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 29, 2024 to October 03, 2024.
In a recent ruling, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) rejected the reclassification of wooden logs as the department failed to prove precise cutting to satisfy the CTH criteria. The Tribunal ruled that the goods were incorrectly classified under the Customs Tariff Heading (CTH) 44.07 by the department and instead should be classified under CTH 44.03.
The bench, comprising of Raju (Technical Member), held that the logs, though cut, were not in a condition to be used without further machining or planing and thus should fall under CTH 44.03, which covers roughly squared wood.
In a recent ruling, the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) overturned the service tax demand on transportation services as the department was unable to provide corroborative evidence to prove that the service provided by the appellant was that of mining.
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The CESTAT bench, comprising of Ramesh Nair (Judicial) and C.L. Mahar (Technical), observed that there was no concrete evidence proving that the appellant had rendered mining services. The department’s case was based on assumptions without any corroborating documentation. The CESTAT bench allowed the appeal and set aside the impugned order.
In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Kolkata, the tribunal clarified that the operation and maintenance of external coal handling systems, such as aerial ropeways, are exempt from service tax for the period prior to July 1, 2012. This decision, delivered by the Eastern Zonal Bench in Kolkata, provides relief to companies involved in infrastructure and service contracts concerning coal transportation.
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The bench of Mr Ashok Jindal and Mr Anpazhakan after reviewing the contentions, agreed with the appellant’s submissions, holding that the operation of the coal handling system, which involved the transportation of coal, could not be classified as an infrastructural support service liable for service tax. The ruling relied heavily on a Central Board of Excise and Customs ( CBEC ) circular issued in 2007, which explicitly exempted transportation of coal via mechanical systems, such as ropeways, from service tax. Thus, the tribunal set aside the service tax demands for CCC the period before July 1, 2012. It was observed that the appellant had already started paying service tax from July 1, 2012, following the changes in the service tax regime. However, the tribunal also directed the adjudicating authority to verify the payment of ₹42.95 lakhs made by the appellant-company for the post-July 2012 period, thus ensuring that the appellant had fulfilled its tax obligations for that time frame. In result, the ruling was in favour of the appellant.
In a recent case before Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) it was ruled that No Central Excise Duty is required to be paid on the freight charged separately in the sale invoices of excisable goods,
The bench comprising Justice Ramesh Nair and Justice C.L Mahar observed that in case of factory gate sale even though sale is on FOR basis the freight charges shown or collected separately in the invoice shall not be included in the transaction value of excisable goods. Therefore the demand on the freight charges was not sustainable. Hence the impugned order was set aside allowing the appeal with consequential relief.
In a recent decision, the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of Bangalore allowed the appellant company to utilize its CENVAT credit availed on inputs, capital goods, and input services, for the payment of sugar cess.
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The Tribunal, led by Dr. D.M. Misra (Judicial Member) and Mrs. R. Bhagya Devi (Technical Member), examined the relevant provisions of Rule 3(4) of the CCR, 2004, and considered the precedents. The Tribunal observed that the sugar cess is treated as a duty of excise and noted the absence of any specific prohibition in Rule 3(4) preventing the use of CENVAT credit to pay sugar cess. The ruling highlighted the Karnataka High Court’s earlier decision affirming that sugar cess is indeed a form of excise duty, and thus, CENVAT credit utilization is permissible under the rules.
Recently, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) of Bangalore ordered the reconsideration of a refund claim related to the Special Additional Duty (SAD) on timber logs imported by M/s. M.M. Saw Mills & Industries. The case, revolving around the correct conversion ratio for timber logs, was remanded to the Commissioner of Customs (Appeals) after the Tribunal condoned a 22-day delay in filing the appeal.
After reviewing the submissions, the bench of Mr PR Augustine and Mr Pullela Nagaswera Rao observed the appellant’s explanation for the delay to be credible and ruled that the 22-day delay was condonable under the Customs Act. The Tribunal stressed that the appellant should be given an opportunity to present their case on merits, particularly regarding the disputed conversion ratio. The case was remanded to the Commissioner (Appeals), who was directed to examine the refund claim in light of the correct conversion ratio applied at the time of import.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of Bangalore, recently ruled that the sale or distribution of SIM cards on behalf of telecom operators, such as BSNL, does not attract service tax under the category of ‘Business Auxiliary Services’.
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The Tribunal further stressed that any incentives or discounts received by the appellant in the course of their trading activity did not constitute taxable services, as had been upheld in earlier cases such as Kerala Publicity Bureau Vs. CCE: 2008 (9) STR 101 (Tri. Bang.) and P. Gautam & Co. Vs. CST: 2011 (24) STR 447 (Tri. Ahmd.). Based on the aforementioned case laws and decisions, the Tribunal ruled in favor of the appellant, setting aside the impugned order passed by the Commissioner. The appeal was allowed, granting consequential relief to the appellant in accordance with the law.
Transportation of Passengers by Ropeway Exempt from Service Tax: CESTAT
M/s. Damodar Ropeways & Infra Limited vs Commissioner of Service Tax CITATION: 2024 TAXSCAN (CESTAT) 805
Recently in a case , the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, held that transportation of passengers by ropeway is exempt from service tax.
The CESTAT bench of Mr Ashok Jindal and Mr K Ankazhappan, after carefully examining the contracts between the appellant and the governments of Sikkim and Jharkhand, observed that the appellant was in fact right in asserting that they provided transportation services to the public. These services were deemed to fall under the exempt category, and the tribunal observed that the appellant had paid a license fee to the state governments but retained the remaining revenue for operating and maintaining the ropeways.
In a recent case before Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) it was ruled that machinery supplied under a lease agreement shall be treated as Sale and is exempt from Service Tax under Supply of Tangible Goods for use.
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Reading the agreement it was clear that right to possession and effective control of machineries had transferred, the transaction is of deemed sale in terms of Article 366 ( 29A ) of the Constitution of India and the Assessee admittedly paid the said VAT. Therefore, the transaction is of deemed sale and not of supply of tangible goods for use service, so the same is not liable for service tax. The bench of Justice Ramesh Nair and C.L. Mahar set aside the impugned order and the appeals filed by the assessee was allowed dismissing the revenue’s appeal.
In a recent ruling, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in the issue regarding the taxability of co-loader and air freight business under the category of courier agency service.
Although the CESTAT, comprising Ramesh Nair Member (Judicial) and C L Mahar Member (Technical), found merit in the appellant’s arguments, it remanded the case back to the original authority for further examination of other transactions not covered in the current order.
In a recent case the Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the demand of Interest under section 11B of Central Excise Act, 1944 is not valid in absence of knowledge on price escalation. The tribunal viewed that notice was issued on 19.09.2013, which is well beyond the normal period of limitation. Also none of the ingredients as contained in proviso to Section 11 A(1) being validly made out in the present case, the larger period of limitation, cannot be invoked.
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A two member bench of Mr R. Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) found that there is not any fraud or collusion or suppression for that matter under the aforesaid scheme of operation to suggest any intention to evade payment of duty, more so since it has been a regular practice of the assessee’s working.The Tribunal set aside the impugned order qua demanding interest on the duty paid on supplementary invoices. Shri Aditya Dutta appeared for the Appellant and Shri S. K. Mukim authorised Representative appeared for the Respondent
In the recent ruling,the Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) affirmed that traders are entitled to exemption under Notification No. 102/2007-Cus for Special Additional Duty ( SAD ) payments, even without the required endorsement on invoices.
The two member bench comprising P.A.Augustian(Judicial Member) and Pullela Nageswara Rao (Technical Member) noted no dispute over the refund application, which included a certificate from the consignee’s Chartered Accountant confirming no CENVAT credit was taken on the Special Additional Duty (SAD) paid, as the issue was addressed by the Larger Bench in M/s Chowgule & Company Pvt. Ltd. (Supra).
The Bangalore bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) dismissed the appeal due to a 325-day delay attributed to medical reasons, finding that it lacked the authority to condone the delay based on statutory limitations set forth in the Customs Act,1962.
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A single member bench of P.A.Augustian (Judicial Member) found that, although the appellant submitted an affidavit and argued that the delay in filing the appeal was due to medical reasons and beyond their control, the Tribunal had no power to condone the delay given the statutory limitation for filing the appeal. Therefore, the appeal was not sustainable. Hence, the appeal filed by the appellant is dismissed.
In the recent ruling,the Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the reclassification of Brush Cutters misdeclared as Power Operated Reapers by the assessee, confirming a duty demand of Rs. 53,37,203 and reducing the redemption fine to Rs. 3,00,000.
The Revenue argued that the investigation revealed the catalogues, user manuals, and the supplier’s website clearly described the goods as Brush Cutters. Despite knowing this, the appellant misdeclared them as Power Operated Reapers to claim duty benefits for agricultural equipment. The user manual identified the product as a Brush Cutter, and Shri Sreepada, the appellant’s partner, admitted instructing the supplier to label the goods as Power Reapers for subsidy purposes.
The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) confirmed the classification of DLP projectors as “Data Projectors” under CTH 8528 6100, allowing an exemption from Basic Customs Duty under Notification No. 24/2005-Cus.
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The two member bench comprising D.M Misra(Judicial Member) and R Bhagya Devi( Technical Member) held that additional features like Video Port, S-Video Port, and HDMI did not justify classification under CTH 8528 6900.
The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal filed by the Service Tax Department concerning the Central Board of Indirect Taxes and Customs (CBIC) guidelines on fixing the monetary limit for filing appeals.
The two member bench comprising D.M Misra(Judicial Member) and R Bhagya Devi(Technical Member) found it appropriate to allow the Revenue’s request to withdraw the appeal. Accordingly, the appeal was dismissed as withdrawn. Furthermore, the miscellaneous application filed by the Revenue was also disposed of, effectively concluding the proceedings.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed the impugned order based on the extended period of limitation, as the bench was of the opinion that freight and insurance costs are not includable in the assessable value.
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The CESTAT bench, comprising of Ramesh Nair (Member Judicial) and C L Mahar ( Member Technical), held that the impugned order is not sustainable. The tribunal bench set aside the impugned order and allowed the appeal.
The Kolkata Bench of Customs, Excise, And Service Tax Appellate Tribunal ( CESTAT ) quashed the service tax demand order ruling that Minimum Demand Charges ( MDC ) for under-consumption of gas are not taxable as it was a penalty.
The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the MDC was collected when the customer failed to consume more than 90% of the booked quantity of gas. Since this was a penalty for under-utilization rather than a charge for services rendered, it did not fall under the taxable service category. The tribunal held that the amount collected as MDC could not be termed as consideration for any service.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) Ahmedabad Bench directed for the reassessment of the valuation which was enhanced solely on the basis of the Directorate General of Valuation (DGOV) Circular. But the court cannot allow it unless strong material is found in support of it.
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The CESTAT Bench comprising Ramesh Nair ( Judicial Member ) and Raju ( Technical Member ) observed that the classification dispute facts had not been properly considered by the Adjudicating Authority. In regard to the submissions of the appellant that the entire consignment cannot be put into confiscation on the ground that some part of the material was mis-disputed as scrap instead of Aluminium foils. Firstly, the dispute of classification is debatable which needs to be re-appreciated. Secondly, since the entire goods is Aluminum scrap except a small part of disputed goods, the entire cannot be confiscated on the pretext that the same were used for concealing the small part of disputed goods. So the prima facie confiscation does not appear to be correct. So the entire matter needs to be reconsidered. So the impugned orders are set aside and appeals are allowed by way of remand to the Assessing Authority.
Recently, the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) of Kolkata reduced the penalties imposed on a customs broker firm and an intermediary involved in an attempted smuggling of Red Sanders logs. The case which arose from a customs transit consignment from Nepal to South Korea, was observed to contain serious lapses in following due procedures, including Know Your Customer (KYC) norms, resulting in the attempted illegal export of a prohibited species.
After hearing the contentions, the bench of Mr R Muralidhar and Mr Rajeev Tandon agreed that while the appellants were not directly involved in the smuggling, their failure to meet statutory obligations warranted penalties. The Tribunal clarified that Section 114(i) of the Customs Act covers not only abetment but also any act of omission or commission that results in goods being liable for confiscation. The Tribunal found that the customs broker and intermediary had exhibited gross negligence by not fulfilling their duties to verify their clients’ credentials and obtain proper documentation.
In a recent case before Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) it was ruled that no service tax shall be levied on GIDC’s infrastructure upgradation, subletting, and other fees during the impugned period of either before or after 01.07.2012.
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The tribunal comprising Justice Ramesh Nair and C.L. Mahar observed that any authority vested with the obligation and powers to develop an industrial estate need to collect charges as per the State Act, and so long as the charges are as per the Act and not discretionary, the same are considered to be statutory levies.
Recently in a ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, allowed the reversal of a ₹3.23 crore denial of CENVAT credit claimed by a taxpayer involved in the construction and leasing of commercial properties.
The Tribunal concluded that the appellant’s claim for CENVAT credit on the input services used for constructing the leased commercial properties was valid. It ruled that the denial of ₹3.23 crore in credit by the Commissioner was unsustainable, and that the appellant was not liable for the penalty or interest previously imposed. The CESTAT set aside the Commissioner’s order and allowed the appeal, providing consequential relief to the appellant.
In a notable judgment, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench in Kolkata, set aside significant penalties imposed on the assessee/ appellant, M/s. Ashirbad Enterprises, a firm based in Gua, West Singhbhum, Jharkhand. The penalties were initially levied by the Commissioner of Central Excise & Service Tax, Jamshedpur, despite the fact that the firm had cleared its service tax liability well before the issuance of the show cause notice.
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Accordingly, the Tribunal allowed the appeal to the extent of setting aside the penalties of Rs. 1,30,00,000 under Section 78 and Rs. 5,000 under Section 77, while upholding the appropriation of the amounts already paid towards the service tax and interest liabilities. In its final order, the Tribunal stated, “We do not find any justification for imposing penalties on the Appellant by the Adjudicating authority. Accordingly, we set aside the penalties.” The appeal was thus allowed, and the penalties were removed, providing relief to M/s. Ashirbad Enterprises. The judgment was delivered and pronounced in the open court on September 17, 2024.
The Kolkata Bench of Customs, Excise And Service Tax Appellate Tribunal quashes the service tax demand order holding that clearance for non-forest use of land and Net Present Value ( NPV ) charges do not constitute ‘declared service’ under Section 66E(e) of Finance Act, 1994.
The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the NPV payment made by the appellant was a statutory obligation under Article 48 of the Constitution and a Supreme Court decision, not a service.
The Ahmedabad Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) Bench, since there was no intention to evade Service Tax Payment, quashed the invocation of Extended Limitation against Manpower Recruitment/Supply Agency.
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So by referring to the decision of the Tribunal in case of Star Freight Pvt Ltd. vs. C.S.T Service Tax – Ahmedabad, where the court decided that since there is no suppuration of fact or malafide intention to evade payment of service tax, the demand or impugned order conforming service tax demand cannot be sustained and needs to be set aside. The CESTAT Bench of C L Mahar (Technical Member) observed that since the facts of the present case being akin to the one which is decided above, the court viewed that the matter is no long res-integra. Following which the court decided to follow and hold that the impugned Order-In-Appeal was without any merit and needed to be set aside. So the appeal was allowed by the court.
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside a Rs. 30 lakh duty demand, issued after 4 years, for importing white poppy seeds using ineligible scrips. The tribunal ruled the demand as time-barred, and the scrips were initially approved by the customs officials.
The two-member bench comprising R. Muralidhar ( Judicial Member ) and Rajeev Tandon ( Technical Member ) observed that the appellant did not have a case on merits, as the goods could not be cleared using the disputed scrips. However, the assessment had already been completed by customs officials after reviewing the relevant documents. The tribunal found merit in the appellant’s argument that there was no suppression of facts as the documents were assessed and verified by the customs officials. Since the assessment occurred in 2011 and the notice was issued in 2015, the tribunal noted that the demand was time-barred.
The Mumbai bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) directed the readjudication on the issue of penalties imposed under section 11AC of Central Excise Act in light of decision by Supreme Court on Same Issue.
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The two member bench of C J Mathew, Member ( Technical ) And Ajay Sharma, Member ( Judicial ) viewed that nonetheless, the order of the Tribunal which, though carried to the Hon’ble Supreme Court by central excise authorities, had been decided in 2004 which was not placed before the adjudicating authority as binding precedent.
In a ruling in favour of Steel Authority of India Ltd ( SAIL ), the Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that service tax is not payable on amount paid for supply of water by Odisha Government.
In light of the judgement, the two member bench of Ashok Jindal, Member ( Judicial ) And K. Anpazhakan, Member ( Technical ) held that the appellant is not liable to pay Service Tax on the amount paid for supply of water by the Government of Odisha to the appellant. The Tribunal set aside the demand confirmed by way of the impugned order and ruled that no penalty is imposable on the appellant in the facts and circumstances of the case.
In a recent case, the Mumbai bench of the Customs , Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the trading was not an ‘exempted service’ prior to 1-4-2011 and allowed pidilite industries to retain cenvat credit which was sought to be recovered.
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The two member bench of C J Mathew, Member ( Technical ) and Ajay Sharma, Member ( Judicial ) held that prior to 1st April 2011, ‘trading’ was not an ‘exempted service’ and the appellant was not obliged to comply with the mandate of rule 6 of CENVAT Credit Rules, 2004 for the relevant period. In the light of decisions, the demands does not survive. Further held that “ As the notices impugned in the dispute pertain to recovery of distributed credit which is a consequence of availment, that is now held as proper, the issue of whether any recovery remains as enforceable needs ascertaining and the original authority is entrusted with such ascertainment in remand proceedings limited to this direction.” The bench disposed of the appeal for determination in de novo proceedings.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed the Cenvat Credit on Service Tax charged by Tata Motors as the services was clubbed under the Business Support Service ( BSS ).
A two member bench of Mr. R. Muralidhar, Member ( Judicial ) and Mr. Rajeev Tandon, Member ( Technical ) observed that there is nothing to indicate that Revenue had any objection towards such classification by Tata Motors and officers were accepting their Returns towards such services. Therefore, the bench treated that as a whole Tata Motors have provided the service of BSS to the Appellant.
The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that penalty not imposable under Central Excise Act, 1944 in absence of suppression of fact. The Tribunal found that the adjudicating authority has failed to show any positive act of suppression on the part of the Appellant.
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The Tribunal found that the adjudicating authority has failed to show any positive act of suppression on the part of the Appellant. The details of VAT collected and retained by the Appellant are reflected in the audited Profit & Loss account and balance sheet of the impugned periods. The CESTAT held that extended period is not invokable in this case and for the same reason, penalty under Section 11AC of the Central Excise Act, 1944 is also not imposable. While partly allowing the appeal, the bench held that “The Appellant is liable to pay duty along with interest for the normal period of limitation. The demand confirmed by invoking the extended period of limitation is set aside.”
The Mumbai bench of the Customs , Excise and Service Tax Appellate Tribunal ( CESTAT ) directed the department to provide one opportunity to overcome the impediment of maintainability as the appeal against the demand under the central Excise (Valuation )Rules, 1975 rejected on limitation. The Tribunal set aside the finding on the allegations in the notice and remand the matter back to the original authority to decide the matter afresh after affording the assessee opportunity to be heard.
The two member bench of Mr C J Mathew, Member ( Technical ) and Mr Ajay Sharma, Member ( Judicial ) observed that the first appellate authority had accepted the explanation, as well as computation of delay of mere 21 days, for all practical purposes. “However, as both the lower authorities had decided to the detriment of the appellant herein, on merits, without hearing them, the validity of the findings are jeopardized. In these circumstances, we find no alternative but to set aside the finding on the allegations in the notice and remand the matter back to the original authority to decide the matter afresh after affording the assessee opportunity to be heard.”, the Tribunal held.
M/s. Hill View Coals Private Limited vs Commissioner of Central Excise & Service Tax CITATION: 2024 TAXSCAN (CESTAT) 830
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter to the Adjudicating Authority for verification of documents in a case where a sub-contractor challenged a service tax demand, citing that the tax had already been paid by the main contractor.
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Therefore, the tribunal remanded the matter back to the adjudicating authority for verification of the main contractor’s service tax payments. The adjudicating authority was directed to complete the verification and if necessary, re-quantify any tax demands but limit it to the normal period of demand. Thus, the appeal of the appellant was disposed of by remanding the case to the adjudicating authority.
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the excise demand was time-barred, citing the department’s delay in issuing the Show Cause Notice despite having prior information of the appellant’s Central Value Added Tax (CENVAT) credit reversal.
The tribunal observed that despite knowing about the reversal, the Department waited nearly three years to issue the Show Cause Notice on February 28, 2014. The tribunal held that no case of suppression of facts could be made out against the appellant as the details of the reversal were properly reflected in their returns, invalidating the justification for invoking the extended period of limitation. Therefore, the tribunal held the notice was time-barred. The appellant was granted consequential relief as per law and the appellant’s appeal was allowed.
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) while adjudging a matter pertaining to the payability of Service Tax by an Indian entity availing services from a foreign company, quashed the invocation of extended period of limitation by the Revenue citing a Revenue Neutral situation.
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With regards to the final issue of time bar raised by the Appellant, CESTAT relied on the judgment of the Supreme Court in Jet Airways (India) Ltd. v. Commissioner (2017) that the Service Charge Demand is under Reverse Charge Mechanism and even if the Appellant had paid the Service Tax Amount, they would be eligible to avail CENVAT Credit of the same amount, resulting in a revenue neutral situation. Consequently, the Appeal was allowed by CESTAT, while setting aside the entire demand.
The Mumbai bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that the abatement towards sales tax has to be allowed in terms of sales tax liability at time of clearance of goods.It was viewed that there is no cause for redetermination of assessable value on account of changes which arose in the sales tax law much after the clearance of the goods.
It was observed that the Apex Court in Paper Products Ltd. v. CCE held that the circulars issued by the C.B.E. & C. are binding on the department and the department is precluded from challenging the correctness of the circulars even on the basis that the same is inconsistent with the statutory provision. In view of the lack of merit on proposal to recover such duties, the two member bench of C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) viewed that the appeal of the Commissioner of Central Excise on limitation not coming into play does not survive and dismissed the appeal.
The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) provided relief to Bharat Petroleum Corporation Limited (BPCL) by remanding the case regarding excess and short receipts of petroleum products, recognizing the coverage of the issue in a prior ruling and partially allowing the appeals for clarification and reconciliation as per the Ministry’s directives.
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As the issue was addressed by the bench and the judgment of the High Court of Kerala, the appeals were partially allowed. The matter was remanded to the original authority for reworking in line with the clarification from the Ministry and for reconciling the net loss or gain as instructed by the High Court. The two member bench comprising P.A.Augustian(Judicial Member) and Pullela Nageswara Rao(Technical Member) granted the appeals through remand.
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