#CESTAT judgment

CESTAT ruled that a refund of service tax paid under a mistake of fact attracts interest at 12% per annum, superseding the earlier 6% rate. This higher rate applies to any taxpayer seeking restitution for erroneous service tax payments, enhancing compensation for delayed refunds. The decision sets a binding precedent for future service tax refund claims.

CESTAT Chandigarh has ruled that penalties under Section 112(a)(i) of the Customs Act cannot be imposed solely for violations of Customs Broker Liability Rules unless the act or omission directly renders the goods liable for confiscation under Section 111. This decision shields customs brokers from punitive action for procedural lapses that do not facilitate smuggling or concealment of prohibited goods, reinforcing the principle that penalty must flow from substantive harm, not technical non-compliance.

CESTAT rules that when both taxpayer and department consistently classify goods under the same tariff heading for years, the department cannot later reassess duties retroactively - establishing a binding legitimate expectation. Penalty under Rule 26 cannot be imposed without a prior finding of confiscation, reinforcing procedural safeguards for taxpayers relying on long-standing classification practices.

CESTAT rules that statements recorded under Section 108 of the Customs Act cannot be used for customs valuation or penalty imposition unless they are formally admitted in evidence through witness examination under Section 138B. This holding reinforces procedural safeguards in customs investigations, impacting how digital and documentary evidence is treated in adjudication.

The CESTAT holds that domain registration and web hosting qualify as taxable Information Technology Software Services under the Finance Act, 1994, clarifying scope of OIADR and rejecting claims of mere facilitation.