India's CESTAT Overturns Service Tax and Customs Duty Demands

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Kolkata set aside a service tax demand on Tabassum Enterprises, a proprietorship that arranges transportation of goods but does not issue consignment notes. The tribunal held that the demand, based solely on data from the Central Board of Direct Taxes, lacked independent verification of taxable services and that without consignment notes the services fell under the negative list, rendering the demand, interest and penalty unsustainable.

In a separate case, the Bangalore bench of CESTAT quashed customs and excise duties imposed on Gem Granites, an export‑oriented unit that imported capital goods for quarrying granite blocks. The tribunal ruled that the capital goods were used as part of the manufacturing process and that the exemption under Notification No 13/81‑Cus. applied, leading to the reversal of the Rs 6.86 crore customs duty and Rs 1.22 crore excise duty demands.