CESTAT Mumbai rules on excise duty and service tax exemptions

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has issued rulings regarding tax liabilities for industrial components and telecommunications distributorships.

In the case of Thermax Ltd. vs Commissioner of CGST & CE, the Mumbai tribunal addressed whether bought-out components supplied directly to customer sites for the installation of boilers and pollution control equipment are liable for central excise duty. The department had argued that these components, procured from independent vendors, should be included in the assessable value of the manufactured goods. Thermax contested this, maintaining that excise duty applies only to goods manufactured and removed from its factory.

In a separate matter involving Reliable Enterprises, CESTAT ruled that commissions earned from the distributorship of Vodafone SIM cards and recharge vouchers are exempt from service tax under specific exemption notifications. The tribunal also addressed a limitation period issue, noting that demands preceding the five-year limitation period were unsustainable because the show cause notice was issued late.