This weekly round-up analytically summarises the key stories related to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the previous week from March 12th to March 21st, 2022.
The Hyderabad bench of the CESTAT comprising Mr. P.K. Choudary, Member (Judicial) and Mr. P. Venkata Subba Rao, Member (Technical)has held that if the export is not prohibited, even if there are some other violations of Act or Rules or regulations or restrictions such goods are not covered by section 113(d).
The CESTAT, Ahmedabad bench has held that no interest on customs duty demand is payable for the period prior to the date of Assessment Order. The bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) held that “We find from the letter dated 31.08.2012 issued by the DRI informing the appellant that seizure of the goods was made on 10.10.2005 and the cargo was handed over to Kandla Port Trust under supradnama of the same date. Even the DRI report which has been much relied upon in the assessment order has clearly stipulated that goods were not physically removed/deposited in the warehouse and were still in the custody of Kandla Port Trust. Therefore, we hold that goods were never warehoused by the department. We also find that the assessment order has been passed after the directions issued by the Hon’ble High Court of Gujarat. After going through the relevant provisions of the Act i.e. Section 15(1), 47, 58, 61 or72(1) of the Customs Act, we hold that appellant is not liable to pay interest for the period prior to passing of assessment order on 28.03.2014,” the Tribunal said.
The CESTAT, Ahmedabad bench has held that the stock exchange fee paid for availing stock exchange service shall be subject to service tax under Reverse Charge Mechanism (RCM) in terms of Section 66A read with Rule 2(1)(d)(iv) of Service Tax Rules, 1994.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has held that the Customs department shall process the refund claims in a proper manner as the interest on delayed refund amount are paid out of public money.
The Delhi bench of the CESTAT has held that the department cannot avail the benefit of extended period of limitation is not available to Revenue in the present matters, there being no element of fraud, mis-statement or contumacious conduct on the part of the taxpayer.
The CESTAT, Ahmedabad bench, while dismissing an appeal by the service tax department against Adani Power Ltd., has allowed refund of service tax paid on the services utilized in SEZ for authorized operations in some of the services. A two-member bench comprising Member (Judicial), Mr. Ramesh Nair and Member (Technical), Mr. P. Anjani Kumar ruled in favour of the assessee and held that “As regard the contention of revenue that Commissioner (Appeals) has erred by ignoring the procedural lapses viz. incorrect address, incomplete address, address not mentioned. In Some case the service provider mentioned the address of Sambhav Building. As per the condition of the Notification, the service should be utilized within SEZ, hence the address of SEZ is mandatory requirement. Hence such services cannot be considered as utilized in relation to authorized operation. On perusal of the impugned order, We find that the Commissioner (Appeals) after going through the impugned Order-in-Original has passed a detailed order and thereafter set aside the Order-in-Original.”
While quashing an order demanding service tax against Goyal MG Gases Private Limited, the CESTAT, Kolkata bench has held that an activity of installing fixed facilities as part of the main activity of the appellant would not constitute “Business Auxiliiary Services” within the meaning of the Finance Act, 1994.
The CESTAT, Ahmedabad bench, in a relief to Adani Energy Ltd., has held that cenvat credit is allowable on the amount of service tax paid for transportation of natural gas through pipeline as the same constitutes input services.
The Hyderabad Customs, Excise, and Service Tax Appellate Tribunal has held that no action against the manufacturer of dutiable goods on reversal of entire amount of Cenvat credit except the amounts covered by Rule 6(5).
The New Delhi Customs, Excise & Service Tax Appellate Tribunal has directed the revenue to refund the penalty imposed for unutilized Cenvat Credit u/s 142(2) and (6) of the Central GST Act. The Coram of Sri Anil Choudhary, Member (Judicial) has held that “the appellant has rightly taken cenvat credit and the same is lying in their books un-utilized as on 30.06.2017 when the provisions of CGST Act (GST regime) was implemented with effect from 01.07.2017, and thus if the appellant has not taken the un-utilized cenvat credit to the GST regime by filing form TRAN-1, they are eligible to refund of the un-utilized credit in terms of the transitional provision under Section 142(2) and (6) of the CGST Act”. It was further held that “admittedly, in the facts of the present case, the appellant has not taken the benefit of transactional provision for transfer of unutilized cenvat credit to the GST regime. In this view of the matter, I hold that the appellant is entitled to refund of the un–utilised cenvat credit of Rs. 48,29,318/-. I further direct the Adjudicating Authority to disburse the amount of Rs. 48,29,318/- with interest as per rules within a period of 60 days from the date of receipt/service of a copy of this order”.
The New Delhi Principal Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the assessee is entitled for an interest of 12% on pre deposit amount under Section 35F of the Central Excise Act. The single bench presided by Rachna Gupta, Member (Judicial) has held that “I am of the opinion that the reasonable rate of interest in the given facts and circumstances is the rate at twelve percent. Hence, the request of the appellant is accepted with respect to rate of interest also. Consequent to the above discussion, the order under challenge/Order-in-Appeal is hereby set aside holding appellant to be entitled for sanction of refund of pre-deposit amount along with interest at the rate of twelve per cent thereof. The appeal accordingly stands allowed”.
While quashing a service tax demand, the CESTAT, Ahmedabad bench has held that the demand cannot be solely on the basis of the statement recorded under section 132 of the Income Tax Act, 1961.
The CESTAT, Allahabad bench, while quashing the customs proceedings, held that the “Proper Officer” who assessed the Bill of Entry has the jurisdiction to issue show cause notice under section 28 of the Customs Act, 1961. Quashing the impugned order, the Tribunal held that “Undisputedly, the bills of entry in this case were not assessed by the officers of DRI but by the officers of the Custom house. Only that officer who has assessed the Bills of Entry in the first place or his successor in office was „the proper officer‟ who, if he was subjectively satisfied that some duty had escaped assessment, could have issued the SCN. As the SCN has been issued by officer of DRI who is not competent to issue it, the impugned order deciding such an SCN cannot be sustained and needs to be set aside and we do so.”
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