Indirect Tax Weekly Flashback for the period 5 January 2025 to 11 January 2025.
Table of Contents
Supreme Court
Service Tax Applicability On Salary Reimbursements For Seconded Employees: Supreme Court To Review Its Own Judgement
Case Title: M/S Mitsui Prime Advanced Composites India Pvt. Ltd. Versus Commissioner Central Exicise And Service Tax
The Supreme Court will review its own judgement related to the applicability of the service tax on the salary reimbursements for seconded employees.
The bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar has issued the notice and directed to tag Civil Appeal No. 7295/2022, titled “Commissioner of GST and Central Excise Chennai vs. M/S Komatsu India Pvt. Ltd.”
Delhi High Court
Placing Matter In Callbook By Customs Dept. Would Not Justify Non-Adjudication Of Notice Within Reasonable Period: Delhi High Court
Case Title: Balaji Enterprises Versus Additional Director General New Delhi & Ors.
The Delhi High Court has held that placing matter in the callbook by the customs department would not justify non-adjudication of notice within a reasonable period.
The bench of Justice Prathiba M. Singh and Justice Amit Sharma has observed that despite the reply having been filed to the show-cause notice, there has been no adjudication. There existed no reason for the non-adjudication of the show-cause notice and therefore the facts do not reveal any glaring impossibility for the Customs Department to deal with the show-cause notice.
Service Of Notices, Orders Ought To Be Effected Even Through Email And On DGFT Portal To Avoid Ex-Parte Proceedings : Delhi High Court
Case Title: Bonanza Enterprises Versus The Assistant Commissioner Of Customs & Anr.
The Delhi High Court has held that the service of notices, communications and orders ought to be effected even through email and on the common portal i.e. on Directorate General Of Foreign Trade (DGFT) so as to avoid ex-parte proceedings.
The bench of Justice Prathiba M. Singh and Justice Amit Sharma has directed the communication of the order to the Chairman, Central Board of Customs and Indirect Taxes so that the mandate of the provision of Section 153(b) and (c) for communication of notices, orders etc., by email as also uploading on the Directorate General of Foreign Trade (DGFT) common portal can henceforth be given effect to.
Encashment Of Bank Guarantee Deserves To Be Restrained Subject To Keeping Bank Guarantee Alive : Delhi High Court
Case Title: Amar Singh And Sons Tree Nuts LLP Versus The Superintendent Of Customs
The Delhi High Court has held that the encashment of the subject bank guarantee deserves to be restrained subject to the Petitioner keeping the bank guarantee alive.
The bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma have observed that no coercive measures can be taken against the Appellant during the period when the limitation for filing of the appeal has not expired. In addition, if the pre-deposit has already been made the remaining amount cannot be recovered by encashment of the bank guarantee. Either way, the Order and the period for filing the appeal is three months in terms of Section 129A of the Customs Act, 1962.
Rajasthan High Court
Disobedience Might Not Be Willful: Rajasthan High Court Ask Deputy Commissioner Of Commercial Taxes To Recall Contemptuous Order
Case Title: Alok Chitra Mandir Versus Hemant Jain
The Rajasthan High Court has asked the Deputy Commissioner Of Commercial Taxes to recall contemptuous order and held that the disobedience by the official might not be willful.
The bench of Justice Rekha Borana has observed that the disobedience might not be willful but because of lack of understanding/misunderstanding, stopping short of recording a finding of willful disobedience qua the respondent-contemnor.
Bombay High Court
CESTAT Failed To Discharge First Appellate Court’s Duties By Passing Single-Paragraph Order: Bombay High Court
Case Title: The Commissioner of Central Excise & Customs Versus M/s. Jain Irrigation Systems Ltd.
The Bombay High Court came down heavily on the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and stated that CESTAT has failed to discharge the first appellate court’s duties by passing a single-paragraph order.
The bench of Justice M.S.Sonak and Justice Jitendra Jain has observed that the CESTAT’s order warrants interference because the CESTAT has not discharged the duties and obligations expected of a first appellate Court in this case. The central and crucial issues were not considered. The findings of fact were not addressed. The CESTAT failed to address, much less come into close quarters with the reasoning of the Commissioner. The order, with respect, is a cryptic single-paragraphed order.
Orissa High Court
Orissa High Court Quashes Increased Tax Demand Against Coca Cola
Case Title: M/s. Hindustan Coca-Cola Beverages Pvt. Ltd., Versus The Commissioner, CT and GST Odisha, Cuttack and others
The Orissa High Court has quashed the increased tax demand against Coca Cola.
The bench of Justice Arindam Sinha and Justice M.S. Sahoo has observed that an amendment, which has the effect of enhancing an assessment or otherwise increasing liability of the assessee shall not be made unless the authority has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.
Himachal Pradesh High Court
Excise Dept. Can’t Red Mark Property In Revenue Records For Old Tax Dues Against Auction Purchaser: Himachal Pradesh High Court
Case Title: M/s H M Industries Versus State of H.P. & Ors.
The Himachal Pradesh High Court has held that excise department cannot red mark property in revenue records for old tax dues against auction purchaser.
The Bench of Justice Tarlok Singh Chauhan and Justice Rakesh Kainthla has relied on the decision in the case of Rajinder Singh vs. State of H.P. & Ors in which it was held that the busi- ness liability of the Erstwhile Dealer (Loanee) could not be fastened unless “an auction purchaser or purchaser became owner by transfer of such business liability” under section 39 of the HP VAT Act.
CESTAT
Once Suppression Of Facts Is Established, Extended Period Of Limitation Can Be Invoked: CESTAT
Case Title: M/s.Combine Trading Company Versus Principal Commissioner of Customs- (Import), Inland Container Depot, Tughlakabad, New Delhi
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that once suppression of facts is established, an extended period of limitation can be invoked.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that there is a deliberate mis-declaration on the part of the appellant in intentionally suppressing the actual invoices reflecting true transaction value so as to evade the payment of higher customs duty. The importer has thus violated the provisions of section 17(1) and section 46 of the Customs Act as they failed to make the correct declaration in Bills of Entry and proper self assessment.
Production Of CA Certificate After 10 Years Nothing But Afterthought Exercise For Claiming Refund: CESTAT
Case Title: M/s Eveready Industries India Ltd. Versus Commissioner of Central Excise, Noida
The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that the refund claim is filed for the period February, 2012 to June 2012 and the order is of 29.04.2013, production of a CA certificate which was later than ten years, the date when the order was passed, do not serve any purpose and it was never ever produced before the Original Authority or before the First Appellate Authority. It was not even the case of the appellant that the Chartered Account certificate was certified with this regard. Such a certificate should be considered nothing but an afterthought exercise, the same needs to be rejected without any further consideration.
Minimum Import Price Fixed By DGFT Can’t Be Called Tariff Value : CESTAT Reduces Redemption Fine
Case Title: M/s Ananya Overseas Versus Commissioner of Customs, Noida
The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) minimum import price fixed by Directorate General Of Foreign Trade (DGFT) cannot be called tariff value and reduced the redemption fine.
The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that the minimum import price fixed by the DGFT could not be called the tariff value as has been done by the impugned order. The Tariff Value as defined by the Custom Act, 1962 is the value of the goods fixed by the Board and could not have been fixed by any DGFT. Minimum Import Price fixed by the DGFT is an indicative minimum price of the goods imported and the goods if imported below this price could not have been allowed clearance for home consumption. However this price could not have been the basis for rejection of the transaction value declared by the importer.
No Service Tax On Discount Towards Sale Of Goods: CESTAT
Case Title: Tata Chemicals Limited vs CE & CGST Noid
The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on discount towards sale of goods.
The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that discount towards sale of goods, is excluded from the definition of ‘service’ under Section 65B(44) of the Finance Act, 1994 and thus not chargeable to Service Tax under Section 66B of the Act for the period from July 2012.
No Penalty Is Imposable For Non-Filing Of Nil Return: CESTAT
Case Title: M/s S. I. Enterprises Versus Commissioner of Central Excise & CGST, Meerut
The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no penalty is imposable for non-filing of nil return.
The bench of P.K. Choudhary (Judicial Member) has observed that filing of return is not required if service tax liability is NIL. Hence, imposition of penalty for not filing returns by the Appellant who was not providing taxable service is unjustified.
SCN Time-Barred, Service Tax Demand Not Sustainable: CESTAT
Case Title: New Age Laminators Private Limited Versus Commissioner of Central Goods And Service Tax & Central Excise &-Alwar
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that since the Show Cause Notice (SCN) stands time-barred, confirmation of service demand proposed in the SCN is not sustainable.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that it is the responsibility of the Central Excise Officer with whom the Returns are filed to scrutinise them and if necessary, make the best judgment assessment under section 72 and issue an SCN under Section 73 within the time limit. If the officer does not do so, and any tax escapes assessment, the responsibility for it rests on the officer.
Education Cess Can’t Be Charged Again Once Added To Customs Duties: CESTAT
Case Title: M/s Meneta Automotive Components Pvt. Ltd. Versus Commissioner of Central Excise, Rohtak
The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that once education cess is added to the customs duties to arrive at the aggregate of customs duties, the question of charging education cess again does not arise.
Banks Entitled To CENVAT credit On Insurance Service By Deposit Insurance Corporation: CESTAT
Case Title: M/s State Bank of Patiala Versus Commissioner of Central Excise and Service Tax, Chandigarh-II
The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the the insurance service provided by the Deposit Insurance Corporation to the banks is an “input service” and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering “output services.
CESTAT Quashes Service Tax On ‘Manpower Recruitment Or Supply Agency’ Services For Setting-Up Of Koldam Hydropower Station On Satluj River
Case Title: M/s Austees Hydro Power & Construction Co Pvt Ltd Versus Commissioner of Central Excise and Central Goods & Service Tax, Shimla
The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax on ‘manpower recruitment or supply agency’ services for setting-up of Koldam Hydropower Station On Satluj River.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the alleged services rendered by the appellant were related, bundled and undertaken in course of construction, repair, maintenance etc of the same dam i.e. cofferdam at KOLDAM which were specifically exempted by name up to 30.06.2012 vide Notification No. 17/2005-ST dated 07.06.2005.
Final Buyer Of Goods/Recipient Of Service Entitled For Refund Of Tax, If Any That Is Due: CESTAT
Case Title: K. Ramani Versus Commissioner of GST & Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the final buyer of goods/recipient of service is entitled for refund of tax, if any that is due.
The bench of M. Ajit Kumar (Technical Member) has observed that it is the appellant/final buyer who has borne the ultimate incidence of the tax, and not the Trust, who is the eligible claimant of the refund and is not barred from claiming the same. The question of unjust enrichment also does not arise as the amount has been paid from the appellants own resources and has not been shown to have been passed on.
CESTAT Quashes Absolute Confiscation To Permit Gold Jewelry To Be Redeemed On Payment Of Fine And Penalty
Case Title: Vicky Ramchand Asrani Versus Commissioner of Customs
The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the absolute confiscation to permit gold jewelry to be redeemed on payment of fine and penalty.
The bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) has observed that gold and articles made of gold are goods and not vested in the government. Illicit import of articles of gold must be deterred but not by alienation of possession from its owner. The cause for restricting import of ‘semi wrought’ gold is monetarily measurable and that would have sufficed as consequence of wrongful import. There was, thus, no justification for absolute confiscation of the goods – either from being restricted or despite being restricted.
CESTAT Uphold Rejection Of Service Tax Refund Claim On Educational Course
Case Title: Maharashtra Knowledge Corporation Ltd Versus Commissioner Service Tax-I Pune
The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the rejection of refund claim for the period from April 2014 to September 2014, sought against service tax paid on educational course imparted on the ground that it was subsequently recognized by Yashwantrao Chavan Maharashtra Open University (YCMOU) in March 2015.
Method Of Goods Manufacturing, Clearance Known To Excise Department In Advance; Extended Period Of Limitation Can’t Be Invoked: CESTAT
Case Title: Franke Faber India Private Limited Versus Commissioner of CGST & Central Excise Aurangabad Commissionerate
The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the extended period of limitation cannot be invoked as the facts regarding the clearance of goods etc. were known to the Department as well as to the Audit Officers well in advance.
