Top Stories CESTAT Annual Digest 2024: Indirect Tax Cases [Part 10] A Round-Up of all the CESTAT Decisions in 2024 By Manu Sharma – On January 6, 2025 9:01 pm – 19 mins read 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. Allegation of Dummy or Fraud Import without Corroborative Evidence: CESTAT Sets aside Penalty Imposed under Customs Act M/s. Orbit Trans Express & Freight Pvt. Ltd. vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 498 The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) set aside the penalty imposed under the Customs Act, 1962 as the allegation of dummy or fraud import without corroborative evidence. A two-member bench of Mr P.A. Augustian, Member (Judicial) and Mr Pullela Nageswara Rao, Member (Technical)   observed that the appellant is only facilitating the customs transaction on behalf of the principal, (importer/exporter), the absence of mens-rea, penalty is not imposable, otherwise all the customs transaction will come to halt, if penalty is imposed on the customs broker the omission /commission of exporter/importer. Moreover, in the impugned order, Adjudication Authority itself held that there is no illegality revealed related to goods cleared through the appellant. Service Tax paid on RCM basis not to be Considered Deposits in Absence of FAR: CESTAT directs Refund Sanction u/s 11B of Excise Act The Commissioner of Central Tax Mysore GST Commissionerate vs M/s. P. G. Setty ConstructionTechnology Private Limited CITATION: 2024 TAXSCAN (CESTAT) 499 The Bangalore bench of CESTAT ( Customs Excise and Service Tax Appellate Tribunal ) has directed that the refund of service tax paid for consultancy services under RCM ( Reverse Charge Mechanism ) shall not be considered as deposit in absence of FAR ( Final Audit Report ). It shall be considered as ‘Tax’ only and it was directed to sanction the refund under Section 11B of Central Excise Act. Thus, the bench of R Bhagya Devi (Technical Member), ruling in favour of Revenue, decided that the service tax category under the relevant provisions and there is nothing declared unconstitutional or under mistake of law, the amount is necessarily to be considered as tax and refund has to be sanctioned as per the provisions specified under Section 11B of the Central Excise Act, 1944. Accordingly, the appeal was allowed.

This ruling, though directed at a refund, supported the appellant’s /revenue’s contention to set aside the order treating the amount paid as ‘Deposit. Anti-Dumping Duty Leviable on Green Reflective Glass during Period 4th Jan 2009 to 22nd May 2009: CESTAT Puthuval Associates vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 500 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that anti-dumping duty is leviable on green reflective glass for the period from 4th January 2009 to 22nd May 2009. In the present case, the two member bench of the tribunal comprising D.M Misra (Judicial member) and R. Bhagya Devi (Technical member) concluded that reflective glass was not found in the Notification No.4/2009-Cus. dated 06.01.2009 for exempting them from anti-dumping duty, the question of extending the benefit does not arise. The Commissioner (Appeals) has rightly held that no attempt can be made to infer the motive or meaning of the Notification other than what is emanating from the plain language of the Notification. Therefore, CESTAT upholds the order of the Commissioner (Appeals) and dismisses the appeal filed by the appellants. Imported Goods cannot be Confiscated u/s 111(m) for Wrong Classification or Ineligible Exemption Claim: CESTAT M/s Raj Metals & Alloys vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 501 The Delhi bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that imported goods cannot be confiscated under Section 111(m) of the Customs Act, 1962 for wrong classification or ineligible exemption claims. The two member bench of the tribunal comprising Binu Tamta (Judicial member) and P.V Subba Rao (Technical member) observed that imported goods cannot be confiscated under Section 111(m) because of a wrong classification or claim of an ineligible exemption notification. In this case, the importer imported thorn and entered an incorrect classification at the 8-digit level in the bill of entry and gave a value as per its transaction value. When examining the self-assessment, the incorrect classification was discovered.

Allegation of Mis-declaration of Goods cannot Sustain: CESTAT sets aside penalty u/s 112 (a) of Customs Act Oliva Care vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 502 The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the allegation of mis-declaration of goods cannot sustain, and accordingly set aside the penalty under Section 112 (a) of the Customs Act, 1962. The bench found that the adjudicating authority has held that there is misdeclaration of the goods with regard to quantity. On perusal of the records it is seen that in the bill of entry, packing list as well as other documents the quantity is declared in kilograms. However, payment of duty is on the basis of measurement in meters. On examination it was found that instead of 11,815 kilograms as declared by appellant, the total quantity imported is 11,900 kilograms Further the two member bench of the tribunal comprising Vasa Seshagiri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) noted that the said difference in quantity was too low so as to allege intentional misdeclaration of the goods. There will be some variation in the quantity during the voyage of the goods. CESTAT held that the allegation of mis-declaration of the goods cannot sustain. Consequently, the Redemption fine and penalty imposed are set aside. Round Ridge Cement tiles Eligible for Customs Duty-Free Import: CESTAT M/s. Monier Roofing Pvt. Ltd vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 503 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that round ridge cement tiles eligible for customs duty-free import.

The two member bench of the tribunal comprising D.M Mishra ( Judicial member) and R. Bhagya Devi ( Technical member ) held that the appellants are entitled to import the Round Ridge Cement Tiles free and the restriction applicable to processed tiles as held in the impugned orders cannot be sustained. In the result, the impugned orders are set aside and appeals are allowed with consequential relief Actual Amount received from m/s BPCL for Sale of Fleet Cards cannot be Subject to Levy of Service Tax: CESTAT Perundurai Lorry Urimaiyalargal Sangam Perundurai vs Commissioner of GST and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 504 The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the actual amount received from M/s BPCL for the sale of fleet cards cannot be subject to the levy of service tax. The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Accountant member) and Sulekha beevi C.S (Judicial member) found that the actual amount received from M/s. BPCL for sale of fleet cards cannot be subject to levy of service tax. CESTAT concluded that the demand of service tax under this category cannot sustain and requires to be set aside. Benefit u/s 28(5) of Customs Act applicable if reduced Penalty of 15% of BCD paid within 30 days of Receipt of SCN: CESTAT M/s Honda Cars India Limited vs Principal Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 505 The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that Benefit of section 28(5) Of Customs Act available when reduced penalty of 15% of BCD amount was paid within thirty days of receipt of Show Cause Notice ( SCN ).

The tribunal relied upon the decision of Gujarat High Court in the case of Prakash Diamond Pvt. Ltd. Vs. Union of India observed that  “if the last date of a period within which an act is to be performed is a holiday, then the last date would be extended to the immediate next working day and the act would be said to be in compliance, if the same is performed on the immediately next working day by invoking the provisions of Section 10 of the General Clauses Act.” A Two-Member Bench comprising S.K. Mohanty, Member (Judicial) and P.V. Subba Rao (Technical Member) held that appellant would be liable to pay the reduced amount of penalty at the rate of 15%, which they have already complied with. Typographical Error in Bills of Entry regarding Ambers of iRET switches  Imported: CESTAT deletes Penalty Sunher Electronics Pvt. Ltd vs Principal Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 506 The Bangalore  Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that due to typographical error occurring in the bills of entry regarding Ambers of Internal Remote Electrical Tilt Switches (iRET) Switches  imported penalty shall not be imposed. Thus, if there is a discrepancy between what is stated to have been imported in the documents and the Bill of Entry and what is actually imported, duty can be charged on what is actually imported and not on what is said to have been imported. A Two-Member Bench comprising Justice Dilip Gupta, (President) and P.V. Subba Rao (Technical Member)  allowed the appeal filed by the appellant. Post Graduate Programme in Management provided by IIM is liable to Service Tax: CESTAT Indian Institute of Management vs The Commissioner of Service Tax-II CITATION: 2024 TAXSCAN (CESTAT) 507

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT )  ruled that post graduate programmes in management provided by the Indian Institute of Management are liable to pay service tax. Further the bench point out that the “claim of the appellant that Indian Institute of Management Act, 2017 since acknowledges such institute as an Institution of national importance and therefore, all the courses offered by the institute should be exempted, in our opinion, also cannot be acceptable as no such provision has been brought to our notice mentioned in the said Act”. Therefore the  Two-Member Bench comprising Dr. D.M. Misra( Judicial  Member) and R. Bhagya Devi,(Technical Member) confirmed the demand and held that the Post Graduate Programme in Management provided by the  Indian Institute of Management  is liable to Service Tax No Excise Duty on Trade Discount Offered to Bulk Buyer of CNG: CESTAT Mahanagar Gas Ltd vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 508 In a recent ruling, the Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that excise duty is not payable on trade discounts offered to bulk buyers of compressed natural gas ( CNG ). The two member bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that no evidence is forthcoming that the discount offered by appellant-assessee to Brihanmumbai Electric Supply and Transport (BEST) was in lieu of the infrastructural facilities extended to them. Further held that the transaction value should be considered the price at which the CNG were supplied by the appellants to BEST, and such a price should be considered the value to assess and discharge of central excise duty liability. While allowing the appeal, the tribunal held that deduction of trade discount from assessable value was admissible on sale transactions. Laying Up of Cables alongside Roads Does Not Amount to ‘Manpower, Recruitment or Supply Agency Services’: CESTAT Sivaraman S vs Commissioner of CGST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 509 In a recent case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that laying up of cables alongside roads does not amount to ‘Manpower, Recruitment or Supply Agency Services’. A two-member bench of Sulekha Beevi C S, Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) observed that the appellant is undertaking work of trenching and laying cable for the areas allotted to them.

There is no supply of labour by the appellant as the wages to the labourers are paid by the appellant.   The amount received from BSNL is for trenching and laying of cable alongside the road. Delay of Consignment Due to Non-Availability of Vessel: CESTAT directs to Reduce Redemption Fine Specta Decor Pvt. Limited vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 510 The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed the Commissioner to reduce the redemption fine under the Customs Act, 1962 as the delay of consignment occurred due to the non-availability of the vessel. Considering the unforeseen circumstances explained by the appellant, the  two-member Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) directed to reduce the redemption fine to Rs.8,00,000/- (Rupees Eight Lakhs Only) and partially allowed the appeal. Sweet Pearl Contains 99% Maltitol Crystals, Classifiable under CTH of Polyhydric Alcohols: CESTAT sets aside Customs Demand M/s. Wrigley India Pvt. Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 511 The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Sweet Pearl, which contained 99% maltitol crystals, is classifiable under the CTH of polyhydric alcohols, thereby setting aside the customs demand.

The two member bench of the tribunal comprising M. Ajith Kumar ( Technical member) and P. Dinesh ( Judicial member) concluded  that the classification declared by the appellant deserves to be upheld since Revenue has not justified reclassification of the impugned goods under CTH 2106 and therefore, CESTAT  set aside the impugned order and allowed the appeal. Service Tax Not Applicable to Composite Contracts Pre-June 1, 2007, Construction Services till Period falls under Service Simplicitor: CESTAT M/s. Urgentechs vs Commissioner of GST and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 512 The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the demand for service tax cannot be sustained under the construction of residential complex services and commercial/Industrial construction service. The bench found that the decision laid down by the tribunal in the case of Real Value Promoters Pvt. Ltd.(supra) would be squarely applicable. The said decision has been followed by the tribunal in the case of Jain Housing & Construction Limited (supra) and was upheld by the apex court reported in by dismissing the department appeal. The two member bench of the tribunal comprising Vasa Sesha Giri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) considered the opinion that the demand cannot sustain and required it to be set aside.

Accordingly, the impugned order was set aside. The appeal was allowed. Imports made for Upgradation of Aircraft are eligible for Customs Duty Exemption which is intended for Servicing, Maintenance or Repair: CESTAT M/s. HALBIT Avionics Pvt. Ltd. vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 513 The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the imports made for replacement of aircraft are eligible for customs duty exemption which is intended for servicing, maintenance or repair. A Two-Member Bench comprising DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “since the benefit is being extended to the parts of aircrafts owned by Government of India, these terms must be understood in terms of their usage and practice. Therefore, in order to understand its true meaning under the said Notification, reference must be made to the Aircraft Rules, 1937.” “The contention of the Revenue is that these goods are meant for replacement and upgradation, which cannot be considered as an activity of servicing, repairing or maintenance and therefore, the appellant is not eligible for the benefit of the Notification No. 12/2012- Cus., dated 17-3-2012, is devoid of merit.” Appellant cannot be Worse off by Reason of Filing Appeal: CESTAT allows Re-Credit of Customs Duty in Advance Authorisation Scrips M/s. Gencor Pacific Auto Engineering Pvt. Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 514 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed re-credit of customs duty in the advance authorisation strips and commented that the appellant cannot be worse off by reason of filing an appeal.  A Single Member Bench of CS Sulekha Beevi (Judicial) observed that “The appellant has paid the penalty and does not contest the same.

So, the observation made by the Commissioner (Appeals) that since goods have been confiscated and penalty imposed, redemption fine has to be imposed is erroneous. Further, there is no appeal filed by the Department against the order of the Adjudicating Authority who refrained from imposing redemption fine. The Commissioner (Appeals) ought not to have imposed redemption fine in an appeal filed by the importer.” The Bench relied on the judgment in Jaswal Neco Ltd, wherein the Apex Court held that the appellant cannot be worse off by reason of filing an appeal. Mere Filing of Appeal against Tribunal’s /High Court’s Order Before Supreme Court Not a Valid Ground to Ignore Challenged Orders: CESTAT National Engineering Industries Limited vs Commissioner of CGST CITATION: 2024 TAXSCAN (CESTAT) 515 In a recent case, the Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that mere filing of an appeal to challenge the order of the Tribunal or the High Court before the Apex Court is not really a valid ground to ignore or disregard the orders of the Tribunal, unless and until the same are stayed, suspended, or finally set aside. The single bench of Binu Tamta (Judicial Member) has held that once the issue has been decided by the Tribunal that the appellant is entitled to the refund, the authorities below have no jurisdiction to order the recovery of the refunded amount unless the order of the Tribunal granting the refund is stayed or set aside by a higher forum.

The tribunal held that the authorities below have absolutely no regard for the orders passed by the tribunal, though, as per the judicial discipline, they are binding on them and they are required to follow the same. There have been decisions after decisions by the Tribunal and also by the Apex Court, specifically conveying that the orders by the Tribunal are binding on the lower authorities and there is no reason to differ from the same. CESTAT allows Service Tax Exemption on Service Tax allowable in respect of GTA services used in Export of Goods to HEG Ltd HEG Limited vs Commissioner (Appeals) GST CITATION: 2024 TAXSCAN (CESTAT) 516 The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that exemption on service tax is allowable in respect of GTA services if are used in the export of goods and allowed the exemption to HEG Ltd. A two-member bench comprising Justice Dilip Gupta, President and Hemambika R Priya, (Technical) observed that the appellant has complied with the notification condition and set aside the demand of duty and interest upheld in the impugned order.

Further, it was held that the penalty under section 78 is imposed when there is a wilful intention to evade the payment of tax. The delay in filing the return for claiming the exemption cannot be termed as a wilful intention to evade payment of duty. The CESTAT set aside the penalties imposed under section 78 of the Act.  While allowing the appeal, the Tribunal upheld the penalty under section 77 is upheld for failure to file the returns in time. Assessable Value of Shampoo Sachet is to be done u/s 4 of Central Excise Act: CESTAT M/s.Hindustan Unilever Limited vs The Commissioner of GST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 517 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the assessable value of shampoo sachet is to be done under Section 4 of the Central Excise Act, 1944. A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi observed that “Further, in the appellant’s own case vide Final Order N0.40032/2020 dated 28.01.2020, the Tribunal followed the above decision to set aside the demand raised under Section 4A and held that the determination of assessable value is to be done under Section 4 of the Central Excise Act, 1944.

Following the decision of the Tribunal in the appellant’s own case for the earlier period, we are of considered opinion that the demand under Section 4A cannot sustain.” Customs Broker cannot be liable for Shifting of Clients Premises and Omission of Client to Inform Authority: CESTAT Sets aside Penalty M/s Shakti Cargo Movers vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 518 The New Delhi bench of the Customs Excise & Service Tax ( CESTAT ) observed that the Customs Broker cannot be liable for the shifting of the client’s premises and the omission of the client to inform the authority and set aside the penalty imposed. It was found that once verification of the address is complete if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker.  A two member bench of Ms Binu Tamta, Member (Judicial) and Mr P V Subba Rao, Member (Technical) held that the responsibility of the Customs Broker under Regulation 10(n) does not include keeping continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations.

Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Liability under Works Contract Service would be taxable only from 1.7.2010: CESTAT Sets aside Demand of CCS M/s. Real Value Promoters Pvt Ltd vs Commissioner of GST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 519 The Chennai bench of the Customs, Excise  and  Service Tax  Appellate  Tribunal ( CESTAT ) has held that the liability under Works Contract Service would be taxable only from 1.7.2010 and set aside the demand of Commercial Complex Service ( CCS ). Insofar as the penalty under RIPS is concerned, the two-member bench of P Dinesha, Member (Judicial) and M. Ajit Kumar, Member (Technical) held that the issue involved interpretation in as much as, the High Court of Delhi held that there was no liability to service tax insofar as the renting of immovable property was concerned and therefore, an amendment was brought in, to overcome the above judgement.

The CESTAT held that the penalties imposed on the appellant also cannot sustain and set aside the impugned orders, insofar as the penalty is concerned and allow the appeals to this extent also. Transaction of Share Sale cannot be considered as an Activity Promoting Business of Purchaser of shares: CESTAT sets aside Service Tax Demand under BAS Rattha Holding Company vs Commissioner of GST and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 520 In a recent case, the Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held that the transaction of sale of shares cannot be considered as an activity promoting the business of the purchaser of shares and set aside the service tax demand under Business auxiliary service ( BAS ). A two member bench of Ms Sulekha Beevi C S, Member (Judicial) and  Mr Vasa Seshagiri Rao,Member (Technical) observed that the Tribunal itself in the appellant’s case had considered the very same issue and held that the demand could not be sustained as there is no provision of services. It was observed that “Whatever be the circumstances under which the shares were sold or the premium of the shares was fixed between the parties, the transaction of sale of a share in no way can be considered as an activity promoting the business of the purchaser of the shares.  It is indeed the Sale of Shares and, therefore, the demand on this count cannot sustain and requires to be set aside, which we hereby do.”

The CESTAT modified the impugned order to the extent of setting aside the demand, interest and penalties imposed under Business Auxiliary Services. Benefit u/s 28(5) of Customs Act applicable if reduced Penalty of 15% of BCD Paid within 30 days of Receipt of SCN: CESTAT M/s Honda Cars India Limited vs Principal Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 521 The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that Benefit of section 28(5) Of Customs Act available when reduced penalty of 15% of  BCD amount was paid within thirty days of receipt of Show Cause Notice ( SCN ). The tribunal relied upon the decision of Gujarat High Court in the case of Prakash Diamond Pvt. Ltd. Vs. Union of India observed that  “if the last date of a period within which an act is to be performed is a holiday, then the last date would be extended to the immediate next working day and the act would be said to be in compliance, if the same is performed on the immediately next working day by invoking the provisions of Section 10 of the General Clauses Act.”

A Two-Member Bench comprising S.K. Mohanty, Member (Judicial) and P.V. Subba Rao (Technical Member) held that appellant would be liable to pay the reduced amount of penalty at the rate of 15%, which they have already complied with. Typographical Error in Bills of Entry regarding Ambers of iRET Switches Imported: CESTAT deletes Penalty M/s Huber + Sunher Electronics Pvt. Ltd vs Principal Commissioner of Customs CITATION:   2024 TAXSCAN (CESTAT) 522 The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that due to typographical error occurring in the bills of entry regarding Ambers of Internal Remote Electrical Tilt Switches ( iRET ) Switches  imported penalty shall not be imposed. However the bench confirmed that there was a typographical error in the Bills of Entry and the invoices which has resulted in the audit objection, the SCN and the impugned order. Thus, if there is a discrepancy between what is stated to have been imported in the documents and the Bill of Entry and what is actually imported, duty can be charged on what is actually imported and not on what is said to have been imported. A Two-Member Bench comprising Justice Dilip Gupta, (President) and P.V. Subba Rao (Technical Member)  allowed the appeal filed by the appellant.

Absence of Evidence of Taxpayer’s Authorisation as Customs Broker u/s 146 of Customs Act: CESTAT reduces Penalty to Rs. 25,000 /- Pigeon International vs COMMISSIONER OF CUSTOMS CITATION: 2024 TAXSCAN (CESTAT) 523 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), in the absence of evidence of the taxpayer’s authorization as a customs broker under Section 146 of the Customs Act, has reduced the penalty to Rs. 25,000. The two member bench of the tribunal comprising P.A Augstian ( Judicial member) and Pullela Nageswara Rao ( Technical member) concluded that the impugned order was  modified and appeal is partially allowed by setting aside revocation of Courier License and enforcement of Bond and Bank Guarantee executed in connection with the Registration/Issue of Courier License. In view of the discussion at Para 9 (supra), the penalty imposed on the appellant under Section 117 of the Customs Act, 1962 is set aside. The penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 was reduced to Rs. 25,000/-(Rupees Twenty Five Thousand only) Builders, Promoters, Developers or any such persons constructing a Residential Complex shall be liable to pay Service Tax: CESTAT Pramod vs Commissioner of Service Tax CITATION: 2024 TAXSCAN (CESTAT) 524

The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that builders, promoters, developers, or any such persons constructing a residential complex shall be liable to pay service tax.  However, since the required documents as proof of payment of service tax as well as non-collection of same from the buyers was not produced by way of documents, their refund claim was rejected by the original authority as well as by the first appellate authority. The single member bench of the tribunal comprising Pullela Nageswara Rao (Technical member) concluded that the required documents are not brought on record even in the appeal before this Tribunal and the appellant has not appeared for hearing on the last three occasions. Accordingly, the appeal filed by the appellant was dismissed. No Import of Prohibited / Restricted Goods: CESTAT sets aside Penalty u/s 117 of Customs Act M/s. Orbit Trans Express & Freight Pvt. Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 525 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has set aside the penalty under Section 117 of the Customs Act, 1962, citing no import of prohibited or restricted goods.

The two member bench of the tribunal comprising  P.A Augustin ( Judicial member ) and Pullela Nageswara Rao ( Technical member) concluded that the appeal was allowed by setting aside revocation of courier license and enforcement of Bond and Bank guarantee executed in  connection with registration/license. Penalty imposed on the appellant under Section 117 of the Customs Act, 1962 was set aside. Pole Shoe is Internal Part of WOEG, Eligible for Excise Duty Exemption: CESTAT dismisses Revenue’s Appeal Commissioner of Central Excise vs M/s. Pearl Insulations Pvt. Ltd CITATION: 2024 TAXSCAN (CESTAT) 526 The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has dismissed the Revenue’s appeal, ruling that the pole shoe is an internal part of Wind Operated Electricity Generators ( WOEG ) and is  eligible for excise duty exemption. The two member bench of the tribunal comprising DM Misra ( Judicial member ) and R, Bhagya Devi (Technical member) found merit in the appeal filed by the revenue. Consequently, the impugned order was upheld and the revenue’s appeal being devoid of merit is liable for dismissal.

Since, CESTAT have decided the appeal on merit, other ancillary issues like reversal of cenvat credit and quantification of demand etc. become academic; hence not analysed. Revenue’s appeal dismissed. Waste Product such as Bagasse is not an Excisable Goods: CESTAT M/s.Ponni Sugars Erode Ltd vs The Commissioner of GST CITATION: 2024 TAXSCAN (CESTAT) 527 The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the waste product such as bagasse is not an excisable goods. The two member bench of the tribunal comprising M. Ajith Kumar (Technical member) and P. Dinesh (Judicial member) observed that the waste product was not a manufactured product to be considered as a final product for the purpose of Cenvat Credit Rules. Consequently, no credit is required to be reversed. Rule (6) of Cenvat Credit Rules as it stood then, could be invoked only in case of products which were excisable in nature, which are manufactured and not waste products that emerge on account of the process of manufacture of a different product. Accordingly, the ground raised by the appellant was allowed.

Royalty not includable in Transaction Value of Imported Raw Materials to demand Differential Customs Duty: CESTAT M/s. Valeo Friction Materials India Ltd vs Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 528 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that royalty not includable in transaction value of imported raw materials to demand differential customs duty. A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “In view of aforesaid discussions and the judicial precedents cited above, we are inclined to hold that Royalty payment is not includible in the transaction value of imported raw materials. Thus, the issue of inclusion of Royalty payment in the transaction value of the imported raw materials is decided in favour of the Appellant and we order so accordingly.” Redemption Fine not Imposable when Minimum Import Price Paid on Prime Pre-painted Steel Coils: CESTAT quashes Penalty under Customs Act M/s Hindustan Distributors vs Commissioner of Customs, Ludhiana CITATION: 2024 TAXSCAN (CESTAT) 529

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that a redemption fine is not imposable when the minimum import price paid on prime pre-painted steel coils and quashed the penalty under the Customs Act, 1962. The single bench of S. S. Garg (Judicial Member) has observed that the appellant has already paid the Minimum Import Price (MIP) for the goods as fixed vide Notification No. 38/2015-2020 dated 05.02.2016 issued by the DGFT, by which impugned goods cannot be imported with a value less than the MIP. The CESTAT  held that in the order passed by the Commissioner (Appeals), sufficient reasons have not been given for imposing the redemption fine and penalty. There was no attempt by the appellant to mis-declare the description or transaction value. Once the confiscation is set aside, the question of the imposition of a penalty under Section 112(a) does not arise. CESTAT quashes Re-determination of MRP of Laptops imported by Acer India Supplied with Laptop Bag by Customs Dept M/s. Acer India (Pvt.) Ltd vs Commissioner of Customs (Audit) CITATION: 2024 TAXSCAN (CESTAT) 530

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed re-determination of MRP of laptops imported by Acer India supplied with laptop bag by the Customs Department. A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “The methodology adopted by adjudicating authority is to deduct the negotiated price of the backpack (Rs.225/-) from the Purchase order price. The Purchase order Price or bid price is inclusive of items which are not imported. Further, the department has no case that such backpack can be obtained at Rs.225/- from market. All these factors would lead to the conclusion that the redetermined MRP cannot be sustained. Consequently, the demand of differential duty also cannot be sustained and require to be set aside. Ordered accordingly.”