This weekly round-up analytically summarizes the key stories of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT ) reported at taxscan.in, from May 18, 2024 to May 22, 2024.
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that expenses related to advertising and marketing are expenses are not includable in value of imported goods since the activities were carried out in India for the sale of the goods in India which amounts to post-import.
The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the reasoning of the Principal Commissioner in the order that since the appellant was required and obliged to undertake marketing and advertising in terms of the agreements with the foreign suppliers, the price of the imported goods cannot be said to be the sole consideration within the meaning of Section 14 of the Customs Act.
In a significant case, the Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that service tax is not demandable on toll charges collected in an independent capacity as a contractor. The tribunal found that the assessee obtained the right to collect toll under a contract and it has neither rendered any service to NHAI nor has acted as a commission agent for NHAI.
During scrutiny of records of the Appellants, it was observed that they had availed Cenvat credit in respect of service tax paid on various input services like telephone service, courier service, business promotion, cleaning and housekeeping, insurance, maintenance or repairs, advertisement etc.
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal( CESTAT ) upheld the commissioners order allowing refund as the excise duty refund rejected without verifying invoice showing double duty payment. The Tribunal found that the Commissioner(Appeals) passed the order after verifying all the issues regarding the clearance of the goods in question and payment of duty thereof and considering the Affidavits filed by the customers as well as transporters’ gate passes etc., It was evident that the respondent has paid duty twice for the same goods.
The Tribunal found that the Commissioner(Appeals) passed the order after verifying all the issues regarding the clearance of the goods in question and payment of duty thereof and considering the Affidavits filed by the customers as well as transporters’ gate passes etc., It was evident that the respondent has paid duty twice for the same goods.
The Ahmedabad bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that excise duty not imposable when excess clearance of waste and scrap made after payment of full duty.
A two-member bench of Mr Somesh Arora, Member (Judicial) and Mr Raju, Member (Technical) observed that for material consumed over and above the SION notification issued by the DGFT, the Department views that duty or at least penalty is liable to be charged in case excess wastage comes into play.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that there is no service tax leviable by clubbing all activities undertaken under “Cargo Handling Service”.
It was also submitted that the C & F Agent and Transportation Services are two independent services and were rendered under two separate contracts, and therefore, the consideration for both the services cannot be clubbed together to levy Service Tax under the single service category of C & F Agency service. This will be contrary to the principle of classification of services as provided under Section 66 F of the Finance Act, 1994.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the charter services for transportation of senior executive officials to attend business meeting in relation to manufacture and sale of finished goods is input service.
A Two Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava observed that “In the present case, Commissioner (Appeals) have concluded that charter services were raised for transportation of the senior executive officials of the company for attending the business meeting in relation of the manufacture and sale of finished goods. We do not find any reason to differ with the findings recorded in the impugned order by Appellate Authority and the same is upheld. Appeal is dismissed.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Allahabad Bench quashed service tax demand as held that the classification of service on basis of non-existing provision is bad in law.
“The demand in the instant case pertains to April,13 to June,17 when the definition provided under section 65 was not in existence. The classification of service on the basis of a non-existing provision is bad in law. With effect from 01.07.12, all services except services mentioned in negative list were made taxable. Contrary to that, definition of „intermediary‟ was available even after 01.07.12 and nature of impugned services were within four corners of intermediary services. We therefore find that observation of the Pr. Commissioner is not sustainable and liable to be set aside” the Tribunal held.
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the rejection of refund claims as the burden of payment of excise duty passed on to customers.
A Division Bench of Justices PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Thus if on examination of facts and documents the conclusion is that burden of the duty has been passed on to the customers the refund could not have been directed to the appellants but would have to be credited to the consumer welfare fund. In view of the discussions as above, we do not find any merits in this appeal.”
The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that mere procedural violation for complying with condition of the Notification is not the act of suppression for invoking extended period of limitation.
A Two-Member Bench of PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “As all the information which was necessary to determine eligibility under Notification No.18/2009- ST was available with the Revenue and the prescribed Return/Form was filed by the appellant they could not have suppressed any fact from the Department for which extended period of limitation could have been invoked. Where merely a procedural violation in respect of complying with a condition of Notification cannot be said to be an act of suppression for invoking extended period of limitation. No justification for invoking extended period of limitation is forthcoming from the show cause notice, order in original or the impugned order.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax is leviable on bus for carrying passengers and hence is not means of transport of goods.
“It was, therefore, concluded that the bus, which is primarily meant for carrying the passengers from one place to another, cannot be called the means of transport of goods and therefore, the appellant is not eligible to claim exemption under Clause 22 (b) of the notification. The said findings are unsustainable” the Tribunal noted.
The Ahmedabad Bench of Central Excise and Service Tax Appellate Tribunal ( CESTAT ) held that service tax is not payable on freight margin recovered from customers in cases of outbound shipment. In the case of outbound shipment, both by aircraft and vessel, the destination of goods shall be outside India, therefore there will be no service tax on the freight margin recovered by the applicant from the customer.
The two-member bench of Somesh Arora (Judicial Member) and C.L. Mahar (Technical Member) observed that the place of provision of service or transportation of goods shall be the place of destination of the goods, as per Rule 10 of the POP Rules. The tribunal held that the appellant would enter into an agreement with the carrier for the transportation of cargo, i.e., the airline /shipping line. The CESTAT has held that, in the absence of a specific exclusion, services provided by the applicant cannot be excluded from the scope of Rule 10 of the POP Rules.
The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) combined MRP of combo pack cannot be the basis for determining assessable value under Section 4A of Central Excise Rules, 1944. The Court viewed that sub-section (2) of Section 4 along with the Explanation thereto that the MRP mentioned is to be the sole consideration in arriving at the transaction value at which the excise duty is payable.
A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that Rule 15 of the SWM Rules refers to the “combination pack” of dissimilar items that are packed in a bigger pack on which MRP is required to be declared. It was clear from the reading of sub-section (2) of Section 4 along with the Explanation thereto that the MRP mentioned is to be the sole consideration in arriving at the transaction value at which the excise duty is payable.
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has dismissed the Service tax appeal applying Resjudicata. It was found by the tribunal that the writ petition was dismissed as withdrawn due to rework needed on interest Calculation.
A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) held that “when this issue was raised and abandoned in the first writ petition which was dismissed as withdrawn, the principles of constructive res judicata which is laid down under Order 23 Rule 1 of the Code of Civil Procedure, 1908, and which principles are extendable to writ proceedings as well as held by this Court in “Sarguja Transport Service v. State Transport Appellate Tribunal, M.P., Gwalior and Others” would be applicable.”
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Bangalore Bench held that the misdeclaration of description of the goods invite extended period of limitation.
A Two Member Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “On going through one of the sample ER-1 return, filed with the Department, for the period February 2014, we find that under the heading ‘Description of Goods’, the item is mentioned as “power”, “ELE”, “Solar”. Thus, there is no correct declaration of the description of the goods mentioned in the ER-1 Returns which have been manufactured and cleared by them by raising invoices mentioning a different description.” “Therefore, the judgments cited by the appellant are not applicable to the present case. On the other hand, mis-declaration of the description of the goods would invite extended period of limitation in view of the judgment of the Supreme Court in the case of CCE, Ahmedabad Vs. Urmin Products P. Ltd. & others” the Bench noted.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the allegation of violation of Regulation 10(d) of the Customs Broker Licensing Regulation, 2018 ( CBLR ) and observed that the duty is cast on the Customs Broker to advise clients to comply with the provision of law.
A Two-Member Bench comprising P.A. Augustian, Member (Judicial) and Pullela Nageswara Rao, Member (Technical) noted that “The responsibility of Customs Broker is only to advise the importer regarding concerned provisions only when it is brought to the notice of the Customs broker that the goods imported by the passenger or importer is imported or being exported in violation of any provision of law. In the present case, there is no way for the Customs broker to find out whether the baggage brought by the passenger belongs to them or any other person.” “If the overseas agency had induced the passenger to carry the goods belongs to other NRIs though unaccompanied baggage of a passenger by offering any amount, in the absence of any knowledge regarding such offer till the filing of baggage declaration, the proceedings initiated against the appellant is unsustainable. Thus, the finding regarding alleged violation of the provision of Regulation of 10(d) of the CBLR 2018 is unsustainable” the Tribunal noted.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that provisions of Section 11B of the Central Excise Act, 1944 not applicable for pre-deposit made under Section 35F of the Central Excise Act, 1944.
A Single Member Bench of Vasa Seshagiri Rao, Technical Member observed that “he nature of payment as a pre-deposit would not undergo any change to become excess payment of tax as contended by the lower Adjudicating Authorities. This contention is totally unjustified and has to be termed as patently illegal. There cannot be any doubt as to the payment made being a pre-deposit may be vide their Head Quarter’s Service Tax Registration at Chennai.” “In view of the above findings and in compliance to judicial discipline and appreciating the decisions cited supra, I am of the considered view that the amount paid by the appellant towards pre-deposit cannot be treated as an excess payment of duty and the provisions of Section 11B of the Central Excise Act, 1944 cannot be made applicable in the facts and circumstances of this case. I find that the appellant is eligible for refund of pre-deposit of Rs.4,80,000/- paid for filing of an appeal under Section 35F of Central Excise Act, 1944” the Tribunal held.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty levied on the misdeclaration of goods in order to avail ineligible drawback. The Appellant Jayant Vikram had filed benami shipping bills with mis-declared quantities and values at the behest of Shri Ashok Sharma.These information getting from Directorate of Revenue Intelligence who said that certain exporters were mis-declaring the description quantity and value of export consignments in order to avail ineligible drawback.
Further the bench observed that this section provides for a penalty for willfully mis-declaring facts in any declaration before the customs authorities which the appellant did. A Two-Member Bench comprising Justice Dilip Gupta, (President) and P.V. Subba Rao, (Technical Member) upheld the penalty levied on the misdeclaration of goods in order to avail ineligible drawback.
TAXSCAN (CESTAT) 479
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed readjudication after finding that the appeal was rejected without deciding the issue on classification of imported insoluble sulphur.
A Two-Member Bench comprising D.M. Misra, Member ( Judicial Member ) and R. Bhagya Devi, (Technical Member) set aside the assessment order and remanded to Commissioner(Appeals) to decide the issue of classification on merit, after affording an opportunity of hearing to the appellant.
Further Sun Direct TV Private Limited had already paid service tax on such amounts paid by customers. The amount is inclusive of service tax and the appellant does not receive any amount from the customer while carrying out the activity of installation and activation of TV connection..
A Two-Member Bench comprising Sulekha Beevi ( Judicial Member ) and Vasa Seshagiri Rao (Technical Member) held that no service tax on commission received from the Sun Direct TV Private Limited for installing the dish antenna and TV connections.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) while dismissing the appeal filed by the appellant held that self assessment could not be modified during refund proceedings .
A Two-Member Bench comprising Dr. Rachna Gupta ( Judicial Member ) and P.V. Subba Rao, Technical Member held that “Since the appellant had self-assessed service tax without applying the notification and the assessment has not been modified, it cannot be modified now in the refund proceedings.”
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the appellant had obtained permission for de-bonding the burnt capital goods under the customs procedures hence there is no basis for the extended limitation.
A Two-Member Bench comprising D.M. Misra, Member ( Judicial Member ) and R. Bhagya Devi, Technical Member observed that the appellant had obtained permission for de-bonding the burnt capital goods under the customs procedures hence there is no basis for the extended limitation.
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand and held that the rent-free accommodation provided to CISF personnel is not additional consideration.
Quashing the service tax demand a Two-Member Bench comprising R Muralidhar, Judicial Member and AK Jyotishi, Technical Member observed that “It can be observed from the above decisions that in the case of other units of the same Appellant, identical issues were raised by the Appellant and in all these cases it has been held that the reimbursement expenses are not to be added to the gross value for arriving at the Service Tax payable. The Rule 5 of the Service Tax (Determination of Value) Rules has been held as ultra vires by the High Court and Hon’ble Supreme Court. Similarly, in these cases, it has also been held that the rent free accommodation provided to the CISF personnel cannot be taken as additional consideration. Therefore, we find that cited case laws are squarely applicable to the facts of the present case.”
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the respondent passed the Unjust Enrichment in relation to the refunds claimed pursuant to finalization of the Provisional Assessments. Hence the bench upheld the order of Commissioner (Appeals).
It was observed by the tribunal that in the respondent’s own case, J.K. Tyre & Industries Ltd.’s case the High Court Karnataka considering more or less similar arguments and scrutiny of the claims from the angle of applicability of unjust enrichment and the refund sanctioned by the Revenue to the respondent from time to time, A Two-Member Bench comprising Dr. D.M. Misra (Judicial) and R Bhagya Devi (Technical Member) upheld the order of Commissioner (Appeals). To Read the full text of the Order CLICK HERE
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that Cenvat Credit on individual items could not be denied merely because it was used for the fabrication of immovable property
Accordingly the appellant’s own case, this Tribunal viewed that because the items are used for fabrication in the erection of storage tank which affixed to earth and become immovable property, cenvat credit availed on individual items cannot be denied being capital goods as defined under Rule 2(a) of the CCR, 2004 . A Two-Member Bench comprising Dr. D.M. Misra (Judicial) and R Bhagya Devi (Technical Member) set aside the order of lower authorities and allowed the appeal filed by the appellant.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
