This weekly CESTAT round-up analytically summarizes the key stories of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) reported at taxscan.in, from January 27, 2024 to February 03, 2024.
Read Last Edition of CESTAT Weekly Round-Up Here.
A two member bench of CESTAT has held that liability of the service tax under reverse charge mechanism will arise only w.e.f. 18.04.2006 in case the services are provided by a person located outside India to a person located in India.
The bench observed that “ the Board has clarified the issue vide its Circular dated 26.09.2011 declaring that the liability of the service tax under reverse charge mechanism will arise only w.e.f. 18.04.2006 in case the services are provided by a person located outside India to a person located in India. Further, we find that the service received by the appellant from the Foreign Service Provider is clearly an Input Service under the provisions of the Service Tax Rules.”
In a major relief to M/s. Acer India Pvt Ltd, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the classification of video projector and held that they are eligible for customs exemption.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesh, Judicial Member observed that “We are inclined to follow the line of reasoning expressed by the Coordinate Bench above and hold that the video projectors are classifiable under Heading 85286100, they thereby become entitled to exemption under Notification No. 24/2005- Cus. dated 1.3.2005 The impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chennai Bench observed that service tax is not leviable on advertising materials like glow sign boards, flex printing etc, on which VAT is paid.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “We are inclined to hold that the advertising materials like glow sign boards, flex printing, broachers, stickers, tags, posters, hand bills, signages, etc., which cater to the requirements of the specific customers, on which VAT is paid, is not leviable to Service Tax. We are also of the view that Service Tax cannot be demanded in respect of cloth banners and wall painting transactions without first analyzing the nature of work undertaken by the appellant in detail.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the eligibility to avail credit of Service tax paid by advertising agency as input services.
A Two-Member Bench comprising Vasa Sesha Giri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “Regarding dis-allowance of CENVAT credit we find that the Appellant, in the case of advertisement through FM/Visual media, at the behest of their clients were availing the services of FM and TV channels including satellite channels who charged service tax along with charges for broadcasting the advertisements. As it is a part of their advertisement work, it is an input service”.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that flanges are part of Wind Operated Electricity Generators ( WOEG ), under Notification No. 12/2012-Central Excise, dated 17.03.2012.
The bench comprising Vasa Sheshagiri Rao ( Member, Judicial ) and Sulekha Biwi C.S ( Member, Technical) held that flanges are parts of WOEG and are classifiable under 8503 and not CTH 7307 as claimed by the department. It was also held that the flanges are eligible for the exemption as per notification no. 12/2012.
The Chennai bench of (CESTAT) Customs, Excise and Service Tax Appellate Tribunal has held that in order to receive reimbursement on expenses incurred as Customs House Agent, the nomenclature used by the Agent has to be decisive. The expenses would have to satisfy the conditions mentioned in the Rule 5(2) of the Service Tax Rules, 2006.
The bench comprising P. Dinesha (Member, Judicial) and M. Ajit Kumar(Member, Technical) held that “In the light of the above discussions, we deem it appropriate to set aside the impugned order and remit the case back to the file of the adjudicating authority for de novo adjudication”.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the definition of manpower service shouldn’t be limited only to the ‘manufacturing activity’ and not to any other activities outside the factory premises. The two member bench observed that many services which are provided by the service provider outside the manufacturing factory premises, such as advertising or sales promotion, market research, as accounting, auditing, financing, etc could be categorized as manpower services and CENVAT credit can be availed on them.
The two member bench comprised of R.Muralidhar ( Member, Judicial ) and Rajeev Tandon( Member, Technical ) found merit in assessee’s argument that Depot management, Sales and other activities are not directly connected to manufacturing activity. The bench held that “We find that the Adjudicating Authority has taken a very narrow view holding that the Manpower Service should be relatable only to the ‘manufacturing activity’ and not to any other activities outside the factory premises. We find this view to be grossly erroneous. Had he taken care to go through the definition of input service in a harmonious way, he would have found that there are many services which are provided by the service provider outside the manufacturing factory premises, which are all eligible for CENVAT Credit. Therefore, we set aside the OIO on merits and allow the Appeal.”
In a major relief to HSBC Electronic Data Processing India, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand on back-office support services.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “With regard to accommodation services, which is sought to be roped in post 01.07.2012, under Rule 5 of POPS, the same is identically worded as in the case of short-term accommodation for the period prior to 01.07.2012, where the Commissioner vide First Order ( Para 23 ) for the previous period up to 30-6-2012 has dropped the demand. On the same basis, the demand for the subsequent period also ought to have been dropped.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that Cost Petroleum and Profit Petroleum cannot be said to be a consideration flowing from the Government of India to the assessee and that the components of “Cost Petroleum” and “Profit Petroleum” are inherent and embedded part of the Production Sharing Contract( PSC ).
The two member bench of CESTAT has held that such components cannot be treated as “consideration” for the “services rendered” by the appellant.
The Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that taxes paid on Goods Transport Agency Services would be eligible for CENVAT credit. The two member bench observed that the entire situation is revenue-neutral and in such situations, the extended period cannot be invoked by Revenue.
The bench comprising M.S. Sulekha Biwi C.S( Member, Judicial ) and Vasa Sheshagiri Rao( Member, Technical ) held that the demand, interest and penalties in regard to ‘GTA Service’ is set aside for the extended period. The details as to whether GTA services were used only for export is not before us. Therefore, the appellant is liable to pay the tax on GTA services for the normal period along with interest. The bench also pointed out that Service Tax Paid on Goods Transport Agency Service Eligible For CENVAT Credit
Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Mere mention of “Food Supplement” in the description in Bill of Entry or FSSAI is not decisive in the classification of the product.
The bench comprising Sulekha Biwi C.S ( Member, Judicial ) and Vasa Seshagiri Rao ( Member, Technical ) held that the ingredient of the product clearly shows that they are Oils of Fish and the same are rightly classifiable under CTH 15042020. The bench observed that “CTH 2106 90 99 is a residuary entry for food preparations/ supplements which are not specified under any other heading. Even assuming that products imported by the Appellant are food supplements, they would still be classifiable under CTH 1504 20 20 as it specifically provides for the classification of Fish Oil.”
Customs Excise & Service Tax Appellate Tribunal( CESTAT ) has held that failure to follow the mandatory procedure prescribed under Section 36B of Central Excise Act, 1944, the electronic evidence cannot be accepted in evidence.
The two member bench comprising Sulekha Biwi C.S( Member, Judicial ) and Vasa Sheshagiri Rao (Member, Technical ) has held that the department has failed to establish that Section 36B was complied with, while taking the printouts from the hard disk attains significance.
The Customs Excise & Service Tax Appellate Tribunal( CESTAT ) has held that one unit of a manufacturing firm cannot be denied CENVAT credit due to another unit’s excessive CENVAT credit claims.
The two member bench comprising Sulekha Biwi C.S( Member, Judicial ) and Vasa Seshagiri Rao ( Member, Technical ) held Unit II cannot be denied CENVAT credit due to the excess CENVAT credit availed by unit I. The bench held that “Following the decisions in the appellant’s own case for the period from April 2007 to September 2011, we are of the considered opinion that demand and penalties cannot sustain and requires to be set aside.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ordered absolute confiscation as there was attempt to smuggle gold of foreign origin without payment of customs duty.
A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “As per the facts of the case, the seizure of gold from the appellants, as recorded in the panchnama and admitted in their respective statements is undisputed. It is also established that the gold was of foreign origin. It is also established that the appellants were attempting to smuggle the gold without payment of duty. We also note that legal import of gold is governed by certain conditions which the appellant do not fulfil. Therefore, we are of the considered opinion that the gold recovered from the appellants is liable for absolute confiscation.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the confiscation of goods on the non-payment of customs duty cannot be justified solely on the basis of accusations by the Revenue. For such confiscation to stand, corroborative evidence is necessary.
The two member bench observed that the assesse’s actions did not demonstrate any intent to reuse the imported pipes and hence the pipes imported were to be considered ‘scrap’.
The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that no tax is liable on construction contracts executed prior to 1st June, 2007.The tax exemption is applicable not to providers of commercial or industrial construction service but to providers of works contract service.
The two member bench comprising S.S.Garg( Member, Judicial ) and Anjali Kumar( Member, Technical ) held that the contracts executed by the appellant are nothing but works contracts. The bench held that “the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed excise duty on galvanized zinc as there was no tangible evidence to prove clandestine removal beyond doubt.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case there is no evidence of clandestine clearance of galvanized MS wires from the factory of the appellant being a job worker. No investigation has been carried out with the transporter, not a single buyer was brought on record who allegedly purchased the clandestinely removed goods. There is absolutely no evidence of any payment received against the alleged clandestine removal.”
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