Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Weekly Flashback for the period 9 to 15 March 2025.
Customs Officer Not Empowered To Interfere With FOB Value Of Goods: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no stranger to the contract, including any Customs officer has any right to interfere with the FOB value of goods.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao, (Technical Member) has observed that FOB value is the transaction value, i.e., the price paid or to be paid for the goods as decided between the exporter and the overseas buyer. The Customs Act does not empower any officer to modify the FOB value of goods.
Customs Brokers Can’t Be Expected To Keep Continuous Surveillance On Client’s Address: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao, (Technical Member) has observed 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.
Excise Dept. Waited 9 Years Just To Fix Personal Hearing: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) while quashing the order issued after inordinate delay held that the excise department waited 9 years just to fix personal hearing, is unreasonable.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the Statute of Limitation, being a procedural law, would apply to pending cases as well with the rider that if something had already expired under the previous law, the new limitation would not revive it. So long as the issue is alive, the new limitation would apply. The date of cause of action is irrelevant to the limitation.
CESTAT Quashes Rs. 125 Crore Service Tax Demand Against Bharti Airtel, Call Free Allowance Waiver For Employees Not Taxable
The Chandigarh Bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) while quashing the service tax demand of Rs. 125 Crore against Bharti Airtel held that the Call Free Allowance (CFA) waiver for employees is not taxable.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that service tax cannot be levied when there is no consideration received. Free allowance given to the employees by the Bharti Airtel is in the nature of discount/concession and as the same has not accrued to the service provider-appellant, it cannot form part of the consideration for the purpose of levy of service tax.
IIFL Not Liable To Pay Service Tax On Delayed Payment Charges Collected Towards Credit Facilities: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that India Infoline Limited (IIFL) is not liable to pay service tax on delayed payment charges (DPC) collected towards credit facilities.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that the adjudicating authority having ignored the department‟s own circular about the collection of delayed payment charges (DPC) has wrongly held the amount to be the consideration for providing a separate activity. It has absolutely been ignored that there was only one contract of appellant with their client for sale/purchase of security and the said contract itself talked about penal charges to have been collected from the clients in case the payments are delayed. DPC are wrongly held to be taxable. Demand is held to have been wrongly confirmed.
CESTAT Upholds Service Tax On Renting Of Immovable Property
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the service tax on renting of immovable property.
CESTAT Directs Provisional Release Of Seized Goods Subject To Hypothecation Of Immovable Property
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has directed the provisional release of seized goods subject to hypothecation of immovable property.
The bench of Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member) has directed that the party shall offer a hypothecation as offered to us, security of any immovable property in the name of the appellant party which shall remain with the department, till the time export sale proceeds are realised. The valuation of the above property shall be more than the amount of bank guarantee determined by the adjudicating authority vide impugned order dated 30.01.2025. Further, the said immovable property should be free from any loan or hypothecation.
Service Tax Can’t Be Demanded On Generator Sales Citing Installation: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the demand of service tax on the sale of generators by treating them as “works contracts” merely because the generators were also installed and commissioned by the appellant cannot be sustained and is liable to be set aside.
Service Tax, Fine, or Penalty Not Considered Pre-Deposit For Filing Appeal: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax, fine, or penalty not considered pre-deposit for filing appeal.
The bench of P.V. Subba Rao (Technical Member) has observed that the distinction between refund of pre-deposit made under section 35F and duty or service tax paid under section 11B is that the pre-deposit under section 35F can be a percentage of duty, fine or penalty. It must be deposited as a pre-condition for filing an appeal. If the pre-deposit is not made, there will be no right of appeal to the person aggrieved by the order. Section 11B, on the other hand, provides for refund of duty or service tax. If an amount is already paid as duty or service tax, it is reckoned while computing if any further amount needs to be paid to meet the mandatory requirement of pre-deposit under section 35F. Merely because such adjustment is made, the amount paid as service tax or fine or penalty does not become pre-deposit under section 35F.
Service Tax Exemption On Services By Organizer For Business Exhibition Held Outside India: CESTAT
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service tax exemption is available on services by organisers for business exhibitions held outside India.
The bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the Business Exhibition for which the appellant received services from the foreign agencies, were held outside the taxable territory. Resultantly, the Place of Provision of Services received by the appellant from the foreign service provider shall be outside the territory of India. The appellant was not liable to pay service tax even under Reverse Charge Mechanism (RCM).
