Hyderabad CESTAT Upholds Rule 26 Penalty On Philips For Knowledge Of Undervalued Excisable Goods

On 14 May, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal filed by Philips Electronics India Ltd. challenging the penalty imposed in connection with excisable goods manufactured by Quad Electronic Solutions Pvt Ltd. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad held that a company can be penalised under Rule 26 of the Central Excise Rules if it knowingly deals with goods cleared at undervalued prices that are liable...

CESTAT New Delhi Holds Transfers Between Amalgamated Units Not Taxable As Related-Party Sales

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 13 May held that transfers of goods between amalgamated units sharing the same legal identity do not qualify as “sales” under the Central Excise law and, therefore, the related-party valuation rules do not apply. Judicial Member Ashok Jindal and Technical Member K. Anpazhakan allowed the appeal by R R ISPAT and held that once two units are amalgamated and operate under the same PAN and Corporate...

CESTAT Chennai Holds Foreign Bank Charges on Export Remittances Not Taxable Under Reverse Charge

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 May held that foreign bank charges deducted during the remittance of export proceeds do not give rise to service tax liability under the reverse charge mechanism, as no service provider–recipient relationship exists between the exporter and the foreign banks. Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar, allowed the appeal filed by Lingeswara Creation and set aside the orders passed by...

CESTAT Hyderabad Says Buyer's Premises Can Be 'Place of Removal', Upholds GTA Credit In FOR Sales

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 May held that in FOR destination sales, where freight and insurance form part of the assessable value and the seller retains risk and ownership till delivery, the buyer's premises can qualify as the “place of removal”. Consequently, Service Tax paid on outward GTA services is eligible for CENVAT Credit. A Bench comprising Technical Member A.K. Jyotishi and Judicial Member Angad Prasad observed that the...

CESTAT Hyderabad Grants ₹1.17 Cr CENVAT Credit Relief To Madhucon Sugar, Holds Electricity Non-Excisable

The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 8 May held that Rule 6 of the CENVAT Credit Rules, 2004 does not permit denial of CENVAT credit on input services used for generation of electricity, since electricity is not an excisable good. Rule 6 bars CENVAT credit to the extent common inputs or input services are used for exempted goods or services.Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed the appeal filed by Madhucon...

CESTAT Ahmedabad Sets Aside Rs 4.94 Lakh Excise Duty Against Pepsico Over Pre-Levy Aerated Water Stock

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Ahmedabad has set aside a Rs 4.94 lakh Additional Excise Duty demand against Pepsico India Holding Pvt. Ltd. over aerated waters manufactured before the levy came into force but cleared later, holding that the department could not sustain the demand. “Since, the department has accepted the earlier orders in favour of the appellant and has not filed any appeal, therefore, now the department is prevented from taking a contrary...

CESTAT Delhi Quashes Excise Demand Against Gutka Firm; One Raw Material Receipt Can't Prove Clandestine Removal

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has set aside an excise duty demand and penalties against R.S. Company and its partner in a gutka clandestine removal case. It found that the Commissioner relied on photocopies of six lorry receipts, DGGI re-quantification, and a formula based on alleged scented tobacco receipts without sufficient supporting evidence. A coram of President Justice Dilip Gupta and Technical Member P. Anjani Kumar observed: “The...

BHEL's Excise Refund Appeal Shouldn't Have Been Dismissed Over Wrong Date In Appeal Proforma: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Delhi has recently held that the Commissioner (Appeals) should not have dismissed Bharat Heavy Electricals Limited's excise duty refund appeal as time-barred solely on the basis of the date mentioned in the appeal proforma, without examining its submissions and affidavit explaining the delay. A bench of Technical Member P. Anjani Kumar remanded the matter to the Commissioner (Appeals), Bhopal, after finding that BHEL's appeal...

Concrete Mixed Near Project Site Not Ready-Mix Concrete: CESTAT Bengaluru Grants Relief To Marymatha Infra

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Bengaluru, has set aside a Rs. 17.53 lakh excise duty demand against Marymatha Infrastructure Pvt. Ltd., holding that the concrete manufactured by the company near the Thanneermukkom Barrage construction site in Kerala was “concrete mix” and not “Ready-Mix Concrete (RMC)” liable to duty. Judicial Member Dr. D.M. Misra and Technical Member R. Bhagya Devi observed that the Revenue had failed to produce evidence showing that...

Sugar Syrup Used In Biscuit Manufacturing Not Marketable, No Excise Duty Payable: CESTAT Hyderabad

The Hyderabad Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 4 May held that sugar syrup prepared and used captively in the manufacture of biscuits is not marketable in the form in which it emerges and is therefore not eligible for central excise duty. The Bench comprising Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed the appeals filed by Sumo Foods Pvt. Ltd. and set aside the demand confirmed by the Department. It observed: “the sugar syrup...

Waste Mud From Refining Process Not Liable To Excise Duty: CESTAT Hyderabad

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that “waste mud” (spent earth) generated during the refining of crude palm oil is not an excisable product under Section 2(d) of the Central Excise Act and is therefore not liable to Central Excise duty. A Division Bench comprising Technical Member A.K. Jyotishi and Judicial Member Angad Prasad set aside the duty demand and held that the adjudication rested on an invalid circular. The Tribunal ruled...

CESTAT Chennai Orders Refund Of Excise Duty On Revised Price Not Accepted By Buyer

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that excise duty paid on a higher price claimed through supplementary invoices cannot be sustained where the buyer never accepted that price. “The contemporaneous letter dated 13.07.2015 issued by the buyer clearly establishes that the supplementary invoice was not accepted, the amount was not accounted in the books and no CENVAT credit was availed. Thus, the revised value never crystallized into a transaction...