CESTAT WEEKLY ROUND-UP [Apr 25 to May 02, 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 25 April 2025 to   April 23 2025.

Adjustment of Rebate Against Unfinalized Demand Not Permissible: CESTAT

UPL LIMITED vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-BHARUCH

CITATION:   2025 TAXSCAN (CESTAT) 426

The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) held that adjustment of rebate against an unfinalized demand is not permissible.

The department argued that filing an appeal doesn’t stay the demand, so the refund could be adjusted. However, the advocate countered that the Revisionary Authority’s (RA) remand was an open remand, which wasn’t considered in the cited cases. The advocate pointed to paragraph 13 of the RA’s order, which set aside the earlier order and remanded the case to the original adjudicating authority.

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Win for IndiGo: CESTAT Reclassifies Aircraft Engine Stands as Containers for Transport

InterGlobe Aviation Ltd. vs Commissioner Of Customs

CITATION:   2025 TAXSCAN (CESTAT) 429

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) recently ruled in favor of InterGlobe Aviation Ltd. (IndiGo), reclassifying aircraft engine stands as containers for transport.

The stands also had forklift channels for lifting, tie-down rings for securing the engine during transit, shock mounts to reduce vibrations, and adapters to secure the engine.The assessee explained that engine stands were required for transporting engines by truck, air, or sea. They were used to protect the engine from damage, and Pratt and Whitney mandated their use for safe transport. The stands remained with the engine during repairs.

CESTAT Reduces Personal Penalty to ₹2 Lakhs Based on Voluntary Offer and Revised Duty Assessment

YUSUF DHANANI vs COMMISSIONER OF CUSTOMS

CITATION:   2025 TAXSCAN (CESTAT) 438

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Mumbai Bench, reduced a personal penalty from ₹5 lakhs to ₹2 lakhs based on the assessee’s voluntary offer and revised duty assessment.

The assessee’s counsel argued that the penalty was not justified since the duty was confirmed only due to non-fulfilment of export obligation. The departmental representative countered that the assessee had already offered to accept a penalty of ₹2 lakhs, which was deposited as a pre-deposit. This statement, recorded in the earlier order, was taken as his acceptance to settle the matter by adjusting the same amount as penalty under Section 112(a)(ii) of the Act.

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Taxability of E-Seva Services under Business Support Services; CESTAT Rules Services Not Taxable as Government Functions

M/s. CMS Computers Ltd. vs Commissioner of Central GST

CITATION:   2025 TAXSCAN (CESTAT) 440

The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)ruled that the E-Seva services provided by CMS Computers Ltd. under contracts with various state governments were not taxable under “Business Support Services.”

For the E-Governance services mentioned in the show cause notices from 2011 to 2014, the Tribunal explained that while E-Governance was not specifically defined in the Finance Act, it referred to using technology to improve government services. The assessee had agreements with several state governments, including Madhya Pradesh and Rajasthan, to provide E-Governance services like bill payments, certificate issuance, and application submissions.

Terminal Handling Charges May Fall under ‘Port Services’: CESTAT Remands Export Refund Dispute for Verification

M/s. General Export Enterprises vs Commissioner Service Tax -II

CITATION:   2025 TAXSCAN (CESTAT) 443

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that terminal handling charges may qualify as ‘port services’ under section 65(105)(zm) of the Finance Act, 1994 and remanded the matter to the original authority for verification of the service provider’s authorization by the port.

The tribunal held that the service classification by the provider could not be the sole basis for the denial of a refund without examining whether the service was, in substance, port-related and provided by an authorized entity.

CESTAT Rejects Refund Claim on Service Tax for Educational Courses Not Recognized by YCMOU During Relevant Period

MAHARASHTRA KNOWLEDGE CORPRATION LTD vs COMMISSIONER SERVICE TAX-I PUNE

CITATION:   2025 TAXSCAN (CESTAT) 449

The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)rejected the refund claim on service tax paid by the assessee for educational courses, as the courses were not recognized by Yashwantrao Chavan Maharashtra Open University (YCMOU) during the relevant period from April 2014 to September 2014.

The two member bench comprising Dr.Suvendu Kumar Pati(Judicial Member) adn Anil G.Shakkarwar(Technical Member) looked at the appeal papers, submissions from both sides, the law, and earlier decisions. It found that the assessee had not received recognition from YCMOU before 31.03.2015. The letter dated 20.06.2016 was only a post-dated approval and could not be accepted under Section 66D of the Finance Act. The documents showed that students enrolled in 2014 but received certificates only in 2016 after recognition was given.

Failure to Verify Excise Duty Paid Before SCN: CESTAT Orders De Novo Adjudication

M/s. Sri Balaji Sago Products vs Commissioner of GST & Central Excise

CITATION:   2025 TAXSCAN (CESTAT) 455

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that failure to verify excise duty payments allegedly made before the issuance of a show cause notice (SCN) necessitated a de novo adjudication.

The tribunal pointed out that the proper course was to verify the appellants’ payment claims before proceeding to decide the appeals. It directed the first appellate authority to call for a report from the adjudicating authority regarding the alleged excise duty payments. The tribunal ordered a fresh de novo adjudication after verification, setting aside the earlier dismissal orders.

Top Stories Relief for Huawei: CESTAT Rules Corporate Guarantee not Taxable under Service Tax in Absence of Consideration

M/s Huawei Telecommunication India Co. Private Limited vs Commissioner of Central Excise and Service Tax

CITATION:   2025 TAXSCAN (CESTAT) 457

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a corporate guarantee extended by an associated enterprise without any consideration is not taxable under the service tax regime.

The two-member bench comprising Judicial Member S. S. Garg and Technical Member P. Anjani Kumar observed that the definition of service under the pre-GST regime requires both a service and a consideration. The tribunal found no evidence of consideration paid or payable for the corporate guarantees and ruled that the imposition of a notional 2% value was legally unsustainable.

Dispute Amount Paid as Excise Duty Under Protest After Clearance of Goods is Not Covered by Unjust Enrichment: CESTAT

M/s. Oiles India Pvt. Ltd. vs Commissioner of Central Excise & CGST

CITATION:   2025 TAXSCAN (CESTAT) 450

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the contested amount paid  as excise duty under protest is not covered by unjust enrichment because it was made long after the items were cleared.

Any amount of cash submitted while an investigation or adjudication process is ongoing is considered a protest deposit, thus the unjust enrichment principles would not apply if a refund was requested for that sum. The deposit “under protest‟ was made against the anticipated liability and which liability though fructified by the respondent-department was set aside by the CESTAT.

Win for Wipro: CESTAT Rules Value Reassessment Unjustified for Free Replacement of Defective Goods

M/s. Wipro Ltd vs Commissioner of Customs

CITATION:   2025 TAXSCAN (CESTAT) 458

The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the customs department’s reassessment of import value was unjustified, as the consignment imported by Wipro Ltd. was a free replacement for defective goods, not a fresh commercial transaction.

The tribunal further held that the confiscation, fine, and penalty were not sustainable, as the import was clearly a replacement, not a case of undervaluation or misdeclaration. The tribunal criticized the customs department for auctioning the goods while the appeal was still pending, without issuing fresh notice or obtaining permission from the appellate forum. The tribunal set aside the impugned order and directed the customs department to restore the full sale value of the auctioned goods to the appellant. The appeal was allowed.

Relief to Sun Pharma Laboratories Limited: CESTAT allows Refund for Education Cess and Higher Education Cess while Exempting Excise Duty

Sun Pharma Laboratories Limited vs Commissioner of Central Excise and Service Tax, Jammu

CITATION:   2025 TAXSCAN (CESTAT) 461

In a ruling in favour of Sun Pharma Laboratories Ltd , the Chandigarh  bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) allowed the refund for Education Cess and Higher Education Cess while exempting excise duty.

The Commissioner (Appeals) has rejected the appeal of the appellant by holding that the appellant are not entitled to refund of education cess and secondary & higher education cess.The tribunal found that the  Apex Court in the case of SRD Nutrients Pvt Ltd  which allowed the refund as the exemption was on the excise duty.

Wind Turbine Towers Recognized as Generator Parts, Not Structures: CESTAT

M/s.Siemens Gamesa Renewable vs The Commissioner of Customs

CITATION:   2025 TAXSCAN (CESTAT) 460

In a recent decision made by the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), it was held that imported wind turbine towers are to be classified as integral parts of wind-operated electricity generators (WOEG) under Customs Tariff Heading (CTH) 8503 and not as civil structures under CTH 7308.

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The tribunal referred to Section Note 2(b) of Section XVI of the Customs Tariff Act, 1975, observing that parts solely or principally used with specific machines must be classified alongside those machines. The bench also placed reliance on Circular No. 1008/15/2015, which in turn referred to the Supreme Court’s decision in CCE Nagpur v. Hyundai Unitech Electrical Transmission Ltd. (2015), where towers were recognized as parts of electrical systems.

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