This half-yearly round-up analytically summarizes the key Indirect Tax-Customs, Excise and Service Tax rulings of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the first half of 2024.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the work of composite nature involving site formation is taxable under Finance Act, 1994, and hence no service tax exemption.
A Two-Member Bench of the Authority comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “In the case of vehicles supplied without an agreement / contract including those related to the supply of tangible goods / vehicles to TAMIN the effective control of the vehicles was with the appellant. Tax for the lease of the vehicles will have to discharged as a taxable service of ‘Supply of tangible goods service’ as defined in Section 65 (105) [(zzzzj) has been rendered. Therefore, the matter is remanded to the Original Authority only for the purpose of quantifying and intimating the correct demand of duty and interest to the appellant.”
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the unjust enrichment not extendable to manufactures working under compounded levy scheme under Section 3A of Central Excise Act, 1944.
A Two-Member Bench of the Tribunal comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Therefore, the principle of the unjust enrichment, which is ordinarily applicable only on the goods manufactured and removed under the scheme of levy and more appropriately under Section 3 of the Act, the said principle cannot by any logically and economical be justifiable as legally tenable principle be extended to the manufactures working under compounded levy scheme under Section 3A.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the advances received in tax period under consideration are taxable.
A Two-Member Bench of the Tribunal comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “Therefore, there is no doubt that Service Tax was payable upon receipt of the consideration. No other factor such as the time of accrual of the consideration was relevant. Hence, the advance of Rs.37,55,76,899/- having already been received, would become taxable in the month in which the same was received by the appellant. This is of course subject to the qualification that if the appellant is able to establish that any portion of the advance so received was either refunded to its customer or no services were rendered in respect of any portion of the advance, then such portion would not be taxable.” “Therefore, we hold that the advances, to the extent they have been received in the tax period under consideration (i.e., 2008-09), would be taxable” the Bench concluded.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) in the case of M/s. Indian Oil Corporation Ltd observed that Charges of Know How agreement are not required to be added to the assessable value of imported goods in terms of Customs Valuation Rules, 1988.
A two-member bench comprising of Mr Ashok Jindal Member (Judicial) And Mr Rajeev Tandon Member (Technical) observed that the contract, as entered into by the appellant with their overseas buyers on identical terms. There was no obligation to bind the appellants to any post-import act/activity and thus render it as a condition of sale for procurement of the imported goods. We also note that there are no technical know-how fees attributable towards post import-related/associated acts and activities. There is nothing in the contract entered into by the two sides, to impute the additional costs as discussed in earlier paras, towards the sale of imported goods or as a condition of sale, the bench set aside the order of the Commissioner (Appeals), is without merits and is therefore liable to be quashed. We therefore set aside the order and allowed the appeal filed by the appellant.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Canned pineapple Slices Fall under CTH of Fresh Or Dried Fruit. It was noted that the appellant had themselves quoted that it was their CHA who filed their Bills of Entry under the wrong CTH 20082000 without taking instructions from them regarding the correct classification, which would be CTH 08119010.
A two-member bench comprising Dr Rachna Gupta, Member(Judicial) And Ms Hemambika R Priya, Member(Technical) observed that the classification of the canned pineapple slices would have to be decided as per the HSN explanatory notes and would therefore be appropriately classifiable under CTH 0804 only.
The Tribunal found that the appellant in his statement has accepted that they have wrongly classified their product under CTH 0811 by suppressing the non-frozen character of the impugned goods, to avail the benefit of Notification no 46/2011 – Cus dated 01.06.2011. The material incriminates the petitioner in contravention of the provisions of the Customs Act. Such material can certainly be used to connect the petitioner to the contravention. Therefore, we do not find any infirmity in the impugned order which has relied on the statement of the appellant.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) observed that the benefit of the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDR) scheme cannot be denied just because of non-filing of declaration.
A two-member bench comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) observed that the benefit of the Scheme cannot be denied to the appellants just because they did not file the declaration under the SVLDR Scheme. The CESTAT allowed the appeal.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) observed that intermittent works executed by Co-operative Societies did not fall under manpower recruitment or supply. The Tribunal upheld the order which set aside the demand of service tax on respondents.
As per Section 65(68) the “Manpower Recruitment or Supply Agency Services” means any person providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person, and Section 65(105)(k) defines the taxable services for providing such services. From the above definitions, it is rather clear that it envisages a supply of labour which can be classified as “Manpower Recruitment or Supply Agency Services”. A two-member bench comprising of Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed thatthe impugned order has rightly dropped the demands under Manpower Recruitment & Supply Agency service and rejected the appeals filed by the Appellant department.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) held that no service tax is leviable on transfer of transit mixer. It was observed that the hiring of Transit Mixer is covered under “right to use” and not under the service of “Supply of Tangible Goods” and the sale of RMC is not liable to service tax as it is a simple sale of transaction and there is no element of service in it.
A two-member bench comprising M S Binu Tamta, Member (Judicial) and P V Subba Rao, Member (Technical) observed that there is not even a whisper in the show cause notice about the provisions of section 65(105)(zzzzj) defining “Supply of Tangible Goods for use Service” and its applicability to the services rendered by the appellant yet the Commissioner in the impugned order has levied service tax holding that services provided by the appellant falls in the category of “Supply of Tangible Goods for use Service”.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty under Rule 26 of the Central Excise Rules, 2002 in the act of evading excuse duty by making clandestine clearances of goods.
A Single Member Bench comprising Sanjiv Srivastava, Technical Member observed that “The Appellant-II was actually involved in the act of evading the duty by making clandestine clearances of the goods for Appellant-I. The penalty imposed upon him under Rule 26 is justified and upheld.”
The Kolkata bench of CESTAT (Customs, Excise and Service Tax Appellate Tribunal) has set aside an order alleging illicit activities against the appellants in connection with clandestine manufacture and clearance of goods in light of the fact that the evidence available on record does not establish the same. The penalty imposed on the appellants were held to be not sustainable in law.
The two member bench comprising Ashok Jindal, Member(Judicial) and K. Anpazhakan, Member(Technical) held that: “Any admission of clandestine removal as per computerised sale register is not relevant unless conditions of Section 36B are satisfied. Provisions of Section 36B are mandatory in nature. Computer printout/electronic record cannot be proved by oral evidence.” The bench further noted that the admissibility of computer printouts as evidence depends on compliance with Section 65B(2) of the Evidence Act The order was set aside.
M/s. Vaibhav Metals vs M/s. Bothra Metals and Alloys Pvt. Ltd. CITATION: 2024 TAXSCAN (CESTAT) 139
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) restricted penalty to pre-deposit as there was role and knowledge of the appellants in clandestine activity designed to misuse CENVAT credit established.
The department was of the opinion that central excise duty was being evaded by way of illegal availment of CENVAT credit of CVD paid on the imported goods by the manufacturers of aluminium products without physically receiving the goods i.e. imported aluminium scrap allegedly purchased from the traders on high sea sales basis into their factory.
On the basis of the investigation conducted, Show Cause Notice dated 6.11.2009 was issued to the appellants proposing to demand Rs.3,14,24,906/- being the wrongly availed inadmissible CENVAT credit by VAPL Coimbatore.
The counsel for the appellants submitted that benefit of nominal penalty should be given to the appellant. For the application of Rule-26 of the Central Excise Rules, 2002, the condition precedent is that the person who in any manner deals with, any excisable goods, which he knows or reason to believe are liable for confiscation. In the present case, there is no evidence that the appellants were aware of the goods being liable for confiscation.
A Single Bench of M Ajit Kumar, Technical Member observed that “The discussion in the impugned order has established the role and knowledge of the appellants in the clandestine activity designed to misuse CENVAT credit.”
“I find that the involvement of the Appellants has been established mainly on the basis of collaborative statements, perhaps due to the clandestine nature of the activity and the lack of proper documentation in such cases, as discussed above. However, the imposition of stiff penalties requires stronger evidence. Hence to that extent the penalties imposed on the Appellants are disproportionate and needs to be modified” the Tribunal concluded.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the imposition of redemption fine and held that the bonafide of Usha International cannot be suspected just because vendor chose to affix different price tag.
A Two-Member Bench comprising M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “Clearly there was an understanding as regards the value is concerned, in support of which documents in the form of e-mails have been placed on record, which are not disputed by the Revenue. The value affixed on the label did not clearly show the price agreed upon in the purchase order dated 27.05.2013. Further, the said price tag was sought to be revised for the reason of fluctuation in the value of the Indian Rupee as against the U.S. Dollar, which fact was also not disputed, but however, the same apparently was not implemented by the foreign vendor / supplier.”
“Hence, we are of the view that the bona fides of the appellant cannot be suspected just because the vendor / supplier chose to affix a different price tag and therefore, there is no case for the Revenue to order confiscation of the goods in question” the Tribunal held.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the non-imposition of redemption fine and penalty as there was compliance of the customs notification.
The revenue is in appeal against the impugned order wherein the adjudicating authority did not impose any redemption fine and penalty on the respondent
The adjudicating authority after recording the fact that on pointing out, the respondent paid duty and interest and refrained from imposing redemption fine and penalty on the respondent. Against the said order, revenue is before the Tribunal.
A Two-Member Bench comprising Ashok Jindal, Judicial Member and Rajeev Tandon, Technical Member observed that “We find that in this case no doubt the respondent in terms of Notification, has failed to fulfil the export obligation within a block of 4 years, the respondent is required to pay 50% of duty along with interest @ 15% within 30 days from the expiry of each block, but the respondent was not aware of this condition as they were under an impression that they were required to fulfil the export obligation within a period of 6 years.”
“But, as and when investigation started the respondent immediately paid duty and interest. Further, as per the condition of the Notification, the appellant is required to pay duty along with interest. In that circumstances, the adjudicating authority has rightly refrained from imposing redemption fine and penalty on the respondent. As the respondent has complied with the condition of the Notification, therefore, we do not find any infirmity in the impugned order” the Tribunal noted.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed excise duty demand as there was receipt of SS waste and scrap supplied through dealers, which are defective and subsequent availment of cenvat credit.
The prime reason to deny credit is on the basis that the Appellant melts its inputs and produces SS Billets/Wires/rods/bars etc. and there is no proof that the Appellant uses SS Patta/Patti, SS Circle, SS Flat, SS Sheet (assuming it to be virgin material) whereas the claim of the Appellant all along before lower authority was that what they had received was off cuts pieces/defective/seconds/waste SS articles, and very much used by them in manufacturing process.
The present investigation has not identified a single supplier of SS scrap to the Appellant so as to make up for the quantity of goods as replacement. There is no evidence regarding flow back of funds by the Appellant/dealer to the suppliers or flow of fund between the utensil manufacturers to the suppliers for the clandestine nature of transaction alleged.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In light of the above, in the facts and circumstances of the present case, it must be held that the Appellant had in fact received SS waste and scrap supplied to them through dealers, on documents, which otherwise show that it was seconds/defective etc. and had correctly availed Cenvat Credit thereon, in absence of any cogent evidence regarding either diversion of such goods by suppliers or replacement thereof by the Appellant from any other
local source.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that no service tax is leviable on Goods Transport Agency (GTA) services availed outside to special economic (SEZ) zone.
On verification of accounts, it was noted that the appellant had not discharged Service Tax under GTA Services which was payable by them. The Show Cause Notice was issued proposing to demand the Service Tax under GTA Services along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. On appeal the Commissioner (Appeals) upheld the same. Hence the appeal.
The Tribunal in the case of M/s. Vision Pro Event Management had also considered the issue whether exemption from Service Tax is eligible when the services are availed outside to the SEZ zone. It was held that “Our view is supported by the fact that the notification which superseded Notification No. 4/2004 has categorically stated that whether or not the taxable services are provided inside the SEZ the exemption is available.”
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “After considering the facts and evidences placed before us and following the ratio laid in the decisions, we are of considered opinion that the demand cannot sustain and requires to be set aside. Ordered accordingly”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded matter in the case regarding ostensible eligibility for benefit of customs notification.
The sole issue appears to be the denial of entitlement to benefit of alternative notification which, in accordance with the decision of the Supreme Court in re Share Medical Care, should have been considered in proceedings emanating from denial of notification originally sought for even if not claimed in bill of entry.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “The ostensible eligibility of the appellant for benefit of notification no. 25/2005-Cus dated 1st March 2005 has been set out in the impugned order, and, in such circumstances, should have been left to the competent authority to dispose off such plea considering it to be exercise of such option available in section 149 of Customs Act, 1962. It is for the original authority to take a decision on the eligibility for such claim and, to decide the matter afresh, we set aside the impugned order directing that duty liability, and other attendant consequence, if any, be determined by the original authority.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) disallowed pay back on credit balance on the ground of manufacture of dutiable 100% cotton.
A Two Member Bench comprising observed that “We find that the provision for lapsing of balance credit as on the date when the assessee opt for exemption is not applicable when the assessee manufacture and clear dutiable as well as exempted goods. In the present case there is no dispute that the appellant was manufacturing dutiable goods viz. other than 100% cotton as well as exempted final product ( articles of 100% cotton ) hence, the credit balance available as on 07.12.2008 was available for utilization for payment of duty on dutiable products.”
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ordered to recalculate the customs duty and noted that the unit price for pair of bra cups used for one brassier should be taken as per the unit price.
A Two-Member Bench comprising P A Augustian, Judicial Member and R Bhagya Devi, Technical Member observed that “In this case, the Chapter 6212 clearly includes Brassier and when there is a specific description, the goods cannot be classified based on the content of the material used to manufacture the same. The Interpretative Rules reproduced below as seen under clause 2(a) the essential character of the product decides the classification and here the bra cups undoubtedly are used as part of a Brassier and the impugned products are more akin to the description given under 6212 and therefore rightly classifiable under 6212 90 as per clause 4 of the Interpretative Rules.”
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the statutory limitation period prescribed under Section 11B of the Central Excise Act, 1944 is not applicable to refund when the amount paid by the appellant is not tax.
A Single Bench of PK Choudhary, Judicial Member observed that “In the present case, when admittedly the Appellant is not required to pay any amount, then the Appellant was clearly entitled to refund of the amount deposited under-protest and consequently the revenue has no authority to retain such amount as it would be in violation of Article 265 of the Constitution.”
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that no service tax leviable on services of design work of slaughter house established for kolkata municipal corporation.
A Two-Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Judicial Member observed that “We find that the slaughter house was established for Kolkata Municipal Corporation in terms of Article 243W read with Schedule 12th of the Constitution of India. Nothing as observed by the Commissioner (Appeals) has been placed on record to show that the said slaughter house was for commerce and industry. On the contrary in terms of Article 243W this was the responsibility of the municipal corporation. That being so, Appellant is entitled to benefit of Sr. No.12(a) of Mega Exemption Notification No.25/2012-ST dated 20.06.2012.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax paid on general insurance service is admissible as cenvat credit.
A Two-Member Bench of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “it can be seen that in many cases the identical issue has been considered and it has been consistently held that the service tax paid on the general insurance service is admissible as cenvat credit as the service is directly or indirectly related to manufacture of the final product in the appellant’s factory. Accordingly we are of the view that the issue is no longer res integra. Since we have decided the matter on merit, we do not incline to address the issue on limitation.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the business of providing Stock Market related tips and advice not covered under taxable service of ‘Banking and other financial Services’.
A Two-Member Bench of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It can be seen from the above reproduced clarification that CBEC was of the view that any services to fall under the category of banking and financial services, the expression ‘any other person needs to be read “ejusdem generis” with the preceding words and the services are to be provided by any person should be similar to a bank or financial institution. In the case in hand, as recorded by us, it is undisputed that appellant is not a financial institution. Hence their activity of giving tips/information on shares would not fall under the “Banking and other financial services”, consequently not taxable.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty on reversal of cenvat credit in the matter regarding electricity supplied to sister concern.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “As regard the short reversal of cenvat credit on electricity supplied to the sister concern, the appellant has paid the amount of Rs. 25,589/- and on merit no contest was raised.”
A Two-Member Bench of the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that no excise duty can be demanded on waste and scrap of machinery on availment of cenvat credit.
The Bench of Ramesh Nair, Judicial Member and Raju, Technical Member noted that “we find that the department could not establish that the waste and scrap generated from the machine and on such machinery any cenvat credit was availed at the time of receipt and installation thereof. Therefore, unless and until the department shows that the appellant have availed any Cenvat credit, no demand on waste and scrap of such machinery can be made. Therefore, the demand of duty on the waste and scrap of the machinery is not sustainable, hence, the same is set aside.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that excess freight collected compared to freight paid to transporter is not includable in assessable value of excisable goods.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “Accordingly, we are of the considered view that the excess freight collected by the appellant as compared to the freight paid to the transporter is not includable in the assessable value of the excisable goods. Consequently, the demand on this count shall not sustain. In the result, impugned order is set aside, appeal is allowed with consequential relief.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed excise duty demand as the charges of creating dummy units for keeping value of clearances below small scale industry ( SSI ) exemption is not sustainable.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that nowhere it can be established that there was mutual flow back of funds amongst the units, control of both financial & management aspect by the same set of persons. We find that all the units are totally independent with no interdependence, no financial flow back, no mutuality of interest between firm, flow back of profit. There is no supporting evidence for common finance and common management and there is no finding that M/s Varun has floated, financed and incorporated the SSI units.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench ruled that cenvat credit cannot be denied merely because godown was situated outside factory premises.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “As regard the issue of cenvat credit of service tax paid on renting of godown situated outside the factory premises for an amount of Rs. 36,191/- we are of the view that merely because the godown was situated outside the factory premises, cenvat cannot be denied for the reason that the said godown was used for storage of the goods which was used in the manufacture, therefore, in our view the credit is admissible.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax is not leviable on charges collected on behalf of stock exchange.
A Two-Member Bench of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is settled that all the charges which are involved in the present case have been held as not the service charges of the broking firm and hence not liable to service tax and this consistent view has been taken in the other judgments cited by the appellant. Therefore, in the present case also all the charges which were collected on behalf of the stock exchange are not liable to Service Tax.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that when complete possession and control of de-humidifier machine given to customer during entire renting period, then it does not amount to supply of tangible goods.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case as per arrangement between the appellant and the service recipient, since after giving the equipment on hire to the service recipient, the right to possession and effective control is with the service recipient who possessed the equipment and operated the same with their own employee.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed benefit of abatement notification and noted that Make My Trip is facilitator between hotel and customer for short-term accommodation service.
A Two-Member Bench comprising Justice Dilip Gupta, President and Hemambika R Priya, Judicial Member observed that “. It is the hotel that has provided the service of short-term accommodation to the customers, and the appellant has merely acted as a facilitator between the hotel and the customer for the provision of short-term accommodation service by the hotels to the customers. The appellant is thus not a hotel. The appellant cannot, therefore, be said to be the provider of short-term accommodation service to the customers.”
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that no service tax is leviable for providing services of sale and purchase of SIM cards. The department viewed that the appellant is providing ‘Business Auxiliary Service’ to BSNL.
On the SIM cards, recharge coupons etc., where the service tax has been paid on the M.R.P. by the main operator the commission agent/distributor need not pay service tax on the commission received by him because the commission also forms part of the M.R.P. on which service tax has already been discharged.” A two-member bench comprising Mr S S Garg, Member (Judicial) And Mr P Anjani Kumar, Member (Technical) held that the impugned order is not sustainable in law, and therefore, set aside the same by allowing the appeal of the appellant with consequential relief.
A two member bench of CESTAT comprising S.S.Garg (Member, Judicial) and P. Anjani Kumar (Member, Technical) held the appellant’s arguments were acceptable and they were of the opinion that the machinery manufactured by the appellants by establishing a separate unit which started production after 07.01.2003, is eligible for benefit of Notification No.50/2003. The bench also observed that there was no condition in the said notification, so as to restrict benefit to only those units which were permitted by the District Industries Centre or any other authority.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that the classification of the vehicle as per rule 2 (a) of general rules for interpretation is not valid as the vehicle at the time of clearance did not possess the essential character of the ambulance.
A two-member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya, Member (Technical) observed that the goods have to be assessed in the form in which they are presented at the time of clearance and not in the form they may ultimately take. The vehicles at the time of clearance did not have the essential character of an ambulance. What was purchased were bare delivery vans without any fittings. The order passed by the Commissioner classifying the vehicles under ETI 8703 33 92 of the First Schedule to the Tariff Act cannot be sustained.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) upheld the order dropping the proceeding against the import of poppy seed. The show cause notice (SCN) was issued demanding customs duty cannot be issued without investigating facts of mismatch in declared value.
As per our above discussion, the enhancement of the price and consequential demand, interest etc. are not sustainable. Accordingly, the impugned order is set aside and appeal is allowed with consequential relief.” In view of the judgement, the two-member bench comprising Shri Ashok Jindal, Member(Judicial) and Shri Rajeev Tandon, Member(Technical) upheld the impugned order and dismissed the appeal of the revenue.
The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the services which are beyond the purview of Finance Act, 1994 lies within exclusive powers of the State Government.
The bench comprising of Ajay Sharma( Member, Judicial ) and C J Mathew( Member, Technical ) observed “We find that the issue lies in the narrow compass of applicability of rule 6(3) of CENVAT Credit Rules, 2004 insofar as the period prior to specific exclusion of ‘trading activity’ is concerned.” The bench held that there was no reason for further proceedings except insofar as notice under rule 14 of CENVAT Credit Rules, 2004 and penalty under rule 15 CENVAT Credit Rules, 2004 is to be confined to non-adherence to the terms as set out. The court set aside the appeal.
The responsibility to demonstrate Intentional Misuse of Tax Credit Provisions lies with the Excise Department: CESTAT
A single member bench of CESTAT set aside the order against assesse on the ground that there was no grounds for initiating proceeding against the asseesee.
The bench observed that the show cause notice should not have been issued in view of proviso to section 73 of the Finance Act, 1994. The bench also observed that amountunt which is ordered to have been appropriated was reversed much prior to issuance of SCN.CESTAT set aside impugned order. The appellant was represented by J.M.Sharma(Consultant) and Pooja Agarwal (Chartered Accountant)
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that the value of scrap cannot be included in the assessable value in terms of alternate procedures of Rules 4(5)(a) of Cenvat Credit Rules (CCR), 2004.
A two-member bench comprising Dr Suvendu Kumar Pati, Member (Judicial) and Mr Anil G Shakkarwar, Member (Technical) set aside the demand against the Appellant for the reason that the value of scrap need not be included in the assessable value. The appeal of the assessee was allowed.
The Mumbai bench of CESTAT set aside the order passed against the appeal and allowed the appeal filed by the petitioner.
The bench comprising Ajay Sharma (Member, Judicial) and C J Mathew (Member, Technical) observed that loss in transit is not includible for computation of ‘assessable value’. The court set aside the impugned order. The Appellant was represented by Payal Nahar. Respondent was represented by Xavier R Mascarenhas.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that no service tax can be levied on ONGC on the consideration received for the Right to use natural resources.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “The demand raised is indeed on the basis of Sl.No.61 of the exemption notification. Para 15 of the SCN also would show that the demand has been raised on the basis that the royalty which is paid periodically is not exempted from service tax. The argument put forward by the Counsel that the liability is derived on the basis of an exemption notification and not charging provision is not without substance.”
In a recent judgement, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the penalty under the Customs Act, 1962 which was imposed on the Customs Broker. The Penalty proceedings were initiated on an attempt toexport 19650 kg Red Sanders which was Violative of Foreign Trade Policy (FTP).
A two-member bench comprising Mr Ashok Jindal Member (Judicial) and Mr Rajeev Tandon Member (Technical) held that the department case falls woefully short of substantiating the invocation of penalty under Section 114(i) of the Customs Act and set aside the order passed by the Adjudicating Authority. The appeal of the assessee was allowed.
In a significant case, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that excise duty exemption on packing materials procured from the domestic market cannot be denied when the assessee complied with procedures under exemption notification.
A two-member bench of Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the appellant had complied with the procedures laid down under Notification No.43/2001-CE(NT) dated 26.6.2001 in procuring the packing materials which are being used in the manufacture of readymade garments and the finished goods are ultimately exported under the scheme. “Denying the benefit of Notification No.43/2001-CE(NT) dated 26.6.2001 in procuring the packing materials duty-free alleging violation of Condition 8 of the Notification No.94/2004-Cus. dated 10.9.2004, in our view cannot be sustained.”, the CESTAT viewed while setting aside the impugned order.
In the case of concealment of foreign currency, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal( CESTAT ) remanded the matter for adjudication on confiscation of currency under the Customs Act, 1962.
A two-member bench comprising of Mr P A. Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the Order-in-Original passed by the Deputy Commissioner was set aside by CESTAT and therefore, the Orderin-Original had become null and void. Accordingly, the CESTA allowed the appeal of the Revenue and remanded the matter to the Commissioner to decide the issue of confiscation of foreign currency and vehicle having Registration No.KRM-1911 as proposed in the show cause notice.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has observed that the CTC machine for tea leaf cutting cannot perform versatile functions beyond leaf cutting and it does not fall under Tariff Heading of ‘Other Machines’. The two-member bench allowed the exemption as per the Excise Notification.
The bench comprising of Mr R Muralidhar, Member (Judicial) and Mr K Anpazhakan, Member (Technical) observed that the Department had failed to bring in any evidence to the effect that the CTC machine was capable of multiple functions. The letter issued by the Tea Board and the Chartered Engineer confirms that the CC machine is used for Cutting Tea Leaves only. The Department has not rebutted these letters with any cogent documentary evidence. The CESTAT held that the confirmed demand for the extended period is not legally sustainable and set aside the same while allowing the appeal.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that reimbursable expenses incurred by Customs House Agent (CHA) on behalf of the service recipient are not includible in the gross value of CHA service. The CESTAT set aside the service tax demand on reimbursable expenses.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) viewed that as per the provisions of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, the reimbursable expenses also need to be included in the value of taxable services rendered. In view of the Apex Court judgment in the Intercontinental case and the Board circular, the CESTAT held that the reimbursable expenses incurred by the appellant on behalf of the service recipient are not includible. While allowing the appeal, the impugned order was set aside.
Concealment of Foreign currency: CESTAT sets aside Penalty u/s 114 of Customs Act in Absence of Evidence other than Statement of Co-accused
In the case of concealment of foreign currency, the Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) set aside Penalty under section 114 of the Customs Act, 1962 in the absence of evidence other than the statement of co-accused.
A two-member bench comprising of Mr P A Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that any additional evidence other the statements of the co- accused produced by the Revenue other than those that have been placed before the trial court based on which the trial court has acquitted the appellant. The CESTAT set aside the impugned order only to the extent of the penalty imposed on the appellant under Section 114 of the Customs Act, 1962.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) classification of goods under CTH based on CRCL test report is not valid as there is no facility to test calcite powder.
The two member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) has held that when a particular laboratory does not have the testing facilities, the test report of the said laboratory without having facilities of testing the goods cannot be relied upon to decide the classification of the goods. In this regard the relevant judgment in the case of Gaurav Lubricants Industries Pvt. Ltd
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that mere assumptions that entering into two separate contracts was intentionally to evade service tax is not tenable unless it is proved.
The two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the finding of the adjudicating authority in this regard is not correct. For levy of service tax individual contracts have to be taken into account. Accordingly, the service tax demand can be determined.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) dismissed the plea for extended period of limitation as the value for purpose of Countervailing Duty ( CVD ) available in the bill of entries.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that an extended period of limitation has been involved to raise this demand. The show cause notice has been issued on 13.04.2018 whereas, the bill of entries is dated 26.07.2016 to 13.08.2016. It is seen that all the data required for the notice except the MRP was available in the bill of entry filed by the appellant. In these circumstances, we do not find any reason to hold that anything was suppressed by the appellant for the purpose of evasion.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the amount of refund when shown as service tax receivable under the asset side of the trial balance sheet is not hit by unjust enrichment.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is also fact on record that as per books of account for the year 2013-2014, the amount of refund shown as service tax receivable under asset side of trial balance sheet, this also proves that the amount of service tax has not been passed on to any other person. Accordingly, we are of the clear view that the amount of refund has not been passed on to any other person. Hence, the same is not hit by unjust enrichment.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted benefit of import as there was compliance with Transitional Arrangement prior to when the watermelon seeds were placed under the restricted category from free category.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The aforesaid documents were admittedly submitted before restriction imposed in import of “watermelon seeds” brought vide DGFT Notification No. 3/2015-20dated 26.04.2021. From the above documents it is undisputed that the appellant had complied with the stipulation of Transitional Arrangement as per Foreign Trade Policy as the appellant had paid the entire amount of the consignment in question much prior to watermelon seeds being placed under restricted category from free category. Therefore, in our considered view the appellant is eligible for consequential benefit of import qua FTP provisions.
The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that denatured alcohol and CO2 manufactured by distillery are duty exempted and Cenvat credit is not available on the same.
A two-member bench comprising Justice Dilip Gupta, President And P V Subba Rao, Member ( Technical ) that all assessees are required to self-assess and pay duty. If duty is paid more than what is due or paid when it is not due, the assessee can claim the refund. There is no mechanism to refund suo moto the duty paid under the Central Excise law. There is also a mechanism of issuing a Show Cause Notice under section 11A to recover duty not levied, not paid, short levied, short paid or erroneously refunded.
The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand on printing papers and noted that the statements cannot be relied without cross-examination of witness.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is seen that prima facie no significant evidence has been gathered from the searches made in premises of the appellants. From the above said all evidence, it is apparent that the SCN is largely based on the statements recorded during investigations. It is apparent that the statements cannot be relied upon without cross-examination of the witnesses.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Ahmedabad Bench directed re-adjudication as there was non-compliance with cost accounting standards as per CAS-4.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We also find that the appellant has vehemently argued about the demand being time barred on the basis that the appellant has not suppressed any fact from the department mainly for the reason that the goods manufactured by the appellant was not cleared from the factory but was available in the factory. This aspect also needs to be reconsidered in detail.”
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that confiscation of goods cannot be made when the assessee submits e-BRC certifying repartition of foreign exchange for FOB Value.
A two-member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) observed that the impugned order upholding the order of original authority in confirmation of adjudged demands, confiscation of goods and imposition of penalty on appellants, is not legally sustainable and hence the same is set aside.
The Mumbai bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) viewed that evidence from panch witnesses without allowing cross examination is not valid and set aside the penalty under the Excise Act, 1944.
A two-member bench comprising Mr C J Mathew, Member ( Technical ) and Mr Ajay Sharma, Member ( Judicial ) viewed that the seizure had not been affected by the central excise officers. Further, other than the statements of the appellant herein and few others, no effort had been made by the central excise authorities to link procurement of raw materials and channelizing of the finished product with the appellant herein. In the absence of such corroborative evidence, statements that may have, otherwise, supported circumstantial evidence are of no relevance
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for adjudication on the determination of the eligible amount of
drawback on change in rate while exporting.
for the limited extent of determination of eligible amount of drawback, arising on account of change in drawback rate alone and not on account of redetermination of the FOB value, the two- member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) remanded the case back to the original authority. The Tribunal allowed the appeals filed by the appellants by setting aside the impugned order.
A Two-Member Bench of the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that residential complexes are built for self-use and remain outside service tax net.
The Bench of Ramesh Nair, ( Judicial Member ) and Raju, ( Technical Member ) observed that “In light of above, it is apparent that when the residential complex is built for self-use then it remains outside the service tax net. In light of above decisions, the demand on the construction of road and residential premises cannot be sustained and the same is set aside.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the Construction of School Rooms not classifiable under Commerce or Industrial Construction Service and held that unjust enrichment is applicable in the present case.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the instant case, there is no dispute that the said rooms were not used for commerce/ industry and therefore, the appellant’s service could not be classified under the head of Commerce or Industrial Construction Service. In view of above, it is clear that the tax has been paid wrongly.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench quashed service tax demand as the difference in receipts towards exempted services was shown in ST-3 return.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The appellant has given detailed reconciliation of the difference in the figures in ST-3 vis-a-vis actual receipt. The appellant has claimed that the variation is on account of inclusion of amount in service tax gross value/ VAT amount/booking of TDS/ declaration of receipt entry. We do not find any mention of these facts in the impugned order nor does the impugned order contain any examination of this data.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the activity of construction of roads is beyond service tax net.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It is apparent from the above Circular that construction of road is excluded from service tax net. In light of the above Circulars, it is apparent that the activity of construction of roads is beyond the service tax net and therefore, demand of service tax on construction of road cannot be sustained. The same is set aside and appeal to that extent is allowed.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed excise duty demand and observed that the allegation that noticee is not aware cannot be decided in adjudication order.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the adjudication order the demand of Rs, 1,20,80,589/- was confirmed on the ground that the said amount was lying in the balance as on 07.12.2008 when the appellant have opted for the exemption and according to Rule 11 (3) of Cenvat Credit Rules, 2004, as the said amount has lapsed. Thus the adjudication order has clearly travelled beyond the scope of show cause notice. It is a settled law in various judgments that when with regard to any charge/allegation the noticee is not put to notice that issue cannot be decided in the adjudication order.”
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