CESTAT Weekly Round-Up

This weekly summary analyses the stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) that have been published at Taxscan.in. during the previous week from October 06 to October 13 2023. M/s Usha Martin Limited vs Commissioner of Central Excise, Customs & Service Tax 2023 TAXSCAN (CESTAT) 1252 Loading and Shifting of Materials from Private Railway Siding to Stacking Yard is Goods Transport Service: CESTAT quashes Service Tax Demand on Cargo Handling service The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand on cargo handling service and held that the loading and shifting of materials from private railway siding to stacking yard is goods transport service. A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We hold that as the main activity of the appellants is transportation of goods, therefore, merits classification of the above said service in question is Goods Transport Service. Therefore, the demand under Cargo Handling Service is not sustainable, hence, whole of the demand confirmed against Appellant No 2 is set aside and consequently, the penalty imposed on the appellants are also set aside.” M/s Shriram Life Insurance Co. Ltd vs Commissioner of Customs Central Excise & Service Tax 2023 TAXSCAN (CESTAT) 1254 CESTAT Quashes Service Tax Demand on Group Life Insurance Schemes on ground of Benefit of Closure u/s 73(3) of Finance Act The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand imposed on group life insurance schemes on the ground of benefit of closure defined under section 73(3) of the Finance Act,1994. The Bench observed that the assessee was registered, and had regularly deposited the admitted taxes and filed periodical returns. It is further evident that the whole case is due to an interpretational issue (change of opinion) on the part of the Revenue and the benefit of closure under section 73(3)of the Finance Act had been wrongly denied to the appellant assessee, and no show-cause notice was required to be issued. The two-member bench comprising Anil Choudary (Judicial) and A.K Jyothishi (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee. Commissioner of Service Tax vs M/s Solux Galfab Private Limited 2023 TAXSCAN (CESTAT) 1253 No Penalty Imposable u/s 76 of Finance Act on Construction Service prior to 01.06.2007: CESTAT sets aside Penalty The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under the category of construction service and held that no penalty can be imposed under section 76 of the Finance Act,1994 on construction service for the period before 01.06.2007. The Bench observed that no service tax is payable by the assessee for the period before 01.06.2007 under the category of construction services, therefore no penalty can be imposed under section 76 of the Finance Act. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that no penalty was imposable on the assessee under the category of Construction service for the period before 01.06.2007 while dismissing the appeal filed by the revenue. M/s Shriram Life Insurance Co. Ltd vs Commissioner of Customs Central Excise & Service Tax 2023 TAXSCAN (CESTAT) 1254 No Issuance of SCN u/s 73(3) of Finance Act when There is No Evidence of willful Short Payment of Service Tax : CESTAT The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that issuance of show cause notice was not allowed under section 73(3) of the Finance Act,1994 when there was no evidence of willful short payments of service tax. The Bench observed that in the case of CCI Logistics Pvt Ltd VS Commissioner of CGST & C.EX Kolkatta North Commissionerate, wherein it was held that show-cause notice was not required to be issued given the provisions of section 73(3) of the Finance Act, there being no evidence of willful short payment of tax, nor of any fraud or suppression, as the entire service tax amount was deposited along with interest immediately after short payment of tax was informed by the audit party. The two-member bench comprising Anil Choudary (Judicial) and A.K Jyothishi (Technical) held that no show cause notice was required to be issued on the assessee when there was no willful short payment of service tax. M/s Souvenior Ceramics vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1259 Castable Refractory Goods Supplied to Power Projects are Eligible for Exemption from Excise Duty under Exemption Notification: CESTAT The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods of castable refractory which was supplied to power projects are eligible for exemption from the central excise duty under exemption notification. The Bench observed that once the department had accepted non-payment of duty for the previous and subsequent periods, it was not open for the Department to deny the refund, if otherwise in order, for the short period during which the assessee had paid duty under the mistaken notion of law. The two-member bench comprising S.S Garg(Judicial) and Anjani Kumar (Technical) quashed the rejection of the refund claim filed by the assessee while allowing the appeal filed by the assessee. Commissioner of CGST & Central Excise vs M/s Tierra Logistics Pvt. Ltd. 2023 TAXSCAN (CESTAT) 1257 Amendment Charges, Container Detention charges falls under Purview of Export of Service Rules, outside Service Tax Net: CESTAT quashes Service Tax Demand The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and held that amendment charges, container detention charges fall under the purview of Export of Service Rules and is outside service tax net. A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “It follows that the place of provision of the service of transportation of goods by air/sea from a place in India to a place outside India, will be a place outside the taxable territory. In this case also, the requirement of Rule 6A of the Service Tax, 1994, as amended, stands duly satisfied. Accordingly, we hold that these charges are within the purview of the Export of Service Rules and hence outside the service tax net.” “Further, we observe that the Appellant have been paying service tax for the considerations received as Amendment Charges, Container Detention Charges, Customer Administrative Charges, DTHC Charges, Handling Fees, Seal Charges and other charges when charged on Indian customers in Indian currency. In view of the above findings, we hold that the demand confirmed in the impugned order on this count is not sustainable and accordingly, we set aside the same” the Bench concluded. M/s Shree Shyam Pipes Pvt. Ltd vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1256 CESTAT Quashes Excise Duty Demand on Clandestine Production and Removal of Copper Tubes on ground of Absence of Corroborative Evidence The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the central excise duty demand imposed on the clandestine production and removal of copper tubes on the ground of the absence of corroborative evidence. The Bench observed that in the case of CCE v. Sai Iron (India) Ltd, the court held that even if the assessee fails to explain the shortages themselves, the charge of clandestine removal cannot be imputed in the absence of an independent investigation to corroborate the allegation. Here the department raised the demand for excise duty without any corroborating evidence against the assessee and that the huge quantity of sponge iron would require a large fleet of lorries/trucks for their transportation and in the end in the absence of any such evidence on record, the findings of clandestine removal cannot be upheld. A single-member bench comprising Sanjiv Srivastava (Judicial) quashed the excise duty demand while allowing the appeal filed by the assessee. M/s Vodafone Essar East Limited vs Commissioner of Service Tax 2023 TAXSCAN (CESTAT) 1260 Relief to Vodafone Essar: CESTAT rules charges paid for services rendered by FTOs not taxable under telecommunication services In a major relief to M/s Vodafone Essar East Limited, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that charges paid for services rendered by the Foreign Telecommunication Operators (FTOs) not taxable under telecommunication services. A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “Regarding the service tax demand of Rs. 1,54,50,000/- confirmed under the head “Telecommunication services” on roaming charges paid to Foreign Telecommunication Operators (FTOs), we observe that the payment of roaming charges was made by the Appellant to FTOs for providing connectivity services to their subscribers when they are abroad. We find that during the relevant period only telecommunication services provided by a ‘Telegraph Authority’ to a person were taxable.” M/s South City Projects vs Commissioner of Service Tax 2023 TAXSCAN (CESTAT) 1255 No Service Tax Leviable under Category of Construction service for Period Prior to 01.06.2007: CESTAT The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the construction service rendered by the assessee was not liable to pay service tax for the period before 01.06.2007. The Bench observed that before the period 01.06.2007, there was a composite contract wherein the supply of materials was also involved, therefore, merits classification was works contract service, which was not in service tax before 01.06.2007. Therefore, no service tax was payable by the assessee for the period before 01.06.2007 under the category of construction services. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand for service tax imposed on the construction service while allowing the appeal filed by the assessee. M/s South City Projects vs Commissioner of Service Tax 2023 TAXSCAN (CESTAT) 1255 ‘Copy Right Service’ Related to Original Artistic Works are Excluded from Payment of Service Tax : CESTAT The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the copyright services that were related to the original artistic works done by the assessee are excluded from the payment of service tax. The Bench observed that there was no service tax demand on ‘Copy Right Service’ and defined under Section 65(za) of the Finance Act specifically excludes the right covered under sub-clause(a) of clause(1) of Section 13 of the Finance Act, which deals with copyrights related to ‘Original literary, dramatic, musical and artistic works’ and the Copy Rights service rendered by the assessee are related to ‘Original Artistic Works’ which are excluded from the payment of service tax. The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand for service tax imposed on copyright services and also quashed the penalty imposed while allowing the appeal filed by the assessee. M/s Uttam Chand Sethia vs Commissioner of Service Tax 2023 TAXSCAN (CESTAT) 1258 Transfer of rights of possession with Machinery not taxable service under ‘Supply of tangible goods’: CESTAT upholds demand of Service Tax The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the demand of service demand and held that transfer of rights of possession with machinery not taxable service under the category of Supply of tangible goods. A Two-Member Bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “Regarding the demand of service tax of Rs. 3,99,282/-on hiring of machinery, we observe that the Appellant has claimed that the machinery was supplied with rights of possession and effective control thereof and hence it would not fall under the taxable service of ‘Supply of tangible goods.” “However, we observe that the claim of Appellant was not supported by any documentary evidence. We find that the impugned order has confirmed the demand on this service only for the period 16.05.2008, ie, after introduction of supply of tangible goods service. Accordingly, we uphold the demand of service tax on this count, along with interest” the Bench noted. Commissioner of Customs vs M/s. Axis Shipping Agency 2023 TAXSCAN (CESTAT) 1261 Issuance of Show Cause Notice u/a 124 instead of Section 146 of Customs Act with Regard to Customs Broker licence is Void ab initio: CESTAT The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the issuance of show cause notice under Section 124 instead of Section 146 of the Customs Act 1962, with regard to the customs broker licence was void ab initio. The two- Member Bench of P. K. Choudhary (Judicial) and Rajeev Tandon Member (Technical) noted that Section 146 of the Customs Act provided for the Licensing of a Customs Broker who was required to carry out various functions and responsibilities under the statute for and on behalf of the importing and exporting community. It was vested in the Board powers to make regulations for the purpose of carrying out the various functionalities as required under Section 146 of the Customs Act. The Bench noted that the opening sentence of the impugned show cause notice was as “Notice to Show Cause, Under Section 124 Of The Customs Act, 1962” Art N Glass vs C.C- Ludhiana 2023 TAXSCAN (CESTAT) 1262 CESTAT Set Aside dismissal of appeal filed within Stipulated Period of 60 days as Prescribed u/s 128 of Customs Act The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the dismissal of appeal filed within the stipulated period of 60 days as prescribed under Section 128 of Customs Act 1962. A Single Bench of S. S. Garg, Member (Judicial) noted that the appellant imported “Euro Grey Float Glass 3300X2140 MM 5 MM” from China dated 26.12.2018 for home consumption. But the department was of the view that the goods attract Anti-Dumping Duty and directed the appellant to deposit the Anti-Dumping Duty and thereafter, sent the sample for analysis and after the Report of the Laboratory came, it was found that the impugned goods did not attract Anti-Dumping Duty. The Bench further set aside the impugned order and remanded back to the CIT(A) for deciding the case on merit holding that the appeal before the Commissioner (Appeals) was very much well within the period of limitation and the dismissal of the appeal as time barred by the Commissioner was not sustainable in law. Bird Travels P Ltd. vs C.S.T- Delhi-IV 2023 TAXSCAN (CESTAT) 1263 No Service Tax under BAS leviable on GSA Commission received from Airlines on Promoting and Marketing Services by Foreign Airlines The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax under Business Auxiliary services (BAS) is leviable on General Sales Agent (GSA) received from airlines on promoting and marketing services by the foreign airlines. Single Bench of S. S. Garg, Member (Judicial) observed the Tribunal’s decision in 4 appeals and by following the ratio of the said decision in the appellant’s own case, allowed the appeal of the appellant on the same terms. Capital IQ Information Systems vs CCE- Delhi-III 2023 TAXSCAN (CESTAT) 1264 No Rejection of Refund Claim of Cenvat Credit of Service Tax which Already Accepted by Revenue: CESTAT Directs Re-adjudication The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal has directed re-adjudication holding that refund of Cenvat credit of service tax which is already accepted by the revenue could not be rejected. the appeal was rejected on the point which was not in dispute before. A Single Bench of S. S. Garg, Member (Judicial) directed re-adjudication observing that the Commissioner (Appeals) had rejected the appeal of the appellant on the points which were not in dispute before him. M/s Laxmi Narayan Transport vs Commissioner of CGST & Central Excise 2023 TAXSCAN (CESTAT) 1265 Transportation of Goods Service by Sub-Contractor Not Taxable as “Cargo Handling Services”, No Service Tax: CESTAT The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal held that the transportation of goods service by a subcontractor could not be taxable under “Cargo Handling Service” and allowed the appeal by Laxmi Narayan Transport (the Appellant) against the order by the Commissioner of CGST & Central Excise (CCE) (the Respondent). The two-member bench consisting of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) after hearing both sides held that “The services provided by the appellant to M/s SSTAPL as a sub-contractor as well as M/s JSL directly, was transportation of goods service and not cargo handling service. Accordingly, we set aside the demand confirmed in the impugned order under ‘cargo handling service’ on merit as well as on limitation. Since the demand itself is not sustainable the question of demanding interest and imposing a penalty does not arise” and the appeal was allowed. M/s Mahindra World City (Jaipur) Ltd vs Commissioner 2023 TAXSCAN (CESTAT) 1266 Relief to Mahindra World City: CESTAT quashes service tax demand as service provided after change in effective rate of tax The New Delhi bench of Customs, Excise and Service Tax Appellate Tribunal allowed the appeal by Mahindra World City (the Appellant) against the order issued by The Commissioner of Central Excise (CCE) as the service was provided after a change in effective rate of tax. The two-member bench consisting of Dr. Rachna Gupta (Judicial Member) and R. Priya (Technical Member) after hearing both sides held that” In view of the above discussions, we hold that the impugned order cannot be upheld and is therefore set aside. Consequently, the appeal is allowed with consequential relief, if any, to the appellant” and the appeal was allowed. LEXUS PAINTS AND COATING vs C.C.-MUNDRA 2023 TAXSCAN (CESTAT) 1268 Export Consignments which is Less than 70% of Iron Content cannot be considered as ‘Iron Oxides’: CESTAT The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the export consignments that were less than 70% of iron content could not be considered iron oxides. The Bench observed that the export consignments are made of Iron Oxide and that charges of mis-declaration of the description of subject consignments were not established and held that the iron content was less than 70% cannot be considered as, Iron Oxides and hydroxide, Earth colors. The two-member bench comprising Somesh Arora (Judicial) and C.L Mahar (Technical) quashed the demand of duty while allowing the appeal filed by the assessee. M/s Patanjali Yogpeeth Trust vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1267 CESTAT Upholds Penalty u/s 77 of Finance Act for Failure to Take Registration in Accordance with Section 69 of Finance Act The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty imposed under section 77 of the Finance Act,1994 for failure to take registration in accordance with section 69 of the Finance Act. The Bench observed that the imposition of penalty under Section 77 of the Finance Act for their failure to take registration under the provisions made thereunder at the rate of two hundred rupees for every day during which such failure continued, starting with the first day after the due date, till the date of actual compliance was legal and upheld. The two-member bench comprising Choudhary (Judicial) and Sanjiv Srivastava (Technical) upheld the penalty imposed under section 77 of the Finance Act. Caravel Logistics Pvt Ltd vs The Commissioner of Customs 2023 TAXSCAN (CESTAT) 1270 Description of Imported Goods in Invoices Different from Bill of Lading, CESTAT Lowers Penalty for Negligence in Import Declaration Verification in Absence of Ulterior Motive or Malicious Intent The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench has reduced the penalty imposed for negligence in Import Declaration verification in the absence of Ulterior Motive or Malicious Intent on the part of the assessee. The single bench of Mr. R. Muralidhar (Judicial Member) set aside the penalty imposed under section 112(b) and reduced the penalty imposed under section 114AA of the Customs Act, 1962 from Rs.2,00,000/- to Rs.50,000/- on the finding that while the appellant did not have any malicious intent, they had indeed been negligent in their responsibilities, which merited a penalty but at a reduced amount. H K Ramani vs C.C.E. & S.T.-Surat-II 2023 TAXSCAN (CESTAT) 1269 No service Tax Leviable on Construction Service of Residential Complex for Jawahar Lal Nehru Urban Renewal Mission: CESTAT The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the works contract service of construction of residential complex for Jawaharlal Nehru Urban Renewal Mission (JnRUM) was not liable to service tax being not a commercial in nature. The Bench observed that in the case of Cemex Engineers v. Commissioner of Service Tax Cochin, the court held that the definition of residential complex services and works contract services and had come to the conclusion that since the construction of a new residential complex was included in the definition of a works contract, the construction of a residential complex based on the works contract, cannot be leviable to service tax. The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee. H K Ramani vs C.C.E. & S.T.-Surat-II 2023 TAXSCAN (CESTAT) 1269 CESTAT quashes Service Tax Demand on Construction of Residential Complex under JnRUM on ground of Absence of Commercial Activity The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on Construction of a Residential complex under the Jawaharlal Nehru Urban Renewal Mission on the ground of the absence of commercial activity. The Bench observed that in the case of Cemex Engineers v. Commissioner of Service Tax Cochin, the court held that the service provided by the assessee was to be treated as a service provided to Govt. of India directly and end use of the residential complex by Govt. of India was covered by the definition of personal use in the explanation to definition of residential complex service, the other aspects need not be considered and this services was mot levy to service tax. The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee. M/s Patanjali Yogpeeth Trust vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1267 CESTAT upholds Appox. 4.94 Crores Service Tax Demand on Yoga Teaching Service against Patanjali Trust for period 01.04.2007 to 31.03.2011 due to Violation of section 68 of Finance Act The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the service tax demand of approximately 4.94 crores on yoga teaching services rendered by the Patanjali trust for the period from 01.04.2007 to 31.03.2011 due to the violation of section 68 of the Finance Act,1994. The two-member bench comprising Choudhary (Judicial) and Sanjiv Srivastava (Technical) held that as the definition of the above-said service includes the activity of Yoga as a taxable service, the assessee was liable to pay the service tax amounting to Rs.4,94,33,027/- (Four Crore Ninety-Four Lac Thirty-Three Thousand and Twenty-Seven Only) in respect of services of health and fitness rendered by them during the period from 01.10.2006 to 31.03.2011. M/s Patanjali Yogpeeth Trust vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1267 Activity of Yoga Falls under ‘Health and Fitness Services’ Attracts Service Tax: CESTAT The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the activities of yoga fall under the category of ‘Health and Fitness Services’ and the provision of ‘health and fitness service’ attracts Service tax. The Bench observed that the definition provides exception only in respect of massage and not to any other activity be it yoga or any other, included in the definition and it was clear that yoga of all sorts was included in the definition of “health and fitness service”. The two-member bench comprising P.K Choudhary (Judicial) and Sanjiv Srivastava (Technical) held that the activities of yoga fall under the health and fitness services which attract service tax. M/s Patanjali Yogpeeth Trust vs Commissioner of Central Excise 2023 TAXSCAN (CESTAT) 1267 Relief to Pathanjali Trust:CESTAT Directs Re-computation of Service Tax Demand for period 01.10.2006 to 31.03.2007 on ground of Absence of Certificate of CA The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to the Pathanjali trust by directing the original authority to re-compute the service tax demand for the period from 01.10.2006 to 31.03.2007 on the ground of absence of Chartered Accountant Certificate. The Bench observed that the demand for the period 01.10.2006 to 31.03.2007 needs to be recomputed after reconciling the amounts received by the appellant during that period with the accounts of the appellant and the certificate of the Chartered Accountant. The two-member bench comprising Choudhary (Judicial) and Sanjiv Srivastava (Technical) directed to re-compute the demand for service tax for the period from 01.10.2006 to 31.03.2007. COMMISSIONER, CUSTOMS (AIRPORT & GENERAL)NEW CUSTOMS HOUSE-NEW vs M/S ARADHYA EXPORT IMPORT CONSULTANTS PVT LTD 2023 TAXSCAN CESTAT) 1271 CESTAT Quashes CB License for Facilitating Fraudulent Exports to Avail Ineligible IGST Refund on ground of violation of Regulation 10(n) of CBL The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the Customs Broker (CB) license for facilitating fraudulent exports to avail ineligible Integrated Goods and Service Tax (IGST) refund on the ground of violation of regulation 10(n) of the Customs Brokers Licensing Regulations Rules (CBLR),2018. The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) held that there was a violation of Regulation 10(n) of CBLR by the assessee and suspension of the Customs Broker license was upheld. M/s. D B Corp Limited vs Commissioner of Central Excise and Service Tax 2023 TAXSCAN CESTAT) 1274 Activities of Management service and Housekeeping Falls under ‘Cleaning Service’ and Not in ‘Manpower Supply Services’: CESTAT The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the activities of management services and house keeping fall under cleaning service and not in the manpower supply services. The two-member bench comprising Rachana Gupta (Judicial) and Subba Rao (Technical) held that it was clear from the contract and invoices that activities received by the assessee fall within the scope of cleaning activities as defined under Section 65(24b) of the Finance Act. M/s. D B Corp Limited vs Commissioner of Central Excise and Service Tax 2023 TAXSCAN CESTAT) 1274 CESTAT Quashes Service Tax Liability on Management Service and House Keeping on ground of Wrongful Inclusion of Service Under ‘Manpower Supply service’ The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on management service and housekeeping on the grounds of wrongful inclusion service rendered by the assessee as manpower supply service. The Bench observed that the department wrongly included the service of the assessee as manpower supply service. The two-member bench comprising Rachana Gupta (Judicial) and Subba Rao (Technical) quashed the service tax demand imposed on the assessee while allowing the appeal filed by the assessee. M/s K. R. Pulp & Paper Ltd. vs Commissioner of Central Excise & Service Tax 2023 TAXSCAN CESTAT) 1277 Non-compliance of Rule 20 of CESTAT Procedure Rules: CESTAT quashes appeal for non-prosecution The Allahabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal by K.R Pulp & Paper Ltd (the Appellant) against the Commissioner of Central Excise (CCE) (the Respondent) due to non-prosecution as per Rule 20 of CESTAT Procedure Rules. The bench consisting of Sanjiv Srivastava dismissed the appeal as per section 35C (1A) of the Central Excise Act, 1944 and Rule 20 of CESTAT Procedure Rules. M/s. Interarch Building Products Pvt. Ltd vs The Commissioner of Service Tax 2023 TAXSCAN CESTAT) 1272 Service Tax Leviable on Indivisible contracts Falls under ‘Works Contract Service w.e.f. 01.06.2007: CESTAT The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the indivisible contracts that fall under the category of works contract service are liable for service tax with effect from the date of 01.06.2007. The Bench observed that in the case of Commissioner of Central Excise vs. Larsen and Toubro, the court held that the indivisible contracts are liable to service tax under ‘works contract’ which was introduced with effect from the date of 01.06.2007. The two-member bench comprising Dilip Gupta (President) and Hemambika Priya (Technical) quashes the demand raised by the department while allowing the appeal filed by the assessee. M/s. Interarch Building Products Pvt. Ltd vs The Commissioner of Service Tax 2023 TAXSCAN CESTAT) 1272 CESTAT Quashes Service Tax Demand on Industrial Construction Service on ground of Limitation The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand imposed on the industrial construction service on the ground of Limitation. The Bench observed that the allegation of willful suppression of facts with an intent to evade the payment of tax by availing wrongful CENVAT credit was not correct and the invocation of the extended period of limitation for denial of CENVAT credit could not have been resorted to under the proviso to section 73(1) of the Finance Act. The two-member bench comprising Dilip Gupta (President) and Hemambika Priya (Technical) quashed the service tax demand while allowing the appeal filed by the assessee. M/S NALWA STEEL & POWER LTD vs COMMMISIONER, CENTRAL EXCISE AND CUSTOMS 2023 TAXSCAN CESTAT) 1275 CESTAT Quashes Excise Duty Demand on Manufacture of TMT Bars on ground of Inclusion of Rule 10(b) of Central Excise Valuation Rules The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on manufacture of TMT Bars on the ground of Inclusion of Rules 10(b) of Central Excise Valuation Rules,1944. The Bench observed that since Rule 10(b) of the Central Excise Valuation Rules applies to this case, residual Rule 11 of the Central Excise Valuation Rules cannot be applied. The two-member bench comprising Dilip Gupta (President) and Subba Rao (Technical) quashed the excise duty demand while allowing the appeal filed by the assessee. M/S NALWA STEEL & POWER LTD vs COMMMISIONER, CENTRAL EXCISE AND CUSTOMS 2023 TAXSCAN CESTAT) 1275 Levy of Excise Duty on Excisable Goods Manufactured in India are Based on Quantity or values contained u/s 3 of Central Excise Act: CESTAT The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the levy of Excise Duty on excisable goods manufactured or produced in India at rates outlined in the Schedules to the Central Excise Tariff Act, 1985 as per section 3 of the Central Excise Act,1944. The Bench observed that rates of levy of excise duty on excisable goods can be based on the quantity (specific rate of duty) or value (ad valorem rate of duty) and on some goods, duties can be based on the Retail Sale Price or even on the capacity of production (compounded rate of duty) for the vast majority of the goods, the duties are chargeable based on value and such value shall be, as per Section 4 of the Central Excise Act the “transaction value” for each removal of the goods. The two-member bench comprising Dilip Gupta (President) and Subba Rao (Technical) held that the levy of excise duty on excisable goods was based on the quantity and values contained as per section 3 of the Central Excise Act. M/s. Reliance Industries Limited vs Designated Authority 2023 TAXSCAN (CESTAT) 1279 Market Value of Ethylene should be considered for determining Cost of Sales of Domestic Industry on Import of ‘Mono Ethylene Glycol’: CESTAT The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that while determining the cost sales of domestic industry on import of ‘Mono Ethylene Glycol’ the market value of ethylene should be considered. The three-member bench comprising Dilip Gupta (President) Binu Tamata (Judicial) and Hemambika Priya (Technical) held that while conducting the profitability analysis for examining the impact of dumped imports on the condition of the “domestic industry”, the designated authority should have considered the market price of ethylene while determining the cost of sales of the domestic industry. M/s. Reliance Industries Limited vs Designated Authority 2023 TAXSCAN (CESTAT) 1279 Anti-Dumping Duties are imposed to ensure Manufacturing facilities of Industry as Whole remains viable for Future Investment: CESTAT The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Anti-dumping duties are imposed to ensure the manufacturing facilities of industries as a whole remain feasible for future investments. The three-member bench comprising Dilip Gupta (President), Binu Tamata (Judicial), and Hemambika Priya (Technical) held that the anti-dumping duties are imposed not only to protect the current manufacturing facilities but also to ensure that the industry as a whole remains viable for the future investments. Commissioner of Service Tax, Delhi-I vs M/s Export Inspection Agency, Delhi 2023 TAXSCAN (CESTAT) 1278 Service Tax Leviable on Any Undertakes Technical, Inspection and Certification service which Is Not Sovereign Function : CESTAT The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that any undertakes technical, inspection, and certification services which was not a statutory or sovereign function was liable for payment of service tax. The Bench observed that in the case of Krishi Upaj Mandi Samiti, Alwar, Vs Commissioner of Central Excise and Service Tax, the court held that “if land/shop/platform/space on rent/lease then and then only it can be said to be a mandatory statutory obligation otherwise it is only a discretionary function under the statute and if it is a discretionary function, then, cannot be said to be a mandatory statutory obligation/statutory activity.Hence, no exemption for service tax and claimed.” The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) held that the technical, inspection, and certification services which were not a sovereign function are liable to service tax. Commissioner of Service Tax, Delhi-I vs M/s Export Inspection Agency, Delhi 2023 TAXSCAN (CESTAT) 1278 CESTAT Upholds Service Tax Demand on Technical, Inspection and Certification Services on ground of Non-Inclusion of Statutory Function The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the service tax demand imposed on the assessee for technical, inspection, and certification service on the grounds of non-inclusion of statutory function. The Bench observed that the consideration received by the assessee for providing the Consultancy Service which admittedly was not transferred to the Government treasury. Hence this money cannot be equated with a fee collected for discharging sovereign function. The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) upheld the service tax demand along with the interest imposed by the department on the assessee. Commissioner of Central Excise & ST vs Vishnu Packaging 2023 TAXSCAN (CESTAT) 1280 Rule 16 of Pan Masala Packing machine Rules applicable on Private Ltd entity Transferred from Partnership: CESTAT upholds Refund under Rule 16 The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)upheld the refund allowed under rule 16 of Pan Masala Packing Machine Rules as it applies to a Private ltd entity Transferred from Partnership after the closure of the old business. A two-member bench comprising Mr. Ramesh Nair, Member (Judicial), and Mr. C L Mahar, Member (Technical) observed that there is a clear distinction between the ownership of a partnership firm and a Private Limited Company. Therefore even if a partnership firm ceased its operation and in place of the same a Private Limited Company started operation, both being separate legal entities, it cannot be said that the partnership firm has not ceased its production permanently. It’s very obvious that when one entity closed its production and surrendered the registration and a new entity obtained a fresh registration with a new PAN, the former entity became non-existent and its closure of production falls under the term “permanently”. The CESTAT held that the case is clearly covered under Rule 16 of the Rules and consequently the respondent is legally entitled to the refund of duty. The Tribunal upheld the impugned order and dismissed the appeal. TBK India Pvt Ltd vs Commissioner of Customs 2023 TAXSCAN (CESTAT) 1281 Decision on goods that are yet to be provisionally assessed is premature intervention: CESTAT quashes customs duty demand The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed customs duty demand and held that decision on goods that are yet to be provisionally assessed is premature intervention. A Division Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Further, for the Tribunal to render a decision on goods that are, as yet provisionally assessed, would be a premature intervention. The time of finalization that should inevitably take place is also, as yet, uncertain. It is also apparent that procedure does not deter the finalization of an assessment for want of decision by the Tribunal or, should such need arise, by the Supreme Court.” “Accordingly, we set aside the impugned order and restore the appeal preferred at the instance of the jurisdictional Commissioner of Customs before the first appellate authority for a fresh disposal. Appeal is, thus, allowed by way of remand” the Tribunal concluded. M/s Safe Cargo Clearing Services vs C.C. Ludhiana 2023 TAXSCAN (CESTAT) 1284 CESTAT Upholds Penalty and forfeiture of Security Deposit of CB on Illegal Smuggling of Cigarettes on ground of Violation of Regulation 10 of CBLR The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty and forfeiture of security deposit of Customs Broker (CB) on illegal smuggling of cigarettes on the ground of violation of Regulations 10 of the Customs Broker Licence Regulations (CBLR),2018. The Bench observed that the assessee illegally cleared the consignment having cigarettes and later on deleted all the WhatsApp chats/call records with their crime partners which clearly shows that he had not fulfilled the obligation under regulation 10 of CBLR but his act and conduct did not warrant the imposition of extreme penalty of revocation of custom broker license depriving him of his livelihood. The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the revocation of the license of the Customs broker and upheld the penalty imposition and forfeiture of the security deposit. Narayan Sharma vs Commissioner of Customs 2023 TAXSCAN (CESTAT) 1282 Statement made before Customs officials Not Recorded u/s 161 of Crpc can be used as Substantive Evidence: CESTAT The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a statement made before the Customs officials that was not recorded under Section 161 of the Criminal Procedure Code, 1973, and such statement of co-accused can be used as a substantive evidence. The Bench observed that in the case of Naresh J. Sukhawani vs. Union of India, the court held that the statement made before the Customs officials were not recorded under Section 161 of the Criminal Procedure Code can be used as substantive evidence. A single-member bench comprising S.S Garg( Judicial) upheld the absolute confiscation of smuggling of gold bars by the assessee. Narayan Sharma vs Commissioner of Customs 2023 TAXSCAN (CESTAT) 1282 CESTAT upholds absolute Confiscation of 1kg Gold Bar on ground of Illicit Smuggling The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the absolute confiscation of a 1kg gold bar valued at Rs.32,98,350/- on the ground of illegal smuggling done by the assessee. The Bench observed that the role played by Rakesh Rai and Vaibhav Rai was concerned, they were also actively involved in the entire smuggling of gold and it had also come in evidence that Rakesh Rai had given the foreign currency of USD 33,000 to Narayan Sharma who was a carrier of the gold. A single-member bench comprising S.S Garg (Judicial) upheld the absolute confiscation of 1kg gold bar by the assessee. Commissioner of Service Tax, Delhi-I vs M/s Export Inspection Agency, Delhi 2023 TAXSCAN (CESTAT) 1278 CESTAT Directs Re-computation of Penalty for Non-payment of Service Tax prior to period 08.04.2011 in Accordance with Section 78(1) of Finance Act The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-computation of the penalty which was imposed on the assessee for non-payment of service tax before the period of 08.04.2011 under section 78(1) of the Finance Act,1994. The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) directed re-computation of penalty and held that penalty for the period before 08.04.2011, shall be equal to the service tax not paid by the assessee and for the period post 08.04.2011, the benefit of the amended penal provision was extended to the assessee. M/s. NPL Impex Pvt. Ltd. vs Commissioner of Customs 2023 TAXSCAN (CESTAT) 1283 Custom Duty Demand on CB for Import of Vontron make RO Membranes without any Violation of Regulation 10(n) of CBLR : CESTAT Quashes Customs Duty Demand The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the Customs duty demand which was imposed on Customs Broker (CB) for the import of Vontron make RO membranes on ground of non-violation of Regulations 10(n) of the Customs Broker Licence Regulations (CBLR),2018. The Bench observed that there was an apparent consensual arrangement between Sandeep Jain and the IEC holders which had nowhere been barred under CBLR and in any circumstance the assessee cannot be held responsible for the reason that admittedly he was not the party to the alleged misdeclaration and undervaluation nor department could produce any evidence that the assessee had been a beneficiary of this arrangement. The two-member bench comprising Rachana Gupta (Judicial) and Subba Rao (Technical) held that there was no violation of Regulations 10(d) and 10(n) of CBLR and quashed the Customs Duty demand imposed on the assessee while allowing the appeal filed by the assessee. M/s Safe Cargo Clearing Services vs C.C. Ludhiana 2023 TAXSCAN (CESTAT) 1284 CB should Verify Correctnedd of IEC number and GST Identification Number of Goods during Import in accordance with Regulation 10(n) of CBLR: CESTAT The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the Customs Broker (CB) had an obligation to verify the correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client, and functioning of his client at the declared address by using reliable, independent, authentic documents, data, or information defined under regulation 10(n) of the Customs Broker License Regulations (CBLR), 2018. Rajeev Gupta, Swati Chopra, and Ravinder Jangu, the counsels for the department relied on the decisions made by the lower authorities and contended that Custom Broker had been found involved in a case of fraudulent import. The Bench observed that the customs broker had to verify the correctness of the importer-exporter code (IEC) number, goods and services tax identification number (GSTIN), identify his client and functioning of his client at the declared address by using reliable,independents, authentic documents, data, or information. The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) held that the assessee had not performed his duty with due diligence and utmost efficiency. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates