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 13, 2024 to July 20,2024.
In a recent case, the Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that bagasse is not a manufactured item and is not dutiable. Further held that it does not attract Rule 6(3) of the CENVAT Credit Rules, 2002 ( CCR 2004 ).
The single bench of P.K. Choudhary (Judicial Member) has observed that Rule 6(3) of CCR, 2004 broadly gives the assessee two options for reversing Cenvat credit of service tax paid on input services. The first option is to pay 6% of the value of exempted goods or exempted services. The second option is to pay an amount determined as per the formula prescribed under Rule 6(3A). The tribunal held that bagasse, being only an agricultural waste and not a result of any process, is not covered in the definition of manufacture under Section 2(f) of the Act, and there is no chapter note or section note in the Central Excise Tariff declaration process in respect of bagasse as amounting to manufacture.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Eastern Zonal Bench, Kolkata, has delivered a favourable judgment for Tata Steel Limited. The tribunal allowed the appeal of Tata Steel, permitting the company to avail CENVAT Credit based on endorsed bills of entry, marking a pivotal moment in the interpretation of the CENVAT Credit Rules, 2004, providing clarity on the admissibility of endorsed documents for claiming tax credits.
The two-member bench of CESTAT comprising Shri Ashok Jindal ( Judicial Member ) and Shri K. Anpazhakan ( Technical Member ) observed that the central issue was whether an endorsed bill of entry is a proper document for availing CENVAT Credit. The bench noted that the Bombay High Court had previously addressed this issue, ruling in favour of the assessee. The CESTAT concluded that Tata Steel had established that the imported duty-paid goods were received and utilised as inputs in its factory, and the importer had not claimed the CENVAT Credit on these goods. Therefore, denying the credit on the basis that the bill of entry was endorsed was unfounded.
The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the activity of electroplating amounts to manufacture and service tax is not payable.
The tribunal held that as the activity of electroplating amounts to manufacture and service tax is not payable. The two member bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that electroplating of electrical contacts by the appellant amounts to manufacture and viewed that if the process amounts to manufacture, no service tax would be liable to be paid. While allowing the appeal, the CESTAT set aside the order.
The Ahmedabad Bench of Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that Suncros UVA Lotion, Gel, and Hyclean Cream are classifiable as medicaments.
The two-member bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that the appellant-assessee produced the ingredients used in the manufacture of UVA Lotion, Gel, and Hyclean Cream. The package of the product and label state that the product is to be sold by retail on the prescription of a registered medical practitioner only. While allowing the appeal, the tribunal held that the adjudicating authority was supposed to either get the product tested or at least obtain an expert opinion from an authorized and recognized independent pharma/chemical authority before deciding the classification. The CESTAT directed to reconsider the issue as the observation of the Commissioner was invalid.
Concerning the case,the Ahmedabad bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the original authority order and granted relief to the assessee and ruled that no service tax is payable on behalf of service provided to government entities and held that the demand was wrongly raised under commercial and industrial construction services instead of works contract service, making it unsustainable.
The two member bench of Ramesh Nair (Judicial Member) and C.L.Mahar (Technical Member) held that the services were provided to a Government Authority and Public Sector Undertaking, no service tax liable to be paid and the extended period demand is also invalid as there was no intent to evade tax. Therefore,the demand for Service Tax, interest, and penalties is not upheld and to set aside the order and grant relief.
In the recent case, the Allahabad bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) upheld the Commissioner (Appeal) Order-In Appeal stating no service tax is payable on ocean freight relying upon the decision made in the landmark case stating that the unauthorized collection of tax entitles the person from whom it is collected to claim a refund.
A member bench of P.K.Choudhary (Judicial Member) contended that no issues were found in the Order-In-Appeal, so it stands and the revenue’s appeal which lacks merits is dismissed.
The Allahabad Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), has allowed the appeal granting interest on the refundable amount of Rs. 50,00,000 to the appellant from the date of deposit till the date of refund at a rate of 12% per annum.
The bench of P.K Choudhary (Judicial Member) observed that the issue was squarely covered by the precedent ruling of the Division Bench in Parle Agro Pvt. Ltd. vs. Commissioner, CGST, Noida, confirmed by the Punjab & Haryana High Court in Riba Textile Ltd. vs. CCE & ST. The Division Bench held that interest on refund of the amount deposited during investigation or pendency of appeal is allowable under Section 35EE of the Act and must be paid from the date of deposit till the date of refund.
While allowing the service tax exemption, the Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that co-owners holding immovable property are treated as independent service providers. It was viewed that the rent received by individuals owning property jointly cannot be clubbed to impose service tax.
A two member bench of the Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) relied in the case of Sarojben Khushalchand versus Commissioner of Service Tax, where it was held that the rent received by individuals owning property jointly cannot be clubbed to impose service tax.
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