This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
With the appellant M/s. Perundurai Common Effluent Treatment Plant, filing an appeal before it, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has quashed service tax demand, holding that the activity of treating effluents discharged from member units is exempt from the levy of Service Tax.
The appellant having submitted that the demand for the period from 01.07.2012 to 31.03.2014 is covered by Notification No. 08/2017-S. T, dated 20.02.2017, issued under Section 11C of the Central Excise Act, 1944 read with the Finance Act, 1994, the Two Member Bench comprising Sulekha Beevi C.S, the Judicial Member and Vasa Seshagiri Rao, the Technical Member observed:
“Since the activity is exempt from the levy of Service Tax as per the above Notification, we have no hesitation to hold that the demand cannot sustain and requires to be set aside, which we hereby do.”
As a major setback to M/s. East West Seeds India Pvt Ltd, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has rejected the service tax refund claim of the appellant.
The appeal being directed against the Order of the Commissioner of Goods & Service Tax and Central Excise (Appeals), Nasik, by which the Commissioner (Appeals) upheld the impugned order passed by the Assistant Commissioner of Goods and Service Tax, Aurangabad Rural Division, rejecting the refund claim for the refund of service tax filed by the appellant under the provisions of Sub-Section 9(b) of Section 142 of the CGST Act, 2017, it was so contented by the appellant that when the excess payment of service tax is not in dispute, the appellant is very much eligible for refund of excess service tax under section 11B of the central excise act, 1944.
With the appellant further submitting that the government cannot retain any amount without any authority of law by virtue of article 265 of the constitution of India which bars the collection of any tax without the authority of law, the Tribunal consisting of Sanjiv Srivastava, the Technical Member noted that admittedly no revised return as provided for in terms of Rule 7B of the Service Tax Rules, 1994 or under provisions of the Section 142 (9) of the CGST Act had been filed by the appellant.
Thus, rejecting the appellant’s claim the Bench observed:
“I do not find any merits in the submissions of the appellant to the effect that the refund application can be considered without revision of the return of the self-assessment made by them while filing the ST-3 return. It is worth noting the provisions in Service tax law provide for the revision of the return by the assessee himself.
The Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), has recently, held that mere availment of CENVAT Credit without its utilisation will attract interest at an appropriate rate.
The aforesaid observation was made by a coram comprising of Ramesh Nair (Judicial Member) and Mr Raju (Technical Member) who noted as below:
“The appellants are liable to pay interest for the unutilized CENVAT Credit since the incident was prior to the amendment. At present interest needs to be paid for wrongly availed CENVAT Credit only if it has been utilised and it needn’t be paid if the wrongly availed CENVAT Credit has not been utilised.”
In a recent appeal filed by M/s. Molax Powder Coating, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has ruled that the activity of powder coating is classifiable under business auxiliary service and hence that service tax is leviable.
Hearing the contentions of both sides and thereby perusing the materials available on record, the Coram comprising Vasa Seshagiri Rao, the Technical Member and P Dinesha, the Judicial Member observed:
“The decision of the Apex Court in the case of M/s. Gujarat Steel Tubes Ltd and orders of other CESTAT Benches would prevail and accordingly, we hold that the issue is answered against the appellant.”
The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has recently in an appeal filed before it, ruled that the club is not required to pay the service tax on the charges collected from its members.
With the bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) having observed that the appellant club has recovered charges towards short term accommodation from its club members and affiliated club members, , the tribunal noted the decision of the Supreme Court in the case of Calcutta Club Ltd., thus setting aside the impugned orders as non – sustainable
In a recent judgment, the New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)has held that inclusion of subsidy amount in transaction value in terms of section 4(3)(d) of the
The allegation of fact suppression is not applicable, so neither interest nor penalty is levyable, according to a single-member bench made up of Ms. BinuTamta (Judicial), who noted that the question of whether the subsidy amount was includible in the transaction value under Section 4(3)(d) of the Central Excise Act was a matter of legal interpretation. The appeal was accepted, and the CESTAT overturned the challenged orders.
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) allowed the refund claim of excise duty Since the central excise duty debited against the amount received as state vat subsidy under protest.
The Central Excise duty was charged against the amount received as State VAT subsidy under protest, and the same cannot be ignored, according to a single-member bench made up of Ms. BinuTamta (Judicial). Further held that the appellant is entitled to the benefit of the proviso to section 11B of the Central Excise Act, 1944, which specifically says that period of limitation of one year shall not apply where duty and interest are paid under protest.
The tribunal ruled, “I completely disagree with the findings in the order that the duty on VAT subsidy was last deposited on 30.11.2016 during the lengthy period from March 2010 to November 2016 or thereafter, and if they had any doubt about the audit they were required to submit a letter of protest or to file a refund claim of duty/interest/penalty deposited within the statutory period of one year provided under section 11B of the Central Excise Act, 1944, but the requirement was not followed.
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the value of corrugated boxes cleared to merchant exporters can be includable for computing threshold under SSI exemption notification.
According to a two-member bench made up of Mr. Sanjiv Srivastava, a technical member, and Dr. Suvendu Kumar Pati, a judge, “inclusion of the value of corrugated boxes supplies to Merchant Exporters to determine tax liability by computing the out-turn to exceed the SSI exemption limit and its confirmation by the Commissioner (Appeals) is not sustainable in both law and facts.” While granting the appeal, the CESTAT overturned the decision made by the Mumbai Zone Commissioner of Central Excise (Appeals).
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ordered to conduct of a fresh adjudication since the duty was demanded on the value of exempted goods without considering evidence of maintaining separate accounts for dutiable and exempted goods.
Mr. R. Muralidhar, (Judicial), served as the sole member of the bench that remanded the case to the adjudicating authority. The CESTAT held, “The Appellant should produce the RG23A Part 1 & Part 2 Books as well as photocopies of the same before the Adjudicating Authority along with statement and copies of the invoices which they claim about inputs used for exempted goods and Cenvat was not taken by them.”
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the failure of the Customs House Agent (CHA) to verify the KYC document of a bogus firm created with forged document does not amount to abetment of export and set aside the penalty imposed.
“How can one expect CHA, who is not even a public official, to unearth the dubious plan of the exporter?” the CESTAT said. “If the Bank officials, despite verification, are not able to detect the fraudulent nature of the documents.” The single-member bench made up of Ms. BinuTamta (Judicial) determined that the appellants had not committed any act of omission or conduct that would have resulted in a penalty under section 112 of the Customs Act while admitting the appeal.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), denied invoking a larger period of limitation in the matter of demand of service tax on sub-contractor for cargo handling service.
The Coram of P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The appellant, as a sub-contractor, was duty bound to discharge the tax liability, perhaps the communication issued by the main contractor i.e., M/s. Aspinwall & Co., prompted them to believe that the tax had indeed been remitted. The villain appears to be M/s. Aspinwall & Co. who misled the appellant or made the appellant believe that it had remitted tax and in turn, made the appellant rely on the letter issued by it in response to Show Cause Notice issued by the Department.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that self- assessment orders are appealable.
The challenged order was cited by the Authorised Representative. In the matter of ITC LTD vs. CCE, Kolkata-IV, the Apex Court clearly declared that self-assessment orders are likewise assessments orders and are subject to appeal in the same way as other orders, such as reassessment orders. The Commissioner (Appeals) has rejected the appeal only on the grounds that no appeal can be brought against the self-assessment order, according to a two-member bench made up of Raju, Technical Member, and Somesh Arora. We determine that the Commissioner’s orders did not benefit from the Apex Court’s ruling in the ITC LTD case.
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and noted that the extended time proviso not invokable on sales commission to overseas commission agent under Reverse Charge Mechanism (RCM).
In their final statement, a Single Bench of CL Mahar, Technical Member stated, “I follow the decision of this Tribunal in the case of M/s. Marck Bioscience Ltd whereunder it has been held that in case of sales commission to overseas commission agent under reverse charge mechanism, the extended time proviso is not invokable.”
The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the penalty imposed under the Central Excise Act, 1944 as the difference in books of account was reconciled with corroborative evidence.
Despite finding that the apparent difference is properly reconciled, still, the Commissioner (Appeals) has rejected the appeal by some irrelevant observations without there being any finding of fact against the pleadings of the appellant. While allowing the appeal, the Court set aside the impugned order.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld service tax demand on manpower recruitment or supply agency service’ taking into consideration that the rate fixed is a measure of value of services.
It was submitted by the Authorized Representative that the appeal filed by the party before the Apex Court Recruitment or supply agency service.
In a significant case, the Hyderabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a CA certificate is not enough to prove the incidence of duty. A single-member bench comprising Mr AK Jyotishi, Member (Technical) referred back the matter to the Original Authority to go through the documents furnished by them and any other additional evidence or documents which he might require to conclude whether the principle of unjust enrichment is invokable in the instant case or otherwise. “Merely CA Certificate per se cannot be the sole ground for proving that they have not passed on the incidence of duty if the sanctioning authority is not satisfied with the documents and he may also rely in addition on any other documents to conclude as to whether duty incidence has been passed on to the customer or not in the facts of the case.”, the CESTAT bench held.
The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that brand promotion by cricket player Pinal Rohit Shah as per agreement with the Mumbai Indians does not fall under Business Auxiliary Service. The two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member has held that the demand under Business Auxiliary Service does not sustain and set aside the impugned order.
The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that One-year Period for Filing Refund has to be from the Date of Finalization of the Bill of Entry when the Provisional Assessment was made Initially. The CESTAT directed to re-considered the matter after verifying the provisional assessment and final assessment of the bill of entry and also taking into consideration the above-cited tribunal’s judgment in the case of Bharat Ship Breakers Corporation and others. While allowing the appeal, the CESTAT set aside the impugned orders
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad has held that a Defunct Manufacturer is eligible for refund of the unutilised CENVAT Credit accumulated on export of finished goods under Bond & Letter of Undertaking (LUT) without payment of Duty and thus remanded the Excise Tax appeal back to the Original Authority for fresh consideration verifying the facts.
In result, the appeal is allowed by way of remand to the original adjudicating authority to decide the matter fresh.
The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that no separate service tax demandable on commission was received from BSNL when the assessee included it in the gross sale price of sim card sold to customers.
In light of the Judicial decision, the two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member set aside the impugned order and allowed the appeal.
The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that the value of free supply material needs to be added with the gross value of construction service to avail of the benefit under service tax.
On the interpretation of the explanation given in notification 15/2004 as well as Notification No.01/2006-ST, and in light of Judgement the two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member held that the demand is not sustainable.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has held that no Excise Duty to be levied on the surplus freight charges collected by the assessee from the customers since the same is excluded from the determination of the Assessable Value for discharging the Central Excise Duty.
The two-member bench consisting of Ms Sulekha Beevi C.S. (Judicial Member) and Mr M. Ajit Kumar (Technical Member) held that the demand for excise duty cannot be sustained. Therefore, the order demanding excise duty was set aside, and the appeal was allowed with consequential reliefs, if any, as per law.
Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit on ‘inputs’ used in the manufacture of Rerolled products and held that the excise duty was not leviable on the same.
A Two-Member Bench consisting of P.K Choudhary, Judicial Member and K Anpazhakan Technical Member observed that “the appellant is eligible for the cenvat credit availed on the ‘inputs’ used in the manufacture of their final products namely, Rerolled products, etc and hence the demands made in the impugned order is not sustainable.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashes excise duty demand allowing transfer of credit to Domestic Tariff Area (DTA) unit after merger, thereby granting relief to Wipro.
A Two-Member Bench of the Tribunal comprising Sulekha Beevi C.S., Member (Judicial) and M. Ajit Kumar, Member (Technical) observed that “The denial of carry forward of accumulated Cenvat credit to assessee’s debonding from the ‘100% Exported Oriented Unit’ scheme to continue operations without the privileges is not correct in law and is set aside.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded back matter to determine on what portion of coaching services is covered by service tax demand.
Remanding the matter to the adjudicating authority for denovo consideration a Two-Member Bench of the Tribunal comprising M Ajit Kumar, Technical Member and CS Sulekha Beevi, Judicial Member observed that “We are not able to understand whether separate fees are collected from students for this course. The order is not clear as to the details of demand in regard to this course. The appellant has not been able to show as to what portion of the demand is covered by the fees collected for the course approved by the Industries Department.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the Service tax under Business Auxiliary Services (BAS) is not leviable Incentives from manufacturers for the sale of cars.
A Two-Member Bench of the Tribunal comprising CS Sulekha Beevi CS, Judicial Member and M Ajit Kumar, Technical Member observed that “We hold that the incentives received by the appellant cannot be subject to levy of service tax under the category of Business Auxiliary Services.”
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that merely sending an order-in-original by registered post would not amount to valid communication.
The CESTAT bench comprising Mr Ajay Sharma, Member (Judicial) observed that the appellant received a copy of the Order-inOriginal on 13.9.2019 the appeal before the Commissioner (A) was filed on 24.10.2019 which is well within a period of three months from the date of receipt/communication of the Order-in-Original. The bench set aside the impugned order and remanded the matter back to the Commissioner (Appeals) to decide the same on merits after following the principle of natural justice within a period of three months.
In a significant case, the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Entry under section 65(105)(zzd) the Finance Act, 1994 is invokable only for construction simpliciter and held that service tax under the category of commercial or industrial construction not demandable.
A Coram comprising Shri P K Choudhary, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract. It was held that entry under Section 65(105)(zzd) of the Finance Act, 1994 is liable to be invoked only for construction simpliciter and set aside the demand of service tax under the category of Commercial or Industrial Construction.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that goods unloaded in the factory and got mixed in a tank is not an afterthought and dismissed the clearance of Goods without a Lab test.
The goods imported by the appellant were not unloaded in the factory premises but cleared as such in the same truck, just a little time after arrival, without any testing to M/s. India Power Corporation Limited (IPCL). “The goods were unloaded in the factory and got mixed in the tank is obviously an afterthought”, the appellant argued. A single-member bench comprising Raju, Technical Member didn’t find any merit in the argument of the appellant and dismissed the appeal.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that rental income received separately by each co-owner below the threshold limit is subject to the levy of service tax.
A two-member bench of Ms Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) observed that the Tribunal has set aside the demand observing that income received as rent separately by each co-owner is much below the threshold limit to subject to levy of service tax. Thus, the income falls within the threshold limit for payment of service tax. In light of the case of S.V. Janardhanam Vs CGST & CE Salem, the CESTAT bench held that demand cannot sustain and set aside the impugned order.
The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT) has held that penalty under section 76 of the Finance Act, 1994 in the absence of elements of fraud, collusion and wilful suppression of fact.
It was evident that the assessee has been regularly filing their service tax returns under the Works Contract Service as well as they have entered into correspondence with the department from August 2008 up to 20th October 2008. In the absence of the element of fraud, collusion or wilful misstatement or suppression of facts and the demand is barred by limitation, the CESTAT set aside the impugned Order-In-Original.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has held that the Cancellation and Revocation of Central Excise Registration are Infructuous, Meaningless and Irrelevant in the light of the introduction of the GST Regime in the country.
The two-member bench consisting of Ms. Sulekha Beevi C.S. (Judicial Member) and Mr. M. Ajit Kumar (Technical Member) concluded that as the GST regime supersedes the Central Excise regime if the department appeal is to be allowed so as to sustain the cancellation of Central Excise registration under the previous system, it would be purposeless and meaningless. The bench finds no merit in the appeal. In the result, the appeal filed by the revenue was dismissed.
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