This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
In a significant case, the Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the revocation of the Customs Broker License since the violation of the regulation of Customs Broker Licensing Regulation, 2018 (CBLR) was proven.
The two-member bench, made up of Mr. S. S. Garg (Judicial) and Mr. P. Anjani Kumar (Technical), came to the conclusion that the appellant had violated regulations 10(b), 10(d), and 10(n) of the 2018 CBLR. The CESTAT rejected the appeal but confirmed the contested decision made by Commissioner Ludhiana.
In a recent judgement,the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) allowed the adjustment of excise duty to Steel Authority of India Ltd (SAIL), Alloy Steel Plant as they paid the Higher Duty than demanded.
The Appellant has paid the right duty determined in accordance with Rule 4 of the Valuation Rules throughout the relevant time, according to a two-member bench made up of Shri P K Choudhary (Judicial) and Shri K Anpazhakan (Technical). Additionally, the Appellant has already paid a substantially higher amount of duty than what is required by the contested decision; under these factual circumstances, an adjustment of excise duty should have been permitted rather than a new demand being made.
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the order by the Commissioner since the interest and penalty against Cipla Ltd for incorrectly availed CENVAT credit on input services dropped without a speaking order.
It was found that the impugned order has been passed most unusually and there was no reasoning given in the conclusion. There was neither any reasoning nor any finding that too while setting aside the reasoned order passed by the adjudicating authority. It was evident that the assessee’s appeal was allowed by way of non- speaking order and the entire adjudication order was set aside.
A two-member panel made up of Mr. Ajay Sharma, Member (Judicial), and Mr. Anil G. Shakkarwar, Member (Technical), overturned the challenged order and remanded the case to the Commissioner (Appeals) for new consideration on the merits of the case, after affording each party a reasonable opportunity to be heard and by providing reasoning and findings when reaching any conclusions in the assessee’s appeal.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax demand and penalty under section 78 of the Finance Act is not valid in the absence of corroborative evidence. A two-person panel made up of Shri P K Choudhary (Judicial) and Shri K Anpazhakan (Technical) noted that the appellant had reported the taxable amount in the ST-3 returns they had submitted and had not withheld any information from the department. Show Cause Notice issued on October 9, 2009 was deemed to be unsupportable due to the use of an extended period of limitation. Additionally, it was said that “the demand of service tax and interest confirmed and the penalty imposed under section 78 of the Finance Act 1994, in the impugned order, is not sustainable on the premise of limitation.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the 100% penalty is not imposable as duty along with interest and 25% penalty paid when the order was received.
A two-person panel made up of Mr. S. S. Garg, a judge, and Mr. P. Anjani Kumar, a technical expert, came to the conclusion that the appellant, a small business owner, lacked the resources to stay up to date on the law. There are grounds to assume that the appellant had good reason to withhold the applicable service tax because the primary cable operator, M/s SIFY, had discharged service tax on the entire amount it had received from customers. While granting the appeal, the Tribunal determined that the appellants are eligible for Section 80’s benefits and overturned the penalties imposed.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that there can be no invocation of the extended time period for issuance of second show cause notice demanding service tax.
The second show cause notice should have been for the normal period of demand, and the department shouldnot have invoked the extended time period for demanding service tax, according to a single-member bench made up of CL Mahar, a technical member, who observed that the first show cause notice had already been issued on 17.03.2008 invoking a period of five years.
The matter is remanded back to the original adjudicating authority to re-judge the matter in light of the above observation and confirm the service tax for the normal period of demand as provided by Section 73 (1) of the Finance Act, 1994. The Bench further noted that the second show cause notice dated 20.03.2009 is beyond the normal period of limitation.
In a major relief to M/s Fresenius Kabi Oncology Limited, the appellant, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the deduction on account of octroi and additional sales tax are permissible.
According to the two-member bench made up of P Anjani Kumar, a technical member, and SS Garg, a judge, “In the instant case, we find that there was no whisper of seeking denial of deduction on secondary goods and to that extent, there is no ambiguity in the SCN and it is not open for the Department to claim confirmation of duty on account of secondary goods at this juncture.” “We discover that it has been ruled in numerous occasions that the SCN is not a pointless formality and that it must be precise and unambiguous. The Department is not permitted to merely request a demand based on statistics that were accidentally provided by the appellant, the Tribunal said.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the penal provision of the Central Excise Rules, 1944 are not to be invoked against the company accountant.
A Single Bench of CL Mahar, Technical Member observed that “, I find that the appellant was only an accountant who was doing normal accountancy work. The issue of valuation of captively consumed yarn is a matter of the interpretation and therefore the penal provision of Rule 209 A of Central Excise Rules, 1944 cannot be invoked against the person who is only involved in maintaining the accounts of the company.”
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), relied on the Supreme Court order wherein it was held that cenvat credit cannot be availed on input services utilized for exempted services or trading goods.
The Lally Automobiles case, which was upheld by the Supreme Court, has now become the rule of the land andmust be adhered to, according to the two-member bench composed of SS Garg, a judge, and P Anjani Kumar, a technical member. As a result, we do not see any flaws in the adjudicating authority’s conclusions on the denial of the CENVAT credit on input services utilised in trading.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand for extended period of limitation on architect services and management or business consultant services.
Judge Dilip Gupta, the president of the two-member bench, and Hemambika R. Priya, the technical member, stated that “the order passed by the Commissioner confirming the demand of service tax for the extended period of limitation in so far as the architect services and management or business consultant services are concerned is set aside.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that service tax is not leviable on hostel services and education services by way of pre-school education and education up to higher secondary school.
The education service is what provides the package of hostel and educational services its basic character, according to a two-member bench made up of Justice Dilip Gupta, President, and Hemambika R. Priya, Technical Member. The negative list of services included in section 66D of the Finance Act includes education services through pre-school education and education up to higher secondary school or equivalent. It cannot therefore be subject to the imposition of a service tax.
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and observed that the work contracts are chargeable only from 01.06.2007.
The Two-Member Bench, composed of SS Garg, a Judicial Member, and P Anjani Kumar, a Technical Member, dismissed the service tax demand, noting that “in light of the Apex Court judgements, works contract are chargeable only from 01.06.2007.” The appellant shaving made themselves eligible for the composition plan under works contract service by choosing to pay duty under the new scheme in their letter dated 04.06.2007.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench quashed the excise duty demand and ruled that the use of inputs supplied by principal manufacturer is essential to qualify as job worker. The usage of inputs provided by the primary manufacturer is at the core of the definition of a job worker, according to the two-member bench made up of SS Garg, a judge, and P Anjani Kumar, a technical member.
Despite the fact that all of the manufactured goods were supplied to M/s Nilkamal Limited, we find that nothing in the contract demonstrates that the appellants produced the goods “on behalf” of that company. Additionally, the primary manufacturer, M/s Nilkamal Limited, did not supply any materials or products for the production of the goods.
The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that courier agency, exhibition, insurance and internet service fall under ‘input service’ under rule 2(l) of Cenvat credit rules, 2004.
A single-member bench comprising Mr S S Garg, (Judicial) observed that all the impugned services fall under the definition of input services and set aside the impugned order.
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that appeal before CESTAT is not valid when National Company Law Tribunal (NCLT) approved a resolution plan on insolvency proceedings and dismissed the Jet Airways (India) Limited.
The appeals before CESTAT have been dropped, according to the bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member), after the NCLT approved the resolution plan in the bankruptcy proceedings involving the corporate debtor of the appellant-assessee firm.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the demand of Cenvat Credit on invoices issued beyond 14 days from the date of completion of service/receipt of payment.
It was determined that even if the service provider issues the invoice more than the required 14 days after the date of completion of the service or receipt of payment, the cenvat credit cannot be denied in the hands of the service recipient by using Rule 4A (1) of the ST Rules. The service supplier, not the service recipient, is now responsible for issuing the invoice on time. The contested order as well as the claim for the return of CENVAT Credit, interest, and penalty were dismissed by the CESTAT. Appeals were granted.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that there is no service tax liability in absence of service receiver and service provider relationship.
“No show cause notice therefore merits issuance to the appellant herein as they are not recipient of service directly from M/s Dipak Paul,” the Bench found. For the contested works order, there is no relationship between TSCBL and M/s Dipak Paul as a service receiver and a service provider.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the classification as Heavy Melting Scrap (HMS), is improper when the assessee admitted misdeclaration of imported cut rails as heavy melting scrap and requested for condonation of misdeclaration.
“There is a lot of factual similarity in this case with the matter of Indo Deutsche Trade Links and is inclined to follow the order of the Supreme Court, in the matter, and accordingly since the letter was not taken into consideration by the Commissioner (Appeals), we are inclined to allow the departmental appeal with consequential relief, on description as well as value accept,” the two-member bench made up of Raju, Technical Member, and Somesh Arora, Judicial Member, concluded.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the central excise duty demand, thereby granting relief to M/s Hindalco Industries Limited, the appellant.The P.K. Choudhary, Judicial Member, and K. Anpazhakan, Technical Member, two-member bench of the Tribunal noted that “When excess paid duty is reconciled against the short payment that net consequence is that there is no short payment by the Appellant. This change was not made by the adjudicating authority. It is against the law to demand duty only on underpayments while ignoring overpayments. As a result, we maintain that the requirement confirmed in the challenged order cannot be met.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed penalty under Sections 112(a) and (b) and 114 AA of the Customs Act, 1962 as the seized gold bars was established to be domestically purchased.
The Two-Member Bench of the Tribunal comprising PK Choudhary, Judicial Member and K Anpazhakan, Technical Member observed that the in the argument of the appellants that penalty is not imposable on them under section 112(a)and(b) of Customs Act, 1962. The investigation has not brought in any evidence to establish that Manoj Kumar Seth has intentionally made false statement or declaration warranting penalty under section 114AA of Customs Act, 1962. Hence, we hold that penalties under sections 112(a) and (b) and 114 AA of the Customs Act, 1962 are not imposable in this case.” the Bench concluded.
The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the demand of Service Tax under ‘construction service’ and ‘commercial or industrial construction service’ and ruled to pay
The Vasa Seshagiri Rao and P. Dinesha bench noted that the appellant has accepted that their services are taxed under “works contract service” as of 01.06.2007 in the grounds of appeal as well as before the lower authority. Further stressed was the fact that the operations carried out by the appellant were in the form of works contracts, rendering the claims made under construction service and commercial or industrial construction service up to 31.05.2007 unsupportable. The two-member panel found that for work contract services provided between June 1, 2007, and March 31, 2009, the appellant was required to pay service tax in the sum of Rs. 7,94,122.
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the appellant is entitled to an abatement of 67% in the value of the contract of construction.
The bench found that the Chartered Engineer and Chartered Accountant Certificates established the fact that the material was used in the work done by the appellants. The contract also included provisions describing the quality of the goods, and the invoices and copies of the Value Added Tax returns conclusively show that steel, cement, and other building materials were purchased. The contract was also quite explicit that it was for construction based on a fixed price per square.
In a recent case, the Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Rule 5 of Cenvat Credit Rules, 2004 cannot be invoked to sanction refund of utilizedCenvat credit in cash.
Dr. Ms. Rachna Gupta, a single member of the panel, declared that “the Adjudicating Authority has not committed any error in holding that Rule 5 of the Cenvat Credit Rules, 2004 cannot be invoked to sanction the refund of unutilizedCenvat credit lying with the appellant much before April 2017, that too in cash as per Section 140 of the CGST Act, 2017.”
In a recent case, the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) service tax liability on strapping of wire rod coil arises separately for service provided by Head Office and Branch Office
It was argued that the service tax in relation to the services given by their Visakhapatnam branch office had been handled independently at Visakhapatnam and that the work at RashtriyaIspat Nigam, Visakhapatnam, had been conducted by their branch office there. As a result, the demand placed at the Kolkata Head Office cannot be met. The identical observations were expressed by the adjudicating authority’s commissioner for appeals, who dismissed the case. The two-member bench, made up of Shri P K Choudhary (Judicial) and Shri K Anpazhakan (Technical), maintained the Commissioner’s contested order and dismissed the appeal made by the department since no further action is necessary in their Head Office in Kolkata.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Activity of Printing on PVC amounts to the Activity of Production of Goods and allowed to avail exemption under excise notification.
The two-member bench, which was made up of Mr. Ramesh Nair (Judicial) and Mr. Raju (Technical), noted that the activity of manufacturing is distinct from that of producing things. It was believed that the notice covered any activity incidental or auxiliary to the production of products in addition to the activity of producing goods itself. The CESTAT upheld that the appellant’s activity of printing on PVC can be considered an activity of producing goods while admitting the appeal and vacated the contested ruling.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)Indian origin gold bangles and silver bar seized are not prohibited goods and deleted the penalty under section 112(b)(i) of the Customs Act, 1962.
The silver bar is of Indian origin, according to a two-member tribunal made up of Shri P K Choudhary (Judicial) and Shri K Anpazhakan (Technical), and the word of the co-accused cannot be trusted without any outside confirmation. A penalty may be imposed under section 112(b)(i) of the Customs Act of 1962 if it is discovered that the individual is dealing with items for which a prohibition is in effect. It was determined that the silver bar and the gold bangles sold by the appellants were of Indian origin and hence were not forbidden items.
According to the CESTAT, they are not subject to punishment under Section 1129B)(i) of the 1962 Customs Act.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Conversion of One Stage of Yarn into Another will not amount to Manufacture and set aside the excise duty demand
.According to a two-member panel composed of Shri P K Choudhary (Judicial) and Shri K Anpazhakan (Technical), converting yarn from one stage to another does not constitute manufacturing. Additionally, it can be seen that the production of hank yarn occurs in a continuous process, with the winding of the bobbin serving as merely an intermediary step. The CESTAT reversed the contested decision and upheld the appeal.
The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)has held that paddles as part of a canoe cannot be classified under yachts and others for sports under Customs Tariff Act(CTA),1975.
A two-person panel made up of Mr. Raju (technical) and Mr. Ajay Sharma (judicial) noted that a combined reading of Chapters 1(p) of Chapters 95 and 44 of the Customs Tariff Act (CTA), 1975, implies that “means of propulsions” of sports crafts like “canoes and skiffs” would be excluded from Chapter 95 and would instead fall under the Chapter relevant to the material of which they are made. It was believed that the descriptor “toys, games, and sports requisites” found in the aforementioned Chapter Notes does not apply to “paddles” (means of propulsion). According to the CESTAT, “the goods are correctly classifiable under Chapter Heading 68151090.”
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) deleted the penalty demanded and held that Rule 96zp of Central Excise Rules, 1944 declared as ultra vires by the Supreme Court.
In order to have the ACP recalculated and the duty set based on actual production, the Appellant has not provided any proof to the Commissioner. In the absence of any revisions made by the Commissioner, the ACP set by the Commissioner at 1106.82 MT annually is still in effect, and the assessee must pay duty in accordance with the ACP set. It was noted that the assessee paid duty in accordance with real output rather than ACP set. The duty demand confirmed in the contested order was sustained by the CESTAT. Taking into account the ruling in the matter of Shree Bhagwati Steel Rolling Mills v. Commr. of Central Excise, where it was decided that the interest and penalty provisions under Rule 96ZP of the Central Excise Rules, 1944 were ultra vires.
The CESTAT held that the demand of interest and penalty in the Impugned Order is not sustainable and set aside the interest and penalty demanded in the said Order.
the Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not demandable on the construction of residential complexes in the period before 01.07.2010.
A Coram made up of P. Dinesha, Member (Judicial), and Vasa Seshagiri Rao, Member (Technical), noted that it had been categorically decided that no service tax could be assessed on residential complex construction performed prior to 1.07.2010, regardless of whether it was performed under a works contract or as a service simpliciter. The aforementioned judgement applies to the current case because the issue in it arose between June 16, 2005, and March 10, 2010. The Tribunal approved the appeal and dismissed the demand made in the contested order.
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the product ‘Miraculan’ based on Traicontanol 0.05% EC is an insecticide and classifiable as a growth promoter.
It was noted that as the product “MIRACULAN” is based on Traicontanol 0.05% EC, which is nothing more than an insecticide, it needs to be registered with the Directorate of the Plant Protection, Quarantine and Storage, Faridabad, in accordance with Section 9(3) of the Insecticides Act, 1968. A two-member Coram comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that a similar product which contains Traicontanol has been classified as an insecticide and not a plant growth regulator and held that the product ‘MIRACULAN’ which primarily contains Traicontanol 0.05% by weight is a product under the category of Insecticides and cannot be considered as the plant growth regulator.
the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Jute Cess is payable only when goods are removed from the factory and quashed the excise duty demand.
The department has not filed an appeal against the contested ruling, according to a two-member bench made up of Shri P K Choudhary (Judicial) and Shri K. Anpazhakan (Technical). As a result, all demands made against the appellant have already been dismissed and have become final. The CESTAT declared that “no additional guidance in these appeals is necessary as the Commissioner’s (Appeals) decision in the contested order has already gained finality. The appeals that the appellant filed are dismissed with the aforementioned remarks.
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the department has no right to file a revision application on refund of service tax on export services.
It was noted that Section 86 of the Finance Act of 1994 contains procedures that govern the filing of appeals before the Tribunal. Ibid. Subsection (1) outlines the procedure for an assessee to file their appeal with the Tribunal. The first proviso attached to sub-section (1) states that the Central Government shall review the order in accordance with Section 35EE of the Central Excise Act, 1994 with regard to the order made by the Commissioner of Central Excise (Appeals) under Section 85 ibid regarding the grant of a rebate relating toservices that are exported.
The bench of S. K. Mohanty (Judicial) and M. M. Parthiban (Technical) held that the assessee is only permitted to file the revision application before the Central Government in terms of Section 35EE and there are no such provisions for the appeals to be filed by the Revenue.
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that exemption on service tax is allowable in respect of GTA services if are used in the export of goods and allowed the exemption to HEG Ltd.
A two-member bench comprising Justice Dilip Gupta, President and Hemambika R Priya, (Technical) observed that the appellant has complied with the notification condition and set aside the demand of duty and interest upheld in the impugned order.
Further, it was held that the penalty under section 78 is imposed when there is a wilful intention to evade the payment of tax. The delay in filing the return for claiming the exemption cannot be termed as a wilful intention to evade payment of duty. The CESTAT set aside the penalties imposed under section 78 of the Act. While allowing the appeal, the Tribunal upheld the penalty under section 77 is upheld for failure to file the returns in time.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the penalty imposed under section 78 of the Finance Act, 1994 in the absence of evidence to prove non-payment of service tax to evade tax.
A two-member bench Comprising Shri P K Choudhary, (Judicial) and Shri K Anpazhakan,(Technical) observed that the Revenue has not brought any evidence to prove that the Appellant has not paid service tax intending to evade payment of service tax. The Appellant has established that there was no intention to evade payment of service tax. The CESTAT held that “no penalty under section 76, 77, or 78 is imposable.”Further set aside the penalty imposed under Section 78 of the Finance Act.
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