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 30, 2024 to April 05 , 2024
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed the Proper Officer to pass speaking order under Section 17(5) of the Customs Act, 1962, as there was mismatch in the reassessed value and self-assessment by the importer.
A Two-Member Bench comprising Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “The value was enhanced without any speaking order as the proposed enhancement was fully accepted by the importer vide his consent given in writing to the proper officer. Due to this, speaking order was not required as per sub-clause 5 of Section 17 of the Act, as quoted above. In such situation, Commissioner (Appeals) had to refer the matter back to the proper officer/adjudicating authority for fresh decision/order, in terms of above quoted sub-clause (ii) of Section 128A (3) (b) of the Customs Act, 1962.”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that no jurisdiction is vested for Adjudicating authority to decide whether availed cenvat credit issued by the Input Service Distributors ( ISD ) is incorrect.
A Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “As the Head Office of the appellant is registered as ISD and distributed the cenvat credit in proportionate to the appellant i.e. 54.51% is valid documents to avail the cenvat credit in terms of Rule 9 of the Cenvat Credit Rules, 2004. If the Revenue wants to deny the availment of cenvat credit i.e to be only to the Head Office, who is registered as ISD. As no investigation has done at the end of the ISD for distributing ineligible cenvat credit to the appellant, the cenvat credit cannot be recovered from the appellants.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and ruled that handling of the container not covered under the taxable activity of cargo handling.
A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “The activity of handling of container cannot to be covered under the taxable activity of cargo handling as cargo handling service also. This activity is essentially a service in relation to merchandise. As per the dictionary also cargo means goods carried on a ship, aircraft or motor vehicle. The empty containers are not the merchandise. The Circular No. B11/1/2002-TRU has explained that empty containers cannot be treated as cargo. In light of these observations, the activity in question cannot even be called as the taxable activity of Cargo Handling Service.”
The Chennai bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has observed that reviewing the earlier order of the commissioner of Goods and Service Tax ( GST ) is Impermissible by law.
A two-member bench of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that the adjudicating authority has proceeded to finalize the provisional assessments without putting the appellant on notice and hence, the Orders-in Original have been passed without adhering to the principles of natural justice.
The Customs Excise & Service Tax Applellate Tribunal ( CESTAT ) upheld the Confiscation and Penalties Imposed Under Customs Act, 1962 as the imported fabrics under advance authorisation were diverted for sale in open market.
A two-member bench of Ms Binu Tamta, Member ( Judicial ) and Ms Hemambika R Priya, Member( Technical ) viewed that the benefit of Notification 99/2009-Cus dt 11.09.2009 cannot be extended to the appellant because of the overwhelming evidence of the diversion of imported raw material to the open market.
The Allahabad bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that clearance of plastic in both units owned by members of the same family cannot be clubbed in the absence of mutuality of interest.
A two-member bench comprising Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) reduced the penalty on appellant-II to Rs.50,000/- only and on appellant-III to Rs.75,000/-. With the above modification, the CESTAT upheld the impugned order. The Appeal of appellant-I is dismissed and the appeals by appellant-II and appellant-III are partly allowed to the extent of reducing penalties.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that penalty under section 114 AA of Customs Act, 1962 is not imposable unless mens rea is established beyond doubt. The Tribunal held that the penalty under section 114 AA of Customs Act is not imposable as the department failed to either prove that goods had originated in Iran or prove role of the Appellant or its Directors in the alleged Mis-declaration.
A two-member bench comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) that viewed that in relation to Section 112 (a) of the Act it has been held in various ruling that mens rea is not a requirement for imposition of penalty, however the same cannot be a standard principle in all matters. In cases where there is absolutely no involvement of assessee and where there is no evidence produced to show their role in the alleged fraud/misdeclaration, then imposition of penalty in our view will amount to injustice as far as the assessee is concerned.
The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that extended period limitation is not applicable when the assessee paid service tax along with interest.
A two-member bench comprising Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that once the demand of Rs.20,36,32,619/- is not found sustainable on merits, the question of imposition of penalty under Section 78 does not arise. The penalty of Rs.1,12,23,633/- is also not sustainable in view of Explanation 2 to Section 73(3), which provides that no penalty is to be imposed when short-paid service tax is deposited along with interest before the issuance of show cause notice. The demand is not sustainable on merits, the imposition of penalty under Section 77 and demand of interest is also not sustainable.
The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that the benefits of exemption notification cannot be denied when documents show the import of coffee beans. Since the Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, the CESTAT set aside the impugned order and allowed the appeals by way of remand.
A two-member bench comprising of Mr P A. Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that there is no doubt that the Bill of Entry describes the goods as ‘Indonesia robusta coffee beans’ and the Indonesian Agricultural Quarantine Agency also declared the goods as Robusta coffee beans, however, on examination it was found that the goods contained 71% coffee husk and the remaining rejected defective beans, thus described as coffee husk/bits as certified by the Bangalore Coffee Board Laboratory.
The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that no penalty is imposable in the absence of intent to evade tax. The Tribunal held that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST.
A single bench comprising Sh S S Garg, Member (Judicial) held that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST. Nothing emerges from the impugned order that the appellant has not filed the requisite returns with intent to evade the payment of tax. The CESTAT held that the imposition of penalties amounting to Rs.96,000/- is not sustainable and set aside the impugned order by allowing the appeal of the appellant
The Ahmedabad bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that the classification of old and used lead acid batteries based on their technical nature cannot be challenged without any evidence. In the absence of any investigation, the technical nature of the product poses a challenge for classification.
A two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the lower authorities had not appreciated the nature and characteristics of the batteries in question before classification. As regards the submissions made by the Appellant the batteries that have been sold are an outcome of ship breaking and not that of manufacturing therefore it has not been sufficiently established that the said goods be classified as scrap altogether.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that corrugated boxes for packaging glassware which are non-cenvatable are not liable to Excise Duty.
A two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the demand was raised on all the scrap sold by the appellant value of which is reflected in the balance sheet. The appellant while giving the information, as asked by the department vide their letter dated 06.03.2013, in their letter dated 11.03.2013 categorically stated that they have paid the excise duty on manufacturing scrap nor cenvatable scrap, they also stated that on the general scrap which is neither manufacturing scrap nor cenvatable scrap, they have not paid the duty.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that no service tax leviable on installations on CNG Kits in absence of separate invoices.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that separate invoices were not found as regards the Assessee having carried out installations on CNG kits that despite the assessee having carried out such installations and paid VAT thereon, it cannot be ipso facto concluded that they have not rendered any taxable service and are not liable to service tax. Therefore we find that in the interest of justice the said issues need to be examined in depth. The issue needs to be remanded to the adjudicating authority for reconsidering the value for demand taking to consideration the dispute raised in the show cause notice and submissions made by both the sides.”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand and held that Emotionally Intelligent Companion Device is human-like companion for children and the same is classifiable as automatic data processing ( ADP ).
A Two-Member Bench comprising Ajay Sharma, Judicial Member and CJ Mathew, Technical Member observed that “The facts, indelibly clear, does not controvert conformity with the essential requirements set out in note 5(A) in chapter 84 of First Schedule to Customs Tariff Act, 1975 There is no finding that the impugned goods, by incorporating or working in conjunction with ‘automatic data processing ( ADP ) machines’, performs the function of ‘toys’ which should be the consummation of resort to note 5(E) in chapter 84 of First Schedule to Customs Tariff Act, 1975 and such finding is well nigh impossible in the absence of any authoritative guidance on ‘toys’ and its intended functions.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Income received by Smaaash from bowling covered under Section 66D(j) of the Finance Act, 1994, and thereby holding that service tax is not leviable.
A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “It has to be held that the income received by the appellant from bowling alley would be covered under section 66D(j) of the Finance Act and, therefore, would not be leviable to service tax.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that excise duty is not leviable on printing Activity as it does not amount to ‘manufacture’.
A Two-Member Bench of Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “We are of the view that the activity of printing done by the appellant does not amount to ‘manufacture’. The demand of Excise duty, interest and the penalties imposed cannot sustain. The demand, interest and penalties are set aside. The impugned order is set aside.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that pump for lotion dispenser not scent spray or toilet spray and hence basic customs duty ( BCD ) is leviable at rate of 7.5%.
A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “We hold that the product in question is a pump for displacing and dispersing the lotion/cream. Hence, it is definitely not a scent spray or toilet a spray ( CTH 9616 ). It is a pump but not the one under 8413 where the pumps meant only for displacement of liquids are covered. The goods in question is held to be covered under CTH 84248990 being the pumps meant not only for displacing the liquid/lotion but for simultaneously dispersing the same.”
The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) in the case of Idea Cellular Ltd has held that the construction service in connection with immovable property is not to be denied as credit under Cenvat Credit Rules (CCR), 2004.
A division bench comprising Justice Dilip Gupta, President, Mr C J Mathew, Member (Technical) And Mr Ajay Sharma, Member (Judicial) held that ‘The decision in Bharti Airtel is limited to ‘input’ as a source of credit consequent on the finding of ineligibility for claim as ‘capital goods’ and, therefore, not relevant in dispute over entitlement of ‘input service’ as credit. There is no break in the CENVAT chain insofar as ‘input service’ is concerned. The decisions of the coordinate benches survive as precedent to the extent appropriate to the facts of the present dispute.’
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