This round-up analytically summarises the key stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during November 4 to 10, 2023.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the denial of benefit of the Voluntary Compliance Encouragement Scheme (VCES), 2013 of service tax on the ground of violation of section 106 of the Finance Act,2013.
The Bench observed that the summon was issued to the assessee on 28.03.2012 much before the cut-off date of 01 March 2013 and subsequently a demand show cause notice was issued to the assessee in the same proceedings which was initiated by said summons. A single-member bench comprising Raju (Technical) held that the assesee was rightly held ineligible for the scheme and upheld the denial of the VCES scheme.
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under Section 112(a) of the Customs Act, 1962, against the Customs House Agent (CHA) on the clearance of an imported vessel without any misclassification.
A single-member bench comprising C. L. Mahar (technical) held that since the cause of imposing the penalty against and the present assessee does not exist anymore, and we quashed the penalty imposed against the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the eligibility of CENVAT credit of Excise Duty of any service received shall be governed by law existing at the time of service receipt.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that the eligibility of the credit to be considered as on the date of receipt of service but in the present case the Adjudicating Authority had not examined the actual date of receipt of service.
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the activities of a sub-contracting Customs House Agent (CHA) are not subject to the levy of service tax. The Ground on limitation is not applicable in the absence of suppression of fact by the assessee.
A two-member bench of Ms Sulekha Beevi C S Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that the Service Tax on the amount received as a sub-contracting CHA was not paid by them as during the relevant time the Board had clarified that the activities of a sub-contracting CHA is not subject to levy of Service Tax. The bench held that there was no suppression of facts on the side of the appellant. The appellant succeeds on limitation also. While allowing appeal, the CESTAT set aside the impugned order.
The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the TDS amount paid to the Income Tax Department by the appellant from his account cannot form part of the consideration of the service charges paid to the overseas service provider, accordingly, service tax is not payable on the Tax Deducted Source (TDS) amount paid by the appellant.
A two-member bench of Dr D M Misra, Member (Judicial) and Pullela Nageswara Rao, Member (Technical) observed that “the TDS amount paid to the Income Tax department by the appellant from his account cannot form part of the consideration of the service charges paid to the overseas service provider, accordingly, service tax is not payable on the TDS amount paid by the appellant. Also, it is brought on record that after the payment of the TDS, realizing that being wrongly paid, a refund application was filed.” The CESTAT set aside the impugned order and allowed the appeal.
The Chennai Bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) has granted relief to Sun Pharmaceuticals holding that the product “Danazol” is entitled to unconditional exemption from Excise Duty.
The Bench held that the appellant was entitled to the benefit of unconditional exemption from tax as per Sl. No. 47A of Notification No. 4/2006-CE dated 1.3.2006.
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on the manufacture of various types of brass articles on the ground of non-falling of service category into the supply agency service.
The Bench observed that in the case of Nishkarsh Industrial Services, the court held that the assessee had not provided the ‘Manpower Recruitment or Supply Agency Services’. Therefore, the demand made under the said category was not sustainable. The two-member bench comprising Somesh Arora (Judicial) and C L Mahar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on illicit manufacture and clearance of pan masala with tobacco on the grounds of the absence of real manufacture.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) quashed the excise duty demand and penalty imposed against the assessee while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty is allowable on outward transportation and also eligible to take the suo motu re-credit.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) upheld the decision of lower authorities to take suo moto re-credit of CENVAT credit which was reversed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Tata Steel by quashing the customs duty demand of approximately 32 crores on the import of iron and steel under the Export Promotion Capital Goods (EPCG) Scheme on the ground of non-examination of documentary evidence.
The Bench observed that the adjudicating authority had failed to appreciate this documentary evidence and had confirmed the demand by simply relying on the assumptions made during the issue of the show cause notice. The two-member bench comprising Muralidhar (Judicial) and Rajeev Tandon (Technical) quashed the Customs duty demand while allowing the appeal filed by the assessee.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no customs duty interest was payable on the warehoused goods during the validity of the warehousing period under section 15 of the Customs Act,1962.
The two-member bench comprising S S Garg(Judicial) and Anjani Kumar (Technical) held that no interest was payable on the warehouse goods for the period they remained in a custom-bonded warehouse.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) granted relief to Taneja Aerospace by quashing the excise duty demand on clearance of armour panels and stretcher assembly on the ground of limitation.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) quashed the excise duty demand while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit balance of excise duty will lapse only if the stock of input or input contained in the final products is exempted under section 5A of the Central Excise Act,1944.
The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that in the present case, notification No. 30/2004-CE contains a condition namely “provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on input had been taken under the provision of CCR.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the permission to allow the destruction of duty-free textile machinery plant without authority to arbitrary abatement of leviable customs duty.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that all the charges invoked in the show cause notice against the assessee are upheld on merits.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Anti-dumping duty was leviable on the import of cold rolled stainless steel coils which was classifiable under the category of mill-edged coils.
The Bench observed that the live consignment of 31 coils was mill-edged and anti-dumping duty was liable to be paid by the assessee. The two-member bench comprising D M Misra (Judicial) and Bhagya Devi (Technical) remanded the matter back to the original authority to re-determine the demand only for the 31 coils for which the reports suggest they are mill-edged coils.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty allowable on spent solvent which was considered as raw materials in the form of drums or barrels which was received by the manufacturer.
The Bench observed that in the case of CCE Vs. West Coast Industrial Gases Ltd, the court held that no duty shall be payable and no reversal of the credit is warranted on waste packages or containers used for packing the inputs on which credit has been taken when cleared from the factory of the manufacturer had availed CENVAT Credit as the same could not be treated as scrap on waste arising out of manufacturing process. The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that the assessee was eligible for the CENVAT credit while allowing the appeal filed by the assessee.
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in a recent case has held that operational surplus is subject to the levy of service tax and cannot be excluded in reimbursable expenses.
It was observed that only the actual amounts which have been received by the appellant from the client for the expenses incurred have been included for raising the demand. The appellant has mentioned “operational surplus” in their financial statements. This is the amount collected from the client over and above the actual expenses incurred by them. It was alleged that the said operational surplus is subject to the levy of Service Tax and cannot be excluded like reimbursable expenses. However, the Counsel has been fair enough to submit that the said circular was superseded by Master Circular No. 96/7/2007-ST dated 23.08.2007 wherein it was clarified by the Department that services provided by sub-contractors are taxable even though the main contractor is discharging the tax liability. The Larger Bench had noted that before 2007, the Trade Notices / Instructions and Circulars had been issued exempting the sub-contracting CHA from payment of Service Tax on the bills raised on the main CHA. The period of dispute in the appeal was before 2007, a two-member bench of Ms Sulekha Beevi C S Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that that based on the Trade Notice which is binding upon the Department, the demand raised cannot sustain and requires to be set aside.
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) allowed interest for period after 3 months refund of 19 crores of cenvat credit.
A two member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that The Appellants have claimed interest as per Section 11BB. As per Section 11BB interest is to be paid after expiry of three months from the date of filing the claim to the date of claim. In the present case refund claim was filed on 27.12.2012 the period of three months will be over on 26.03.2013. They would be entitled to the interest for the period beyond 26 March, 2013 to the date of payment i.e. 21.05.2013, which is about 55 days. To that extent appeal is allowed in favour of the appellant.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on the Customs House Agent (CHA) on the illegal export of prohibited red sander goods on the ground of absence of direct involvement of Customs Broker (CB).
The Bench observed that the Commissioner (Appeals) accepted that the assessee did not have direct involvement in the illegal export of prohibited good red sander and penalty imposed against the CHA cannot be sustained. The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the penalty imposed under Section 114 (i) and under Section 114 AA of the Customs Act against the CB while allowing the appeal filed by the assessee.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Special Additional Duty (SAD) cannot be levied on the clearance of sample of Compact Disc (CD) or Digital Video Disc (DVD) devices in Domestic Tariff Area (DTA) which was not subjected to Value Added Tax (VAT).
The Bench observed that the goods had been cleared in the DTA as sample that had not been sold and Sales Tax / VAT not payable and the SAD was not leviable on the goods cleared as sample by availing of exemption from payment of Sales Tax / VAT and in the present case the goods are not specified as exempt goods as defined under the VAT Act, but are not part of taxable turnover. The two-member bench comprising P K Choudhary (Judicial) and Sanjiv Srivastava (Technical) quashed the SAD demand against the assessee while allowing the appeal filed by the assessee.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed excise duty benefit to Kitex Garments on the manufacture of readymade garments by using snap fasteners or buttons which was entitled to benefit under exemption notification.
The Bench observed that the benefit of the Notification for snap fasteners was to be allowed and the department had accepted these orders and allowed the benefit of the Notification no 21/2002. The two-member bench comprising P A Augustian (Judicial) and Bhagya Devi (Technical) upheld the allowance of benefit to the assessee while dismissing the appeal filed by the revenue.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be levied on Tax Deducted at Source (TDS) amount which was paid by the assessee from its funds and was not deducted from the client’s accounts and does not form part of the consideration of service paid.
The Bench observed that in the case of VSL India Pvt Ltd vs. CST, the court held that when TDS was not received from the non-resident since it was not towards value/consideration, there was no merit in requiring such assessee to include even the TDS it paid in the value of services. The two-member bench comprising D M Misra (Judicial) and Pullela Nageshawara Rao (Technical) held that the TDS amount paid to the Income Tax department by the assessee from his account cannot form part of the consideration of the service charges paid to the overseas service provider, accordingly, service tax was not payable on the TDS amount paid by the assessee and quashed the service tax demand while allowing the appeal filed by the assessee.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax can be levied on the guarantee commission which was paid to the State Government of Karnataka for providing irrevocable guarantee in raising funds from the debt market.
The two-member bench comprising D M Misra (Judicial) and Pullela Nageswara Rao (Technical) held that raising of finance for day-to-day operations by the assessee was a ‘service’ in the ordinary course of business operation and squarely falls within the scope of the definition of ‘support service’ and thus the assessee was liable to discharge service tax on the Guarantee commission paid to Government of Karnataka.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on clearance of electrical goods using the wrong assessee code on the ground of small inadvertent mistakes.
The Bench observed that in the case of Sahara India TV, the court held that in the absence of any malafide when the mistake was brought to the department by the assessee, there had not been any short or delayed payment of service tax and directed the revenue to rectify the mistake and set aside penalty and interest. The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that the demand of duty which was already paid and corresponding interest and penalties were not sustainable and quashed the excise duty demand against the assessee.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the royalty for technical know-how for the manufacture of pantographs was a post-import activity and therefore, it cannot be part of the transaction value for the imported goods.
The Bench observed that in the case of Commissioner of Customs vs. Ferodo India Private Limited, the court held that the royalty for technical know-how for the manufacture of pantographs was a post-import activity and could not be the part of the transaction value for the imported goods. The two-member bench comprising P A Augustian (Judicial) and Bhagya Devi (Technical) quashed the addition of royalty to the transaction value while allowing the appeal filed by the assessee.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Redington (India) Limited by quashing the Customs Duty Demand on the import of Wireless Application Protocol (WAP) which works on technology and does not support Long Term Evolution (LTE) standards on the ground of exemption eligibility.
The Bench observed that in the case of Ingram Micro India, the court held that the classification of identical product (i.e. WAP) are eligible for the benefit and extended the benefit of the subsequent notification and once the benefit has been granted to Ingram Micro in the subsequent notification for an identical product, the benefit under the notification should also be extended to the assessee. The two-member bench comprising Dilip Gupta (Judicial) and Rajeev Tandon (Technical) held that the WAP imported by the assessee works on technology and does not support LTE standard and justified in claiming exemption from the whole of the customs duty under Serial No.13 (iv) of the notification.
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