Neel Metal Products Ltd Vs Commissioner of Central Excise (CESTAT Chandigarh)
Summary: The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal filed by M/s Neel Metal Products Ltd against Order-in-Appeal No. 119/ST/CGST-APPEAL-GURUGRAM/SG/2018 dated 30.08.2018, by which the Commissioner (Appeals), CGST, Gurugram had rejected the appellant’s appeal and upheld the Order-in-Original dated 16.03.2018. The Tribunal pronounced Final Order No. 60469/2026 on 23.07.2026.
The appellant was engaged in the manufacture of auto components and, during the relevant period, was registered under the Central Excise Act, 1944 and the Finance Act, 1994. During an audit conducted in January 2017 for the period 2015-16, the Department took the view that amounts received by the appellant as “notice pay” constituted consideration for the declared service described in Section 66E(e) of the Finance Act, 1994, namely agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.
A Show Cause Notice dated 25.04.2017 was consequently issued invoking the extended period of limitation and demanding service tax of Rs. 13,53,012/- on notice pay receipts of Rs. 1,02,02,702/- for the period August 2012 to December 2016, together with interest and penalty. The Original Authority confirmed the demand along with equal penalty by Order-in-Original dated 16.03.2018. The Commissioner (Appeals) subsequently rejected the appellant’s appeal, leading to the present proceedings before CESTAT.
