This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan from 03 February 2025 to February 07 2025.
M/s Jindal Stainless Ltd. VS Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 195
The Hyderabad bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT)In a ruling in favour of Jindal Stainless Ltd held that “Quick Lime” Properly classifiable under Harmonized System (HS) code for quicklime ie, under Customs Tariff Item 25221000.
The facts reveal that the imported goods are quicklime. There is no case of mixture of different material or substance to merit application of GIR 2 or 3. Thus, the Revenue’s argument for Classification of quick lime under heading 2825 as it occurs last among other classification under heading 2522 is not legally sustainable. There is no case for application of Rule 3 of GIR in this case. In view of the above, we are of the view that the imported goods are appropriately classifiable under CTH 25221000.
Anshu Sahay vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 198
The Mumbai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that penalty is not payable under Customs Act, 1962 when goods transshipped from aircrafts and vessels traversed after fastening duty. The CESTAT held that there is no cause for confiscation of the impugned goods under section 111(n) and section 111 (o) of Customs Act, 1962 in the light of all movements having been effected under the approval of customs authorities.
The CESTAT held that there is no cause for confiscation of the impugned goods under section 111(n) and section 111 (o) of Customs Act, 1962 in the light of all movements having been effected under the approval of customs authorities. With lack of empowerment to invoke section 28 of Customs Act, 1962, penalties under section 114A and section 114AA of Customs Act, 1962 are without authority of law. Appeals are allowed by setting aside the impugned orders.
SKF Technologies (I) Pvt. Limited vs Commissioner of Central Excise & ST CITATION: 2025 TAXSCAN (CESTAT) 196
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied at the recipient’s end when service tax has been paid and accepted at the provider’s end.
The tribunal observed no objections had been raised during prior tax assessments, and similar transactions had been assessed without issue. The tribunal referenced Amara Raja Electronics Ltd. (2016), Nahar Granites Ltd. (2014), and Creative Enterprises (2009) which held that credit cannot be denied at the recipient’s end when tax is collected at the provider’s end.
M/s Kailash Chawla vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 197
In a recent case, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) New Delhi has held that service tax is not leviable on work contract service (WCS) provided to airports and non-commercial governmental authorities. The bench viewed that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty.
The Departmental Representative for department also has relied upon the Circular No. 12/2003-ST dated 20.06.2003 which also exempts so much of the value of all taxable services, as is equal to the value of the goods and materials sold by the service provider to the recipient of service from the service tax leviable thereon under Section 66 of the Finance Act. Though as per department this circular is applicable if there is documentary proof specifically indicating the value of said goods or materials. But as already held above that in such case there shall be available the abatement of 67%. In any case the value of goods is not leviable to service tax.
SKF Technologies (I) Pvt. Limited VS Commissioner of Central Excise & ST CITATION: 2025 TAXSCAN (CESTAT) 196
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that CENVAT credit cannot be denied solely on the basis that invoices were photocopies, provided that the service tax payment has been duly made and accepted by the revenue authorities without challenge.
The tribunal held that invoices issued in the name of the head office were valid for claiming credit at the unit where the service was actually utilized. The tribunal also observed that photocopies of invoices could not be the sole ground for denial if the authenticity of tax payment was not in question.
TENNCO EXHAUST INDIA PVT LTD VS COMMISSIONER OF CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 200
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that excise duty is not payable on tools and fixtures used captively within the factory, even if sale invoices are issued, and that demands based on revenue-neutral transactions are time-barred.
Regarding the transfer to the Pune unit, the tribunal ruled that the entire transaction was revenue-neutral and that no malafide intent was established, making the extended period of limitation inapplicable. The tribunal held that the demand was time-barred and not sustainable. The impugned order was set aside, and the appeal was allowed.
Sri Deepak Keshan M/s. Budge Budge Refineries Ltd vs Commissioner of Central Excise Kolkata-VII Commissionerate CITATION: 2025 TAXSCAN (CESTAT) 199
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that excise exemption on captively consumed packaging materials cannot be entirely denied when some portion is used for traded goods.
The revenue countered that the appellant failed to maintain separate accounts to differentiate between packaging materials used for captive consumption and traded goods. The mixing of traded and manufactured RPO in the same tanks violated the conditions of Notification No. 10/96-CE, which mandates exclusive use of exempted materials for captive production. The appellant did not meet the exemption conditions so the revenue argued that it was not entitled to any benefit under the notification.
M/s Sarvatra International vs Commissioner of Customs, ICD CITATION: 2025 TAXSCAN (CESTAT) 201
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the customs duty evader to pay a penalty as it was a bonafide mistake by the department to not impose mandatory penalty.
Under section 111(m) of the Act, the goods may be seized in addition to a redemption fine because there appears to have been a misrepresentation in both the description and the value of the commodities. The proviso to paragraph (1) of section 28 of the Act provides for the recovery of duty based on the same logic and comparison. As a result, the adjudicating authority’s differential customs duty calculation for the two bills of entry is upheld. The application of the penalty under section 114A of the Act must be sustained since the appellant used fact suppression to avoid fulfilling his obligations.
Geo Dyanamics vs Commissioner of C.E. & S.T.-Vadodara-i CITATION: 2025 TAXSCAN (CESTAT) 205
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the non-submission of A1/A2 certificates should not prevent the granting of service tax exemption for services provided to a Special Economic Zone ( SEZ ).
The assessee’s counsel, argued that while the A1/A2 certificate was not submitted in some cases, the service provided to the SEZ was undisputed. He claimed that non-submission of the certificate was a procedural lapse and that the exemption should apply, citing Section 26(1)(e) of the SEZ Act and Rule 31 of the SEZ Rules. He relied on the Tribunal’s judgment in M/s Anjani Excavation Operation vs. Commissioner of Central Excise & ST, Bharuch, Final Order No. 11444/2023.
TENNCO EXHAUST INDIA PVT LTD vs COMMISSIONER OF CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 196
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied solely on the ground that the GAR-7 challan was in the name of the head office or another unit of the same company.
The appellant argued that proportionate credit was claimed at the Ahmedabad unit and relied on Greaves Cotton (2015 (37) STR 395) and M/S Piramal Glass Pvt. Ltd. (2021 (55) GSTL 22 (Tri-Ahm)), which allowed credit of one unit to be availed by another unit of the same company. The appellant also contended that minor errors in foreign service providers’ invoices, such as the inclusion of VAT, should not be grounds for denial of credit.
M/s. Wellworth Project Developers VS Commissioner of CGST CITATION: 2025 TAXSCAN (CESTAT) 202
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that the department cannot invoke the extended period of limitation merely because the returns were self-assessed. The Tribunal concluded that the show cause notice only asserts that the assessee violated several provisions of the Finance Act and the Rules in order to avoid paying service tax because the assessee failed to disclose the correct value of taxable services in the ST-3 returns, allowing the payment of service tax totaling Rs. 2,40,96,546 to evade assessment.
The Tribunal has consistently maintained that the appropriate officer can always ask the asseessee for information, even under the self-assessment scheme, and that it is the responsibility of the appropriate officer to carefully examine whether the duty assessed by the asseessee is correct. The mere fact that the returns were self-assessed does not allow the department to claim the longer period of limitation. Since the appropriate officer may have discovered the facts, the Commissioner erred in ruling that the extended period of limitation could be used if the department learned of them during an investigation.
Gujarat Alkalies And Chemicals Ltd vs Commissioner of C.E. & S.T.-Vadodara-ii CITATION: 2025 TAXSCAN (CESTAT) 204
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the case to the Adjudicating Authority regarding the 8%/10% payment on electricity, citing the reversal of Cenvat credit .
The tribunal, after considering both sides submissions and reviewing the records, remanded the case to the adjudicating authority in the appellant’s earlier matter. The issue was whether the appellant was liable to pay 8%/10% on electricity sold to the State Electricity Board under Rule 6(3A) of the Cenvat Credit Rules, 2004, due to the use of common inputs/services. The assessee had reversed the proportionate Cenvat credit, which was acknowledged by the adjudicating authority.
Gujarat State Electricity Corporation Ltd vs C.C.E. & S.T.-Vadodara-I CITATION: 2025 TAXSCAN (CESTAT) 203
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that residential property is not subject to ‘Rental Services of Commercial Property’ charges.
Given the lack of evidence supporting the classification of the property as commercial, the tribunal set aside the order of the lower authority. Consequently, the appeal was allowed, and the assessee was granted the appropriate relief.
Deepak Pandey vs Commissioner of Service Tax CITATION: 2025 TAXSCAN (CESTAT) 207
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), the fact that the tax was collected illegally does not mean that the deadline for submitting a refund application can be ignored.
The Tribunal opined that once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion.
Henkel Adhesives Technologies India Pvt Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 208
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside an order affirming the inclusion of ‘royalty’ in transaction valuation, ruling that the first appellate authority lacked jurisdiction due to the absence of finalized provisional assessments.
The appellate tribunal pointed out that appeals should stem from a final assessment under section 17 or section 18 of the Customs Act, 1962. In this case, the ‘proper officer’ should have either accepted the declared duty or reassessed it, including provisional assessments. Since the finalization of the provisional assessments had not occurred, the first appellate authority’s decision was made without jurisdiction.
M/s.Goyal Impex and Industries Ltd. vs The Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 210
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) upheld the rejection of a Nil Countervailing Duty (CVD) benefit claim under Notification No. 30/2004-CE, as the assessee failed to meet the updated conditions introduced by subsequent amendments.
The central issue was whether the assessee’s claim for Nil CVD under Notification No. 30/2004-CE was valid. The assessee relied on the Supreme Court’s decision in SRF Ltd. Vs. Commissioner of Customs, Chennai (2015) and cited several other rulings to support the claim. They argued that the benefit had previously been granted to M/s. Aditya International Ltd. and that rejecting their claim was unjust.
Indoworth India Ltd vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 209
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) denied the benefit of concessional excise duty under Notification citing the company used imported consumables rather than domestically sourced raw materials which made them ineligible.
The revenue countered that Notification No. 23/2003-C.E. explicitly required raw materials to be domestically sourced, and the appellant’s failure to meet this condition made them ineligible for concessional duty. The department contended that the use of imported inputs violated the statutory provisions, justifying the duty demand and penalties imposed.
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