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 23, 2024 to March 29, 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 being 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 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. no demand of service tax both can be raised on the appellant on account of transaction charges and delayed payment charges. The impugned order deserves to be set aside and the appeal is, accordingly allowed.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the excise duty not payable on waste and scrap of packing material of inputs when demand travelled beyond show cause notice ( SCN ).
A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member ( Judicial ) and Anil G. Shakkarwar, Member ( Technical ) observed that “We are of the view that no demand is raised on the Appellant in the Show-cause notices on the ground that it was engaged in trading which was treated as an exempted service against which it cannot avail credits on inputs but the demand was solely based on the ground that out of two varieties of manufacturing waste, one is exempted from payment of Excise Duty for which demand is raised against non-reversal of the allegedly inadmissible credit availed on those exempted products and it is a settled principle of Law.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and ruled that the burden is cast upon the Department to show that assessee recovered cost of service rendered.
A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member relied on the judgment in Indian Oil Sky Tanking Ltd. vs CST, Bangalore, wherein it was held that “Burden cast upon the department to show that the assessee has recovered the cost of service rendered. In the absence of such recovery, the question of levy of service tax does not at all arise. The book adjustment cannot be the ground to fix the liability.”
In the present case, we observe that the Show Cause Notice as well as orders of the adjudicating authority have just appreciated the difference noticed between the amount mentioned in the profit and loss account and are mentioned in ST 3 returns of the appellant. Without appreciating the amount out of the impugned invoices to have been actually received by the appellant and without verifying as to whether the requisite services were finally being provided. Resultantly, we hold that order confirming such a demand is not sustainable” the Bench noted.
The Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) held that no Service tax is demandable on Works Contract Service. It was viewed that the activity of ‘providing and placing hard stone boulders on the slope of the embankment of PST of required thickness, including all cost of materials, labour, T&P, royalty taxes, etc.’ as directed by the service recipient. As no demand has been raised under the category of “works contract service”, therefore, no demand is sustainable against the appellant.
A two member bench comprising Shri Ashok Jindal, Member (Judicial) and Shri K Anpazhakan, Member (Technical) held that the merit classification of the services rendered by the appellant is under works contract service. As no demand has been raised under the category of “works contract service”, therefore, no demand is sustainable against the appellant. While allowing the appeal, the CESTAT set aside the impugned order
The Allahabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no excise duty is demandable in the absence of evidence to establish the use of the machine for packing gutkha. The CESTAT viewed that the demand of duty was contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008
A two member bench comprising of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that all the evidences produced in form of declaration, ground plan and correspondences show that the machine was installed in the separate room and was used only to pack sweet supari. The CESTAT viewed that the demand of duty was contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008 and set aside the same while allowing the appeal.
The Chandigarh bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in a ruling in the case of Yamaha Motor Solutions India Pvt. Ltd has held that Service Tax is not payable under Consulting Engineer’s Service for Advisory Support Service. The CESTAT viewed that during the period in dispute, the activities of the appellant were exempted by Notification No. 04/1999 dated 28.02.1999 and Circular No. 70/19/2003-ST dated 17.12.2003.
The CESTAT viewed that during the period in dispute, the activities of the appellant were exempted by Notification No. 04/1999 dated 28.02.1999 and the Circular No. 70/19/2003-ST dated 17.12.2003. When the appellant is not liable to pay service tax, the question of demanding interest and imposing penalty does not arise. The Tribunal set-aside the impugned order by allowing the appeal of the appellant with consequential relief, if any, as per law. Shri Tanuj Hazari appeared for the appellant and Shri Raman Mittal, Authorised Representative appeared for the Respondent.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed penalty and noted that the misdeclaration of country of origin in bills of entry is immaterial towards valuation.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “As regard the issue of misdeclaration of Country of Origin in the bills of entry filed by the appellant, the material information declared in the bill of entry mainly corresponds to the goods that are under import and mis declaration of country of origin is immaterial towards the valuation, description and other such particulars concerning the goods, and the appellant would have gained nothing as no preferential rate of duty was claimed by the appellant.”
Hindalco Industries Limited, one of India’s leading producers of aluminium and copper, has been deemed eligible for Cenvat credit on inputs used in fabricating capital goods.
In result, the two-member bench comprising Mr. Ramesh Nair ( Judicial Member ) and Mr. Raju ( Technical Member ) concluded that Hindalco Industries Limited is eligible for Cenvat credit on inputs used in fabricating capital goods. The denial based on immovability and timing was rejected and the appeal was allowed.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that issuing a consolidated hearing notice with multiple hearing dates constitutes a violation of the principles of natural justice.
In result, the single bench of Mr. S. S. Garg (Judicial Member) set aside the orders and remanded the case back to the Commissioner (Appeals) with clear instructions. The CESTAT directed the Commissioner (Appeals) to reconsider the case on its merits, ensuring that the appellant is afforded a reasonable opportunity of hearing in accordance with the principles of natural justice. Additionally, the Commissioner (Appeals) was instructed to render a reasoned decision within a specified timeframe to expedite the resolution of the appeals.
In a recent case, the Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) allowed the claim of self-credit refund on M. S. Ingots as the manufacturing of the same is exempted under excise notification. The Bench viewed that the refund of excise duty claimed by an assessee and sanctioned by the competent Authority under Notification No. 56 of 2002-CE which has attained finality as not having been challenged before any appellate or revisional authority under the Excise Act cannot be termed as ‘erroneous refund’ and recovered by resort to section 11A of the Act.
A two-member bench Sh. S S Garg, Member (Judicial) and Sh. P Anjani Kumar, Member (Technical) viewed that in the case of M/s Alu Bond Enterprises vs. CCE & ST, J&K, the Division Bench of the Tribunal has held that “5. I heard both sides and perused the records of the case. We find that the impugned order considers the self-credit taken by the appellants as “erroneous” credit and confirms the demand of the same in terms of Section 11A of the Central Excise Act, 1944 along with interest and penalty under Section 11AC ibid. We find that the Hon’ble High Court Jammu & Kashmir vide their order in CEA 06/2018 held that: The refund of excise duty claimed by an assessee and sanctioned by the competent Authority vide its order under Notification No. 56 of 2002-CE which order has attained finality as not having been challenged before any appellate or revisional authority under the Excise Act cannot be termed as ‘erroneous refund’ and recovered by resort to section 11A of the Act.
The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that mere non-payment of service tax and non-filing of returns is not sufficient to extend the period of limitation. The Tribunal has been taking a consistent view that a mere non-payment of service tax and non-filing of Returns would not be a sufficient reason to extend the period of limitation.
A single member bench of Mr P Anjani Kumar, Member ( Technical ) found that except for stating that the show-cause notice has been issued only after the conduct of the audit and that the appellants have suppressed the material facts, no evidence has been put forth in the show-cause notice or in the impugned order to show that there has been a positive act of suppression on the part of the appellants to evade payment of duty.
The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that the demand of service tax under financial leasing without considering the nature of the transaction is invalid.
A two-member bench comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) held that for facility management, demanding service tax under financial leasing during the relevant period is not sustainable. It was found that an amount of Rs. 9,37,76,673/- has been received by the appellant for providing financial leasing service without taking into consideration the actual nature of the transaction. Hence, the demand is liable to be set aside and we accordingly do so.
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