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 16, 2024 to March 22,2024
In the case of M/s Bharat Sanchar Nigam Limited(BSNL), the Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Cenvat Credit is allowable on Rent a cab services availed in course of business of providing output services. In terms of Rule 2(l)(b) of the Cenvat Credit Rules, 2004, the appellant providing output service is entitled to take the Cenvat credit on service tax paid by them.
A two-member bench comprising Mr Ashok Jindal, Member (Judicial) and Mr K Anpazhakan, Member (Technical) observed that the said service has been availed by the appellant in the course of their business of providing output services. Therefore, in terms of Rule 2(l)(b) of the Cenvat Credit Rules, 2004, the appellant providing output service is entitled to take the Cenvat credit on service tax paid by them.
The Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Cenvat Credit is allowable on service tax paid on transportation under the Reverse Charge Mechanism ( RCM ). The Tribunal viewed that when the entire demand is under reverse charge mechanism and if the appellant had paid the service tax under reverse charge mechanism, they would have been entitled to Cenvat credit of the same amounts.
A two-member bench comprising Mr Ashok Jindal, Member ( Judicial ) and Mr K Anpazhakan, Member ( Technical ) found that the appellant was required to pay service tax on transportation services under the Reverse Charge Mechanism ( RCM ). If the said charges had been paid by the appellant, the same were entitled to take the credit to the appellant. Therefore, it is a situation of revenue neutrality as the appellant himself has to take the credit for the same.
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax is not leviable merely on basis of figures reflected in statutory records.
A Single Member Bench comprising P Anjani Kumar, Technical Member observed that “It is clear that the cases are made on the basis of third party data i.e., amounts reflected in Income Tax Returns and in Form 26AS. Revenue takes the stand that in the Negative List regime, Department is not obliged to prove the provision of a particular service to demand service tax and further, the Appellants could not explain that the difference satisfactorily. I find that this is not the correct approach; exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof.
The Delhi bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that delayed payment charges ( DPC ) is not a commission/brokerage for sale/purchase of securities and no Service Tax Chargeable.
A two member bench comprising of Ms Binu Tamta, Member ( Judicial ) and Ms Hemambika R Priya, Member ( Technical ) observed that there persisted several confusion between the revenue and the appellants in respect to determination of accessible value of taxable service provided by the stock brokers and therefore there was a bona fide belief that there was no levy on receipts other than commission or brokerage received by the stock broker and consequently, no suppression of material facts can be attributed on the appellant with intent to evade payment of duty.
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that following rescinded Excise Circular by Commissioner ( Appeals ) is condemnable act of judicial indiscipline.
The Single Bench of Dr Rachna Gupta, Judicial Member observed that “Circular dated 25.04.2016 was held unsustainable in law. Subsequent to the said decision that Department also came up with another Circular No.1084/2005 dated 07.07.2022 rescinding the Circular of 25.04.2016 in the light of decisions of the Supreme Court. Commissioner (Appeals) in the present case is observed to still have followed the said rescinded Circular dated 25.04.2016. The said act of the adjudicating authority not merely amounts to mis-interpretation of the provision, but it amounts to the violation of statutory principles, the circular dated 07.07.2022 being binding upon him. The ignorance of law laid down by the Hon’ble Supreme Court is a condemnable act of judicial indiscipline.”
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that minor discrepancies cannot be reason for recovery of customs refund when Chartered Accountant (CA) certify stock report.
A two member bench comprising Mr Raju, Member (Technical) and Mr Somesh Arora (Judicial) held that minor discrepancies cannot be the reason for recovery of refund when the appellant had submitted Chartered Accountant certified stock report. The Tribunal set aside the order and allowed the appeals.
The Delhi bench of the Customs Excise & Service Tax Applellate Tribunal ( CESTAT ) has held that sale of beer which is an alcoholic liquor for human consumption is taxable under Business Auxiliary Service. The Tribunal directed the adjudicating authority to consider the same and allow the benefit of exemption notification as claimed by the appellants.
A two member bench comprising of Mr Somesh Arora, Member ( Judicial ) And Ms Hemambika R Priya, Member ( Technical ) allowed the affidavit to be taken on record and directed the adjudicating authority to consider the same and allow the benefit of exemption notification as claimed by the appellants. The CESTAT held that the adjudicating authority shall appropriately consider the benefit of the notification to be allowed to the appellant in the light of affidavit having been filed with undertaking of not availing the credit, which has been stated to be not taken till date by the appellant.
The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that process of making lacquered plastic film not amounts to manufacture and CENVAT credit is admissible if such inputs are cleared on payment of duty.
In various decision, the Supreme Court and High Court has been held that when process undertaken by the assessee does not amount to manufacture, even then the CENVAT credit is admissible if such inputs are cleared on payment of duty which would amount to reversal of credit availed. In view of the ratios of various decisions, the coram comprising Mr S S Garg, Member ( Judicial ) and Mr P Anjani Kumar, Member ( Technical ) set aside the impugned order and allowed the appeal.
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) viewed that the importer cannot be penalized for incorrect mention of country of origin in the bill of entry and set aside the Penalty under Customs Act, 1962.
A two member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju Member ( Technical ) held that for incorrect mention of country of origin, the importer cannot be penalized. Considering overall facts and the fact of incorrect declaration, the bench viewed that if any misdeclaration regarding country of origin in the Country of Origin Certificate, the appellant is not liable for any penalty or fine.
The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the demand of service tax under ‘Advertisement Service’ is invalid in absence of evidence to show engagement in making or preparing or advising for advertisement.
A two member bench comprising Mr P K Choudhary, Member ( Judicial ) And Mr Sanjiv Srivastava, Member (Technical) observed that it is evident from the details given in above invoices that the Appellant was not engaged in designing and conceptualising advertisement. So, they were not covered under the taxable services.
In a recent judgement, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded matter for re compute service tax payable under Good Transport Agency Service (GTA) Service, as the service undertaken for carriage of food grains and pulses are exempted by notification
A two member bench of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) directed the Lower Adjudicating Authority to re-compute the tax payable giving the benefit of abatement under Notification No. 32/2004-ST dated 03.12.2004 and exemption benefit under Notification No. 34/2004-ST dated 03.12.2004. GTA Service undertaken for carriage of food grains and pulses is also exempted from payment of Service Tax w.e.f. 29.02.2010 under Notification No. 33/2004-ST dated 03.12.2004
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of Ahmedabad set aside the order of adjudicating authority demanding extended period as the department failed to establish non utilisation of common input services for trading. It was viewed that the department has failed to establish the allegation of suppression of facts with intent to evade payment of duty against the assessee so as to invoke the extended period.
A two member bench comprising Ms Sulekha Beevi C S Member ( Judicial ) and Mr C L Mahar Member ( Technical ) observed that the department has failed to establish the allegation of suppression of facts with intent to evade payment of duty against the assessee so as to invoke the extended period. The show cause notice issued beyond the normal period cannot sustain and requires to be set aside. The issue on limitation is answered in favour of assessee and against the department.
In a major relief to M/s Kuoni Travel India, the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that service tax is not leviable without identifying specific service provided and consideration received.
A Two-Member Bench comprising Justice Dilip Gupta, President and P Anjani Kumar, Technical Member observed that “We fail to understand as to how the Commissioner comes to the conclusion that this 10% of the income or advances shown in the books of accounts of the appellants leads to the inevitable conclusion that the amounts were for provision of certain services. We find that no specific service has been identified by the Adjudicating Authority, while accepting in principle that duty evasion cannot be proved with mathematical precision, the same cannot be established by applying a mathematical formula. We find that Courts and Tribunal have been consistently holding that service tax cannot be fastened without identifying the specific service provided and consideration received or to be received for the same.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand and held that the services of planning travel itinerary of clients classifiable as air travel agent
A Two-Member Bench comprising Binu Tamta, Member ( Judicial ) and Hemambika R. Priya, Member ( Technical ) observed that “The fact that the appellant has been discharging service tax under Rule 6(7) implies that they are acting as “air travel agents” and hence no further liability arises. There is no doubt that the appellant is engaged in the travel agency business and has been charged service tax under “Air Travel Agent” service as defined in Section 65(4) read with section 65(105)(l).”
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), West Zonal Bench at Ahmedabad has held that the remuneration paid to whole-time directors of a company in the form of a commission based on profit constitutes an employer-employee relationship, thereby exempting it from service tax.
The CESTAT emphasised that whole-time directors hold significant positions under the Companies Act, are considered key managerial personnel, and are held responsible for any defaults or violations. Therefore, their remuneration, including commission on profit, is part of the employer-employee relationship and not subject to service tax, irrespective of the form of remuneration.
The Ahmedabad Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the transfer of goods from a 100% Export Oriented Unit ( EOU ) to its own Domestic Tariff Area ( DTA ) unit should be deemed as a stock transfer and not a sale. It was also held that such stock transfers from 100% EOUs to their domestic units are not subject to Special Additional Duty ( SAD )
the two-member bench comprising Mr. Ramesh Nair ( Judicial Member ) and Mr. Raju ( Technical Member ) dismissed the revenue’s contention regarding the limitation issue, noting that the appellant had regularly filed returns indicating the nature of their clearances of goods to their sister units and claiming the benefit of SAD exemption. Consequently, the orders demanding SAD were set aside and the appeals were allowed.
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