Madras High Court Calls CESTAT Order 'Very Cavalier', Restores ₹90 Lakh Customs Penalty On Steamer Agent

The Madras High Court has recently restored a ₹90.15 lakh customs penalty imposed on MSC Agency India Pvt. Ltd. It found that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had dealt with the matter in a “very cavalier fashion”, despite the fact that the actual weight of goods unloaded from 150 containers was only 12.5% on average of the declared weight.“We find that the Tribunal failed to note that admittedly, 150 containers were shipped through the same shipping line and in...

CESTAT Delhi Holds Consultancy To Single Client Cannot Be Treated As Intermediary Services

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, has recently held that consultancy services provided directly to a service recipient cannot be classified as intermediary services merely because the consultancy helps the recipient deal with third parties.The bench comprising Judicial Member Binu Tamta and Technical Member P.V. Subba Rao observed that an intermediary arrangement requires three parties. The intermediary must facilitate or arrange the main supply between...

Customs Law Does Not Recognise 'Substantial Compliance' In Matters Of Warehousing: CESTAT Hyderabad

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has recently ruled that Customs law does not recognise the concept of “substantial compliance” in warehousing. It rejected Oswal Minerals Ltd.'s argument that its imported manganese ore substantially remained under the custody of the same warehouse operator.“Customs law does not recognise the concept of “substantial compliance” in matters concerning warehousing. What the statute requires is deposit of the imported goods...

CESTAT Chandigarh Remands Dabur Appeals Over Excess Self-Credit, Excise Duty Demands For Recalculation

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has sent back a batch of appeals involving demands against Dabur India Ltd.'s Jammu and Kashmir units for allegedly taking refunds or self-credit in excess of the value addition permitted under the applicable exemption.For Unit I, the Department had demanded ₹3.45 crore as repayment of self-credit and a further ₹12.41 lakh as excise duty. For Unit II, it had demanded ₹5.40 crore as repayment of self-credit and a further...

Bills Issued By GTA Can Qualify As Consignment Notes If They Contain Essential Particulars: CESTAT Allahabad

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad has recently held that a document issued by a Goods Transport Agency (GTA) need not be titled a “consignment note” to qualify as one, as its substance and contents are material.A bench comprising Judicial Member P. K. Choudhary and Technical Member K. Anpazhakan relied on the words “by whatever name called” in Section 65(50b) of the Finance Act, 1994, which defines a GTA. The provision covers a person providing services...

Madras High Court Orders Provisional Release Of Vimpro Tech Goods Pending Adjudication

The Madras High Court on 5 August held that pendency of a Customs investigation by itself cannot be a ground to deny provisional release of imported goods when Section 110A of the Customs Act, which specifically permits provisional release of detained goods subject to conditions, applies. Justice Hemant Chandangoudar set aside the Customs order rejecting Vimpro Tech's request for provisional release and directed the authorities to release the goods subject to conditions, while allowing the...

CESTAT Mumbai Holds CCSP Suspension Must Be Preventive Not Punitive, Restores ICTPL Licence

On 10 August, the Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the power to immediately suspend a Customs Cargo Service Provider (CCSP) approval under Regulation 11(2) of the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR) is preventive and not punitive, and can be exercised only where a demonstrable and continuing threat requires immediate action. A Bench comprising Judicial Member Ajay Sharma and Technical Member A K Jyotishi set aside the...

Allahabad CESTAT Sets Aside ₹22.84 Crore HCL Infosystems Service Tax Demand As Time-Barred

On 10 August, the Allahabad Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the Rs. 22.84 crore service tax demand against HCL Infosystems Ltd., holding that the demand up to September 2014 was barred by limitation. A Bench comprising Judicial Member P.K. Choudhary and Technical Member K. Anpazhakan also clarified that the demand for the post-1 July 2012 period was unsustainable on the basis of the provisions invoked by the Department. It observed: ...

Customs Duty Exemption On Flavour Compound Cannot Be Denied On Alcohol Content Alone: CESTAT Bengaluru

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bengaluru, has held that a customs duty exemption claimed on imported flavour compounds cannot be denied without establishing that the goods fall within the exclusion for compound alcoholic preparations of a kind used for the manufacture of beverages.The revenue must prove that the goods satisfy the exclusion. A bench comprising Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi refering to a 2002 notification...

Recovery Of LC Charges By Non-Banking Entity Not Taxable As Banking Services: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has held that the issuance of a Letter of Credit (LC) by a person or body corporate not engaged in banking, financial, or similar activities is not covered under the taxable category of "Banking and Other Financial Services." It ruled that the recovery of LC charges by the State Trading Corporation of India Ltd. (STC) from buyers in High Seas Sale (HSS) transactions is therefore not liable to service tax.A bench of...

Interest On Duty Drawback Payable From LEO Date Not Adjudication Order: Delhi High Court

The Delhi High Court on 3 August held that interest on delayed duty drawback becomes payable one month after issuance of the Let Export Order (LEO), and the pendency of adjudication proceedings cannot postpone the statutory liability under Section 75A of the Customs Act (which provides for payment of interest on delayed drawback). A Division Bench of Justices Anil Kshetrapal and Shail Jain dismissed the Revenue's appeal against Siddhachalam Exports Pvt. Ltd., holding that the exporter was...

CESTAT Delhi Sets Aside ₹3.77 Crore Penalty Against Maruti Suzuki In Customs Classification Dispute

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside a ₹3.77 crore penalty imposed on Maruti Suzuki India Ltd. over the classification of imported Glow Plug Control Units (GCUs).It held that customs authorities had accepted the company's classification of imported Glow Plug Control Units (GCUs) since 2015. The tribunal, however, ruled that the products are classifiable as components of electrical ignition or engine-starting equipment used in diesel engines. ...