This yearly digest analyzes all the CESTAT stories published in the year 2023 at taxscan.in
In a major relief to M/s. Novartis Healthcare Pvt. Ltd, the appellant, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, ruled that Information Technology Software Services are taxable services under Section 65(105) of the Finance Act,1994.
A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical)observed that “The services rendered by the Appellant are defined as taxable services under 65(105) of the Finance Act, 1994 but for the purpose of export only they were allowed to export the same without payment of Service Tax but that by itself would not put the services under the category of unentitled service, so as to deny Cenvat Credit and consequential refund to the Appellant.”
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and noted that the supply of manpower as accounts executive is manpower supply services.
A Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “On going through the work orders placed before us, which clearly depicts that the description of the scope of the work order is supply of manpower as accounts executive, store-keeper, draftsman etc. Going through the work order, we do not find that the activity undertaken by the appellant is manpower recruitment agency service as the appellants are supplying manpower to their service recipients.” “In those circumstances, we hold that the activity undertaken by the appellant do qualify under manpower supply services and not manpower recruitment agency services. The appellant was liable to pay service tax is security service on which the appellant has already discharged service tax” the Bench concluded.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that no service tax is leviable for reimbursement of repairs carried out during the warranty period and other free services by the authorised car dealers.
A Two-Member Bench comprising Dr DM Misra, Judicial Member and Pullela Nageswara Rao, Technical Member concluded that “We do not find any reason not to follow the said judgment of this Tribunal delivered for the earlier period. Consequently, following the said judgment, the present appeal is also allowed with consequential relief, if any, as per law.”
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that service tax cannot be levied on reimbursable expenses.
A Two-Member Bench comprising CS Sulekha Beevi CS, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The Supreme Court in the case of UOI Vs Intercontinental Consultants and Technocrats Pvt. Ltd. has held that the demand of service tax on reimbursable expenses cannot sustain. The Tribunal in the decision of Broekman Logistics (India) Pvt Ltd, has set aside the demand applying the said decision of the Apex Court.” “After appreciating the facts and following the above decisions, we are of the considered view that the demand cannot sustain and requires to be set aside which we hereby do. Appeal is allowed with consequential relief, if any” the Bench concluded.
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the show cause notice (SCN) issued on the consideration of Contradictory statements in SCN regarding declaration in ST-3 Returns.
Holding that the show cause notice is not sustainable in law a Two-Member Bench comprising Anil G. Shakkarwar, Member (Technical) and Dr. Suvendu Kumar Pati, Member (Judicial) observed that “It is stated that the appellant has not filed service tax returns for the period from October 2015 to June 2017 and at the same time in para 2 of the show cause notice, it is stated that there was mismatch in the values declared in ST-3 returns and in the Income Tax Returns for financial years 2015-16 and 2016-17. We observe that the above two statements in the said show cause notice are contradictory to each other.”
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ordered fresh adjudication in the matter as no inquiry was made about details of imported Malvern Master Sizer to classify under Customs Tariff Act, 1975.
A Two-Member Bench comprising Raju, Technical Member and Somesh Arora, Judicial Member observed that “Therefore, while Commissioner (Appeals) is within its powers to confirm the decision or order appealed against or modify the same, but there is an initial requirement that he should make further inquiry as may be necessary and pass such order i.e just and proper.”
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that exemption from excise duty allowable as assesee complied with requirements under Excise Notification.
A two member bench comprising of Ms Sulekha Beevi C S, Judicial Member and Mr Vasa Seshagiri Rao, Technical Member in light of the decision held that “the demand cannot sustain and requires to be set aside which we hereby do. The appeals are allowed with consequential relief, if any.”
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chandigarh bench has held that the extended period for invoking Section 11A of the Central Excise Act, 1944 cannot be applied without concrete evidence of wilful suppression of facts, fraud, collusion or wilful default.
The bench cited the judgment of the Supreme Court in the case of Pushpam Pharmaceuticals, which defined “suppression of facts” in the context of tax law as a “deliberate act of non-disclosure to escape duty payment”. In result, the two-member bench comprising Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar, (Technical Member) concluded that the extended period could not be invoked without evidence of wilful suppression of facts, fraud, collusion, or wilful default.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Chandigarh Bench, has held that the benefit of cum-duty pricing is applicable when the invoice price is inclusive of the duty payable or paid, regardless of whether the duty amount is separately disclosed in the invoice.
The bench clarified that the mere availing of an exemption does not automatically disqualify a manufacturer from applying cum-duty pricing. Instead, it should be evaluated on a case-by-case basis, taking into account the specifics of the invoices and the overall circumstances. In this case, the respondent had provided invoices that showed a total invoice value inclusive of CST/GST and freight charges, implying that the CENVAT duty was not paid or recovered. As a result, the tribunal upheld that the benefit of cum-duty was available to the respondent.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai bench has held that “bus transportation charges” paid by an employer to transport its employees to the workplace do not qualify as an “input service”.
Consequently, the employer is not entitled to claim Cenvat credit for the service tax paid on these charges.The single bench of Mr. Ajay Sharma (Judicial Member) held that the services involving the transportation of employees, especially those not directly related to the manufacturing process, do not qualify for Cenvat credit under the amended rules. In result, the appeal filed by the appellant was dismissed and the order of the Commissioner (appeals) was upheld.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench has held that Cenvat Credit availed on inputs that were written off is not subject to reversal as the recovery mechanism under Rule 3(5B) of the Cenvat Credit Rules, 2004 has no retrospective effect.
The bench also noted that the entire demand was based on entries reflected in the financial books and balance sheet of the appellant, and there had been no suppression or malafide on their part. Therefore, the demand pertaining to the extended period of limitation was not sustainable and the demand for the normal period of limitation amounted to only Rs. 2,17,251/-. The tribunal observed that since there was no recovery mechanism provided in the Cenvat Credit Rules during the relevant period and the demand was based on entries in financial records, the entire demand is liable to be set aside. In result, the two-member bench comprising Mr. S.
S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member) set aside the demand and allowed the appeal of the appellant with consequential relief, if any, as per law.
The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that charge on under valuation of imported goods is not valid as department failed to produce Corroborative Evidence.
A two member bench comprising Me SK Mohanty , (Member Judicial) and Mr M M Parthiban (Member Technical) Observed that “there are no evidences produced by the department that the excess amount over and above the invoice price was paid to suppliers. There is no evidence as to how the Appellant came into possession of cash alleged to be differential amount towards goods imported, nor there is any evidence of any cash being handed over to any person, representing suppliers in India.” “Since the department had failed to produce corroborative evidences regarding the undervaluation of imported goods, the charge of undervaluation of imported goods in the present matter is not sustainable.”, the CESTAT held. While allowing the appel, the CESTAT set aside the impugned order confirming the adjudged demands on the appellants.
In a significant, the Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT)has held that Cenvat Credit cannot be demanded after suo moto reversal and in absence of discrepancy.
A two-member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) observed that “ Since the appellant had already reversed the credit and we did not find any discrepancy about the double payment on duty and suomoto re-credit. Even, the same was not disputed by the department either in the show cause notice or in the order. The appellant is correctly entitled to the re-credit therefore we hold that the appellant has the legal right to re-credit the amount of Rs. 1 crore, in their Cenvat Account. “ The CESTAT while allowing appeal set aside the impugned order.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed confiscation of gold jewellery on the ground that there was no proof that seized gold jewellery is of foreign origin found during Directorate of Revenue Intelligence (DRI) Investigation.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and P Dinesha, Judicial Member observed that “This is a case where the appellants have been penalized for an alleged activity which, according to the Revenue, has resulted in confiscation of the allegedly imported goods. When, therefore, a Show Cause Notice is issued by the DRI, a reasonable belief is required to be established before alleging any activity in the nature of smuggling. In the case of town seizure, the initial burden is always on the Revenue to prove as to what prompted it to reasonably believe that the gold / gold jewellery in question were smuggled / of foreign origin.” “As the gold jewellery seized were not proved to be of foreign origin, the seizure of 4.627 kgs. of gold bars/bits, 3 nos. of 1 kg. gold bars and 10.011 kgs. of admittedly Indian-made gold jewellery as sale proceeds of smuggling is also not in accordance with the law” the Bench noted.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that molasses captively consumed in the manufacture of alcohol for human consumption is not subject to central excise duty.
A Two-Member Bench comprising PA Augustian, Judicial Member and Pullela Nageswara Rao, Technical Member relied mainly on the decision in Kothari Sugars & Chemicals Ltd. Vs. Comm. of C.Ex., Trichy, wherein it was observed that “The excisable goods are defined in the Central Excise Act, 1944 as goods specified in the tariff schedule as being subject to a duty of excise. Since undenatured ethyl alcohol is outside the purview of the central levy, it is not subject to a duty of excise under the Central Excise Act, 1944 and hence, not excisable. As a corollary, the same cannot be treated as either exempted goods or chargeable to nil rate of duty.”
In a significant case, the Ahmedabad bench Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the reversal of Cenvat Credit is not valid when Cenvat Credit availed on Exempted Common Input Service.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar Member (Technical) viewed that the appellant admittedly paid an amount of Rs. 4,06,785/- plus interest, this is not under dispute, thus the appellant have complied with the condition prescribed under Rule 6(3)(ii) read with sub-rule (3A) of Rule 6 of Cenvat Credit Rules, therefore demand of huge amount of Rs. 24,71,93,529/- of the total value of the vehicle amounting to. Rs. 494,38,70,577/- sold in the market cannot be demanded.
The Chandigarh bench of the Customs Excise and Service Tax (CESTAT) set aside the show cause notice (SCN) demanding excise duty as the revenue failed to Substantiate allegation of clandestine removal of scrap. A two member bench comprising Mr S S Garg , Member(Judicial) and Mr P Anjani Kumar, Member(Technical) observed that “no investigation was made by the Department, even the consumption of electricity was not examined by the Department who adopted the short cut method by raising the demand and levied the penalties. The statement of so called buyers, namely M/s. Singhal Cement Agency, M/s.
Praveen Cement Agency; and M/s. Taj Traders are based on memory alone and their statements were not supported by any documentary evidence/proof.” Further viewed that when there is no extra consumption of electricity, purchase of raw materials and transportation payment, then manufacturing of extra goods is not possible. No purchase of raw material outside the books have been proved. Since the the Department has failed to substantiate the allegation of clandestine removal of scrap by the appellants, the CESTAT set aside the show-cause notice bereft of any investigation and proof.
The New Delhi bench of Customs, Excise, and Service Tax Appellate Tribunal [CESTAT], demanded re- adjudication on an order issued by the commissioner of central excise[CCE] demanding service tax on convention services and sponsorship services of Quality Council of India [QCI], the appellant.
After considering the documents and arguments of both sides the bench consisting of Binu Tamata [judicial member] and Hemambika R. Priya [technical member] decided that they were right to challenge the order and that it was a “non-speaking order”. They further added that the adjudicating authority should have at least appreciated the services rendered by the QCI.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Vodafone Idea by quashing the service tax demand imposed on International inbound roaming charges on the ground of Inclusion of service rendered by the assessee as export of service.
The two-member bench comprising Sulekha Beevi (Judicial) and Sanjiv Srivastava (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee.
The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) service tax demand confirmed under rule 5 of service tax (determination of value),Rules 2006 is not valid as it is ultra vires of Section 67 of Finance Act, 1994.
A two-member bench comprising Mr S K Mohanty, Member (Judicial)and Mr M M Parthiban, Member (Technical) observed that the demand for service tax on reimbursement expenses goes beyond the mandate of Section 67, which is a charging section for levy of service tax. Section 67, both before and after the 01.05.2006 amendment authorises the determination of the value of the taxable service to charge service tax under Section 66 as the gross amount charged by the service provider for such service provided or to be provided by him, in a case where the consideration for the service is money. The underlined words i.e. “for such service” are important in the setting of Sections 66 and 67. The charge of service tax under Section 66 is on the value of taxable services. The taxable services are listed in Section 65(105). The service provided by the petitioner falls under clause (zzzt). While allowing the appeal, the Court set aside the impugned order.
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the demand of CENVAT credit of service tax availed on the employee’s health insurance and group accidental insurance policy on the ground of limitation.
A single-member bench comprising P.K Choudhary (Judicial) held that the impugned order cannot be sustained and quashed while allowing the appeal filed by the assessee.
The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for Customs duty imposed on the export of synthetic fabrics without considering the Bank Realisation Certificate (BRC).
The Bench observed that the department had not made any effort to verify as to what was the purchase price in India for such fabric and the assessee provided such details from their side, it was important for the department to carry out further investigation to find out whether the purchase price shown by the assessee was correct or not. The two-member bench comprising R. Muralidhar (Judicial) and Rajeev Tandoon (Technical) quashed the demand along with penalty and interest while allowing the appeal filed by the assessee.
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the service tax demand imposed under the category of Construction of complex services on the ground of the absence of conclusive evidence.
The Bench observed that the assessor had made no effort to provide any documents to evidence the return of the advance amount and they had not suppressed any fact, the Commissioner (Appeals) had noted that they had not filed any Service tax returns and had suppressed the taxable value from the department. A single- member bench comprising Hemambika Priya (Technical) upheld the decision made by the Commissioner (Appeals) while dismissing the appeal filed by the assessee.
The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that any delay in filing an appeal beyond the extended period of thirty days or after expiry of the normal period of sixty days cannot be condoned since the Statute does not permit and the provisions of Section 5 of the Limitation Act,1980 would not apply.
A single-member bench comprising Sanjiv Srivastava (Technical) upheld the dismissal of the appeal passed by the Commissioner (Appeals) while dismissing the appeal filed by the assessee
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty imposed for non-payment of service tax which falls under the category of erection, commissioning, and installation on the ground of absence of conclusive evidence.
The two-member bench comprising P.Dinesh (Judicial) and Ajit Kumar (Technical) upheld the penalty imposed on the assessee and remanded the matter back to the lower authority to determine the value of the taxable service afresh allowing cum-tax benefit and by not including the value of goods.
The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the place of provision of the service of transportation of goods by air/sea from a place in India to a place outside India will be a place outside the taxable territory and not liable to service tax.
The Bench observed that a freight forwarder, when acting as a principal, will not be liable to pay service tax when the destination of the goods was from a place in India to a place outside India. The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) held that the assessee was not covered under the category of intermediary, which by definition excludes a person who provides a service on his account. To Read the full text of the Order CLICK HERE
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed for non-payment of service tax on ocean freight charges on the ground of time-barred by limitation.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) held that the demand was to be restricted to the normal period only and quashed the penalty imposed on the assessee.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that to determine service tax liability, the extended period of limitation cannot be invoked in the absence of any finding of willful suppression.
The Bench observed that the demand was to be restricted to the normal period only as the ingredients to evoke were not demonstrated to be present as per both orders. The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) Penalties imposed, which are consequential to evoking of the extended period are quashed.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the Tribunal has no jurisdiction to prescribe rate of interest which is prescribed by Government of India in terms of Notification issued under Section 11BB of Central Excise Act,1944.
The Tribunal thus noted that the appeal filed by the appellant is to be partly allowed to extent of interest due to them in terms of section 11BB taking the date of filing the application for refund as 06.09.2010.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on hiring of the buses to Maharashtra State Road Transport Corporation (MSRTC) under ‘Rent a Cab operator Service’ and observed that the entire demand beyond normal period is not sustainable.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We find that there is no dispute that the issue involved interpretation of law regarding taxability of the service of hiring of buses. On this issue various cases have been decided and though finally it was held that the hiring of the buses also falls under ‘rent a cab service’ but considering the bonafide of the assessee the demand is set aside on the ground of time barred.” “Even though the demand on merit was sustainable, but demand for the extended period was set aside. Considering this legal position is the present case since entire demand is beyond normal period the same is not sustainable. Consequently, the penalties are also not sustainable” the Tribunal noted.
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