This annual round-up analytically summarizes all the Customs, Excise and Service Tax Orders of the CESTAT Benches of India reported at Taxscan.in during 2024. CESTAT quashes Denial of Excise Duty Exemption on Molasses Captively Consumed in Rectified Spirit and ENA M/s. EID Parry India Ltd. vs Commissioner of GST & Central Excise Respondent CITATION: 2024 TAXSCAN (CESTAT) 531 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the denial of excise duty exemption on molasses captively consumed in rectified spirit and extra neutral alcohol ( ENA ). A Two-Member comprising of M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “The only issue to be considered by us is, “whether the Revenue is justified in denying the benefit of exemption Notification No.67/95 dated 16.3.1995?” We agree with the contention of the Advocate that this Bench has considered almost identical issue, in their own case, to hold that the denial of exemption Notification No.67/95 was incorrect, for the reasons discussed therein, by also relying upon an earlier order of Chennai Bench in the case of Sri Ambika Sugars Ltd.” Absence of Mens Rea: CESTAT quashes Penalty imposed on CB M/s. Gayrams Shipping Services vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 532 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed penalty imposed on Customs Broker ( CB ) in the absence of mens rea. A Single Member Bench of P Dinesha, ( Judicial ) observed that “I have gone through both the orders relied upon by the rival parties; in the case of M/s. Seaswan Shipping and Logistics, the issue relates to the penalty under Section 114 of the Customs Act and hence, the ratio of said order is not squarely applicable to the facts of this case although the penalty under Section 114 has been upheld on the customs broker for alleged violations therein. In the case of M/s. Max Miller Agencies this Bench has considered an almost similar issue and after considering several judicial pronouncements has found it proper to delete penalty imposed for violations of regulation in 10 (d) and 10 (e).” Manufacture of Display Material falls under

‘Trading Advertising Material’, attracts Nil Rate of Duty: CESTAT M/s. Fourth Dimension India Private Limited vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 533 The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the Manufacture of display material falls under ‘Trading Advertising material’ thereby attracting nil rate of duty. A Two-Member Bench comprising DM Misra, Judicial Member and R DM Misraevi, Technical Member observed that “Applying the meaning of ‘Furniture’ as explained by the Hon’ble Supreme Court to the case in hand, it cannot be construed that the display material which has been supplied by the appellant after procuring skeleton- fabricated frames and affixing/pasting the printed material on the same in their premises would result into ‘manufacture’ of furniture. On the other hand, the purpose and object of the supply of the said printed materials on the procured frames by the appellant would safely be considered as for the primary purpose of advertisement and covered under the scope of Tariff Subheading 4911 1090 as ‘Trading Advertising material’. Set Top Boxes of Dish TV amounts to Inputs: CESTAT allows 100% Cenvat Credit M/s Dish TV India Ltd vs Commissioner of CGST, Noida CITATION: 2024 TAXSCAN (CESTAT) 534 The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that Dish TV is entitled to 100% credit as the set top boxes satisfy the definition of ‘Inputs’. The two-member bench of P. K. Choudhary ( Judicial Member ) and Sanjiv Srivastava (Technical Member) has observed that the set-top boxes satisfy the definition of inputs as they are goods used by the output service provider for the provision of the output services. There cannot be any fallacy in the stands taken by the appellant in taking the entire credit at the time of receipt of these set-top boxes as inputs. CESTAT abates Appeal under Rule 22 of CESTAT Procedure Rules as No Application made by Liquidator on Continuance of Appeal M/s Moser Baer India Ltd vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 535 The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) abated the appeal under Rule 22 of the Custom, Excise & Service Tax Appellate Tribunal Procedure Rules, 1982, as no application was made by official liquidator appointed by the National Company Law Tribunal ( NCLT ) in the matter for the continuance of the appeal before tribunal even after expiry of more than five years from the date of the NCLT order. A two-member bench of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that undisputedly in terms of the order dated 20.09.2018, the National Company Law Tribunal has directed for winding up of the appellant company and have appointed official liquidator in the matter. No application as per Rule 22, has been made by the official liquidator appointed by the NCLT in the matter for the continuance of the appeal before tribunal even after expiry of more than five years from the date of the NCLT order.  The CESTAT held that “ appeal abates in terms of Rules 22 of Custom, Excise & Service Tax Appellate Tribunal Procedure Rules, 1982. “

Confiscation of Goods Attempted to be Improperly Exported u/s 113 FERA: CESTAT reduces Penalty to 5L Surendran vs The Commissioner of Custom CITATION: 2024 TAXSCAN (CESTAT) 536 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) reduced the penalty to 5 lakhs for the attempted improper export of confiscated goods under Section 113 of the foreign exchange Regulation Act, 1947. The bench considered other penalization faced by the appellant. However, the two member bench of the tribunal comprising D.M Misra (Judicial member) and R. Bhagya Devi (Technical member) taking into consideration the fact that all the DEPB licenses were cancelled and the DEPB credit of Rs.98,54,987/- was denied, and the exporter having penalised, it would be fair to reduce the penalty to Rs.5, 00,000/- on each of the Appellants. Accordingly, the penalty stands reduced to Rs.5, 00,000/- on appellant 1 (Surendran) and Rs.5, 00,000/- (rupees five lakhs only) on appellant 2 (Ashok Shukla) Rs.5, 00,000/-. Accordingly, appeals were partially allowed. Renting of Immovable Property including Vacant Land owned by Corporation would Fall within Scope of Taxable Service: CESTAT Thrissur Municipal Corporation vs Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 537 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the renting of immovable property, including vacant land owned by a corporation, falls within the scope of taxable service. Therefore, the two member bench of the tribunal comprising D.M Mishra (Judicial member) and R. Bhagya Devi (Technical member) set aside the demand for the extended period and restricted it to the normal period of limitation. Therefore, since the demand except for telecom services are barred by limitation, the matter was being remanded for redetermination of the taxes based on tribunal observations under each category. While redetermining the same, the written submissions dated 19.10.2023 filed by the appellant with regard to the factual errors and duplication of taxes need to be considered. An opportunity of being heard was to be provided before redetermination of the demands to the appellants. All penalties are set aside, accordingly, appeal was allowed by way of remand.

Municipality is Liable to Pay Service Tax under Renting of Immovable Property Services and other Services: CESTAT remands to Adjudicating Authority M/s. The Coimbatore City Municipal Corporation vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 538 The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the case to the adjudicating authority, stating that the municipality is liable to pay service tax under Renting of Immovable Property Services and other related services. Further considered opinion, that in the interest of justice, these matters also require to be remanded to the Adjudicating Authority to consider afresh the issue as to whether Municipality is liable to pay service tax under renting of immovable property services and other services. It is to be noted that some of the amounts falling within the demand pertain to fees and charges collected for carrying out functions specifically listed in 12th Schedule. Further, all these services are carried out as per the provisions of Coimbatore City Municipal Corporation Act, 1981. The State (Tamil Nadu) has bestowed the local authority vide the above enactment to carry out certain functions and services in consequence to Article 243X read with Article 243W of the constitution. These issues have to be examined in detail. If the activities are in discharge of sovereign right / function, the levy of service tax cannot be attracted. Accordingly, the two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi CS (Judicial member) concluded that the impugned orders were set aside. The appeals were allowed by way of remand to the Adjudicating Authority Relief to Tata Steel Downstream: CESTAT allows to adjust Service Tax Liability from Credit in terms of Rule 6(3) of Service Tax Rules M/s. Tata Steel Downstream Products Ltd vs Commissioner of GST CITATION: 2024 TAXSCAN (CESTAT) 539 The Chennai bench of the Customs Excise and Service

Tax Appellate Tribunal ( CESTAT ) granted relief to Tata Steel Downstream by permitting the adjustment of their Service Tax liability from credit, in accordance with Rule 6(3) of the Service Tax Rules, 1994 The bench found that the appellant was not contesting the service tax excess paid in respect of 2nd and 3rd supplementary invoices. Further the single member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) affirmed the decision of the lower appellate authority holding that the appellant is eligible for adjustment of the service tax liability on the subsequent supplementary invoice raised against the excess service tax paid on the original supplementary invoices which were not paid by their customer Viz., M/s. Tata Steel Limited. Further found that the appellant has submitted Chartered Accountant’s Certificate to the effect that they have canceled 3 supplementary invoices raised originally and that they have not received any consideration in respect of these invoices. Accordingly, the impugned Order-in-Appeal dated 28.10.2022 was not sustainable and ordered to be set aside. The appeal was allowed with consequential relief. Municipality is liable to pay service Tax under Renting of Immovable Property Services: CESTAT directs remands to Adjudicating Authority The Commissioner vs The Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 540 The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has directed that the municipality is liable to pay service tax under Renting of immovable property services and remanded the case to the adjudicating authority. The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) observed that these matters also require to be remanded to the adjudicating authority to consider afresh the issue as to whether Municipality is liable to pay service tax under renting of immovable property Services as well as other demands on the basis of the above observations and judgements rendered by jurisdictional High Court.

Further, services are carried out as per the provisions of Panchayat Act, Municipalities Act etc. by which State has bestowed the local authority to carry out such functions and services. These issues require to be examined. If sovereign functions, the levy of tax cannot be attracted. Service Tax Demand on Landowner Shares in Residential Complex under Construction Deemed Unsustainable: CESTAT M/s. Srivari Property Developers vs Commissioner of GST and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 541 The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) deemed the service tax demand on landowner shares in a residential complex under construction as unsustainable. Further, the two member bench of the tribunal comprising Vasa Sesha Giri Rao ( Technical member ) and Sulekha Beevi C.S ( Judicial member ) observed that the tribunal in the case of Srinivasa Shipping & Property Developers Ltd. ( supra ) on a similar set of facts and issues had held that the demand under residential complex services cannot sustain. CESTAT held that the demand raised under construction of residential complex services cannot sustain. Accordingly, the impugned order was set aside. The appeal was allowed.  Installation of Transformer/Substations undertaken independently are Taxable under Erection, Commissioning or Installation Services: CESTAT M/s. SKD & Co vs The Commissioner of CGST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 542 The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that the installation of transformer/substations undertaken independently is taxable under Erection, commissioning or installation services. The two-member bench of Ms Sulekha Beevi C S, Member (Judicial) And Mr Vasa Seshagiri Rao, Member ( Technical ) found that the department themselves had a contrary view holding that the activity is not subject to levy of service tax.  Further, the Tribunal in the case of CCE Lucknow Vs Raj Electric Works – 2017 had held that the activity of laying opting fibre cables for M/s.BSNL is not subject to the levy of service tax.

Following the decision, the Tribunal held that the demand for service tax cannot be sustained and set aside the same while allowing the appeal. Appeal Rejection without taking issue on Merit on Misinterprets S.17 (5) of Customs Act, Goods Clearance Deemed Final: CESTAT remands Matter M/s. Zeetel Electronics vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 543 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter, stating that the appeal was rejected without addressing the issue on its merits, thereby misinterpreting Section 17(5) of the Customs Act, 1962 and deeming the clearance of goods final. The Coram of M. Misra ( Judicial member) and R. Bhagya Devi ( Technical member)  found that after rejection of the appellant’s claim of benefit under the above said notifications as declared in their Bills of Entry, they paid the duty under protest and preferred appeal before the Commissioner ( Appeals ). Therefore, the commissioner ( Appeals ) ought to have decided the appeals on merits instead of rejecting the same by observing that the appellant has accepted the assessment. Further the impugned order was set aside and the case was remanded to the commissioner ( Appeals ) to decide all the issues on merit, after affording an opportunity of hearing to the appellant. Since the assessment involved in the appeals is around a decade old, it was directed that the denovo proceeding be completed within three months from the date of communication of this order. Accordingly, appeal was allowed by way of remand. Confiscation of unaccounted Raw Material and Clandestine of Gutka: CESTAT upholds Penalty SHRI SUNIL SARAOGI vs COMMISSIONER OF CENTRAL EXCISE CITATION: 2024 TAXSCAN (CESTAT) 544 In a recent case, the New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty of confiscation of unaccounted raw material and clandestine of Gutka. A two-member bench comprising Justice Dilip Gupta, President and Mr P V Subba Rao, Member ( Technical )  observed that the transporters and trucks drivers may or may not be very well educated. It was also a fact that every truck driver and transporter who transports commercial goods carries with him the Bill to cover the goods which he was transporting.  Further observed that once the goods reach the destination he shows the Bills to the recipient and gets an acknowledgment that the goods in the Bills received.  Therefore, no matter how less educated the driver might be, he will certainly know that he has to carry the goods only with the Invoice or Bill.   Therefore, the Tribunal found no force in the submissions of the appellant that the penalties imposed on them must be set aside.

The CESTAT dismissed the appeals listed and upheld the penalties imposed under rule 26 on the appellants. Excise Appeal filed by Sunil Sarogi, the appellant was allowed and set aside the impugned order. Re-export of Prohibited Goods: CESTAT Imposes Redemption Fines and Penalties under Customs Act Scania Commercial Vehicles vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 545 The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that a redemption fine and penalty can be imposed on the re-export of prohibited goods. The two-member bench of M. Ajit Kumar (Technical Member) has observed that a penalty is the result of a breach of statutory duty. While a fine is imposed on the redemption of offending goods imported in breach of law, a penalty is levied on a person responsible for the breach of statutory duty. While rejecting the assessee’s plea, the Tribunal held that goods become liable to confiscation if the importer or exporter contravenes any of the provisions of the Customs Act or any other Act for the time being in force to the importation and exportation of goods. No Service Tax on Sale Proceeds of Auction of Abandoned Imported Goods: CESTAT Commissioner of CGST Delhi South vs Container Corporation of India Ltd CITATION: 2024 TAXSCAN (CESTAT) 546

The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT )  has held that service tax is not demandable on sale proceeds of auction of abandoned imported goods. It was observed that whether the service tax can be demanded on the sale proceeds of the auction of the abandoned imported goods is no longer res integra and has been decided in favour of the assessee and it has been settled that in the whole transaction, no service recipient exists and, therefore, there is no question of providing any service to any person.  A two-member bench of Ms Binu Tamta, Member (Judicial) Ms Hemambika R Priya, Member (Technical) held that in the whole transaction, no service recipient exists and, therefore, there is no question of providing any service to any person. Service Tax under Category of GTA cannot be Demanded in Absence of Consignment Note: CESTAT M/s. Vaishnav Marbles Private Limited vs Commissioner of Central Excise, Central Goods and Service Tax CITATION: 2024 TAXSCAN (CESTAT) 547 The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Service Tax under the category of Goods Transport Agency ( GTA ) cannot be demanded in the absence of a consignment note.  The CESTAT found that the case of the appellant is on the same footing as he availed the services of individual transporters and truck owners and in the absence of issuing the consignment note, the appellant cannot be made liable to pay service tax under the category of GTA. “Girls Leggings, Kids Leggings Girls Pyjama, Half Stockings” Classifiable as Pyjamas: CESTAT Dismisses Revenue Dept’s Appeal Commissioner of Customs (Port) vs M/s. Binod Kumar Agarwal CITATION: 2024 TAXSCAN (CESTAT) 548 The Kolkata Bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that “Girls Leggings, Kids Leggings  Girls Pyjama, Half Stockings” are  Classifiable as Pyjamas and not as trousers. The tribunal dismissed the appeal of revenue department regarding classification of good.

The adjudicating authority observed that “38. The essential ingredients of a Trouser are not fulfilled by the seized items. It is true that the general definition of Trouser because of its broad encompass as said in the SCN can be used to cover the seized items but that would be a mere exercise in technicality not representing the true facts. Pyjamas can also have two seams per leg but that will not make them Trousers. Admittedly the importer had imported similar garments in the past. Therefore these, like the live consignment were not Trousers but Pyjamas and correctly classified under Customs Tariff Item No. 61083210. It is pertinent that this Tariff Item Number applies specifically to Night Dress and Pyjamas made of synthetic fibres.” In light of the observation of the adjudicating authority, the two member bench comprising Ashok Jindal, Member (Judicial) and K Anpazhakan, Member (Technical) held that the goods in question cannot be termed as Girls Trousers and upheld the impugned order. Delay in issuance of GST Refund u/s 54: Delhi HC directs Proper officer to Expedite Processing of Refund SMARTADMEDIA THROUGH ITS SOLE PROPRIETORE NAVDEEP SINGH SAHNI vs COMMISSIONER OF DELHI GOODS AND SERVICE TAX & ANR. CITATION: 2024 TAXSCAN (CESTAT) 549 The Delhi High Court has directed the proper officer to expedite the processing of the GST refund under Section 54 of Central Goods and Service Tax Act, ( CGST ) 2017, due to delays in its issuance. The division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja referred to Section 54, subsection (7), which mandates that a proper officer shall pass an order within 60 days from the date of receipt of an application complete in all respects. Further petition was disposed of in the above terms.

It would be open to the petitioner to avail of such further remedies as available in law if aggrieved by any order passed by the proper office on the application of refund and the claim of interest. Refund u/s 11B of Central Excise Act not Refundable if Taxpayer cannot Utilize Cenvat Credit: CESTAT M/s Cyient Limited vs The Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 551 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that refund under Section 11B of the Central Excise Act is not applicable if the taxpayer was unable to utilize Cenvat credit. Further, the single member bench of the tribunal comprising P. Anjani Kumar (Technical member) held that no refund can be sanctioned under Section 11B if the assessee was unable to utilize Cenvat credit on account of closure of the manufacturing activities. Further find that the cases relied upon by the appellant are not of any help as the facts of the cases are different. Accordingly, the appeal was rejected. Taxpayer Explained source of Money for Purchase of Gold: CESTAT deletes Penalty u/s 112 of Customs Act Kogatam Sadik Basha vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 552 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has deleted the penalty under section 112 of the Customs Act after the taxpayer provided an explanation regarding the source of money used for the purchase of gold. The single member bench of the tribunal comprising Anil Choudhary (Judicial member) allowed the appeal and set aside the impugned order. The appellant shall be entitled to consequential benefit including return of the confiscated gold and if the gold has already been disposed of by the Department, shall be entitled to receive the sale proceeds with interest as per rules. Construction of Residential Complex is properly Classifiable under head WCS u/s 65(105): CESTAT Aparna Constructions & Estates Pvt Ltd vs Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 553 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has determined that the construction of a residential complex is properly classifiable under the head “Works Contract Service”( WCS)  under Section 65(105).

The two member bench of the tribunal comprising Anil Choudhary ( Judicial member) and A.K, Jyothishi ( Accountant member) uphold the classification of the work cum service involved, done by the Appellant, in the nature of construction of residential complex, etc., was rightly classifiable under the head – WCS. Thus, this ground is allowed in favour of the Appellant and against the Revenue. Emergency Response Services, Including Police and Fire Exempt from Service Tax: CESTAT EMRI Green Health Services vs Commissioner of Central Tax Medchal – GST CITATION: 2024 TAXSCAN (CESTAT) 554 The Customs Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that emergency response services, including police and fire, are exempt from service tax. Further the two member bench of the tribunal comprising Anil Choudhary (Judicial member) and A.K Jyotishi (Accountant member) found there was no malafide on the part of the Appellant in not depositing the service tax with respect to police/fire – 100 Project, being under the belief that the same is being provided to the State Government in discharge of their statutory functions to the people at large. Further, under the comprehensive contracts, the Dial 100 Project police/fire was only a minuscule element less than 5%. Further, admittedly the appellant have deposited the service tax where they found the same to be payable before issue of SCN along with applicable interest, for which there was proposal in the SCN itself was made for appropriation. CESTAT held that the extended period of limitation was not available to revenue and accordingly the demand was confined to the normal period of limitation.  The Appellant assessee shall be entitled to consequential benefits in accordance with law. Bonafide Service Tax Payment on Composite Contract under CCS instead of WCS: CESTAT sets aside Demand of Extended Period M/s.R.R. Constructions vs The Commissioner of CGST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 555

The Chennai bench of the Customs, Excise & Service Tax Appellate  Tribunal  ( CESTAT ) observed that bonafide payment of service tax on composite contracts under Complex Service ( CCS ) instead of Works Contracts Service ( WCS ) and set aside the demand of service tax for an extended period.  A two-member bench of Ms Sulekha Beevi C S, Member (Judicial) And Mr Vasa Seshagiri Rao, Member (Technical)  observed that the issue of classification of construction services was doubtful and the issue of classification of services being interpretational and set aside the demand raised for the extended period. It was further viewed that the department has not brought out any positive act of suppression on the part of the appellant. The entire figures have been taken from the accounts of the appellant and the Department reclassified the services under WCS. The appellant has correctly discharged service tax and the allegation is only about the classification of the construction services. “The demand for the period April 2012 to June 2012 would fall within the normal period and the appellant is required to pay service tax for this period under the category of WCS.  However, the demand raised by the department @ 12% denying abatement and composition scheme is not sustainable. The reason for denying the benefit of the composition scheme is that the appellant has not obtained permission from the Department for applying the composition scheme.”, the Tribunal held. Taxpayer is liable to pay Interest on Service Tax Paid in Delayed Manner: CESTAT Upholds Rejection of Refund Claim M/s Quality Waves Benchmark LLP vs The Commissioner of Central Tax,Hyderabad- GST CITATION: 2024 TAXSCAN (CESTAT) 556 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the rejection of the refund claim, affirming that the taxpayer is liable to pay interest on service tax that was paid in a delayed manner.

Therefore, the single member bench of the tribunal comprising P. Anjani Kumar ( Technical member)  found that the admissibility of credit in such situation is subject to provision of Rule 9(1) (bb) and therefore, no argument at length, on the issue of provisions of Section 142(7) of CGST Act, 2017, are applicable to the appellant.CESTAT found  that authorized representative for the revenue has placed a number of judgments passed by this very Bench holding that the appellants were not eligible for refund of such credit. Process of Cutting Jumbo and Slitting does not fall under Definition of Manufacturing as per Section 2 (f) of Central Excise Tariff Act: CESTAT Oil Country Tubular Ltd vs Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 557 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the process of cutting jumbo rolls and slitting does not fall under the definition of manufacturing as per Section 2(f) of the Central Excise Tariff Act. The two member bench of the tribunal comprising Anil Choudhary ( Judicial member ) and A.K Jyotishi ( Technical member ) set aside the impugned orders and allowed the appeals. The Appellant shall be entitled to consequential benefits, in accordance with law. Section 74(1) of Finance Act Cannot be Invoked in absence of Deliberate or Intentional Non-payment of Service Tax: CESTAT M/s Shri Shakti Resorts & Hotels Ltd vs Commissioner of Central Tax CITATION: 2024 TAXSCAN (CESTAT) 558 The Hyderabad bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that Section 74(1) of the Finance Act, 1994 cannot be invoked in absence of deliberate or intentional non-payment of service tax. A single bench of Mr A K Jyotishi, Member (Technical) has held that there was no deliberate or intentional non-payment of service tax and therefore invoking proviso to Section 73(1) is clearly bad in Law.

The bench held that the proviso to Section 73 is not applicable and therefore extended period cannot be invoked for demanding service tax on the rental income during the material period in 2014-15 as the show cause notice has clearly been issued after 30 months from the given date.  Therefore, the demand is clearly time barred.  The Tribunal allowed the appeal. Shri Lalit Mohan Chandna appeared for the Appellant and Shri B. Sangameshwar Rao, Authorised Representative appeared for the Respondent. Value of Export Goods is FOB Value as per S. 14 of Customs Act: CESTAT sets aside Notice Issued in absence of Mis-declaration of Goods Terapanth Foods Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 559 The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has observed that value of export goods are transaction value as per Section 14 of Customs Act, 1962 and set aside the notice issued under customs act demanding penalty in absence of misdeclaration of goods. A two member bench of Mr Anil Choudhary, Member (Judicial) and Mr P V Subba Rao, Member ( Technical ) observed that as per Section 14 of the Customs Act, the value of export goods shall be the transaction value i.e. the price actually paid or payable for the goods when sold from India for delivery at the time and place of exportation ( FOB Value ). Air Cargo Agent Building is a part of Airport /Aerodrome, Excludes under Exclusion Clause of WCS: CESTAT M/s Sew Infrastructure Pvt Ltd vs Commissioner of Central Tax Hyderabad – GST CITATION: 2024 TAXSCAN (CESTAT) 560 The Hyderabad Bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT )while setting aside the show cause notice demanding service tax held that Air Cargo Agent building is a part of Airport /Aerodrome and the activity constructing same is excluded under exclusion clause of Work Contract Service ( WCS ).  A two member bench of Mr Anil Choudhary, Member (Judicial) and Mr A K Jyotishi, Member (Technical) viewed that the air cargo agent building is admittedly constructed as an annexee building to the air cargo terminal and the same is necessary for the smooth functioning of the air cargo terminal.

It is admitted fact that both incoming and outgoing cargo is partly processed by the air cargo agents facilitating the main processing and clearance for export/import, in the air cargo terminal. Cenvat Credit cannot be Disallowed under CCR when Assessee Regularly availed Cenvat Credit of Input Service in Books of Account: CESTAT Sri Sai Communications vs Commissioner of Central Tax Medchal – GST CITATION: 2024 TAXSCAN (CESTAT) 561 The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that cenvat Credit cannot be disallowed under CENVAT Credit Rules, 2002 ( CCR ) when assessee regularly availed cenvat credit of input service in books of account. The Tribunal observed that the appellant has regularly taken Cenvat credit of input service tax in their books of accounts after making payment to the service providers. Such aggregate input service tax, including cess, reflected in the trial balance, being debit balance as on 31st March under the re-grouped account head ‘duties and taxes’. The CESTAT held that appellant has taken service tax credit regularly within the prescribed period from the date of invoice as prescribed under Rule 4 read with Rule 9 of CCR, 2004.

While allowing the appeal, the CESTAT set aside the impugned order. Failure to pay Service Tax under “Manpower Recruitment of Supply Agency Services” due to Bonafide Employer-Employee Relationship Belief: CESTAT sets aside Demand M/s Halcrow Consulting India Private Limited vs Commissioner of Service Tax CITATION: 2024 TAXSCAN (CESTAT) 562 The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) set aside the demand for service tax as it was found that failure to pay Service Tax under “manpower recruitment of supply agency services” on bonafide belief of having employer-employee relationship. A two-member bench of Dr Rachna Gupta, Member (Judicial) and Ms Hemambika R Priya, Member (Technical) held that the department has not been able to establish the ingredient of malafide intention to evade payment of service tax and set aside penalties imposed under Sections 76,77, & 78 of the Act. Intention to Smuggle Prohibited Goods cannot be Equated with attempt to Export Prohibited Goods: CESTAT sets aside Absolute Confiscation of Foreign Currency Sh Mohammed Mustafa vs Pr. Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 563 The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that an intention to smuggle prohibited goods cannot be equated with an attempt to export prohibited goods and set aside absolute confiscation of foreign currency. A two-member bench of Mr Anil Choudhary, Member (Judicial) and Mr A K Jyotishi, Member (Technical) agree with the conclusion of the Adjudicating Authority that foreign exchange or currency is prohibited goods and therefore liable for confiscation.  It was observed that an intention to smuggle prohibited goods cannot be equated with attempt to export prohibited goods. The CESTAT held that there is only a venial breach of the provisions of Section 113(d) of the Act.

The Tribunal set aside the Order of absolute confiscation under Section 113(e) and (h) of the Act and held that the foreign currency in question is liable for confiscation under Section 113(d) of the Act. Allegation of Gold Smuggling: CESTAT sets aside Confiscation Order as Assessee Discharges Onus u/s 123 of Customs Act Sri Rayapudi Rajasekhar vs Commissioner of Central Tax Vijayawada CITATION: 2024 TAXSCAN (CESTAT) 564 In a recent case related to an allegation of gold smuggling, the Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the confiscation order as assessee discharge onus under section 123 of Customs Act, 1962. A single member bench of Mr Anil Choudhary, Member (Judicial)  observed that there were no foreign markings on the gold seized and subsequently confiscated, being 1129 gms of gold. The gold is comprised of bar/rods and bits and is not of standard shape, size and weight, as in the case of gold of foreign origin.

Mr. R. Rajasekhar who has claimed the ownership of the gold has led cogent evidence in the form of his business records and account statements in support of the gold in question. The Tribunal found that the explanation given by these appellants has been corroborated by the statement of smelters/melters both at Jaggayyapet and at Chennai and the appellants have discharged the onus under section 123 of the Act. While allowing the appeals, the CESTAT set aside the impugned orders. B. Seetha Ramaiah appeared for the Appellants and A. Rangadham appeared for the Respondent Excise Duty not Payable on House Mark Engraved on Gold Coins: CESTAT M/s.AVR Swarnamahal Jewelry Limited vs The Commissioner of CGST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 565 The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that excise duty is not payable on the mark engraved on gold coins as it is just a house mark. The Tribunal viewed that the mark is not a brand name. The two-member bench of Sulekha Beevi C. S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that a mark intended for identifying the manufacturer cannot be considered to be a brand name as it is only a house mark. The CESTAT held that the mark on the gold coins only indicates the manufacturer or seller of the coins. The mark engraved on the gold coins is only a house mark and not a brand name or trade name.

The demand of duty alleging that the gold coins bear a brand name cannot be sustained and set aside the same Interest on Export Iron Ore Fines Duty Refund: CESTAT Directs 6% Annual Interest u/s 129 E of Customs Act Bagadiya Brothers Pvt Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 566 The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) directed a 6% annual interest under Section 129E of the Customs Act on the refund of duty for export iron ore fines. The two member bench of the tribunal comprising Anil Coudhary ( Judicial member) and A.K Jyotishi ( Technical member) allowed  the appeal of assessee modifying the impugned order, directing to grant interest @6% per annum from the date of deposit till the date of refund. So far the appeal of Revenue is concerned, there being no merits, and CESTAT dismissed the same. Service Tax Not Payable on Interest Income from Overdraft/Cash Credit Facilities: CESTAT The Assam Cooperative Apex Bank Ltd vs Commr. of CGST CITATION: 2024 TAXSCAN (CESTAT) 567

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand on interest equivalent on overdraft or cash credit extended by cooperative banks. The two-member bench of R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) has observed that Notification No. 29/2004-ST clearly exempts service tax on interest income on overdraft/cash credit facilities, and it is required to be shown separately in the invoice, bill, or challan for the purpose. Reimbursements for Direct ABP Operation Costs per Written Agreement Exempt from Service Tax: CESTAT M/s Direxions Marketing Solutions vs Commr. of Service Tax, Kolkata CITATION: 2024 TAXSCAN (CESTAT) 568 The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that reimbursements for direct ABP operation costs as per written agreement are exempt from service tax.  Accordingly, the two member bench of the tribunal comprising R. Muralidhar (Judicial member) and Rajeev Tandon (Technical member) set aside the confirmed demand for the extended period on account of time bar. Accordingly, CESTAT allowed the appeal both on merits as well as on account of limitation.