CESTAT WEEKLY ROUND-UP [Apr 16 to Apr 23, 2025]

This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) reported at Taxscan from 16 April 2025 to April 23 2025.

Airbnb India’s Marketing and Promotional Services to Airbnb Ireland Qualify as Export, Not Intermediary Services: CESTAT

M/s Airbnb India Pvt. Ltd. vs Commissioner of Central Goods and Service Tax, Gurugram
CITATION: 2025 TAXSCAN (CESTAT) 389

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the marketing and promotional services provided by Airbnb India Pvt. Ltd. to its parent company Airbnb Ireland qualify as export of services and do not fall under the category of intermediary services, even when there is some level of customer interaction.

The two-member bench comprising Judicial Member S. S. Garg and Technical Member P. Anjani Kumar observed that the agreement clearly established an independent contractor relationship between Airbnb India and Airbnb Ireland, with no agency or tripartite relationship. The tribunal explained that the mere fact of following client guidelines or subcontracting work did not change the nature of the service into that of an intermediary.

Customs Officer being Stranger to Sale Contract cannot re-determine FOB Value: CESTAT

M/s Kritika Enterprises vs Commissioner of Customs (Appeals)
CITATION: 2025 TAXSCAN (CESTAT) 390

Recently, the New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that only parties to a contract of sale — namely, the buyer and seller — have the authority to determine the transaction value of goods. The Tribunal categorically stated that customs officers or any other third party cannot re-determine the Free on Board (FOB) value declared in the shipping documents without concrete documentary evidence.

The ruling came in a case where an exporter had filed a Shipping Bill for exporting oil filters, declaring an FOB value and paying IGST without claiming state levies, while availing benefits under the Merchandise Exports Incentive Scheme (MEIS). Customs officials alleged overvaluation of goods to secure higher IGST refunds and MEIS incentives, leading to the detention of goods and re-determination of the FOB value by the Additional Commissioner. The goods were also confiscated.

CESTAT allows JSW Cement’s Appeal on Cenvat Credit for Outward Transport; Sets Aside Demand Citing Limitation Bar

M/s JSW Cement Ltd. vs Commissioner of Central Tax
CITATION: 2025 TAXSCAN (CESTAT) 392

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal has allowed the appeal filed by M/s JSW Cement Ltd., setting aside the demand of Rs.3,44,228 relating to Cenvat Credit on outward transportation, on the ground that the extended period of limitation was not validly invoked.

The Tribunal, while upholding the adjudication on merits, accepted the appellant’s contention regarding limitation. It noted that the show cause notice did not allege fraud, suppression or willful misstatement and that the extended period was invoked without substantive justification. The Tribunal observed that the dispute pertained to interpretational issues on the definition of ‘place of removal’, and that such ambiguity, coupled with departmental circulars and judicial decisions, negated the justification for extended limitation.

CESTAT Overturns Rs.17.5 Cr Service Tax Demand Against Ultra tech Cement, Faults Department’s Calculation Method

M/s. UltraTech Cement Limited vs Commissioner of C.G.S.T. and Central Excise
CITATION: 2025 TAXSCAN (CESTAT) 393

In a significant relief to Ultra Tech Cement the Eastern Zonal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has set aside a service tax demand of Rs.17,49,80,654 that was raised on the company for the period between 2009-10 and 2012-13. The tribunal found that the demand, which had been confirmed by the Commissioner of Service Tax-II, Kolkata, was based solely on a flawed comparison of entries in the company’s freight ledger with the service tax returns filed under the reverse charge mechanism for Goods Transport Agency (GTA) services.

The bench comprising Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical), concluded that the demand was not sustainable as it was raised without analyzing the nature of transactions and without rebutting the CA certificates. The tribunal also held that the associated interest and penalty could not be sustained since the primary demand itself was not legally tenable.

CESTAT allows Honda’s Appeal, Holds Education Cess Leviable only on ‘Levied and Collected’ Service Tax Amount

M/s. Honda Motorcycle and Scooter India Pvt. Ltd vs Commissioner of Service Tax
CITATION: 2025 TAXSCAN (CESTAT) 391

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Principal Bench, New Delhi, has allowed the appeals filed by Honda Motorcycle and Scooter India Pvt. Ltd. in a service tax matter related to transportation and insurance charges recovered in excess from its dealers. The Tribunal held that no service tax is leviable on such excess amounts in the absence of a service provider-recipient relationship and where excise duty has already been paid on the entire transaction value including such charges.

The Tribunal further noted that the excess amounts retained by the appellant were not linked to any independent service agreement but were incidental to the sale of excisable goods. It also observed that once excise duty has been paid on the full transaction value, demanding service tax on the same amount would amount to double taxation. The decision of the Tribunal in the appellant’s own Manesar unit, where similar demands had been dropped, was also relied upon.

CESTAT Denies CENVAT Credit on Rent-a-Cab Services, Due to Non-Compliance with Rule 2(l)

M/s CBRE South Asia Pvt. Ltd. vs Commissioner of Service Tax
CITATION: 2025 TAXSCAN (CESTAT) 394

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench has upheld the denial of CENVAT credit for availing input tax credit on Rent-a-Cab services, while granting partial relief on other disputed demands. The tribunal confirmed that the company wrongly claimed credits on these services, which are explicitly excluded under the CENVAT Credit Rules, 2004.

CESTAT Bench comprised of S S Garg (Judicial Member) and P Anjani Kumar (Technical Member) dismissed the Revenue’s invocation of the extended period of limitation, noting no evidence of intent to evade taxes. It confirmed demands for other periods, including Rs. 1,91,82,534 for 2013-14 to 2014-15, Rs. 1,41,12,379 for 2015-16, and Rs. 2,64,44,500 for 2016-17 and 2017-18 (up to June 2017). However, all penalties across the appeals were set aside.

Refund Recovery Proceedings Invalid Without Review of Sanction Order: CESTAT

M/s CRYSTAL CROP PROTECTION PVT LTD vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-JAMMU & KASHMIR

CITATION: 2025 TAXSCAN (CESTAT) 395

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench ruled that recovery proceedings under Section 11A of the Central Excise Act, 1944, cannot be sustained without first reviewing the original sanction order ratifying the refund claim.

CESTAT Bench comprised of S S Garg (Judicial Member) and P Amjani Kumar (Technical Member) concluded that the department had not established any fraudulent conduct or suppression justifying the extended period of limitation under the proviso to Section 11A. It held that the demands were based on assumptions and lacked evidentiary support.

CESTAT Rules Hydrogen Gas Compression not ‘Manufacture’, Sets Aside Excise Duty Demand

M/s Royal Tarush Gases vs Commissioner of Central Excise
CITATION: 2025 TAXSCAN (CESTAT) 396

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh has ruled that compressing hydrogen gas into cylinders does not amount to ‘manufacture’ under central excise laws, quashing a Rs. 50.59 lakh duty demand on Royal Tarush Gases. The bench held that the activity merely involved repackaging an already marketable product for industrial consumers, which falls outside the definition of manufacturing under Chapter 28 of the Central Excise Tariff Act.

The tribunal rejected this argument, relying on Supreme Court and CESTAT precedents including Surya Air Products and Goyal M G Gases Pvt. Ltd. It noted that Chapter Note 9 of Chapter 28 (covering hydrogen gas) lacks the specific provision found in Chapter 27 (for natural gas) that explicitly treats compression as manufacture. The bench observed that industrial buyers like vanaspati manufacturers don’t qualify as ‘consumers’ under tariff rules, and the gas remained marketable in its original form.

Mutuality Exempts Clubs from Service Tax on Member Transactions, But Refunds Must Clear Unjust Enrichment Test: CESTAT

Commissioner of Service Tax- Service Tax-Ahmedabad vs Rajpath Club Ltd

CITATION: 2025 TAXSCAN (CESTAT) 399

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that incorporated clubs are exempt from service tax on transactions with their members under the doctrine of mutuality but any refund claimed on such tax payments must satisfy the statutory test of unjust enrichment under Section 11B of the Central Excise Act.

The two-member bench comprising Judicial Member Somesh Arora and Technical Member Satendra Vikram Singh explained that the doctrine of mutuality cannot be stretched to defeat the statutory framework of Section 11B. The tribunal held that even though clubs and members may be the same entity for the purpose of taxability but they are not the same for refund purposes, particularly where individual members bore the tax burden.

Jarda Scented Tobacco Misclassified as Chewing Tobacco to Evade Excise Duty: CESTAT Confirms Demand and Penalty

M/s.Kaipan Pan Masala Pvt. Ltd vs Commissioner of CGST & Central Excise

CITATION: 2025 TAXSCAN (CESTAT) 398

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Jarda Scented Tobacco was misclassified as Chewing Tobacco to evade excise duty and confirmed the duty demand, interest, and penalty imposed by the adjudicating authority.

The tribunal upheld the imposition of interest, citing the compensatory nature of such levy, and also affirmed the penalty imposed under Rule 18 of the Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, read with Section 11AC of the Central Excise Act and Rule 25 of the Central Excise Rules, 2002. The appeal was accordingly dismissed.

Vodafone Idea ₹13 Crore CENVAT Credit on Service Tax Dispute: CESTAT Upholds Relief  granted by Co-ordinate Bench

Commissioner of CGST & Central Excise vs Vodafone Idea Limited

CITATION: 2025 TAXSCAN (CESTAT) 405

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai recently upheld a relief order favoring Vodafone Idea Limited in a ₹13.91 crore service tax dispute, dismissing the Revenue Department’s appeal.

Additionally, the Commissioner had noted that the debit notes issued by the vendor contained all the relevant details as prescribed/required under Rule 4A of the Service Tax Rules 1995, hence qualifying to be a specified document for availing CENVAT Credit under Rule 9 of the CENVAT Credit Rules, 2004.

Relief to Sony India Ltd: CESTAT allows Customs Duty Exemption to Imported ‘Digital Still Image Video Cameras’

M/s Sony India Private Ltd vs Commissioner of Customs (Appeals)
CITATION: 2025 TAXSCAN (CESTAT) 407

In a ruling in favour of Sony India Ltd, the New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held  that imported ‘digital still image video cameras’ are entitled to basic customs duty exemption.

The two member bench of Justice Dilip Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) set aside the order dated 20.03.2018 passed by the Commissioner (Appeals) holding that the ‘digital still image video cameras’ imported by the appellant would not be entitled to basic customs duty exemption under the notification dated 01.03.2005, as amended by the notification dated 17.03.2012 on the basis of the decision rendered by the Tribunal.

Relief for Vivo: CESTAT Orders Refund of Excess CVD, Rejects Consumer Welfare Fund Claim

M/s. Vivo Mobile India Pvt. Ltd. vs Commissioner of Customs

CITATION: 2025 TAXSCAN (CESTAT) 408

The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)  provided relief to Vivo Mobile India Pvt. Ltd. by ordering a refund of Rs. 1,67,79,311 in excess countervailing duty (CVD) paid on mobile phone imports, rejecting the Commissioner (Appeals) decision to credit the amount to the Consumer Welfare Fund.

The CESTAT referred to several decisions supporting the view that a Chartered Accountant’s Certificate, when consistent with financial statements, is valid evidence that the duty was not passed on to the buyers. These decisions established that it is up to the Revenue to provide evidence proving that the duty was passed on.

Win for Coca-Cola: CESTAT Rules ISD-Distributed CENVAT Credit Cannot Be Denied for Lack of Nexus with Manufacturing Activity

Hindustan Coca-Cola Beverages Pvt Ltd vs Commissioner of CGST & Customs

CITATION: 2025 TAXSCAN (CESTAT) 409

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit distributed by an Input Service Distributor (ISD) cannot be denied to a manufacturing unit on the ground that the underlying services lack direct nexus with the manufacturing activity.

The single-member bench comprising C.J. Mathew (Technical Member) observed that under Rule 7 of the CENVAT Credit Rules, a manufacturer is entitled to use credit lawfully distributed by an ISD, and it is not the role of the recipient to re-examine the nexus or character of such services.  The tribunal explained that any challenge regarding the admissibility of the credit must be made at the ISD level, not against the recipient who has received the credit through statutory distribution.

Service Tax Not Applicable on Buying or Selling of Space in Print Media: CESTAT

PRINCIPAL COMMISSIONER OF CGST & CENTRAL EXCISE vs M/S NEXUS ALLIANCE ADVERTISING & MARKETING PVT LTD
CITATION: 2025 TAXSCAN (CESTAT) 412

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has  held that service tax not applicable on buying or selling of space in print media and receiving incentives on meeting targets.

The two member bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has found that the assessee is not obligated to the media outlets. Media companies only pay if the assessee meets specific goals while conducting business for its clients; otherwise, they provide incentives.

Cenvat Credit Extends Period Prior to Excise Registration: CESTAT allows Credit to Baking Soda Manufacturer

M/s. Bakers Product (India) vs Commissioner of GST and Central Excise

CITATION: 2025 TAXSCAN (CESTAT) 413

In a recent ruling, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has allowed CENVAT credit to baking soda manufacturers observing that the credit extends to the period prior to excise registration. It stated that it is a settled principle in law that the benefit of credit cannot be denied to a manufacturer for the period prior to Registration.

The bench observed that the appellants did not obtain Central Excise registration under a bona fide belief that their products were exempt from excise duty. It noted that “They had not taken out Central Excise Registration on a bonafide belief that their products do not attract excise duty. It is seen that the main demand pertains to Corn Flour clearances which are not dutiable as held above. In respect of Baking Powder after allowing the Cenvat credit, the duty demanded of Rs.18,66,889/- will be drastically reduced. Further, after according the concessional rate of duty on Custard Powder and Icing Sugars also, the duty demand would not be significant. Their view that they are not required to take Central Excise Registration under a genuine plea that their products do not attract excise duty as they are related to agriculture and food products appears to be acceptable.”

Construction of Educational Institution Non-Commercial in Nature, Exempt from Service Tax: CESTAT

M/s. Shree Mahalakshmi & Co. vs The Commissioner of GST and Central Excise

CITATION: 2025 TAXSCAN (CESTAT) 411

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the construction of educational institutions qualifies as a non-commercial activity and is therefore exempt from the levy of service tax.

In addition the bench relied on the decision of this tribunal in R.R. Tulasi India Pvt Ltd vs The Commissioner of CGST & Central Excise, Salem Commissionerate, where it was observed that the department Circular No.80/10/2004-ST dt. 17.09.2004 was not withdrawn even after issuance of following master circulars. The Board in this circular has explained that when the building is meant only for educational purposes, the levy of service tax is not attracted.

Creditors including Central Govt Barred from Recovering Omitted Pre-Resolution Dues After NCLT Approval: CESTAT dismisses Appeal

M/s. Orchid Healthcare vs Commissioner of GST and Central Excise

CITATION: 2025 TAXSCAN (CESTAT) 415

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that once a resolution plan is approved by the National Company Law Tribunal ( NCLT ), creditors including government authorities cannot recover duty dues that were not included in the approved plan. It dismissed the appeal as such the appeal gets  abated under Rule 22 of CESTAT (Procedure) Rules, 1982 and infructuous.

Additionally the bench noted that as the NCLT, Chennai has already accorded its order for Liquidation of approval of the Resolution Plan in respect of the appellant vide its order dated 27.06.2019 and as application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate in terms of the referred Rule.

Manpower Supply by ITC to Five Hotels Liable to Service Tax Under “Manpower Recruitment or Supply Agency Service”: CESTAT

Commissioner of Service Tax, Delhi vs M/s. ITC Ltd, Gurgaon

CITATION: 2025 TAXSCAN (CESTAT) 414

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Bench in New Delhi has ruled that providing manpower by ITC Ltd  to five hotels for almost three years will undoubtedly result in service tax under “manpower recruitment or supply agency service.”

The two-member bench of P.V. Subba Rao (technical) and Dilip Gupta (president) has noted that ITC has assigned staff to other hotels in order to maintain and operate those hotels in accordance with ITC Welcome group standards and to run those hotels smoothly and efficiently. This is in reference to the manpower supply to five units on a cost recovery basis. Under the heading of “manpower recruitment or supply agency service,” it would be evident that providing labor to five hotels for almost three years would be subject to service tax.

Setback for J.K. Cements: CESTAT Denies Interest on Cenvat Refund, Sanctioned Within Three Months

M/s. J.K. Cement Works vs Commissioner of CGST & Central Excise

CITATION: 2025 TAXSCAN (CESTAT) 418

The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)  ruled against J.K. Cements’ claim for interest on a Cenvat refund, stating that since the refund was processed within three months and the reversal of Cenvat credit was considered an appropriation towards duty rather than a deposit under protest, no interest was payable under Section 11BB of the Central Excise Act,1944.

A single member bench of Dr.Rachna Gupta (Judicial Member) noted that the refund claim was linked to six show cause notices issued between September 2003 and April 2004, which proposed reversal of Cenvat credit availed on inputs used for manufacturing. The assessee had reversed ₹13,20,352/- after receiving the notices. While it was claimed that the reversal was under protest, the tribunal found no written evidence to support this and observed that the reversal matched the exact amount proposed in the notices.

Refund Denial Over Delayed Cenvat Reversal: CESTAT Terms It Procedural, Allows Claim

Forrester Research India Private Limited vs Commissioner, Central Goods & Service Tax

CITATION: 2025 TAXSCAN (CESTAT) 416

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) allowed refund claims filed by the assessee, holding that the delayed reversal of Cenvat credit after the Goods Service Tax(GST) transition was a procedural lapse and did not warrant the denial of the refund.

It held that the delay in reversal was a technical lapse and should not be a reason to deny the refund. The Tribunal referred to past decisions, including Lightspeed India Partners Advisors LLP, Chariot International (P) Ltd., and Sandoz Pvt. Ltd., where similar delays were accepted and refunds were allowed.

Rejection of Interest Waiver for Power Project Found Unreasoned: CESTAT Remits Matter for Fresh Consideration

Essar Power Gujarat Ltd vs Commissioner of C.E. & S.T.

CITATION: 2025 TAXSCAN (CESTAT) 417

The Customs,Excise and Service Tax Appellate Tribunal(CESTAT) Ahmedabad  Bench  found the rejection of interest waiver for a power project unreasoned and arbitrary due to the Chief Commissioner‘s failure to provide any explanation or hearing, and remitted the matter back for fresh consideration.

The appellate tribunal observed that the CBIC Circular clearly supported interest waiver for power projects and explained why such cases deserved sympathetic consideration. However, the Chief Commissioner failed to apply the circular or provide any reasoning.

Setback for GACL: CESTAT Upholds Service Tax Demand on ISO Tank Lease under Business Auxiliary Service

Gujarat Alkalies And Chemicals Ltd vs Commissioner of C.E. & S.T.-Vadodara-ii

CITATION: 2025 TAXSCAN (CESTAT) 419

The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT),upheld the service tax demand against Gujarat Alkalies and Chemicals Ltd. (GACL), holding that the lease of ISO tanks from a French company for storing Aluminium Chloride abroad qualified as a taxable “Business Auxiliary Service” under Section 65(19)(iv) of the Finance Act, 1994, as it involved procurement of input services.

The appellate tribunal referred to Rule 4 of the Place of Provision of Services Rules, 2012, and agreed with the Commissioner (Appeals) that it did not apply in this case. Instead, Rule 3 was applicable, as the tanks were provided by the foreign service provider to the appellant in India. Consequently, the place of provision was India, making the service taxable here. Since the provider was located outside India, the service tax had to be paid under reverse charge by the recipient, as per Section 68(2) read with Notification No. 30/2012-ST.

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