This weekly round-up analytically summarizes the key stories of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reported at taxscan.in, from March 3, 2024 to March 15,2024
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that no service tax can be imposed on “incentives”.
The tribunal bench of Binu Tamta ( Judicial Member ) and P.V. Subba Rao ( Technical Member ) explained that “commission” directly correlates with the service provided by the appellant, specifically the booking of airline space. On the other hand, “incentive” represents the profit earned from charging clients more than the negotiated price with airlines, indicating a trading activity rather than a service.
In a ruling in favour of Reliance Industries Ltd, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Levy under the Finance Act will apply to goods manufactured or produced in India other than goods produced in Special Economic Zone ( SEZ ).
A two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju Member ( Technical ) viewed that the appellant was completely justified in contending that the provisions of the Central Excise Act, 1944 about levy and collection of Central Excise duty, to the extent they are not inconsistent, apply equally to the provisions of the Finance Act and accordingly the levy under the Finance Act will apply to goods manufactured or produced in India, other than the goods produced or manufactured in SEZ.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that goods kept in a factory are not liable for confiscation in the absence of evidence to show an attempt to remove clandestinely without payment.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr Raju Member (Technical) observed that the goods were lying within the appellant’s factory. There was no evidence on record to show that there was any attempt to remove those goods clandestinely without payment of duty.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the Customs House Agent ( CHA ) is not required to advise on assessment aspect to clients unless solicited and set aside Penalty under section 117 of Customs Act, 1962. There is nothing on record to show that he has been subjected to action under Customs Broker License Rules, ( CBLR ) 2018.
The two-member bench comprising Mr Raju, Member (Technical) and Mr Somesh Arora, Member (Judicial) observed that CHA is not required to advise on assessment aspects to its clients unless solicited. Again there is nothing on record to show that he has been subjected to action under C.B.L.R, 2018.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed the re-adjudication on Service Tax leviability of work undertaken for BECL under Construction of Complex Service. The Tribunal observed that the adjudicating authority had not properly examined the facts/ terms of the contract.
A two-member bench comprising of Mr Ramesh Nair Member ( Judicial ) And Mr Raju, Member ( Technical ) observed that the levy of service tax under the construction must be based on the terms of the contract. However, the adjudicating authority has not properly examined the facts/ terms of the contract and he has not seen the light of the judgements given subsequently on the identical issue.
The Chennai bench of Customs, Excise And Service Tax Appellate Tribunal( CESTAT )has held that Maximum Retail Price ( MRP ) based assessment is not applicable to Packaged Drinking Water. The MRP-based assessment as per the above notifications applies only to mineral water and aerated water falling under Tariff Heading 22011010 or 22011020. The appellant does not manufacture mineral water.
The two-member bench comprising Vasa Seshagiri Rao, Member ( Technical ) and Sulekha Beevi Cs, Member ( Judicial ) held that the invocation of the extended period cannot be sustained. The CESTAT set aside the penalty imposed on the Executive Director of the appellant company is not warranted.
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that abatement of 60% of assessable value is allowable as per Exemption Notification. The Tribunal held that there is no need to pay Service Tax for renting vehicles to Uttar Pradesh State Road Transport Corporation ( UPSRTC ).
A two-member bench comprising Mr P K Choudhary, Member ( Judicial ) and Mr Sanjiv Srivastava, Member (Technical) observed that “the impugned order to the extent of confirmation of the demand and imposition of penalty under Section 77 of the Act of Rs.200 for every day during which the party continued to fail to get itself registered under Section 69 of the Act read with provisions of Rule 4 of the Rules ibid, starting with the first day of such failure after the due date, till the date of actual compliance and penalty of Rs.1,40,911/- under Section 78 of the Act are set aside. “
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Regional Bench in Allahabad, has held that insurance charges collected by a manufacturer are to be excluded from the assessable value and are therefore exempt from excise duty.
the two-member bench comprising Mr. P.K. Choudhary ( Judicial Member ) and Mr. Sanjiv Srivastava ( Technical Member ) set aside the Order-In-Appeal and reinstated the Order-In-Original upholding the principle that excise duty does not extend to profit elements. The appeal filed by the appellant was allowed with consequential relief, if any, as per the law.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that refund of Special Additional Duty ( SAD ) cannot be denied stating invalidity of certificate even after issuance of correlation certificate. The tribunal viewed that when the chartered accountant has examined the documents relating to the import as well as the sales as accounted by the appellant and issued a correlation certificate, the refund cannot be denied.
A two-member bench comprising Mrs Sulekha Beevi C S, Member ( Judicial ) and Mr Vasa Seshagiri Rao, Member ( Technical ) observed that when the Chartered Accountant has examined the documents relating to the import as well as the sales as accounted by the appellant and issued a correlation certificate, the department cannot deny the refund stating that the said certificate is not valid. In view of the above, we hold that the appellant is eligible for a refund.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in Ahmedabad has made a significant ruling clarifying that the limitation period to file an appeal begins from the date of acknowledgment of the order, not from the date of dispatch.
The bench, comprising Ramesh Nair ( Judicial Member ) and Raju (Technical Member), noted that while there was evidence of the department dispatching the order to the appellant, there was no proof of acknowledgment. In accordance with appeal provisions, the time limit commences from the communication of the order, not its dispatch. Since there was no evidence of the order being communicated, the date on which the department provided the copy of the orders-in-original to the appellant was considered the date of communication. Consequently, the appeals before the Commissioner ( Appeal ) were deemed not time-barred.
The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that the transaction between licensee and licensor does not fall under renting of immovable property and sets aside the Demand of Service Tax. The said transaction was a business transaction between the two since the consideration was not like regular rent but depended on the annual performance and the profits generated.
A two-member bench comprising Mr P Dinesha, Member ( Judicial ) And Mr K Anpazhakan, Member ( Technical ) observed that there is no change in the facts and circumstances of the case on hand and the one decided by the co-ordinate Bench for earlier periods ( supra ) and hence, the decision arrived at in the earlier order squarely covers the issue in the case on hand as well.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the beneficial notification can be claimed at a later stage also if otherwise the same is eligible at the time of import of goods.
A two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the issue of whether after import, the appellant can claim alternate exemption notification is settled by the Apex Court in the case of Share Medical Care, wherein it was held that the beneficial notification can be claimed at a later stage also if otherwise the same is eligible at the time of import of goods.
In the recent case, the Hyderabad bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that Explanation 3(a) to Sec.65(44)of the Finance Act does not apply to members of clubs/associations that are incorporated.
A two-member bench comprising of Mr Anil Choudhary, Member ( Judicial ) and Mr A K Jyotishi, Member ( Technical ) observed that the Appellant is a body registered or incorporated under the Andhra Pradesh Societies Registration Act, 2001. Further explanation 3(a) to Sec 65(44) does not apply to members’ clubs/associations, which are incorporated.
The Customs, Excise And Service Tax Appellate (CESTAT) of the Chennai bench while setting aside the Confiscation of Goods ruled that any goods which fall under the category of equipment apparatus are freely importable as per Foreign Trade Policy (FTP)
A two-member bench comprising of Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) relying on the decision viewed that FTP, any goods which fall under the category of pieces of equipment, apparatus etc. are freely importable irrespective of their size and nature.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the demand recovery of 5 years in the matter regarding interest on wrongly taken cenvat credit.
A Two-Member Bench of PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “It was for the appellant to have paid the interest along with the reversal of the excess credit taken. It is also observed that during the period of dispute section 11A did not provided, for recovery of interest and hence was not applicable. The recovery of interest was made in terms of Section 11AB/ 11AA which did not provided for any limitation.”
The Chennai in the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter regarding the allegation on the amount reversed by Lotte India on Processed milk under reversal of proportionate credit to the adjudicating authority.
A two-member bench comprising Ms Sulekha Beevi C S, Member ( Judicial ) and Mr Vasa Seshagiri Rao, Member ( Technical ) viewed that the said issue as to whether the appellant has reversed the correct amount requires verification by the adjudicating authority. The demand raised for paying 5% / 6% of the value of the exempted goods as per Rule 6 (3) (i) cannot be sustained, as the appellant has exercised the option by reversing some amount of credit.
In a recent judgement, the Chennai in the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that reverse proportionate credit as per Rule 6(3) of Cenvat Credit Rules ( CCR ), 2004 are allowable on manufacturers of processed milk and set aside the demand against the Lotte India Corporation Ltd.
A two-member bench comprising Ms Sulekha Beevi C S, Member ( Judicial ) and Mr Vasa Seshagiri Rao, Member ( Technical ) observed that the appellant is liable to either reverse the proportionate credit under Rule 6 (3) (ii) or pay an amount equal to 5% / 6% of the value of exempted goods as per Rule 6 (3) (i) of CCR 2004.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has observed that a penalty under the Excise Act is not leviable when duty to proportionate CENVAT credit of exempted goods paid. Further held that since the appellant has paid the amount of 60,15,116/- which is proportionate Cenvat credit attributed to the exempted goods belatedly, they are liable to pay the interest till the date of reversal.
A two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) And Mr C L Mahar, Member ( Technical ) that the appellant has a strong prima facie case on time bar, despite that the appellant has paid the proportionate credit of Rs. 60,15,116/- and despite the demand being time bar they are not contesting the payment of Rs. 60,15,116/- but they are only seeking a lenient view as regard imposition of equal penalty.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), South Zonal Bench, Chennai, has held that deodorants are not considered prohibited goods under the Drugs and Cosmetics Rules, 1945. The bench dismissed the penalties and fines imposed on the importer highlighting the lack of legal basis in the re-determination of the value based on non-contemporaneous imports.
The two-member bench comprising Mr. S.S. Garg ( Judicial Member ) and Mr. Ajit Kumar ( Technical Member ) set aside the enhancement and dismissed penalties and fines, except for a Rs.1,00,000 penalty under Section 111(d) of the Customs Act, 1962, for the violation of port restrictions.
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that excise duty exemption cannot be denied in the absence of wilful suppression of fact to evade tax. As there is no case of fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade and the larger period of limitation is inapplicable in the present case.
A two-member bench comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that exemption from Excise duty equal to SAD under Notification No.23/2003-CE is not required since the said goods if imported are exempt from SAD and therefore Excise duty equal to SAD payable under the Proviso to Section 3 (1) of the Central Excise Act 1944, will be NIL.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the confiscation order and noted that balloons used for decorations are not required to satisfy BIS Registration as they are not toys.
A Two-Member Bench of Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “In the present case, the appellant has consistently from the very beginning contended that they are engaged in the business of decorations using balloons, and the goods ( balloons ) imported were intended to be used only for decoration. The department has not been able to establish otherwise. As per the list of items shown in the IS 9873 ( Part I ): 2012 item at (k) shows that holiday decorations that are primarily intended for ornamental purposes are excluded. Thus goods used for decoration is excluded. The said item at (k) does not make any distinction or differentiation based on the material used in for the balloon. Further, in the present case the appellant offered to test the goods as to the nature of the material used. The department did not conduct any test.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that valid availment of credit after three and half years implies that excise duty refund was sanctioned correctly.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We find that in the present case, it is not the stand of the Department that it has sanctioned/approved, refund of duty which was not paid by the appellant, but this is the case, in which the Department has sanctioned refund equal to the amount which was paid by the appellant in cash or through PLA, therefore, it cannot be said that this is a case of excess availment of refund by not complying with the condition of the said Notification.”
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