CESTAT Weekly Round-Up

This round-up analytically summarizes the key stories related to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan. in during December 22 to December 29, 2023, the last week of 2023. The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that Crane Hiring Service Falls Under the Supply of Tangible Goods Service and Taxable.

A division bench comprising Mr R Muralidhar, Member (Judicial) And Mr K Anpazhakan Member (Technical) observed that the service of ‘Crane hiring’ rendered by the Appellant falls within the ambit of ‘Supply of tangible Goods service’ as defined under Section 65(105)(zzzzj) of the Finance Act, 1994. The CESTAT held that the adjudicating authority has rightly confirmed the demand for service tax on ‘Crane hiring Charges’ under the category of ‘Supply of Tangible Goods service’ w. e.

f 16. 05. 2008.

The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that the Supply of Aircraft/Helicopters on Charter Hire Along With Own Crew Falls under “supply of tangible goods services”. A two-member bench of Dr Rachna Gupta, Member (Judicial) And Mr P V Subba Rao, Member (Technical) observed that the mere allegation will not be sufficient for the Department to invoke the extended period of limitation. The Tribunal viewed that there is no element of suppression or malafide intention on the part of the appellant.

Read Previous Round-Up: The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that exemption for payment of excise duty under notification is allowable when the installed capacity of the factory has been enhanced substantially by more than 25%. The CESTAT refused to interfere with the detailed findings and the Order passed by the Commissioner (Appeals), wherein he has considered all the factual details and the Chartered Engineer’s Certificate and the statutory provisions. Therefore, the Tribunal dismissed the present Appeal filed by the Appellant.

The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that Smarta Immobiliser Is only a security device to prevent vehicle theft and are classifiable as a part and accessories of motor vehicles. A two member bench of Mr P A Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the sole and principal use of Smarta Immobiliser is only as an accessory to the vehicle as an antitheft device, adding value to the vehicle in terms of security, the question of classifying the same under Chapter Heading 8536 does not arise. Moreover, it is to be classified as part of motor vehicle unless excluded by the Section or Chapter Notes or if there is a specific entry in the Tariff as per the General Explanatory Notes.

A division bench of Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the Tribunal in Appellant’s case, reported as Hindalco Industries Ltd. v. CCE, has held that “providing operational or administrative assistance in any manner or providing infrastructural support service or managing distribution and logistics service, fall within the ambit of ‘ ’.

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Business Support Service from ABMCPL is Qualified as Input Services and Hindalco is eligible to avail of Cenvat Credit. The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Hindalco can avail of cenvat credit on mining services as the Mined Coal is used to Produce Electricity for manufacturing Dutiable Goods. A division bench of Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the Appellant is eligible for the Cenvat credit of the input services received and used in the captive mines as the said services were used in mining of coal which was used for generation of electricity at their Captive Power Plant and the electricity was used in the manufacturing unit for manufacture of dutiable goods.

The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has upheld the confiscation of Goods under the Customs Act as there was a declaration of Wheat in the Export Shipping Bill for Availing Benefit under the Merchandise Export from India Scheme (MEIS). It was observed that reliance placed by the appellant on Circular No. 17/2009 dated 25.

5. 2009 is misconceived as it specifically refers to norms for the execution of bank guarantees under specified export promotion schemes, i. e.

. Advance License and EPCG Schemes, whereas the Circular dated 4. 1.

2011 specifically provides for conditions while ordering the provisional release of export goods where they have been mis-declared. The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) remanded the matter regarding the claim of export service refund for scrutinizing the Foreign Inward Remittance Certificate (FIRCs) and Individual Invoices. The claim was rejected for not fulfilling the export criteria under Rule 6A of Service Tax Rules, 1994.

A single-member bench of Mr Anil G Shakkarwar, Member (Technical) concluded that the activity is export of service. Since the FIRCs and individual invoices were not scrutinized by the original authority, the matter needs to be remanded to the original authority. For the said purpose, the impugned order needs to be set aside.

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded matters to consider the response of the Directorate General of Foreign Trade (DGFT) in the matter of imposition of redemption fine on re-export of imported Titanium Powder. The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that premature termination of the contract of employment is treatable as the amount paid for service provided by employees in the course of employment and no Service Tax. It was observed that compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T&D that Notice pay, instead of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside.

The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) in the case of Godrej Consumer Products Ltd, has held that the application for fixation of special rate filed after the decision of the Supreme Court in VVF Ltd cannot be rejected as time-barred. A two-member bench comprising Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the application for special rate fixing for the period 2009-10 to 2016-17 was initially held that they have filed the applications for fixing special rate after 30th September of the same year and is barred by limitation. The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that premium Collected Towards Savings (Investment) cannot be Considered as an Exempted Service.

A two-member bench of Dr. D. M.

Misra, Member (Judicial) and Mr. Pullela Nageswara Rao, Member (Technical) concluded that “since no other service is provided by the appellant except life insurance service, a part of the premium collected towards savings(investment), cannot be considered as an ‘exempted service’ and demand of 6% of the value of the premium attributable to other than risk coverage be confirmed under Rule 6(3(i) of CENVAT Credit Rule,2004. ” As a relief to Cadbury India, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) has held that interest liability under rule 7 of the Central Excise Rules arises only when assessments were made provisional after new rules.

As regards revenue, plea interest will be chargeable for the entire period because the power to charge interest existed under Sec. 37. A two-member bench Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial) observed that Sec.

37 was only an enabling power to charge interest and once the power is not exercised the interest cannot be charged. The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)has held that no service tax leviable on commission is received from overseas entities as consideration for Business Auxiliary Services (BAS) as they are an export of service. The Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)has held that Excise Duty is not demandable when the Cenvat credit attributable to zinc sulfate cleared, reversed and remanded the matter for adjudication.

A two-member bench of Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) viewed that the matter needs to travel back to the Commissioner to examine the report dated 16. 03. 2010 and to record reasons as to why the same was not considered.

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that construction services provided to charitable trusts are exempted from service tax. The bench observed that Construction services for this Trust were exempt under Serial 13(c) of Notification No. 25/2012 – ST dated 20.

06. 2012. The Appellate Authority initially denied the exemption on a technicality—the appellant provided details for “World Vision of India,” while claiming it for “World Vision India.

” The appellant clarified their identity with supporting evidence. Recognizing their equivalence, held that the appellant qualifies for the Serial 13(c) exemption, rendering the service tax demand in the contested order unsustainable. The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal in a ruling in favour of Hindalco Industries Ltd has held that Excise Duty is not leviable on Aluminium Dross and Skimming Generated While Processing Aluminium Ingots.

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal set aside the penalty imposed on the Customs Broker alleging acts of fraud. The penalty was set aside in the absence of Evidence Showing Violation of the Customs Broker Licensing Regulations 2013 (CBLR). A two-member bench comprising Ashok Jindal Member (Judicial) and Mr Rajeev Tandon Member (Technical) observed that there is no infringement of Regulation 10(q) as well in the matter as it is on record that the appellant has always co-operated in the enquiry.

In the matter of Jet Airways India, the Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that transportation Costs are not included in the value of Remnant ATF for determining assessable value. A two-member bench comprising Ashok Jindal Member (Judicial) and Mr Rajeev Tandon Member held that the transportation cost is not to be included in the value of remnant ATF for determining the assessable value in this case. set aside the demand of duty confirmed against the assessee.

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand as there was sufficient evidence on dispatch of orders by the Excise Department. A Single Bench of M Ajit Kumar, Technical Member observed that “The Department has by its letter dated 27/09/2021 demonstrated the despatch details of the letter for each document, postal acknowledgements have also been enclosed for some of the documents. Unlike the Appellants claim of ignorance of receipt of the impugned documents the Commissioner (Appeals) has shown that all the SCN were issued prior to the closure of the Appellants factory.

Factual details and circumstances show the service of the impugned orders on the Appellant. ” The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the ‘place of removal’ in this case is the port of loading and all services availed up to the port of loading qualify as ‘input services’ and upheld the Eligibility to Avail Cenvat Credit of Wharfage Landing Charges paid by Indian Oil Corporation for Using Jetties/berths of Port Authorities. In the case of IBM India Pvt Ltd, the Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has held that Penalty under section 114 A of the Customs Act, 1962 would be proportionate, ie, a person liable to Duty would be Liable to Penalty Equal to Duty and the person liable to pay interest would be liable to pay penalty equal to the interest amount.

A two-member bench composed of Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that the Commissioner (Appeals) in computing the penalty under Section 114A of the Customs Act, 1962 is unsustainable in law. The CESTAT set aside the impugned order and allowed the appeal. The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that Transmission of electricity is exempt from service tax.

The single bench of the tribunal comprising S. S. Garg member (Judicial) concluded that remanding this case to the original authority for a comprehensive reevaluation of the appellant’s refund application.

It was noted that, “The original authority should thoroughly assess the impact of the notifications cited by the appellant, along with the various documents submitted, and issue a new order in adherence to legal principles. ” The Hyderabad Bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) observed that Alleged Clandestine Production Vague and Unsupported by Prescribed Norms and thereby quashed the excise duty demand Regarding the Rs. 61,90,180/- disallowed Cenvat credit, items like MS angles, bars, coils, etc.

, were legitimately used in production, including constructing an EOT Crane and periodic furnace lining repair. MS bars, used in stirring molten steel, become part of the steel and are consumed in finished goods manufacturing. The bench observed that the Appellants rightfully claimed Cenvat credit, rendering the disallowance unwarranted.

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that Automatic Voltage Regulators are classifiable under Electrical Transformers, Static Convertors and it attracts 20% duty. After analyzing the submissions from both sides, the same Bench vide Final Order No. 21151 – 21152/2023 dated 20.

10. 2023 has held as follows “The counsel has also relied on the explanatory notes where it states “automatic voltage regulators are classified in heading 90. 32, conveniently ignoring the HSN explanatory notes under Chapter 8504”.

As discussed above, the items imported are not automotive regulators but frequency inverters and going by the Technical Literature provided by the appellant, they are rightly classifiable under Chapter 85. 04. ” The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the nil rate of basic customs duty (BCD) on right claim of classifying goods into “Bakery Shortening”.

A Two-Member Bench of the Tribunal comprising M Ajith Kumar, Technical Member and P Dinesha, Judicial Member observed that “To put it in simple words, when Sl. No. 246 was inserted, the Central Excise Tariff Heading 150890 was based on 6 digit code, but the corresponding Customs Tariff was based on 8 digit code; Chapter 15 of the Central Excise Tariff contained Headings up to 1508 as against the revised Central Excise Tariff with 8 digit code having Headings up to 1522 00 90.

Hence, CTH 150890 at Sl. No. 246 of Notification No.

06/2002 is to be considered in the light of the 6 digit code as per the old tariff heading alone. ” The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ordered revocation of courier registration as there was violation of Regulation of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 (CIER) by the licensed courier. A Two-Member Bench of the Tribunal comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “In view of above discussions, we also find that there is sufficient evidence on record to hold that the above said Regulations have been violated by the respondent.

The violation invite revocation of courier license as per Regulation 11. But the original adjudicating authority despite acknowledging the alleged violations has merely imposed a penalty. Since the alleged act is proved to be intentional act of the respondent, we hold that mere imposition of penalty of Rs.

50,000/- (fifty thousand) is disproportionate punishment. ” The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed denial of service tax exemption and ruled that the implementation and usage of information technology by Andhra Pradesh Technology Services Ltd (APTS) is not business auxiliary services (BAS). A Two-Member Bench of the Tribunal comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “A perusal of the said categorisation of services would clearly reveal that, the Appellant would only assist the Government Departments/Organisation for availing/procuring various IT related hardware/services, and for such assistance, they collect certain administrative charges.

Therefore, the services of the Appellant do not satisfy the definition of ‘commission agent’ so as to bring them under the category of ‘Business Auxiliary Services’. ” The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand on Andhra Pradesh Technology Services Ltd (APTS) and observed that the activity of letting out ‘computer lab’ not ‘mandap keeper services’. A Two-Member Bench of the Tribunal comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “At the outset, to qualify under Mandap Keeper services, there must be a service of letting out any immovable property including furniture, fixtures, light fittings etc.

, and which are let out for consideration for organizing any official, social or business functions. From perusal of the records, it is seen that APTS is only providing computer labs to National Institute of Information Technology and other organizations, such as APTEC, who impart training to personnel of the Government and its organizations in computer awareness, it would be highly incorrect to hold that, they are providing ‘Mandap Keeper Services’. ” The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that the commercial construction service is not classifiable under management, maintenance or repair service’, and hence service tax is not leviable.

A Two-Member Bench of the Tribunal comprising R. Muralidhar, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “Accordingly, we hold that the activity undertaken by the Appellant cannot be classified under the category of ‘ Management, maintenance or Repair service’ and hence the demand of service tax confirmed in the impugned order under the category of “Management, Maintenance or Repair Service, is not sustainable.

Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise. ” The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the penalty as there was no proof of mala fide and wilful misrepresentation by customs brokers. A Single Bench of the Tribunal comprising R Bhagya Devi, Technical Member observed that “The Tribunal vide its Final Order had clearly held that since the exporter had challenged the eligible claim of drawback before the revisionary authority the matter was sub-judice and it also observed that the department had failed to prove that there is a mala fide and wilful misrepresentation by the customs broker and accordingly penalty was set aside on the set of facts of ineligible drawback claimed by the exporter.

Considering all these facts and taking into account the unblemished record of the customs broker as held by the Commissioner, the penalty imposed upon the appellant is set aside. ” The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the customs duty remission on the goods that were lost on fire where the fire incident was an accident that was beyond the control of ONGC Petro. The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) viewed that once after carrying out a thorough inspection and survey, the insurance company has satisfactorily granted the insurance claim that itself is evidence to establish that the fire incident was beyond the control of the appellant.

Therefore, the ground that the appellant was negligent in the matter of the fire incident cannot be accepted. The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on Grants from the government received by the Indian Institute of Technology (IIT). The CESTAT observed that in respect of sponsored research, there is no provision of service.

The services provided are like furtherance of education and promotion of sharing of knowledge. Many times, the projects include organizing workshops, international conferences and conducting seminars. As such, the impugned Order-in-Original No.

11/2013 (RST) dated 31. 05. 2013 demanding Service Tax in respect of sponsored research projects cannot be sustained.

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) remanded the matter to consider the Chartered Accountant (CA) certificate while deciding the applicability of unjust enrichment on refund claim of Excise Duty. A two-member bench comprising Mr C J Mathew, Member (Technical) and Mr Ajay Sharma, Member (Judicial) directed to take fresh decision after taking the submission of facts, as well as a certificate of the Chartered Accountant, into account. The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a refund claim in terms of customs notification cannot be rejected due to non-filing of certificate of origin at the time of bills of entry and ruled that bar of Unjust Enrichment not applicable.

A two-member bench comprising of Mr Ashok Jindal, Member (Judicial) and Mr Rajeev Tandon, Member (Technical) observed that the respondent is a manufacturer and using the imported goods to manufacture the final product, which is exported, in that circumstances, the question of bar of unjust enrichment does not arise. The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) has held that demand for an extended period is not invokable in the absence of suppression of fact or misdeclaration to evade payment of customs duty. A two-member bench of Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical)observed that since there was no suppression of fact on the part of the appellant as all the information was available to the department, the demand for an extended period is not sustainable also on limitation.

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Provisional Assessment is only applicable to Specific Situations as per Rule 7 of Central Excise Rules, 2002. The Hyderabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that using of word ‘Commission’ instead of ‘profit Margins’ in Hindustan Petroleum Company Ltd (HPCL) has no adverse inference and set aside the excise Duty demanded on sale of CNG to HPCL. A Coram Comprising of Mr Anil Choudhary, Member (Judicial) and Mr A K Jyotishi, Member (Technical) observed that the Court below has erred in drawing adverse inferences as the word ‘commission’ has been used instead of the word ‘profit-margin’.

Further, no adverse inferences can be drawn as the RSP is fixed by the Appellant, which is a PSU and CNG being a sensitive product touching the life of common man, in various aspects The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the Service Tax upheld by the Commissioner Which was Shown In the Books of Accounts as a Work in Progress. The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) has held that central excise authorities cannot deem the clearance to have been a provisional assessment in the absence of exercise of such an option. The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) remanded the matter for clarification on excise Duty Liability on Plastic Sheet.

In light of the judgment, the two-member bench of Mr C J Mathew, Member (Technical) And Mr Ajay Sharma, Member (Judicial) set aside the impugned order to remand the matter back to the original authority and, while clarifying that duty liability will arise on plain ‘plastic sheets’ only if liability had not been discharged, we restrict recovery, if any, only to such unpaid duties on goods manufactured before printing. The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the Appeal lies to CESTAT against order passed under Section 142 of the Central Goods and Services Tax Act, 2017 (CGST Act). The Three Member Bench of the Tribunal comprising Justice Dilip Gupta, President, DM Misra, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “In the present case, the service tax was paid under the provisions of Chapter V of the Finance Act and refund was claimed under sub-section (3) of section 142 of the CGST Act, under which the claim was required to be disposed of in accordance with the provisions of the existing law.

Therefore, even if the service tax had been deposited by the appellant after 01. 01. 2017, nonetheless the refund of any amount of the CENVAT credit could be claimed only under subsection (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal.

” In a major relief to M/s Tata Motors Limited, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed excise duty exemption on special purpose bullet proof armored vehicles. The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that the transfer of credit in case of closure of a factory is permissible in terms of Rule 10 of Cenvat Credit Rules (CCR) 2009. The Two-member bench comprising of P.

A. Augustian (Judicial member) and R. Bhagya Devi (Technical member) held that since Reflective Glass was not found in the Notification No.

4/2009- for exempting them from anti-dumping duty, the question of extending the benefit does not arise. © 2020 Taxscan © 2020 Taxscan.