CESTAT Chandigarh Holds 'Input Service' Has Wide Scope Under Cenvat Rules, Allows Hero MotoCorp Appeals

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 26 May held that the definition of “input service” under Rule 2(l) of the Cenvat Credit Rules, 2004 has a wide ambit and includes services having even an indirect nexus with manufacturing or business activities. Judicial Member S.S. Garg and Technical Member P. Anjani Kumar allowed a batch of appeals filed by Hero MotoCorp Ltd (formerly Hero Honda Motors Ltd) and set aside the demand raised by the...

Proportionate CENVAT Credit Reversal Equals Non-Availment; CESTAT Delhi Quashes Demand Against Hindustan Zinc

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has set aside a more than ₹7.18 crore demand, along with interest and penalties, raised against Hindustan Zinc Limited over electricity wheeled out from its captive power plant to sister concerns and the state distribution utility. A coram of President Justice Dilip Gupta and Technical Member P. Anjani Kumar held that the reversal of proportionate CENVAT credit attributable to such electricity...

No Excise Duty On Export Unit's Domestic Sale Of Marble Slabs Cut From Imported Blocks Pre-2006: CESTAT Delhi

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in New Delhi has recently held that no central excise duty could be levied on the domestic sale of marble slabs and tiles by Abhishek Exporters, a 100% export-oriented unit, after finding that cutting imported marble blocks into such products during 2002 to August 2005 did not amount to manufacture. A bench of President Justice Dilip Gupta and Technical Member K. Anpazhakan partly allowed appeals filed by...

CESTAT Allahabad Holds Department Must Prove RMC Manufacture Before Levying Excise Duty On Concrete Mix

The Allahabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 14 May held that concrete mix manufactured and consumed at construction sites for residential projects qualifies for exemption from central excise duty and cannot be classified as “Ready Mix Concrete” (RMC) without technical evidence establishing the characteristics of RMC manufacturing. Judicial Member P.K. Choudhary and Technical Member Rajeev Tandon held that the Department failed to prove that...

CESTAT Ahmedabad Holds Rule 8(3A) Invalid After Indsur Global Ruling, Quashes ₹3.60 Crore Duty Demand

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 15 May held that once Rule 8(3A) of the Central Excise Rules, 2002 was declared ultra vires by the Gujarat High Court in Indsur Global Ltd. v. Union of India judgment, the Department could not demand excise duty merely because the taxpayer utilised CENVAT credit during the period of default in payment of duty. Judicial Member Dr. Ajaya Krishna Vishvesha and Technical Member Satendra Vikram Singh partly...

CESTAT Delhi Says Goods Found In Godown Alone Cannot Prove Clandestine Removal, Quashes ₹50 Lakh Excise Demand

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has set aside a central excise duty demand of over Rs. 50 lakh raised against Sharp Mint Limited, holding that the department failed to prove its allegation that the company had clandestinely removed excisable goods found in its godown. A bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan allowed the appeal filed by Sharp Mint Limited against a de novo adjudication order...

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...