Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Weekly Flashback for the period 2 to 8 March 2025.

AVVNL Not Liable To Pay Service Tax On Amount Recovered Towards Penalty: CESTAT

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Ajmer Vidyut Vitran Nigam Ltd. (AVVNL) is not liable to pay service tax on the amount recovered towards penalty.

The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical  Member) has observed that the amount recovered by the appellant towards penalty is not a consideration for any activity which has been undertaken by the appellant and as a result there is no ‘service’ in terms of Section 65B(44) of the Finance Act, 1994.

No Service Tax Payable On Cartage Charges: CESTAT

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no Service Tax is payable on cartage charges which is related to payments made to the supplier of the goods which included the transportation cost and is not included under Goods Transport Agency (GTA) services.

The bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the amount/expenses/charges were not paid by the respondent directly to the transporter for transportation of any goods. Thus, the activity cannot be covered under GTA Services, hence, no service tax liability can be levied on the aforesaid amount/expenses/charges under GTA services.

Alleged Artificial Division Of Units To Claim Separate SSI Exemptions : CESTAT Quashes Central Excise Duty Demand

The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the central excise duty and penalties demand of Rs.15.46 lakh against the assessee who was allegedly involved in artificial division of units to claim separate SSI exemptions.

The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that there was no evidence of common accounts, financial flow, or mutuality of interest, holding that the units were independent and eligible for SSI exemption. A significant relief for the appellants and a reaffirmation of established legal principles.

CESTAT Upholds Service Tax On Legal Fee Expense

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the Service Tax amounting to Rs. 31800 on Legal Fee expense incurred by the appellant, Saisun Outsourcing Services during the period F.Y. 2016-17.

The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya Member (Technical) has observed that the appellant has shown Legal fees expense of Rs. 2,12,000/-in 2016-17. No submission was made by the appellant nor have they contested the applicability of Service Tax on the said expense. In absence of any reply or any supporting documents, Legal fees expenses incurred by the appellant are expenses towards Legal services.