Service Tax | Madras High Court Says Refund Cannot Be Denied For Tax Paid Under Mistake Of Law

The Madras High Court has dismissed the Revenue's appeal against an order granting a refund of service tax paid on the supply of floating rigs, holding that the tax had been collected under an erroneous classification and could not be retained by the Government.A Division Bench comprising Dr. Justice G. Jayachandran and Justice N. Mala held that where service tax was paid due to a mistake of law, the Department could not deny a refund merely by relying on the limitation prescribed under...

CESTAT Must Issue Fresh Notice If Bench Does Not Sit On Fixed Hearing Date: Allahabad High Court

The Allahabad High Court has recently held that where no bench of the Customs, Excise and Service Tax Appellate Tribunal sits on the date fixed for hearing so that no judicial order comes to be passed fixing the next date, the Tribunal must issue a fresh notice to the party intimating the next date and place of hearing. It held that an appeal decided ex parte on such an unnotified date is decided without affording the appellant due opportunity of hearing. Rule 18(1) of the Customs,...

CESTAT Must Decide All Issues As Final Fact-Finding Authority: Bombay High Court

The Bombay High Court has recently observed that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), as the final fact-finding authority under the statute, must adjudicate all issues arising from the record. Failure to consider a contention and render a finding on it amounts to failure to exercise jurisdiction, the court observed.“The CESTAT, being the final fact-finding authority under the statute, was duty bound to adjudicate on all issues arising from the record. Its failure to...

CESTAT Kolkata Allows CENVAT Credit On Steel Used To Manufacture Capital Goods

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed Maithan Steel & Power Ltd. to claim CENVAT credit on MS angles, channels, joists and plates used to manufacture capital goods for use within its factory.The tribunal also allowed credit on welding rods and oxygen. Judicial Member R. Muralidhar observed, “From the above Certificate, it is seen that the goods in question including the welding rods and oxygen have been used within the factory...

Calcutta HC Rejects ₹27.74 Cr CENVAT Demand, Says Revenue Cannot Choose Assessee's Compliance Method

The Calcutta High Court has recently dismissed the Revenue's appeals against a biscuit manufacturer in a Rs 27.74 crore CENVAT credit dispute involving the manufacture of both dutiable and exempted biscuits.It held that an assessee has the right to choose between the methods of compliance available under Rule 6(3) of the CENVAT Credit Rules.A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar held that the Revenue cannot switch an assessee to a more punitive method merely...

Excise Department Cannot Invoke Extended Limitation For Omission When Facts Were Already Known: Supreme Court

The Supreme Court on Thursday reiterated that the Excise Department cannot invoke the extended limitation period when the relevant facts were already known to it. The court set aside an excise duty demand after finding that the Department knew the manufacturer had cleared the chassis at 110% of its manufacturing cost.A Bench of Justices J.B. Pardiwala and K. Vinod Chandran, however, upheld the Department's position on valuation. It ruled that the additional 10% included in the valuation of the...

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...

No Excise Duty On Liquor Destroyed In Accidental Fire Without Negligence: Madhya Pradesh High Court

The Madhya Pradesh High Court on 4 August held that excise duty cannot be levied on foreign liquor destroyed in an accidental fire where the loss occurred due to an unavoidable cause and there is no evidence of negligence or deliberate wrongdoing by the licensee.A Single Judge Bench of Justice Milind Ramesh Phadke dismissed the State's writ petition and upheld the Board of Revenue's order setting aside the Rs. 38.41 lakh excise duty demand, finding that the factual conclusions were supported by...

Xerox's 'Kitting' Of Imported Photocopier Modules Is Not 'Manufacture': Supreme Court Upholds CESTAT Ruling

The Supreme Court has held that Xerox India's practice of grouping, plugging and pinning imported photocopier modules according to customers' requirements, commonly known as "kitting", did not amount to "manufacture" under Section 2(f) of the Central Excise Act, 1944. As no manufacturing activity was found, the company was not liable to pay central excise duty. The court reiterated that a process amounts to manufacture only if it results in a new product with a distinct name, character, and...

CESTAT Chandigarh Allows CENVAT Credit On Inputs From Exempt Units, Grants Relief To Reckitt Benckiser

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has ruled that consumer goods maker Reckitt Benckiser India Ltd. was entitled to claim CENVAT credit on duty-paid raw materials purchased from certain tax-exempt manufacturers.It held that the benefit could not be denied simply because the law was amended later to expressly allow it. "We find that before the amendment there was no express prohibition in the CENVAT Credit Rules so as to deny such credit availed by the...

CESTAT Chennai Sets Aside Reclassification Of Poultry Cage Components As Iron and Steel Structures

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the reclassification of weld mesh components used in poultry battery cages. It held that the Revenue failed to explain how products admittedly manufactured exclusively for use in poultry battery cages could be treated as iron and steel structures under the Central Excise Tariff."The Revenue has not made any attempt in placing on record conceivable and convincing reasons as to how the goods under...

Natural Gas Compression For Transport Is Not Manufacture; CESTAT Kolkata Quashes ₹8.97 Crore Excise Demand

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has set aside an excise duty demand of ₹8.97 crore against Great Eastern Energy Corporation Ltd. (GEECL), ruling that compressing natural gas solely to facilitate transportation does not amount to the manufacture of compressed natural gas (CNG).Relying on its earlier ruling in GEECL's own case and its decision in Essar Oil and Gas Exploration and Production Ltd., the tribunal observed, "The above two case laws make it...