This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan from 09 March 2025 to March 16 2025.
Toyota Kirloskar Motor Private Limited vs Pr. Commissioner of Central Tax CITATION: 2025 TAXSCAN (CESTAT) 291
In a ruling in favour of Toyota Kirloskar Motor Private Limited, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the order rejecting the refund of excess cenvat credit being contrary to section 142 (3) of the Central Goods and Service Tax (CGST), Act, 2017.
Thereafter, the appellants submitted the refund application in Form ‘R’ to the Deputy Commissioner, Pune vide reference No. TKM/GST/DIV6/ 050/18-19 dated 11.3.2019, comprising the closing balance of Education Cess of Rs.1,00,770/- & SHE Cess of Rs.50,537/- totaling to Rs. 1,51,307/-.Assistant Commissioner of Central Tax, Pune, had issued a Show Cause Notice No. PI/Ref-SCN/01/Toyota/ 2019-20 dated 16.4.2019, proposing to reject the refund claim of Rs. 1,51,307/-, based on the allegation that the refund of closing balance of Education Cess & SHE Cess lying in CENVAT credit account is not covered in any of the categories of duty of excise as provided under sub-section (2) of Section 11B of CEA, 1944; Rule 5 of CCR, 2004 shows that refund of unutilized CENVAT credit in relation to duty paid on input or input services has been provided only in cases of export of the final products; except for such a contingency, it appears that there is no provision for grant of refund or encashment of CENVAT credit, in the entire framework of the CCR, 2004.
Hindustan Coca-Cola Beverages Pvt Ltd vs Commissioner of CGST & Customs CITATION: 2025 TAXSCAN (CESTAT) 287
The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the recovery demand of Rs. 35.68 lakh in CENVAT credit, which was levied against Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL).
The CESTAT observed that “the impugned order confirms the recovery of credit taken and distributed under Rule 7 of the CENVAT Credit Rules, 2004, by the input service distributor (ISD). However, the appellant merely utilised the credit, and since there’s no violation of Rule 3(4), they shouldn’t be held accountable for its source. The obligation under Rule 3(1) applies to the ISD, not the recipient.”
M/s. Shyam Sel & Power Limited vs Commissioner of Customs (Preventive) CITATION: 2025 TAXSCAN (CESTAT) 293
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has set aside an order and directed fresh adjudication in a customs dispute involving Shyam Sel & Power Limited and Shyam Metalics & Energy Limited. The tribunal ruled that the customs authorities had failed to provide test reports to the appellants before finalizing the assessment, violating principles of natural justice.
The tribunal, consisting of Judicial Member R. Muralidhar and Technical Member K. Anpazhakan, observed that the customs authorities had an obligation to share the test reports before finalizing the assessments. The bench ruled that failure to do so constituted a violation of natural justice, as the appellants were denied an opportunity to rebut the findings. CESTAT held that assessments made without furnishing key evidence to the affected parties cannot be sustained under the law.
M/s L G Electronics India Pvt. Ltd vs Commissioner, Central Excise, Noida-II CITATION: 2025 TAXSCAN (CESTAT) 294
The Allahabad Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has held that LG Electronics India Pvt. Ltd. is entitled to avail CENVAT credit on service tax paid for call centre services utilized for after-sales support. The Tribunal found that such services directly contribute to the brand image and sales promotion of the company’s manufactured goods, thereby qualifying as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004.
The Tribunal relied on several judicial precedents, such as CCE, Nagpur v. Ultratech Cement Ltd. (2010) where ut was held that any service that contributes to the final value of a product is eligible for CENVAT credit. Similarly in the case of Coca-Cola India Pvt. Ltd. v. Commissioner (2009) the court had recognized that services used in brand building and customer engagement qualify as input services.
M/s Mittal Appliances Limited vs The Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 295
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that the transaction value is not the only basis for assessment of the duty. It is sufficient if the proper officer has reasonable doubt for the transaction value to be rejected under Valuation Rule 12.
While dismissing the appeal, the bench ruled that rejecting the transaction value does not need proof that the invoice was fraudulent or falsified. Furthermore, it is not required to prove a family connection between the buyer and seller. It is sufficient if the proper officer has reasonable doubt for the transaction value to be rejected under Valuation Rule 12.
M/s Seafox Impex vs The Commissioner of Customs (Appeals) New Delhi CITATION: 2025 TAXSCAN (CESTAT) 296
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that datafrom the National Import Database (NIDB) cannot be the basis for enhancement of value under the Customs Act, 1962. The judicial member Rachna Gupta’s single bench has ruled that the department still has the responsibility of proving the aforementioned claims. In the event that the burden is not met, the appellant’s statement or payment of the differential duty will not be enough to waive the need to challenge the reassessment.
The tribunal concluded that there was no reasonable doubt regarding the accuracy of the transaction value or the value declared by the appellant in the contested Bill of Entry because the appropriate official had not verified, examined, or tested the items. Prior to rejecting the aforementioned value, the department apparently and admittedly did not complete the investigation required by Rule 12 of the Valuation Rules. Additionally, no exercise was conducted as required by Customs Act Sections 4 and 17. The department solely used the NIDB data to reevaluate the products’ value at a higher price and reject the value stated in the Bills of Entry.
Indian Oil Corporation Limited vs Commissioner of Customs-Jamnagar CITATION: 2025 TAXSCAN (CESTAT) 297
In a ruling in favour of Indian Oil Corporation, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the order which reject the refund of customs duty citing the bar of limitation.
The bench viewed that the Bill of Entry was finalized on 15.03.2007 and final assessment was done for the first time on 15.03.2007 after the cut-off date 13.07.2006, after which the doctrine of Unjust Enrichment became applicable.The bench agreed with contention, that the appellant did not become entitled for a refund on their filing of the Bill of Entry for warehousing but only after it was finalized. After the first final assessment order, the appellant filed an appeal before Commissioner (Appeals) which was allowed vide order dated 03.06.2008. Therefore, assessee became entitled for refund as a result of the order of Commissioner (Appeals) dated 03.06.2008.
M/S JBN APPARELS PVT LTD vs COMMISSIONER OF CUSTOMS-NEW CITATION: 2025 TAXSCAN (CESTAT) 298
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that no stranger to the contract, including any Customs officer has any right to interfere with the Free on Board ( FOB ) value of the goods.
The bench allowed the appeal, ruling that the entire investigation, the SCN that followed, and the adjudication proceedings gave the false impression that the Customs officers had the authority to change the FOB value or that the drawback, MEIS, and ROSL, which must be paid as a percentage of FOB according to the drawback schedule and the FTP, could instead be paid on a different value that the officers decided.
M/S AKANKSHA GLOBAL LOGISTICS PVT LTD vs COMMISSIONER, CUSTOMS-NEW DELHI CITATION: 2025 TAXSCAN (CESTAT) 299
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that once address verification is finished, the customs broker is not liable if the client relocates.
The two member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that according to Regulation 10(n), the Customs Broker is not required to continuously monitor the customer to make sure he is still operating from that address and hasn’t altered his business practices. Consequently, the Customs Broker cannot be held accountable for the client’s act or omission if, after the address has been verified, the client moves to a different location and fails to notify the authorities or have his documents updated.
M/s National Rifle Association of India vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 300
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the Exemption Notification No. 146/94-Cus does not impose an ‘Actual User’ condition and allowed the National Rifle Association of India (NRAI) to sell imported arms and ammunition to affiliated State Rifle Associations and District Clubs.
The two-member bench, comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member)observed that the exemption notification did not mandate that the importer itself must use the arms but only required their use in approved championships. The tribunal found that there was no ‘Actual User’ condition and that NRAI’s supply to affiliated associations did not violate the exemption.
Shapoorji Pallonji & Company Limited vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 301
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled in favor of Shapoorji Pallonji & Company Limited, ruling that the failure to submit Forms A-1 & A-2 does not invalidate the SEZ service tax exemption under the Special Economic Zones ( SEZ ) Act, 2005.
The failure to submit Forms A-1 & A-2 was deemed a procedural lapse rather than a substantive non-compliance, and such minor deficiencies cannot override the statutory exemption granted under the SEZ Act. The tribunal set aside the service tax demand of Rs. 14.52 crores along with penalties and interest, ruling that Shapoorji Pallonji was entitled to SEZ service tax exemption despite not submitting Forms A-1 & A-2.
M/s. Anisha Trends vs mmissioner of Customs (Imports) CITATION: 2025 TAXSCAN (CESTAT) 302
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)set aside the re-determined value, fine, and penalties in a case involving the alleged misdeclaration of quantity and value in the import of ‘MACE GRADE III’ from Indonesia.
It found that the Department failed to provide key documents, including the relied-upon Bill of Entry, and the Spice Board’s report lacked clarity on the grade of goods. Citing a Supreme Court ruling Commissioner of Central Excise, Bangalore vs. M/S Brindavan Beverages (P) Ltd., the tribunal held that a vague Show Cause Notice denied the importer a fair chance to respond. It reiterated that the burden of proving undervaluation rested on the Department and that NIDB data could not be used unless it met legal criteria for identical or similar goods.
M/s.New Rina TV vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 303
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the order denying CENVAT Credit due to non-production of documents, directing the assessee to provide the necessary documents for verification and reconsideration of the claim.
It directed the assessee to appear before the Commissioner, provide the necessary documents, and allow for verification. If satisfied, the authority would consider the CENVAT Credit claim. The assessee was also asked to cooperate and ensure a speaking order was passed within 30 days.
M/s. Steel Authority Of India Limited vs Commissioner (Appeals) CGST, Central Excise & Customs CITATION: 2025 TAXSCAN (CESTAT) 306
In a recent case, the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reduced the penalty imposed on Steel Authority of India Limited( SAIL) for non-filing of documents within the prescribed period under customs provisional duty assessment regulations, 2000.
The Advocate appearing on behalf of the appellant submits that the appellant is a Public Sector Undertaking and has to gather documents from various sources in order to file all the documentary evidence before the Customs Authority. This has resulted in a delayed filing of the documents before them. Therefore, he submitted that considering these facts, the adjudicating authority has correctly imposed a penalty of Rs.45,000/-. It was argued that the Commissioner of Appeals has gone to another extreme by imposing penalty of Rs.50,000/- on each and every bill of entry, which has resulted in a huge penalty of Rs.44,00,000/-.
M/s.K.B. & Co vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 305
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)sets aside demand for service tax on the construction of individual houses under the ‘Construction of Complex Service.’
The impugned order referred to a statement by the assessee’s proprietor, which confirmed that more than 12 individual houses were constructed, and this was not disputed by the Revenue. The appellate tribunal concluded that since the appellant built individual residential units, which were not covered under ‘Construction of Complex Service,’ the demand for service tax was not applicable.
M/s.Trident Coatings Pvt. Ltd. vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 304
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted exemption to the assessee for its powder coating activity, setting aside the denial of service tax exemption under Notification No. 8/2005-ST and ruling that the activity was not taxable under Business Auxiliary Service (BAS).
The assessee sought the benefit of Notification No. 8/2005, but the AA wrongly referred to Notification No. 4/2004-ST and denied the benefit. The Commissioner (Appeals) also doubted the delivery of goods to the SEZ units, even though the assessee claimed delivery, the SEZ units didn’t dispute it, and payment was made by cheque. Since the AA accepted the delivery and no appeal was made by the Revenue, the impugned order was unfair and violated natural justice.
M/s.SLV Trading Company vs The Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 308
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) set aside an order after finding that the Commissioner (Appeals) failed to consider binding judicial decisions while imposing a redemption fine and penalty under Sections 112(a) and 114AA of the Customs Act, 1962.
A single member bench comprising P. Dinesha (Judicial Member) allowed the early hearing and took up the appeal for final disposal. It set aside the impugned order and remanded the case to the Commissioner (Appeals) to consider binding judicial decisions and issue a fresh order. All other contentions on the redemption fine and penalty remained open. The miscellaneous application was allowed, and the appeal was disposed of.
M/s. Tojo Tyre Retread vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 307
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that tyre re-treading qualified as a works contract and set aside the service tax demand.
It held that tyre re-treading was a works contract, making the materials used liable only to sales tax. The demand covered 2005–06 to 2008–09, but the Show Cause Notice was issued on 16.09.2010 by invoking the extended limitation period. Since the demand for 2008–09 was already dropped, the tribunal found that extending the limitation period for 2005–06 to 2007–08 was unjustified.
M/s.Rasi Seeds Private Limited vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 309
The Chennai Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)set aside an order rejecting a refund claim filed within time without issuing a show-cause notice (SCN), holding that the failure to provide an SCN violated natural justice and rendered the order legally unsustainable.
The two member bench comprising P.Dinesha(Judicial Member) and Vasa Seshagiri Rao(Technical Member) held that the Revenue should have issued a SCN before rejecting the refund claim. An SCN was essential to inform the assessee of the reasons for rejection and ensure compliance with natural justice. Calling for a personal hearing did not replace this requirement.
M/s. P & C Constructions (P) Ltd vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 310
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside a service tax demand on electrification work, ruling that the extended limitation period was unjustified.
The SCN was issued on October 22, 2012, beyond the normal time limit. The appellate tribunal found that the Revenue failed to prove suppression of facts with intent to evade tax. The demand was based only on non-compliance despite reminders, and Circular No. 80/10/2004-ST was not considered.
M/s.AVR Cargo Agency Pvt. Ltd. vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 311
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the service tax demand on the air freight mark-up, ruling that there was no third-party involvement to classify it under Business Auxiliary Service (BAS).
Citing decisions in DHL Logistics (P) Ltd. and Continental Carriers, the tribunal found that freight rebates and incentives from bulk cargo space purchases did not fall under ‘BAS. Since the assessee bought and sold cargo space directly, without acting on behalf of a client, the transaction was not a taxable service.
M/s. Ashok Leyland Limited vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 312
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal(CESTAT) dismissed Ashok Leyland’s appeal, rejecting its claim for input service credit on windmill expenses due to the absence of a lease arrangement in the agreement
The Revenue countered that the agreement with ALWEL only covered the sale of electricity, not windmill leasing. The appellate tribunal found that ALWEL handled windmill operation and maintenance, bore the costs, and retained ownership. The agreement did not mention any lease arrangement.
Sarajdeep Logistics Pvt Ltd vs Principal Commissioner of Customs (General) CITATION: 2025 TAXSCAN (CESTAT) 313
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that customs brokers cannot be held responsible for educating clients on compliance under Regulation 10 of the Customs Brokers Licensing Regulations (CBLR), 2018.
The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) observed that customs brokers are responsible for the correct filing of documents but are not expected to act as educators or enforcers of compliance for their clients. The tribunal further observed that there was no substantive evidence to support the allegations and that the charges relied entirely on statements deemed inadmissible in law.
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