aside. Accordingly, the appeal is allowed with consequential benefits as per law” the Bench noted.

Relief to Schindler India: CESTAT quashes Service Tax demand on Supply of Equipment Schindler India Pvt. Ltd vs Commissioner of CGST CITATION:   2023 TAXSCAN (CESTAT) 1392

In a major relief to M/s. Schindler India Pvt. Ltd, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on supply of equipment.

A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical) observed that “we are of the considered view that the sole basis of conformation of demand made in these three appeals was that in the de novo proceeding the demand in its entity was conformed with interest and penalties but having regard to the fact that the said de novo adjudication order has been set aside by this Tribunal and the subsequent demands raised through Section 73(1A) as well as its conformation having based on the previous conformation orders, the same is liable to be set aside and we do so.”

Illegal Manufacture and Clearance of Unmanufactured Tobacco: CESTAT upholds Penalty u/r 26 of Central Excise Rules Shri Krishna Kumar vs Commissioner of Central Excise & Service Tax, Patna CITATION:   2023 TAXSCAN (CESTAT) 1393

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the penalty under the Rule 26 of the Central Excise Rules, 2002 and observed that illegal manufacture and clearance of unmanufactured tobacco.

A Two-Member Bench comprising R Muralidhar, Judicial Member and K Anpazhakan, Technical Member observed that “Suresh Prasad Sah, Appellant 2 has admitted that he is involved in the illegal manufacture and clearance of unmanufactured tobacco. Since he has changed his statement so many times, we observe that his statement has no evidentiary value. However, we find that there is no demand in the notice against Shri Suresh Prasad Sah.” “We observe that his involvement in the clandestine manufacture and clearance is very well established by his own admission. He is also involved in introducing a non-existence person Shri Mahesh Prasad before the Notary for executing the lease agreement. Accordingly, we hold that he is liable for penalty under section 26 of the Central Excise Rules 2002. Accordingly, we uphold the penalty imposed on Shri Suresh Prasad Sah” the Tribunal noted.

Relief to Tata Motors: CESTAT Quashes Excise Duty Demand of Approx.21 crores on Manufacture of Commercial Motor Vehicles on ground of Absence of Actual Manufacturer M/s Tata Motors Limited vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1394

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Tata Motors India by quashing the excise duty demand of approximately 21 crores on the manufacture of a commercial motor vehicle on the ground of the absence of an actual manufacturer. 
The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the excise duty demand against the assessee while allowing the appeal filed by the assessee. 

Turnover was less than 4 lakhs in relevant FY: CESTAT grants benefit of SSI exemption Sarvan Kumar S/o Inder Singh vs CCE-Rohtak CITATION:   2023 TAXSCAN (CESTAT) 1395

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted benefit of Small Scale Industry (SSI) exemption as the turnover was less than 4 lakhs in the relevant Financial Year (FY).
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “we find that the appellant is entitled to SSI exemption for the period 2005-2006 because their turnover was less than 4.00 lacs in that financial year which entitles them for SSI exemption in terms of Notification No. 06/2005-ST dated 01.03.2005.”

Relief to Volkswagen: CESTAT Quashes Excise Duty Demand of Approx. 24 Crores on Amount Recovered as Liquidated Damages on ground of Non-violation of Rule 6 of Central Excise Rules M/s. Volkswagen India Pvt. Ltd. vs Commissioner of Central Excise & Service Tax CITATION:   2023 TAXSCAN (CESTAT) 1396

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relied to Volkswagen India by quashing the excise duty demand of approximately 24 crores on the amount recovered as liquidated damages on the ground of non-violation of Rule 6 of the Central Excise Rules,2002. 

The Bench observed that in the case of Skoda Auto Volkswagen India Pvt. Ltd. cs. CCE, the court held that as per section 4 of the Central Excise Act, 1944 any deviation from any of the elements enumerated therein would require treatment prescribed in Central Excise (Determination of Price of Excisable Goods) Rules, 2000. These several rules commence with the declaration that there was no option for determination of value other than by recourse to in Central Excise Rules.  Also observed that in the event of rejection of the invoice value as transaction value, it was not open to the adjudicating authority to re-determine value without recourse to Rule 6 of Central Excise Rules.  While allowing the appeal, the two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) quashed the excise duty demand against the assessee. 

No Reversal of Cenvat Credit of Service Tax done on Already Paid Tax even if Activity does not Amount to Manufacture: CESTAT Turner Project Management India Pvt. Ltd vs Commissioner of Central Tax, Navi Mumbai CITATION:   2023 TAXSCAN (CESTAT) 1397

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no reversal of CENVAT Credit of service tax can be done on already paid duty or tax which was not payable, and even if the activity does not amount to manufacture. 

The Bench observed that in the case of CCE, Pune vs. Ajinkya Enterprises, the court held that central excise duty which was not required to be paid on the final product was paid by the assessee and the assessee had availed CENVAT credit of duty paid on the inputs and the assessment of final product was not reversed by revenue and the assessee before they were not paid the refund of the duty which was not required to be paid, availing of CENVAT credit of duty paid on inputs was regular.  A single-member bench comprising Anil G. Shakkarwar (Judicial) quashed the demand for the recovery of the availed CENVAT Credit while allowing the appeal filed by the assessee. 

No excise duty leviable u/s 11A of Central Excise Act for allegation of illicit clearing in absence of evidence relating to inflow of cash: CESTAT Parvati Steel Rolling Mills Pvt. Ltd. vs Commissioner of Central Excise CITATION: 2023 TAXSCAN (CESTAT) 1398

The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no excise duty was leviable under section 11A of the Central Excise Act, 1944 on the allegation of illicit clearing in the absence of evidence relating to the inflow of cash and allowed the appeal by Parvati Steel Rolling Mills Pvt. Ltd (The Appellant against the Commissioner of Central Excise (CCE) (The respondent).

The two-member bench consisting of Ajay Sharma (Judicial Member) and C J Mathew (Technical Member) after hearing both sides held that “In view of the discussions made hereinabove, we are of the considered view that the department has miserably failed to substantiate the allegation of clandestine manufacture and clearance by any tangible or corroborative evidence and the diaries or pen-drive from a third party cannot be said to be sufficient proof of such allegation and the department has failed to make out a case beyond any doubt” and the appeal was allowed.

Rejection of CENVAT Credit Claim not justified as ground is premature u/s 11B of Central Excise Act: CESTAT remands matter for Re-adjudication Global Wool Alliance Private Ltd vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1399

The Mumbai bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that the rejection of the refund claim was not justified as the ground of rejection was premature as per Section 11B of the Central Excise Act 1944 and remanded the matter for fresh adjudication in the appeal by Global Wool Alliance Pvt Ltd (The Appellant) against the Commissioner of Central Excise (CCE) (The Respondent).

The two-member bench consisting of Ajay Sharma (Judicial Member) and C.J. Mathew (Technical Member) after hearing both sides held that “We find that the factual aspects of eligibility – both by reversal of CENVAT credit as well as the existence of facility for the manufacture of ‘staple fiber’ in the light of decisions of the Tribunal – have not been examined by the lower authorities. With the claim for refund restored to the original authority and with these two aspects having to be examined afresh, the issues would have to go back for re-adjudication. Accordingly, the impugned order is set aside and all the disputes restored to the original authority for a fresh determination “and the appeal was remanded

Set back to Reliance Industries: CESTAT upholds Rejection of Customs Duty Refund claim of Approx. 4 crores on Clearance of Crude Petroleum Oil on ground of Short Payment of Customs Duty Reliance Industries Limited vs Commissioner of Customs CITATION:   2023 TAXSCAN (CESTAT) 1400

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the rejection of a customs duty refund claim of approximately 4 crores on the clearance of crude petroleum oil on the grounds of short payment of Customs duty. 

The Bench observed that in the case of Mangalore Refinery and Petrochemicals Limited, the court held that a demand or duty on transaction value would be leviable despite “ocean loss”, it flies in the face of Section 23 of the Customs Act, 1962 in particular, the general statutory scheme and Rules 4 and 9 of the Customs Valuation Rules, 2007.  The two-member bench comprising Somesh Arora (Judicial) and C L Mahar (Technical) upheld the order passed by the Commissioner (Appeals) while dismissing the appeal filed by the assessee. 

Clearance of Excisable Goods without Payment of Duty which Resulted into Evasion of Excise Duty by Manufacturer of “Chhakkdo Rickshaw”: CESTAT upholds Penalty Karimbhai Nanjibhai Shah vs C.C.E.-Ahmedabad-ii CITATION:   2023 TAXSCAN (CESTAT) 1401

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the penalty imposed on clearance of excisable goods without payment of duty by the manufacturer of the chhakkdo rickshaw.

he Bench observed that the assessee was conscientious by providing his Automotive Research Association of India registration to the manufacturer or buyers of non-duty Rickshaws for getting the same registered with the Regional Transport Officer (RTO), and the assessee facilitated the clearance of excisable goods without the payment of duty, which ultimately resulted in the evasion of the Central Excise Duty by the manufacturer of the “Chhakkdo Rickshaw”. A single-member bench comprising C. L. Mahar (technical) upheld the penalty imposed against the assessee under Rule 26 of the Central Excise Rules while dismissing the appeal filed by the assessee.

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