This weekly round-up analytically summarizes the key stories of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reported at taxscan.in, from September 15, 2024 to September 19, 2024.
In a recent ruling of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) West Zonal Bench at Ahmedabad, the tribunal confirmed the reclassification of AC remote components made by the appellant, stating that Specific mentions take priority over general ones.
The bench comprising Justice Somesh Arora and Raju observed the appellant engaged in manufacturing of remote control handset, PCB assembled after mounting are supplied to various Air Conditioner manufacturing companies.The appellants argued that the classification under CTH 85159000 of the items as sought by them is appropriate, As the ā sole and principal useā rule does not apply to parts which constitute an article covered by heading of Section Note 2, hence the same shall be classified in their own appropriate heading. The bench upheld the classification done by appellant. And the appeal was accepted with modification of classifying the silicone keypad under 84159000.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the service tax penalty was unjustified and without jurisdiction due to time-barred proceedings.
The bench further observed that, since the appellant had filed returns regularly, had cooperated with the department, and had submitted all information and documents during the audit, the intention to evade has to be a positive act to be established by the department.The bench, comprising Binu Tamta and Hemambika R. Priya, held that there was no justification for invoking the extended period to impose a penalty under Section 78 or for imposing a penalty under Section 77 of the Finance Act.
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed the appeal and held that in the period involved in the appeal no service tax was charged on composite contracts.
The CESTAT bench comprising of Mr. Justice Dilip Gupta and Ms. Hemambika R. Priya, Member (Technical), observed that on composite contracts, service tax was not levied up to 01.07.2012 and the period involved in this appeal is from April 2009 to June 2012.Due to the above reason, the bench held that the impugned order passed by the commissioner cannot be sustained. The CESTAT bench allowed the appeal.
In a major relief to Reliance Life Science Private Limited, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Mumbai has directed a cash refund of ā¹49 lakh in a case involving excess reversal of CENVAT credit during the transition from the CENVAT regime to the Goods and Services Tax ( GST ) regime.
In its detailed order, the tribunal concluded that the assessee had correctly followed the procedures for reversing CENVAT credit and was entitled to a cash refund of ā¹49,06,962, as the excess credit could not be utilized under the GST regime. In result, the appeal was allowed.
In a recent decision, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Mumbai granted partial relief to Godrej Consumer Products Ltd. ( GCPL ) in a dispute over the availment of CENVAT credit on advertising services. The Tribunal rejected the retrospective CENVAT credit reversal but ordered the recalculation of credits post the 2011 amendment of the CENVAT Credits Rules.
The two member bench of Mr Ajay Sharma and Mr C J Mathew, after examining the case in detail, agreed that trading could not be classified as an exempt service before April 1, 2011, thereby invalidating the demand for the reversal of CENVAT credits for the period prior to the amendment. The Tribunal upheld previous legal precedents, such as the Trent Hypermarket and Lenovo (India) cases, confirming that trading was not considered an exempt service before the legislative change. Consequently, the Tribunal ruled that the Commissionerās demand for the pre-2011 reversal could not be upheld. However, the Tribunal concurred with the Revenueās position regarding the period after April 1, 2011. It was observed that the assessee should have proportionally reversed the CENVAT credits based on the turnover from traded goods. Thus, the case was remanded to the adjudicating authority to recalculate the necessary reversal for the post-2011 period in line with the proportion of traded versus manufactured goods.
Recently in a ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ordered a reassessment of a ā¹7 crore excise duty demand on pharmaceutical equipment prototypes, questioning the denial of an excise duty exemption claimed under a long-standing government notification. The Tribunal set aside two orders passed by the Commissioner of Central Excise, Mumbai-IV, which had imposed the excise duty demand on goods cleared between November 2008 and March 2016.
As a result, CESTAT set aside the Commissionerās orders and remanded the case back for a fresh decision. The Tribunal instructed the excise authorities to reassess the matter, ensuring that the conditions stipulated in the exemption notification were carefully considered. In result, the case was remanded back to the Commissioner of Central Excise for a new assessment, in line with CESTATās instructions.
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) of Mumbai held that CENVAT credit on input services are not reversible for unsold flats after receiving completion certificate.
After carefully considering the arguments from both sides and examining the relevant case laws, the bench of Dr. Suvendu Kumar Pati, delivered its final order on September 11, 2024. The Tribunal acknowledged that judicial precedent had consistently supported the appellantās position. It was observed that the eligibility for CENVAT Credit should be determined at the time the input services are received, and subsequent changesāsuch as the conversion of flats into immovable propertyādo not retrospectively affect that eligibility. The Tribunal also observed that the provision excluding the sale of immovable property from Service Tax, as contained in Section 65B(44) of the Finance Act, 1994, was not applicable for reversing CENVAT Credit that had already been legitimately availed. In result, the CESTAT allowed the appeal and set aside the order passed by the Commissioner of GST & Central Excise (Appeals), with consequential relief to the assessee.
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) of Mumbai held that the set-off of excess duty payments against short-payments is permissible, and remanded the case back to the lower authority for fresh consideration.
The present dispute was therefore considered by the Tribunal in light of these prior decisions. It was observed that the principle of allowing set-offs between excess payments and short-payments had already been established in earlier remand orders. Given that the original authorityās decision to disallow set-off for the period from April 2008 to September 2008 was inconsistent with previous findings, the Tribunal decided that the matter should be remanded once more. Thus, the appeal was allowed, with the decision deferred for a fresh review by the original authority.
In the recent case, the Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) granted relief to Harbinger Systems Private Limited by approving the refund of CENVAT credit for payments made under the Voluntary Compliance Encouragement Scheme ( VCES ) Scheme.
A single member of Ashok Jindal(Judicial Member) set aside the impugned order and allowed the appeal with consequential relief, based on the M/s. Oxygen Bio Research P Ltd. decision.
In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled in favour of M/s Parle Products Pvt Ltd, declaring that their product, āCheeselings,ā should be classified as āNamkeenā and thus exempt from excise duty under the relevant notification.
CESTAT, in its ruling, mentioned that the term ānamkeenā does not have a specific definition in the tariff or notification. Therefore, the classification should reflect the productās nature and market classification rather than just its manufacturing process. The tribunal found that the adjudicating authorityās decision to classify āCheeselingsā as a āsnack foodā was not supported by a clear definition of ānamkeenā or a proper assessment of the productās market classification. Accordingly, the two member bench of Ajay Sharma ( Judicial Member ) and C J Mathew ( Technical member) concluded that āCheeselingsā indeed falls under the category of ānamkeenā and thus qualifies for the excise duty exemption.
In a recent ruling, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled in favor of Mercedes Benz India Pvt. Ltd., allowing the refund of Rs. 40,01,872 for excess CENVAT credit under the transitional provisions of Section 142(3) of the CGST Act, 2017.
The tribunal referred to a previous decision by the Supreme Court of India in the Union of India Vs. Kamlakshi Finance Corporation Limited, 1991, which emphasized the importance of judicial discipline. According to this principle, lower authorities must follow the decisions of higher appellate bodies without questioning them unless thereās a stay or appeal in place. After careful consideration, the tribunal ruled in favor of Mercedes Benz, ordering the department to refund the Rs.40,01,872 to the company. The tribunal concluded that the transitional provisions of the CGST Act clearly provided for this refund, and denying it would be unjust.
In a recent ruling, the Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside excise duty recovery on Cipla Limited stating that once the development commissioner grants permission, it cannot be challenged by revenue.
Therefore, the tribunal set aside the order demanding the duty and penalty, remanding the case back to the adjudicating authority for reconsideration. The tribunal instructed to refer to the Development Commissioner for clarification on the DTA sales entitlement, particularly concerning the interpretation of āproductsā and the percentage limits for DTA sales under the FTP.
In the recent case, the Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that refund claims for exported goods from April to June 2009 were not impacted by the conditions of the new notification issued on July 7, 2009.
The bench observed that the appellants refund claim was rejected because it did not meet conditions 2, 3, and 4 of Notification No. 18/2009-S.T. (July 7, 2009), which pertain to refund limits, half-yearly return submissions, and canalized items. However, the goods were not claimed as canalized items, and the refund amount was not disputed. Since the exports were completed before the new notification was issued, the conditions related to return submissions were not relevant for denying the exemption. A single member bench of M.M Parthiban (Technical Member) overturned the order dated May 18, 2018, and approved a refund of Rs.16,17,016 to the appellant.
In a significant case, the New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that service tax cannot be determined without clarifying the category of service under which the said amount can be attributed.
The single Bench of Binu Tamta (Judicial Member) has observed that the amount of Rs.25,83,338/- has been directly taken from Note 16 of the balance sheet, whereas the assessee had taken the amount as per the Ledger records. The revenue was required to clarify the service under which the differential amount of ā¹56,169/- was chargeable.The Tribunal viewed that the revenue has taken the details of the valuation from the balance sheet and the profit and loss account maintained by the assessee. Since there is no suppression justifying the invocation of the extended period of limitation. The Tribunal allowed the appeal. Ankur Upadhyay appeared for assessee and Rohit Issar appeared for the respondent.
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