This weekly round-up analytically summarizes the key stories of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reported at taxscan.in, from July 7, 2024 to July 12, 2024.
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has upheld the adjustment made by the appellant/assessee of excess paid service tax towards the subsequent tax liability.
The two-member bench of Ramesh Nair ( Judicial Member ) and C. L. Mahar ( Technical Member ) viewed that the appellant is entitled either to a refund of 50% of the excess paid service tax or to an adjustment against the excess paid towards the future tax liability. While allowing the appeal, the Tribunal viewed that there is no illegality or error on such adjustment made by the appellant. It is also fact on record that service recipient paid 50% in terms of the Supreme Court interim order has been debited the said amount to the appellant. Therefore, the said amount was also born by the appellant only. The CESTAT Bench held that the adjustment made by the appellant of excess paid service tax towards the subsequent tax liability is absolutely in order and correct. The Appellate bench set aside the impugned order. Vaibhav K Jajoo appeared for the appellant and Ajay Kumar Samota appeared for the respondent.
In a significant case, the Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the demand for service tax on the quality assurance charges for testing rifles as it was exempted from taxability. It was viewed that the amounts collected towards quality assurance charges for testing the rifles are fees prescribed for conducting the quality checks and are not subject to service tax.
The two-member bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has observed that Rule 22 of the Arms Rules, 1962, which states that proof testing of firearms manufactured by a licensed dealer shall be carried out only under the regulations that may be framed by the central government or framed by such authority as a government may specify on his behalf and approved by that government. No dealer shall sell a firearm that has not been duly proof tested. Hence, the amounts collected towards quality assurance charges for testing the rifles are fees prescribed for conducting the quality checks and are not subject to service tax. H.S. Manoharan appeared on behalf of the appellant and Anoop Singh appeared on behalf of the respondent
The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that mosquito repellents and ladiesâ garments, being smuggled goods, cannot be confiscated under Section 123 of the Customs Act.
The two member bench of the tribunal comprising Ashok Jindal ( Judicial member ) and Rajeev Tandon ( Technical member ) found that the fact that the mosquito repellents and ladies garments in question are of foreign origin or smuggled one has to be proved by the Revenue. However, the Revenue has failed to prove that the same are smuggled in nature. From the investigation conducted, it is not forthcoming as to how the revenue has alleged that the impugned mosquito repellents and ladies garments are smuggled ones.
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) determined that such payments fall under Section 11B of the Central Excise Act, 1944, as duty payments, not deposits.
The two member bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that several Supreme Court judgements, including Mafatlal Industries Ltd., have established Section 11B of the Act as the exclusive remedy for claiming refunds of Central Excise duty, except in cases of unconstitutional levies. The Tribunal clarified that payments made after an audit objection and subsequent Order-in-Appeal (OIA) are considered duty payments under the Act and not deposits.
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has set aside the order imposing service tax liabilities on the husband of a deceased proprietor. The case arose from the Order-in-Appeal dated 09.04.2018 passed by the Commissioner (Appeals) of CGST and Excise, Patna.
The two-member bench, comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member), relied on the precedent set by the Supreme Court in the case of Shabina Abraham vs. Collector of Central Excise & Customs. The Supreme Court had held that âwhat revenue is asking us to do is to stretch the machinery provisions of the Central Excise and Salt Act, 1944, on the basis of surmises and conjectures. This, we are afraid, is not possible. There is no charge to excise duty under the main charging provision of a dead person.â
In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that imported liquid crystal devices under specific Customs Tariff Items 9013 80 10 are exempt from customs duty.
A two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) emphasized the need for cooperation from the assessee with adjudication authorities. They urged the assessee to submit all relevant grounds presented in their appeal and allowed the submission of any additional points of dispute during the new proceedings. The bench highlighted that the original adjudicating authority must consider these additional submissions and ensure a reasonable opportunity for a personal hearing before reassessing the impugned goods. Consequently, the appeals were allowed and sent back for de novo proceedings.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in Kolkata, comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member), has set aside an order, ruling that the company leasing workwear to clients is not liable for service tax.
The bench observed that âwe find that in the instant case, in terms of agreement work-wear rented out always remains within the exclusive possession of their clients and nobody else can use those work-wear at the same time and hence effective control to lie with the user/ clients. The appellant, therefore, does not have control over the use of the work-wearâ.
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that the CENVAT credit can be availed of on input services of commercial and industrial construction, fabrication and erection, manpower supply for construction, and Goods Transport Agency for construction materials, etc.
The two-member bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) viewed that the period of dispute is from April 2008 to March 2011, and the definition of âinput serviceâ as it stood before the amendment with effect from 1.4.2011 would apply. Rule 2(l) of the Cenvat Credit Rules, 2004 (CCR), as in force before April 1, 2011, defined âinput serviceâ to mean any service used for providing output service or used by the manufacturer concerning the manufacture of the final product. While allowing the appeal, the CESTAT held that the ambit of the definition before April 1, 2011, was large enough to cover all activities as long as there was no denial by the department that, after setting up the factory, no business was carried on from that premises.
The Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed the refund claim, ruling that the absence of prior approval for procuring waste disposal service was not a valid reason to deny the refund.
The single member bench of the tribunal comprising C.J Mathew ( Technical member ) observed that the denial of refund by the lower authorities was not consistent with law and the assessee was entitled to refund of the entire claim. Appeal was accordingly allowed.
In a recent ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the taxpayer was eligible for a refund of CENVAT credit on inputs or input services used in the export of goods or services.
The single member bench of the tribunal comprising M.M. Parthiban ( Technical member) do not find any merits in the impugned order dated 21.08.2018, insofar as the adjudged demands were confirmed on the appellant by the Commissioner (Appeals), upholding the order of the original authority and by rejecting the appeal filed by the appellant. Accordingly, setting aside the impugned order, the appeal was allowed in favour of the assessee.
The two-member bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, ruled that imported aerosol valve components are classifiable under tariff heading 8481 8090 of the First Schedule to the Customs Tariff Act, 1975, setting aside the order.
The bench, consisting of S.K. Mohanty (Judicial Member) and M.M. Parthibhan (Technical Member), considered that the impugned goods are classifiable under tariff heading 8481 8090 of the First Schedule to the Customs Tariff Act, 1975. Consequently, the impugned order dated April 12, 2023, which classified the imported goods under heading 9616 1020, does not withstand legal scrutiny and is therefore not legally sustainable. Accordingly, the appeal was allowed, and the impugned order was set aside.
The CESTAT ( Customs, Excise and Service Tax Appellate Tribunal ) has ruled that service tax is not payable on TDS paid by the Indian Company on behalf of the Foreign Service Provider. Thus, the impugned order which raised the demand was set aside by the tribunal.
The two-member bench of M. Ajit Kumar (Technical Member) and P. Dinesha (Judicial Member) of CESTAT observed that TDS paid to the government by the appellant arises from a statutory liability and cannot be considered âconsiderationâ for services unless mandated by law.
The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to Price Waterhouse Coopers Private Limited (PwC) by allowing CENVAT credit of service tax paid under Section 66A of the Finance Act, 1994.
The Coram of Ashok Jindal (Judicial member) and K. Anpazhakan (Technical member) held that the Respondent was eligible to avail the credit of service tax paid under Section 66A during the period from 2004-05 to 2007-08. Accordingly, CESTAT upholds the impugned order and rejects the appeal filed by the Revenue.
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has determined that gold cannot be confiscated without concrete proof of foreign marking or smuggling.
The two-member bench of Ashok Jindal (Judicial Member) and K. Anpazhakan, (Technical Member), found that the revenue failed to discharge their onus of how they formed an opinion that they had a reasonable belief that the gold was of foreign origin and smuggled.
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has allowed cash refund of CENVAT credit on the amount of cash of countervailing duty ( CVD ) and special additional duty ( SAD ) paid even after July 1, 2017.
The two-member bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that the appellant/assessee has paid the CVD and SAD for the period before July 1, 2017, even though the payment was made after July 1, 2017. Since the duty was paid by the appellant for the period when the Cenvat credit rules existed, the appellant was entitled to Cenvat credit during the period prior to July 1, 2017. While allowing the appeal, the tribunal held that the assessee is entitled to a cash refund of CENVAT credit in the amount of CVD and SAD paid even after July 1, 2017 and upheld the order of Commissioner (Appeals).
In a recent case, the Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) quashed the excise duty on Ashok Leyland Ltd as black sand not a by-product just a waste.
The two-member bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) held that black sand is not generated from the manufacture of iron or steel, but rather sand that is used âremainsâ as sand only but in black colour upon being burned; it is only the âremainsâ of natural sand after losing its ânaturalâ colour.
The Allahabad Bench of Customs, Excise, & Service Tax Appellate Tribunal ( CESTAT ) set aside a recovery order concerning M/s Veena Enterprises, which had availed CENVAT credit instead of seeking a refund and utilised the same for the payment of central excise duty.
The bench of Sanjiv Srivastava (Technical Member), acknowledged that the appellant was entitled to a refund of the service tax paid. However, it noted that instead of claiming a refund, the appellant availed the amount as CENVAT credit and used it to pay central excise duty, which was not a prescribed document for availing credit under Rule 9 of the CENVAT Credit Rules, 2004. The tribunal observed that since the credit taken was reflected in the appellantâs ER-1 return, there was no suppression of facts, and the authorities should not have invoked the extended period of limitation as the appellant declared the credit in their returns.
The Kolkata Eastern Zonal Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that âNimbooz Masala Sodaâ is subject to an excise duty of 6.18% and not 12.36%, thereby deciding in favor of M/s. Varun Beverages Limited, a franchisee of M/s. PepsiCo Inc.
The two-member bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) referenced the Larger Benchâs decision in the Brindavan Beverages Pvt. Ltd. case, which determined that products like âMinute Maid Nimbu Freshâ and â7UP Nimbooz Masala Sodaâ are classifiable under Tariff Item 2202 90 20 as âfruit pulp or fruit juice based drinks.â
The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) Hyderabad held that averments in a Show Cause Notice ( SCN ) without providing the nature of service and classification of the taxpayer are vague, resulting in the upholding of the Rs. 9 crore service tax demand drop.
The bench of Anil Choudhary (Judicial Member) and A.K. Jyotishi (Technical Member) held that the demand of Rs.6,11,70,185/- raised under VCES was not justified as the department had not considered the amount paid through Cenvat credit. However, the bench agreed with the department that the appellant was not eligible for the VCES scheme due to their failure to deposit 50% of the tax dues by the due date. The Tribunal observed that the department was already aware of activities of the appellant due to previous audits and the issuance of an SCN in October 2014. This prior knowledge, according to the CESTAT, precluded the department from invoking the extended period of limitation for the SCN dated December 2014. Accordingly, the bench set aside the disputed demand of Rs. 6,11,70,185/- and upheld the dropping of the Rs. 9,68,42,681/- demand.
The Single member bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Allahabad, ruled that there was no time limit prescribed under Section 27 of Customs Act, 1962 for refund of penalty and redemption fine.
Thus though the coram of Sanjiv Srivastava (Technical member) hold that the refund claim has to be processed under the provisions of Section 27 of the Customs Act, 1962, as this is a case of consequential refund of penalty and redemption fine, the same cannot be held to be barred by the limitation as provided in the said section. Thus CESTAT does not find any merits in the impugned order. Accordingly, the appeal was allowed.
In the case of Rajat International, the Ahmedabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) remanded the matter to decide the nature of goods, stating that Boom sticks made solely of plastic, without vegetable materials, are taxable.
The single member bench comprising Somesh Arora (Judicial member) found that broomsticks which are made up of plastic and do not use a vegetable material alone are taxable w.e.f 22.09.2017 in Notification No. 01/2017 since after amendment, the Broomsticks fall under Serial No. 260 of Notification No. 01/ 2017 have to be of other than Chapter Heading No. 96031000 and therefore have to be Broomsticks of other than twigs and such vegetable materials.
The Coram of Ashok Jindal (Judicial Member) and K. Anapazhakan (Technical Member) of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata, held that Section 123 of the Customs Act, 1962, is not applicable without material evidence.
The bench observed that âwe observe that the questions to be answered in this case are whether the provisions of Section 123 of Customs Act, 1962 are applicable in this caseâ Under the facts and circumstances of this case, the provisions of Section 123 of Customs Act, 1962 were not applicable in this case, since it was not established that the gold was of foreign origin. Accordingly, CESTAT set aside the impugned order and allow the appeal filed by the assessee.
In major ruling, the Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has quashed the reversal of Central Value Added Tax ( CENVAT ) credit on input parts following the destruction of semi-finished goods in a fire.
The two member bench of the tribunal comprising Anil Choudhary (Judicial member) and A.K Jyotishi (Technical member) allowed the appeal and set aside the impugned order. It was clarified that the assessee was not required to reverse the Cenvat credit of Rs.76, 88,124/- with respect to inputs forming part of work in progress/semi-finished goods destroyed in fire. The assessee shall be entitled to consequential benefits, in accordance with law.
In a major ruling, the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has granted relief to National Aluminium Company Limited ( NALCO ) by setting aside the time-barred excise duty demand on goods that were captively consumed.
Therefore, further two member bench of the tribunal comprising Ashok Jindal ( Judicial member) and K.Anpazhakan ( Technical member) held that the assessee has correctly paid the duty on the goods in question, which has been captively consumed by the sister unit for manufacturing of excisable goods in terms of CBEC Circular No.692/8/2003-CX dated 13.02.2003. On merit, the assessee has rightly paid the duty as per CAS-4 in terms of Rule 8 of the Valuation Rules CESTAT held that Rule 4 of the Valuation Rules, was not applicable in the facts and circumstances of the case, accordingly, appeal was allowed.
In a major ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) quashed the confiscation and duty demand on the alleged misuse of âSaffronâ capable of use as food flavor and color.
In the circumstances of the present dispute, the two-member bench of the tribunal, comprising Vijay Sharma (Judicial member) and C.J. Mathew (Technical member), held that the adjudicatory jurisdiction should not have been extended beyond the contents of the authorizations, which were to be evaluated solely in terms of the appellantâs claim that âsaffronâ is capable of use as âfood flavorâ and âfood color,â as described in the impugned authorizations. These descriptions were not disputed in the proceedings, and the test of commercial viability, adopted in the impugned order, was not conceptually intrinsic to export promotion schemes in the Foreign Trade Policy (FTP), thus undoing the foundation of both confiscation and recovery of duty in the impugned order. Accordingly, the impugned order was set aside to allow the appeal.
The two member bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, quashed the excise duty demand and penalty, stating that there can be no denial of Central Value Added Tax (CENVAT) Credit without cogent evidence of paper transactions.
Accordingly, the two coram of Ashok Jindal (Judicial member) and K. Anpazhakan (Technical member) held that the demand on account of denial of Cenvat Credit was set aside, as the demand against the assessee was not sustainable, therefore, penalty on the assessee are not imposable. Moreover, the assessee No.1 is the proprietor of the assessee No.2, therefore, penalty on both the appellant is also not sustainable in the facts and circumstances of the case. The impugned demand confirmed and penalty imposed on the assessee were set aside. Accordingly, CESTAT set aside the impugned order and allow the appeal with consequential relief.
The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) quashed the âš3.17 lakh excise duty demand due to the allegation of clandestine removal being made without any evidence or proof.
Since the two member bench of the CESTAT comprising K. Anpazhakan ( Technical member) and Ashok Jindal ( Judicial member) highlighted that the demands of central excise duty and the reversal of Cenvat Credit confirmed in the impugned order are held to be not sustainable, the question of demanding interest and imposing penalty on the appellant does not arise. Consequently. CESTAT set aside the impugned order and allowed the appeal filed by the assessee.
In a recent ruling, the Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) quashed the confiscation order and redemption fine, while reducing the penalty, stating that there was not enough evidence to prove the illegal procurement of plastic scrap from Nepal
The bench found that documentary evidence clarifies that the assessee had imported the 11,000 kgs. on 15.06.2016 vide Bill of Entry No.5638434, which is also affirmed by the Asstt. Commissioner and the invoice raised by them is for 10,000 kgs., whereas, the goods in question were weighted at 9388 kgs.. Reading together all these documents, further find that enough evidence has been provided by the Appellant to the effect that these are not procured illegally from Nepal, but are legally procured goods. Therefore, set aside the confiscation order and the redemption fine of Rs.50,000/- imposed on the scrap valued at Rs.2,16,180/-. The Revenue is directed to release the plastic scrap to the Appellant forthwithâ.
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has quashed the service tax demand in respect of housekeeping services provided to UN agencies and educational institutions.
The two-member bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the exemption to the United Nations is general in nature, and services provided to UNDP, UNICEF, UN Women, UNAIDS, UNODC, and UNOPS are available based on Mega Exemption Notification No. 25/2012-ST dated June 20, 2012. While allowing the appeal, the CESTAT held that Mega Exemption Notification No. 25/2012-ST provides an exemption to the United Nations, and there is no condition in this notification that any organizations or agencies attached to or affiliated with the United Nations also required to be notified by the Central Government under Section 3 of the United Nations ( Privileges and Immunities ) Act, 1947.
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