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 23, 2024 to June 01, 2024
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that no service tax payable under Business Auxiliary Service, Technical Inspection and Certification Service for the export of Hosiery Garments to Non Resident Company .
It was observed by the tribunal that the identical facts in the cases of Original Knit Exports, Harini Colours and Veera Creations where the Service Tax demands were confirmed under BAS and TIC and where M/s. JPS Trading Company, Dubai was the buying agent and garments were exported by these appellants to M/s. Bon Prix, Germany, the Tribunal Chennai have set aside the Service Tax demands raised and also imposed a penalty imposed in favour of the exporters of the garments. Therefore the Two-Member Bench comprising Sulekha Beevi C.S ( Judicial Member) and Vasa Seshagiri Rao(Technical Member) held that confirmation of the demand of Service Tax and the imposition of penalties cannot be sustained.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that Unjust Enrichment is not applicable for duty paid under the Provisional Assessment during the period under dispute.
It was observed that “it is a settled position in law that the principle of unjust enrichment is not applicable to the refund claims arising out of the finalization of the provisional assessment prior to 25.06.1999.” A Two-Member Bench comprising Sulekha Beevi C.S. (Judicial) and Vasa Seshagiri Rao (Technical Member) held that Unjust Enrichment is not applicable for duty paid under the Provisional Assessment during the period under dispute .Hnece the tribunal allowed the appeal.
The Allahabad Bench of Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that service tax leviable on service received by Samsung India Electronics from associate enterprises on taxable value under section 67 of the Finance Act, 1994. It was directed to furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority.
A two-member bench of Mr P K Choudhary, Member (Judicial) And Mr Sanjiv Srivastava, Member (Technical) held that the appellant is required to pay Service Tax on the service received by them from their associate enterprises on the taxable value as determined in terms of section 67 of the Finance Act, 1994. The appellant should furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority. The service tax liability is to be discharged by the appellant in the manner and at the time as determined in terms of Rule 6 of the Service Tax Rules, 1994 read with Rule 7 of Point of Taxation Rules, 2011. For any delay in payment of Service Tax from the due date interest at the appropriate rate should be paid by the appellant in terms of Section 75 of the Finance Act, 1994 for period of delay in payment of tax.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Bangalore Bench upheld the excise duty demand on scraps, made within 5 years from date of knowledge.
A Two-Member Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “With regard to limitation, it is an admitted fact that the shortage was detected by the Department only on 25.08.2011 and the show-cause notice was issued on 29.01.2014 which is within 5 years of the date of knowledge. In fact, no return was filed explaining the shortages and it was noticed only after visiting the unit and the return was filed at a later date.” “Based on the above the demand is within 5 years from the date of knowledge and therefore the claim of the appellant that it is time barred is unacceptable. Accordingly, we uphold the demand of duty but extend the benefit of the Notification No.23/2003-CE dated 31.03.2003 without extending the benefit of SAD since the appellant has not proved that VAT has been discharged on these shortages. The matter stands remanded for redetermination of duty after extending the benefit of Notification 23/2003-CE dated 31.03.2003” the Tribunal held.
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service tax is not leviable on renting of immovable property service by religious body to religious body.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member observed that “After considering the facts of the case before us and also appreciating the documents produced, in nature of Memorandum of Association, we are of the considered opinion that the assessee fits in to the category of ‘religious body’. As per the definition of Renting of immovable property service, such service rendered by a religious body or to a religious body is excluded from the levy of service tax. We hold that the assessee herein is not liable to pay service tax under the category of renting of immovable property services up to 30.06.2012. Therefore, the demand for the period prior 30.06.2012 cannot be sustained and require to be set aside.”
The Chennai Bench of the Customs, Excise and Service Tax ( CESTAT ) quashed order rejecting customs refund as the order-in-original was not served.
A Single Member Bench of P Dinesha, Judicial Member observed that “Thus, it is clear that none of the communications to the appellant indicates date of actual communication of the order in original dated 29.04.2015. Hence, the prima facie burden on the revenue to adduce proper evidence to show the actual date of communication of the Order in Original, not to speak of the date of dispatch, remains un-discharged. Even from the said Order in Original, I find that the authority passing the order has nowhere indicated about providing an opportunity of being heard, before passing the said order. Even this therefore appears to be an order passed by violating the principles of natural justice.”
The Ahembadad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that broomsticks made up of plastic without using vegetable material alone are taxable with effect from September 22, 2017.
The two-member bench of Somesh Arora (Judicial Member) and Raju (Technical Member) has held that broomsticks are made up of plastic and do not use a vegetable material alone are taxable w.e.f. September 22, 2017 as per the Notification No. 01/2017. After amendment, the broomsticks fall under Serial No. 260 of Notification No. 01/2017 and have to be of other than Chapter Heading No. 96031000 and therefore have to be broomsticks of other than twigs and vegetable materials. The bench held that the Commissioner (Appeals) while deciding classification, should keep the discussion in mind while working into the demand period and related statutory changes. It should first decide about the nature of broomsticks and brooms and their classification with statutory changes. The court remanded the matter back to decide the nature of the goods.
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that customs duty exempted as an export obligation under the advance authorisation scheme has complied. It was found that the goods were cleared under the advance authorization scheme, according to which all the duties are exempted by way of debiting in the advance licence scheme.
The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the adjudicating authority has denied the exemption on the ground that export obligations have not been fulfilled. The Export Obligation (EODC Certificate) shows that the export obligation under the advance authorization scheme has been complied with accordingly. The sole ground for denying the exemption by the adjudicating authority does not exist.
In a recent case, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that omission on the part of the appellant to engage the executive as an authorized person to file courier bills of entry as per Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 cannot be reason to invoke harsh proceedings including revocation of courier license and enforcement of bond and bank guarantee executed in connection with registration/license as an authorized courier.
A two-member bench of Mr P.A. Augustian, Member (Judicial) and Mr Pullela Nageswara Rao, Member (Technical) found that there was an omission on the part of the appellant to engage the executive M. Elias as an authorized person to file courier bills of entry as per Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.
The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in the matter where the demand of service tax alleging tax suppression without evidence, remanded the matter for denovo adjudication. It was evident that the reporting of income in the P &L being irrelevant for the determination of service tax payable, the basis of the impugned assessment is erroneous.
The respondent relied upon the P and L accounts to conclude that the amounts reflected therein have not been offered for service tax. The reporting of income in the P &L being irrelevant for the determination of service tax payable, the basis of the impugned assessment is erroneous. A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) remanded the matter to the original authority to undertake the exercises of re-conciliation.
The Bangalore Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed to recover credit taken wrongly by allowing to reverse proportionate credit along with interest Ineligible Credit Availed by Motorola Mobility India.
High Courts of Telangana and Rajasthan emphasized the fact that the authorities were entitled to recover the credit taken wrongly by allowing them to reverse the proportionate credit along with interest. A two-member bench of Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member(Technical) upheld the Commissioner’s order concerning the confirmation of service tax demand of Rs.1,14,64,277/- only. The Revenue’s appeal concerning the demand of interest was upheld and accordingly, interest is to be paid on the above demand of Rs.1,14,64,277/- in terms of Rule 6(3A) of the Cenvat Credit Rules, 2004.
The Allahabad Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed denovo proceedings on the deduction claim of gross value of service on “Supply of Tangible Goods Service” for Period before 16.05.2008. The Tribunal remanded the matter back to the original authority for reconsideration of the issue to the extent of allowing deduction claim received against the services of “Supply of Tangible Goods Service” before 16.05.2008, the date from which the service was made taxable.
The Tribunal comprising Mr P K Choudhary, Member (Judicial) And Mr Sanjiv Srivastava, Member (Technical) remanded the matter back to the original authority for reconsideration of the issue to the extent of allowing deduction of Rs. 84,17,327.67/- which appellant claim was received by them against the services of “Supply of Tangible Goods Service” before 16.05.2008, the date from which the service was made taxable. The appeal was partly allowed to the extent of remanding the matter to the original authority to the extent. As the matter is quite old adjudicating authority should in de novo proceedings adjudicate the matter within three months from the date of receipt of the order, following the principles of natural justice.
The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) set aside the penalty imposed under the Customs Act, 1962 as the allegation of dummy or fraud import without corroborative evidence.
A two-member bench of Mr P.A. Augustian, Member (Judicial) and Mr Pullela Nageswara Rao, Member (Technical) observed that the appellant is only facilitating the customs transaction on behalf of the principal, (importer/exporter), the absence of mens-rea, penalty is not imposable, otherwise all the customs transaction will come to halt, if penalty is imposed on the customs broker the omission /commission of exporter/importer. Moreover, in the impugned order, Adjudication Authority itself held that there is no illegality revealed related to goods cleared through the appellant.
The Bangalore bench of CESTAT ( Customs Excise and Service Tax Appellate Tribunal ) has directed that the refund of service tax paid for consultancy services under RCM ( Reverse Charge Mechanism ) shall not be considered as deposit in absence of FAR ( Final Audit Report ). It shall be considered as ‘Tax’ only and it was directed to sanction the refund under Section 11B of Central Excise Act.
Thus, the bench of R Bhagya Devi (Technical Member), ruling in favour of Revenue, decided that the service tax category under the relevant provisions and there is nothing declared unconstitutional or under mistake of law, the amount is necessarily to be considered as tax and refund has to be sanctioned as per the provisions specified under Section 11B of the Central Excise Act, 1944. Accordingly, the appeal was allowed. This ruling, though directed at a refund, supported the appellant’s /revenue’s contention to set aside the order treating the amount paid as ‘Deposit.
The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that anti-dumping duty is leviable on green reflective glass for the period from 4th January 2009 to 22nd May 2009.
In the present case, the two member bench of the tribunal comprising D.M Misra (Judicial member) and R. Bhagya Devi (Technical member) concluded that reflective glass was not found in the Notification No.4/2009-Cus. dated 06.01.2009 for exempting them from anti-dumping duty, the question of extending the benefit does not arise. The Commissioner (Appeals) has rightly held that no attempt can be made to infer the motive or meaning of the Notification other than what is emanating from the plain language of the Notification. Therefore, CESTAT upholds the order of the Commissioner (Appeals) and dismisses the appeal filed by the appellants.
The Delhi bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that imported goods cannot be confiscated under Section 111(m) of the Customs Act, 1962 for wrong classification or ineligible exemption claims.
The two member bench of the tribunal comprising Binu Tamta (Judicial member) and P.V Subba Rao (Technical member) observed that imported goods cannot be confiscated under Section 111(m) because of a wrong classification or claim of an ineligible exemption notification. In this case, the importer imported thorn and entered an incorrect classification at the 8-digit level in the bill of entry and gave a value as per its transaction value. When examining the self-assessment, the incorrect classification was discovered.
The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the allegation of mis-declaration of goods cannot sustain, and accordingly set aside the penalty under Section 112 (a) of the Customs Act, 1962.
The bench found that the adjudicating authority has held that there is misdeclaration of the goods with regard to quantity. On perusal of the records it is seen that in the bill of entry, packing list as well as other documents the quantity is declared in kilograms. However, payment of duty is on the basis of measurement in meters. On examination it was found that instead of 11,815 kilograms as declared by appellant, the total quantity imported is 11,900 kilograms Further the two member bench of the tribunal comprising Vasa Seshagiri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) noted that the said difference in quantity was too low so as to allege intentional misdeclaration of the goods. There will be some variation in the quantity during the voyage of the goods. CESTAT held that the allegation of mis-declaration of the goods cannot sustain. Consequently, the Redemption fine and penalty imposed are set aside.
The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that round ridge cement tiles eligible for customs duty-free import.
The two member bench of the tribunal comprising D.M Mishra ( Judicial member) and R. Bhagya Devi ( Technical member ) held that the appellants are entitled to import the Round Ridge Cement Tiles free and the restriction applicable to processed tiles as held in the impugned orders cannot be sustained. In the result, the impugned orders are set aside and appeals are allowed with consequential relief
The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the actual amount received from M/s BPCL for the sale of fleet cards cannot be subject to the levy of service tax.
The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Accountant member) and Sulekha beevi C.S (Judicial member) found that the actual amount received from M/s. BPCL for sale of fleet cards cannot be subject to levy of service tax. CESTAT concluded that the demand of service tax under this category cannot sustain and requires to be set aside.
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that Benefit of section 28(5) Of Customs Act available when reduced penalty of 15% of BCD amount was paid within thirty days of receipt of Show Cause Notice ( SCN ).
The tribunal relied upon the decision of Gujarat High Court in the case of Prakash Diamond Pvt. Ltd. Vs. Union of India observed that “if the last date of a period within which an act is to be performed is a holiday, then the last date would be extended to the immediate next working day and the act would be said to be in compliance, if the same is performed on the immediately next working day by invoking the provisions of Section 10 of the General Clauses Act.” A Two-Member Bench comprising S.K. Mohanty, Member (Judicial) and P.V. Subba Rao (Technical Member) held that appellant would be liable to pay the reduced amount of penalty at the rate of 15%, which they have already complied with.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that due to typographical error occurring in the bills of entry regarding Ambers of Internal Remote Electrical Tilt Switches (iRET) Switches imported penalty shall not be imposed.
Thus, if there is a discrepancy between what is stated to have been imported in the documents and the Bill of Entry and what is actually imported, duty can be charged on what is actually imported and not on what is said to have been imported. A Two-Member Bench comprising Justice Dilip Gupta, (President) and P.V. Subba Rao (Technical Member) allowed the appeal filed by the appellant.
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that post graduate programmes in management provided by the Indian Institute of Management are liable to pay service tax.
Further the bench point out that the “claim of the appellant that Indian Institute of Management Act, 2017 since acknowledges such institute as an Institution of national importance and therefore, all the courses offered by the institute should be exempted, in our opinion, also cannot be acceptable as no such provision has been brought to our notice mentioned in the said Act”. Therefore the Two-Member Bench comprising Dr. D.M. Misra( Judicial Member) and R. Bhagya Devi,(Technical Member) confirmed the demand and held that the Post Graduate Programme in Management provided by the Indian Institute of Management is liable to Service Tax
In a recent ruling, the Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that excise duty is not payable on trade discounts offered to bulk buyers of compressed natural gas ( CNG ).
The two member bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that no evidence is forthcoming that the discount offered by appellant-assessee to Brihanmumbai Electric Supply and Transport (BEST) was in lieu of the infrastructural facilities extended to them. Further held that the transaction value should be considered the price at which the CNG were supplied by the appellants to BEST, and such a price should be considered the value to assess and discharge of central excise duty liability. While allowing the appeal, the tribunal held that deduction of trade discount from assessable value was admissible on sale transactions.
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