Top Stories CESTAT Annual Digest 2024: Indirect Tax Cases [Part 7] A Round-Up of all the CESTAT Decisions in 2024 By Manu Sharma – On January 6, 2025 7:12 pm – 21 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. Excise Duty not payable on Waste and Scrap of Packing Material of Inputs when Demand travelled beyond SCN: CESTAT Commissioner of Central Excise, Aurangabad vs M/s Skoda Auto Volkswagen India Pvt. Ltd CITATION: 2024 TAXSCAN (CESTAT) 369

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the excise duty not payable on waste and scrap of packing material of inputs when demand travelled beyond show cause notice ( SCN ). A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member ( Judicial ) and Anil G. Shakkarwar, Member ( Technical ) observed that “We are of the view that no demand is raised on the Appellant in the Show-cause notices on the ground that it was engaged in trading which was treated as an exempted service against which it cannot avail credits on inputs but the demand was solely based on the ground that out of two varieties of manufacturing waste, one is exempted from payment of Excise Duty for which demand is raised against non-reversal of the allegedly inadmissible credit availed on those exempted products and it is a settled principle of Law.” Burden Cast upon Department to show that Assessee Recovered Cost of Service Rendered: CESTAT quashes Service Tax Demand RAJASTHAN STATE ROAD TRANSPORT CORPORATION vs JOINT COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAIPUR CITATION:   2024 TAXSCAN (CESTAT) 370 The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and ruled that the burden is cast upon the Department to show that assessee recovered cost of service rendered. A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member relied on the judgment in Indian Oil Sky Tanking Ltd. vs CST, Bangalore, wherein it was held that “Burden cast upon the department to show that the assessee has recovered the cost of service rendered. In the absence of such recovery, the question of levy of service tax does not at all arise.

The book adjustment cannot be the ground to fix the liability.” In the present case, we observe that the Show Cause Notice as well as orders of the adjudicating authority have just appreciated the difference noticed between the amount mentioned in the profit and loss account and are mentioned in ST 3 returns of the appellant. Without appreciating the amount out of the impugned invoices to have been actually received by the appellant and without verifying as to whether the requisite services were finally being provided. Resultantly, we hold that order confirming such a demand is not sustainable” the Bench noted. No Service tax  Demandable  on Works Contract Service: CESTAT M/s. Ashoka Bricks Industries (P) Limited vs Commissioner of Central Excise, Customs and Service Tax CITATION:   2024 TAXSCAN (CESTAT) 371 The Kolkata bench of the  Customs, Excise And Service Tax Appellate Tribunal (CESTAT)  held that no Service tax is demandable on Works Contract Service. It was viewed that the activity of   ‘providing and placing hard stone boulders on the slope of the embankment of PST of required thickness, including all cost of materials, labour, T&P, royalty taxes, etc.’ as directed by the service recipient.  As no demand has been raised under the category of “works contract service”, therefore, no demand is sustainable against the appellant. A two member bench comprising Shri Ashok Jindal, Member (Judicial) and Shri K Anpazhakan, Member (Technical) held that the merit classification of the services rendered by the appellant is under works contract service. As no demand has been raised under the category of “works contract service”, therefore, no demand is sustainable against the appellant. While allowing the appeal, the CESTAT  set aside the impugned order No Excise Duty Demandable in Absence of Evidence to Establish use of Machine for Packing  Gutkha: CESTAT M/s Simla Food & Flavours vs Commissioner of Customs, Central Excise & Service Tax CITATION: 2024 TAXSCAN (CESTAT) 372

The Allahabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no excise duty is demandable in the absence of evidence to establish the use of the machine for packing gutkha. The CESTAT viewed that the demand of duty was contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008 A two member bench comprising of Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that all the evidences produced in form of declaration, ground plan and correspondences show that the machine was installed in the separate room and was used only to pack sweet supari. The CESTAT viewed that the demand of duty was contrary to the declaration filed along with the ground plan, which is required in terms of Pan Masala Packing Machines (Determination of Capacity and Collection of Duty) Rules, 2008 and set aside the same while allowing the appeal. Relief to Yamaha Motor Solution, No Service Tax payable under consulting engineer’s service for Advisory Support Service: CESTAT Yamaha Motor Solutions India Pvt. Ltd vs CCE & ST- Delhi-IV CITATION: 2024 TAXSCAN (CESTAT) 373 The Chandigarh bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in a ruling in the case of Yamaha Motor Solutions India Pvt. Ltd has held that Service Tax is not payable under Consulting Engineer’s Service for Advisory Support Service. The CESTAT viewed that during the period in dispute, the activities of the appellant were exempted by Notification No. 04/1999 dated 28.02.1999 and Circular No. 70/19/2003-ST dated 17.12.2003. The CESTAT viewed that during the period in dispute, the activities of the appellant were exempted by Notification No. 04/1999 dated 28.02.1999 and the Circular No. 70/19/2003-ST dated 17.12.2003.

When the appellant is not liable to pay service tax, the question of demanding interest and imposing penalty does not arise.  The Tribunal set-aside the impugned order by allowing the appeal of the appellant with consequential relief, if any, as per law. Shri Tanuj Hazari appeared for the appellant and Shri Raman Mittal, Authorised Representative appeared for the Respondent. Mis-Declaration of Country of Origin in Bills of Entry is Immaterial towards Valuation: CESTAT quashes Penalty Aspam Petronergy Pvt Ltd vs C.C.-Kandla CITATION: 2024 TAXSCAN (CESTAT) 374 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed penalty and noted that the misdeclaration of country of origin in bills of entry is immaterial towards valuation. A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “As regard the issue of misdeclaration of Country of Origin in the bills of entry filed by the appellant, the material information declared in the bill of entry mainly corresponds to the goods that are under import and mis declaration of country of origin is immaterial towards the valuation, description and other such particulars concerning the goods, and the appellant would have gained nothing as no preferential rate of duty was claimed by the appellant.”

Hindalco Industries Eligible for Cenvat credit on Inputs used in fabricating Capital Goods; CESTAT Rejects Denial based on Immovability & Time Limit HINDALCO INDUSTRIES LIMITED vs C.C.E.-BHARUCH CITATION: 2024 TAXSCAN (CESTAT) 375 Hindalco Industries Limited, one of India’s leading producers of aluminium and copper, has been deemed eligible for Cenvat credit on inputs used in fabricating capital goods. In result, the two-member bench comprising Mr. Ramesh Nair ( Judicial Member ) and Mr. Raju ( Technical Member ) concluded that Hindalco Industries Limited is eligible for Cenvat credit on inputs used in fabricating capital goods. The denial based on immovability and timing was rejected and the appeal was allowed. Consolidated Hearing Notice with Multiple Hearing Dates Deemed Violation of Natural Justice Principles; CESTAT remands Ex Parte Order M/s IND Swift Laboratories vs Commissioner of Central Excise And Service Tax CITATION: 2024 TAXSCAN (CESTAT) 376 The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that issuing a consolidated hearing notice with multiple hearing dates constitutes a violation of the principles of natural justice. In result, the single bench of Mr. S. S. Garg (Judicial Member) set aside the orders and remanded the case back to the Commissioner (Appeals) with clear instructions.

The CESTAT directed the Commissioner (Appeals) to reconsider the case on its merits, ensuring that the appellant is afforded a reasonable opportunity of hearing in accordance with the principles of natural justice. Additionally, the Commissioner (Appeals) was instructed to render a reasoned decision within a specified timeframe to expedite the resolution of the appeals. Manufacturing of Ingots are exempted under Excise Notification: CESTAT allows claim of Self Credit Refund Tawi Chemical Industries vs Commissioner of Central Excise & Customs CITATION: 2024 TAXSCAN (CESTAT) 377 In a recent case, the Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) allowed the claim of self-credit refund on M. S. Ingots as the manufacturing of the same is exempted under excise notification. The Bench viewed that the refund of excise duty claimed by an assessee and sanctioned by the competent Authority under Notification No. 56 of 2002-CE which has attained finality as not having been challenged before any appellate or revisional authority under the Excise Act cannot be termed as ‘erroneous refund’ and recovered by resort to section 11A of the Act. A two-member bench Sh. S S Garg, Member (Judicial) and Sh. P Anjani Kumar, Member (Technical) viewed that in the case of M/s Alu Bond Enterprises vs. CCE & ST, J&K, the Division Bench of the Tribunal has held that “5. I heard both sides and perused the records of the case. We find that the impugned order considers the self-credit taken by the appellants as “erroneous” credit and confirms the demand of the same in terms of Section 11A of the Central Excise Act, 1944 along with interest and penalty under Section 11AC ibid. We find that the Hon’ble High Court Jammu & Kashmir vide their order in CEA 06/2018 held that:  The refund of excise duty claimed by an assessee and sanctioned by the competent Authority vide its order under Notification No. 56 of 2002-CE which order has attained finality as not having been challenged before any appellate or revisional authority under the Excise Act cannot be termed as ‘erroneous refund’ and recovered by resort to section 11A of the Act.

Mere Non-Payment of Service Tax and Non-Filing of Returns Not sufficient to Extend Period of Limitation: CESTAT M/s Teradata India Pvt. Ltd. vs The Commissioner of Central Excise And Service Tax CITATION: 2024 TAXSCAN (CESTAT) 378 The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that mere non-payment of service tax and non-filing of returns is not sufficient to extend the period of limitation. The Tribunal has been taking a consistent view that a mere non-payment of service tax and non-filing of Returns would not be a sufficient reason to extend the period of limitation. A single member bench of Mr P Anjani Kumar, Member ( Technical ) found that except for stating that the show-cause notice has been issued only after the conduct of the audit and that the appellants have suppressed the material facts, no evidence has been put forth in the show-cause notice or in the impugned order to show that there has been a positive act of suppression on the part of the appellants to evade payment of duty.

Demanding Service Tax under Financial Leasing without Considering Nature of Transaction is invalid: CESTAT M/s Xerox India Ltd vs Commissioner of Service Tax CITATION: 2024 TAXSCAN (CESTAT) 379 The Chandigarh bench of  Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that the demand of service tax under financial leasing without considering the nature of the transaction is invalid. A two-member bench comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) held that for facility management, demanding service tax under financial leasing during the relevant period is not sustainable. It was found that an amount of Rs. 9,37,76,673/- has been received by the appellant for providing financial leasing service without taking into consideration the actual nature of the transaction. Hence, the demand is liable to be set aside and we accordingly do so. Mismatch in Reassessed Value and Self Assessment by Importer: CESTAT directs Proper Officer to Pass Speaking Order u/s 17 (5) of Customs Act Commissioner of Central Excise And customs vs M/s Century Metal Recycling Private Limited CITATION: 2024 TAXSCAN (CESTAT) 380 The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed the Proper Officer to pass speaking order under Section 17(5) of the Customs Act, 1962, as there was mismatch in the reassessed value and self-assessment by the importer. A Two-Member Bench comprising Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “The value was enhanced without any speaking order as the proposed enhancement was fully accepted by the importer vide his consent given in writing to the proper officer. Due to this, speaking order was not required as per sub-clause 5 of Section 17 of the Act, as quoted above. In such situation, Commissioner (Appeals) had to refer the matter back to the proper officer/adjudicating authority for fresh decision/order, in terms of above quoted sub-clause (ii) of Section 128A (3) (b) of the Customs Act, 1962.”

No Jurisdiction for Adjudicating Authority to decide whether availed Cenvat Credit issued by ISD is Incorrect: CESTAT M/s Nalco Water India Limited vs Commissioner of CGST & Excise, Howrah CITATION: 2024 TAXSCAN (CESTAT) 381 The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that no jurisdiction is vested for Adjudicating authority to decide whether availed cenvat credit issued by the Input Service Distributors ( ISD ) is incorrect. A Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “As the Head Office of the appellant is registered as ISD and distributed the cenvat credit in proportionate to the appellant i.e. 54.51% is valid documents to avail the cenvat credit in terms of Rule 9 of the Cenvat Credit Rules, 2004. If the Revenue wants to deny the availment of cenvat credit i.e to be only to the Head Office, who is registered as ISD. As no investigation has done at the end of the ISD for distributing ineligible cenvat credit to the appellant, the cenvat credit cannot be recovered from the appellants.” Handling of Container not Covered under Taxable Activity of Cargo Handling: CESTAT quashes Service Tax Demand M/s. Container Corporation of India Ltd. vs Commissioner of Central Excise CITATION: 2024 TAXSCAN (CESTAT) 382

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and ruled that handling of the container not covered under the taxable activity of cargo handling. A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “The activity of handling of container cannot to be covered under the taxable activity of cargo handling as cargo handling service also. This activity is essentially a service in relation to merchandise. As per the dictionary also cargo means goods carried on a ship, aircraft or motor vehicle. The empty containers are not the merchandise. The Circular No. B11/1/2002-TRU has explained that empty containers cannot be treated as cargo. In light of these observations, the activity in question cannot even be called as the taxable activity of Cargo Handling Service.” Reviewing of Earlier Order of Commissioner of GST is Impermissible by law: CESTAT sets aside order United India Insurance Company Limited vs Commissioner of G.S.T. and Central Excise CITATION: 2024 TAXSCAN (CESTAT) 383 The Chennai bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has observed that reviewing the earlier order of the commissioner of Goods and Service Tax ( GST ) is Impermissible by law. A two-member bench of Mr P Dinesha, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that the adjudicating authority has proceeded to finalize the provisional assessments without putting the appellant on notice and hence, the Orders-in Original have been passed without adhering to the principles of natural justice. Imported Fabrics under Advance Authorisation were diverted for Sale in Open Market:

CESTAT upholds Confiscation and Penalties imposed under Customs Act HIMACHAL FASHION PRIVATE LIMITED vs COMMISSIONER OF CUSTOMS CITATION: 2024 TAXSCAN (CESTAT) 384 The Customs Excise & Service Tax Applellate Tribunal ( CESTAT ) upheld the Confiscation and Penalties Imposed Under Customs Act, 1962 as the imported fabrics under advance authorisation were diverted for sale in open market. A two-member bench of Ms Binu Tamta, Member ( Judicial ) and Ms Hemambika R Priya, Member( Technical ) viewed that the benefit of Notification 99/2009-Cus dt 11.09.2009 cannot be extended to the appellant because of the overwhelming evidence of the diversion of imported raw material to the open market. Clearance of Plastic both Units Owned by Members of the same Family cannot be Clubbed in the absence of Mutuality of Interest: CESTAT M/s TSM Plastics vs Commissioner of Central Excise & Service Tax, Noida CITATION: 2024 TAXSCAN (CESTAT) 385 The Allahabad bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that clearance of plastic in both units owned by members of the same family cannot be clubbed in the absence of mutuality of interest. A two-member bench comprising Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) reduced the penalty on appellant-II to Rs.50,000/- only and on appellant-III to Rs.75,000/-. With the above modification, the CESTAT upheld the impugned order.

The Appeal of appellant-I is dismissed and the appeals by appellant-II and appellant-III are partly allowed to the extent of reducing penalties. Penalty u/s 114 AA of Customs Act not imposable unless Mens rea is established beyond doubt: CESTAT Anglo Eastern Maritime Services Pvt. Ltd vs Commissioner of CGST CITATION: 2024 TAXSCAN (CESTAT) 386 The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that penalty under section 114 AA of Customs Act, 1962 is not imposable unless mens rea is established beyond doubt. The Tribunal held that the penalty under section 114 AA of Customs Act is not imposable as the department failed to either prove that goods had originated in Iran or prove role of the Appellant or its Directors in the alleged Mis-declaration. A two-member bench comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) that viewed that in relation to Section 112 (a) of the Act it has been held in various ruling that mens rea is not a requirement for imposition of penalty, however the same cannot be a standard principle in all matters.  In cases where there is absolutely no involvement of assessee and where there is no evidence produced to show their role in the alleged fraud/misdeclaration, then imposition of penalty in our view will amount to injustice as far as the assessee is concerned. Extended period Limitation not applicable When Assessee paid Service Tax Along With Interest:

CESTAT M/s Jaypee Sports International Ltd vs Commissioner of Central Excise & CGST, Noida CITATION: 2024 TAXSCAN (CESTAT) 387 The Chandigarh bench of  Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that extended period limitation is not applicable when the assessee paid service tax along with interest. A two-member bench comprising Mr P K Choudhary, Member (Judicial) and Mr Sanjiv Srivastava, Member (Technical) observed that once the demand of Rs.20,36,32,619/- is not found sustainable on merits, the question of imposition of penalty under Section 78 does not arise. The penalty of Rs.1,12,23,633/- is also not sustainable in view of Explanation 2 to Section 73(3), which provides that no penalty is to be imposed when short-paid service tax is deposited along with interest before the issuance of show cause notice. The demand is not sustainable on merits, the imposition of penalty under Section 77 and demand of interest is also not sustainable. Benefits of Exemption Notification cannot be denied when documents show Import of Coffee Beans:

CESTAT Vidya Herbs Private Limited vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 388 The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that the benefits of exemption notification cannot be denied when documents show the import of coffee beans. Since the Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, the CESTAT set aside the impugned order and allowed the appeals by way of remand. A two-member bench comprising of Mr P A. Augustian, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) observed that there is no doubt that the Bill of Entry describes the goods as ‘Indonesia robusta coffee beans’ and the Indonesian Agricultural Quarantine Agency also declared the goods as Robusta coffee beans, however, on examination it was found that the goods contained 71% coffee husk and the remaining rejected defective beans, thus described as coffee husk/bits as certified by the Bangalore Coffee Board Laboratory. No Penalty Imposable in Absence of Intent to Evade Tax: CESTAT M/s Vinayak Industries vs Commissioner of Central Excise & Customs CITATION: 2024 TAXSCAN (CESTAT) 389 The Chandigarh bench of  Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that no penalty is imposable in the absence of intent to evade tax. The Tribunal held that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST. A single bench comprising Sh S S Garg, Member (Judicial) held that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST.

Nothing emerges from the impugned order that the appellant has not filed the requisite returns with intent to evade the payment of tax.  The CESTAT held that the imposition of penalties amounting to Rs.96,000/- is not sustainable and set aside the impugned order by allowing the appeal of the appellant Classification of Old And Used lead Acid Batteries based on Technical Nature cannot be challenged without any evidence: CESTAT Triveni Shipbreakers vs C.C.E. & S.T.-BHAVNAGAR CITATION: 2024 TAXSCAN (CESTAT) 390 The Ahmedabad bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that the classification of old and used lead acid batteries based on their technical nature cannot be challenged without any evidence. In the absence of any investigation, the technical nature of the product poses a challenge for classification. A two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the lower authorities had not appreciated the nature and characteristics of the batteries in question before classification. As regards the submissions made by the Appellant the batteries that have been sold are an outcome of ship breaking and not that of manufacturing therefore it has not been sufficiently established that the said goods be classified as scrap altogether. Corrugated Boxes for Packaging Glass Ware Which are Non Cenvatable is not liable to Excise Duty: CESTAT Shreno Ltd vs C.C.E. & S.T.-Vadodara-i CITATION: 2024 TAXSCAN (CESTAT) 391

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that corrugated boxes for packaging glassware which are non-cenvatable are not liable to Excise Duty. A two-member bench comprising of Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member ( Technical ) observed that the demand was raised on all the scrap sold by the appellant value of which is reflected in the balance sheet. The appellant while giving the information, as asked by the department vide their letter dated 06.03.2013, in their letter dated 11.03.2013 categorically stated that they have paid the excise duty on manufacturing scrap nor cenvatable scrap, they also stated that on the general scrap which is neither manufacturing scrap nor cenvatable scrap, they have not paid the duty. No Service Tax leviable on Installations on CNG Kits in Absence of Separate Invoices: CESTAT Commissioner of C.E. & S.T.-Surat-i vs J K Motors CITATION: 2024 TAXSCAN (CESTAT) 392 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that no service tax leviable on installations on CNG Kits in absence of separate invoices. A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that separate invoices were not found as regards the Assessee having carried out installations on CNG kits that despite the assessee having carried out such installations and paid VAT thereon, it cannot be ipso facto concluded that they have not rendered any taxable service and are not liable to service tax. Therefore we find that in the interest of justice the said issues need to be examined in depth. The issue needs to be remanded to the adjudicating authority for reconsidering the value for demand taking to consideration the dispute raised in the show cause notice and submissions made by both the sides.”

Emotionally Intelligent Companion device is Human-like Companion for Children, classifiable as ADP: CESTAT quashes Customs Duty Demand R N Chidakashi Technologies Pvt Ltd vs Commissioner of Customs (Import) CITATION: 2024 TAXSCAN (CESTAT) 393 The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed customs duty demand and held that Emotionally Intelligent Companion Device is human-like companion for children and the same is classifiable as automatic data processing ( ADP ). A Two-Member Bench comprising Ajay Sharma, Judicial Member and CJ Mathew, Technical Member observed that “The facts, indelibly clear, does not controvert conformity with the essential requirements set out in note 5(A) in chapter 84 of First Schedule to Customs Tariff Act, 1975 There is no finding that the impugned goods, by incorporating or working in conjunction with ‘automatic data processing ( ADP ) machines’, performs the function of ‘toys’ which should be the consummation of resort to note 5(E) in chapter 84 of First Schedule to Customs Tariff Act, 1975 and such finding is well nigh impossible in the absence of any authoritative guidance on ‘toys’ and its intended functions.”

Income Received by Smaaash from Bowling covered u/s 66D(j) of Finance Act, Service Tax not leviable: CESTAT M/s Smaaash Leisure Limited vs Commissioner of Central Goods & Service Tax, New Delhi CITATION: 2024 TAXSCAN (CESTAT) 394 The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Income received by Smaaash from bowling covered under Section 66D(j) of the Finance Act, 1994, and thereby holding that service tax is not leviable. A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “It has to be held that the income received by the appellant from bowling alley would be covered under section 66D(j) of the Finance Act and, therefore, would not be leviable to service tax.”

No Excise Duty Demand on Printing Activity as it does not amount to ‘Manufacture’: CESTAT M/s.Chromaprint (India) Pvt. Ltd vs The Commissioner of GST & Central Excise CITATION: 2024 TAXSCAN (CESTAT) 395 The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that excise duty is not leviable on printing Activity as it does not amount to ‘manufacture’. A Two-Member Bench of Vasa Seshagiri Rao, Technical Member and CS Sulekha Beevi, Judicial Member observed that “We are of the view that the activity of printing done by the appellant does not amount to ‘manufacture’. The demand of Excise duty, interest and the penalties imposed cannot sustain. The demand, interest and penalties are set aside. The impugned order is set aside.” Pump for Lotion Dispenser not Scent Spray or Toilet Spray, BCD leviable at rate of 7.5%: CESTAT Principal Commissioner of Customs vs M/s. Aptar Pharma India Pvt. Ltd CITATION: 2024 TAXSCAN (CESTAT) 396

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that pump for lotion dispenser not scent spray or toilet spray and hence basic customs duty ( BCD ) is leviable at rate of 7.5%. A Two-Member Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “We hold that the product in question is a pump for displacing and dispersing the lotion/cream. Hence, it is definitely not a scent spray or toilet a spray ( CTH 9616 ). It is a pump but not the one under 8413 where the pumps meant only for displacement of liquids are covered. The goods in question is held to be covered under CTH 84248990 being the pumps meant not only for displacing the liquid/lotion but for simultaneously dispersing the same.” Construction Service in connection with Immovable property not to be denied as credit under CCR: CESTAT rules in favour of Idea Cellular Ltd Idea Cellular Ltd vs Commissioner of Service Tax CITATION: 2024 TAXSCAN (CESTAT) 397 The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) in the case of Idea Cellular Ltd has held that the construction service in connection with immovable property is not to be denied as credit under Cenvat Credit Rules (CCR), 2004. A division bench comprising Justice Dilip Gupta, President,  Mr C J Mathew, Member (Technical) And Mr Ajay Sharma, Member (Judicial) held that  ‘The decision in Bharti Airtel is limited to ‘input’ as a source of credit consequent on the finding of ineligibility for claim as ‘capital goods’ and, therefore, not relevant in dispute over entitlement of ‘input service’ as credit.

There is no break in the CENVAT chain insofar as ‘input service’ is concerned. The decisions of the coordinate benches survive as precedent to the extent appropriate to the facts of the present dispute.’ Supply of Manpower Services to Educational Institutions are exempted from Service Tax: CESTAT Commissioner of Central Excise vs M J SOLANKI CITATION: 2024 TAXSCAN (CESTAT) 398 The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the supply of manpower service to educational institutions is exempted from service tax. The Tribunal held that the respondent is eligible for exemption from payment of Service Tax for the supply of manpower to educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012. A two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member (Technical) held that the respondent is eligible for exemption from payment of Service Tax for supply of manpower to above mentioned educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012  and dismissed the appeal of the revenue. No service Tax Leviable on Work done in Capacity of Subcontractor: CESTAT Tejal Construction vs C.C.E. CITATION: 2024 TAXSCAN (CESTAT) 399 The Ahmedabad bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that service tax is not leviable on work done in the capacity of subcontractor.

It was argued that the majority of demand has been confirmed for the work done under the capacity of a sub-contractor since the same would be tantamount to double taxation, therefore no demand can be sustained. A two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr C L Mahar, Member ( Technical )  found that the appellant has submitted that for computation of demand service category-wise demand was not given in the adjudication order. The Tribunal viewed that at least before 01.07.2012, the correct classification of services is are must to demand the service tax. Therefore, the adjudication order is lacking with regard to the service-wise bifurcation of the demand which needs to be done. Freight Amount not Includible in Assessable Value of Goods for Charging Excise Duty: CESTAT Panama Petrochem Ltd vs Commissioner of C.E. & S.T.-Daman CITATION: 2024 TAXSCAN (CESTAT) 400 The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the freight amount is not includible in the assessable value of goods for charging excise duty.

A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “We find that freight/insurance have been charged separately and received separately. We also take notice that the buyers of the goods Indian Oil Corporation Ltd. and Hindustan Petroleum Corp. Ltd. have issued purchase order specifying the price for the goods separately and also specifying the transportation cost for the supply of goods. Accordingly, appellant have supplied the goods and raised invoices for the price of goods and the transportation. Thus, it amounts to showing the cost of transport separately in the invoices.” Adjudicating Authority not under Whims of to Allow or Reject Request for Cross-Examination u/s 9D of Central Excise Act: CESTAT Shri Abbasbhai Teherali Bharmal vs Commissioner of C.E. & S.T CITATION: 2024 TAXSCAN (CESTAT) 401

The Ahmedabad Bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the Adjudicating Authority is not empowered to act under whims of to allow or reject request for cross-examination under Section 9D of the Central Excise Act, 1944. A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “Mainly the case is based on statements of various persons. The appellant have requested for cross-examination of the witnesses, which has been rejected by the Adjudicating authority. In the Adjudication process, the conducting the examination-inchief and thereafter offering the witness to appellant for cross-examination is mandatory under Section 9D of Central Excise Act, 1944. Cenvat Credit not Available in Absence of Declaration of Duty in Invoice issued to Buyer: CESTAT remands Matter for Adjudication Anwitha Impex Pvt. Ltd. vs Commissioner of Customs (Exports) CITATION: 2024 TAXSCAN (CESTAT) 402

The Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that Cenvat Credit was not available in the absence of a Declaration of Duty in the invoice issued to the buyer and remanded the matter to consider the Chartered Accountant’s certificate dated 06/06/2014 apart from the other documents already submitted by the Appellant at the time of filing the refund claim adjudication. A single bench of Shri M. Ajit Kumar, Member (Technical)  found that the Board vide instruction circular issued from F.No. 275/34/2006- CX.8A, dated 25-7-2008 has stated that Commissioner (Appeals) while deciding the appeals filed before him under Section under Section 128A of the Customs Act, 1962, shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. He can direct the production of any document, or the examination of any witness to enable him to dispose of the appeal. In the circumstances, it was not proper of him to have rejected the appeal without examining it on its merits and after issuing a proper speaking order. No service Tax liability Arise u/s 66A on Company operating as Agency to Carry Out Business Trading: CESTAT Kiran Gems Pvt Ltd vs C.C.E. & S.T.-Surat-i CITATION: 2024 TAXSCAN (CESTAT) 403

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax liability arises under section 66 A of the Finance Act, 1994 on a company operating as an agency to carry out under the purview of Section 66A of the Finance Act,1994 when a permanent establishment of the foreign service provider exists in India the recipient of service in India cannot be made liable to pay service tax under reverse charge mechanism. A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that a branch office is covered under the scope of permanent establishment. Since Sarin India is a wholly owned subsidiary of Sarin Israel carrying out and coordinating essential trading activities it would be safe to say that Sarin India is in itself a branch office of the Israel company. Denial of Claim of 4 % SAD Refund alleging Trivial Procedural Requirement: CESTAT allows Refund HAMILTON HOUSEWARES PVT LTD vs C.C. AHMEDABAD CITATION: 2024 TAXSCAN (CESTAT) 404 In a recent judgement, the Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the denial of the Claim of 4 % Special Additional Duty ( SAD ) refund alleging trivial procedural requirement is invalid and allowed the refund. The Tribunal viewed that the benefits under Notification No.102/2007 – Customs should not be denied to the Appellant thereby the Appellant is entitled to refund the claim. A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) viewed that the benefits under Notification No.102/2007 – Customs should not be denied to the Appellant thereby the Appellant is entitled to refund claim. Relief to Hindalco, Credit of steel Used to Support Capital Goods is Eligible for Cenvat Credit: CESTAT HINDALCO INDUSTRIES LIMITED vs C.C.E.-BHARUCH CITATION: 2024 TAXSCAN (CESTAT) 405 In the case of Hindalco Industries Ltd, the Ahmedabad bench of Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that the credit of steel used to support capital goods is eligible for cenvat credit.

A two-member bench of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that the Cenvat credit has been denied on iron and steel items used in the fabrication of supporting structures for capital goods is eligible. The Appellants have availed Cenvat credit on H.R. M.S. & S.S. plates used in the fabrication of supporting structures of capital goods.