CESTAT Weekly Round-Up [May 12 to May 19, 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 12 May 2025 to May 19 2025.

Freight and Insurance Income Not Taxable Under Service Tax: CESTAT Quashes ₹26.94 Crore Demand Against BHEL

M/s. Bharat Heavy Electricals Ltd. vs COMMISSIONER OF CGST CITATION: 2025 TAXSCAN (CESTAT) 497

The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)quashed a ₹26.94 crore service tax demand against Bharat Heavy Electricals Ltd. (BHEL) on income from freight and insurance.

In that case, it was held that no service tax was payable on the amount received for facilitating freight and insurance, since the assessee was not a Goods Transport Agency or Courier Agency. It noted that under Section 66D(p) of the Finance Act, transportation of goods by road was not taxable unless done by a GTA or courier agency.

Charge of Clandestine Removal Must be Proved with Corroborative Evidence: CESTAT

M/S SHRI PARASNATH ALLOYS PVT LTD vs ADDITIONAL DIRECTOR GENERAL (ADJUDICATION)
CITATION:2025 TAXSCAN (CESTAT) 498

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the Revenue has not shown enough supporting evidence to prove the serious charge of clandestine removal.

Pendrives, hard drives, and several loose papers were found during the search. Additionally, printouts from confiscated hard drives were obtained. A shortfall of certain items was also discovered on July 4, 2023, when M/s Trikoot’s production grounds were searched. Additionally, some superfluous end cuts were discovered. The aforementioned items were seized, and statements made by different individuals regarding M/s Trikoot were documented. Some of the statements were later taken back. In keeping with the search that was done at M/s Trikoot’s location, where some documents pertaining to the appellants in question were also found, a search was also carried out.

CESTAT Upholds Service Tax Demand of Rs. 3.44 Crore on Promotional Marketing Activities

M/s. VCI Hospitality Limited vs Commissioner of Central Tax CITATION:   2025 TAXSCAN (CESTAT) 499

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the Rs. 3.44 crore service tax demand related to the hotel’s marketing and promotional activities.

The tribunal ruled that on July 1, 2003, the Finance Act of 2003 made business auxiliary activities pertaining to marketing, advertising, and customer support taxed under “business auxiliary services.” The Finance Acts of 2004 and 2005 expanded the range of activities that fall under the category of business auxiliary services. These activities included nearly all services related to obtaining inputs for the client, producing or processing goods (that do not constitute manufacturing) for and on behalf of the client, and providing a service on behalf of the client. These activities were then subject to taxation under this classification.

CESTAT allows SAD Refund based on TR-6 Challans to Prove Duty Incidence Borne by Importer

Varian Medical Systems International (India) Appellant Pvt. Ltd. vs Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 500

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) found that TR-6 challans are enough evidence of the duty incidence suffered by the importer when ordering the customs agency to reimburse the Special Additional Duty of Customs (SAD).

The appellant said that he had a running account with their customs broker, who continues to pay the appellant for the items’ clearance. He has provided a copy of the TR-6 challan, which shows that the appellant paid the customs duty because it lists the importer’s name and address as M/s. VMS International Pvt. Ltd. There are numerous challans that would cover the whole Rs. 2,87,801 SAD refund, with the appellant’s name and address listed as the importer on the TR-6 challan.

‘Limitation Not Applicable to Pre-Deposit Refunds’: CESTAT Orders 12% Interest from Date of Deposit

M/s. Alliance Francaise De Delhi vs Commissioner of Central Goods CITATION:   2025 TAXSCAN (CESTAT) 501

The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)  held that the time limitation under Section 11B of the Central Excise Act, 1944, does not apply to refund claims for pre-deposits made under Section 35F of the Central Excise Act. The Tribunal directed the authorities to refund Rs. 16,14,167 along with 12% interest per annum from the date of deposit to the appellant.

The appellant’s counsel argued that the pre-deposit was not a payment of duty but a compliance with the Tribunal’s stay order, making Section 11B inapplicable. The counsel cited departmental circulars and judicial precedents, including the Tribunal’s recent decision in Barmer Lignite Mining Company Ltd. Vs.Commissioner, CGST, Jaipur,3, which held that amounts deposited during adjudication or investigation are not duty payments.

Club Building Charges Included in Construction Are Part of Bundled Service and Not Separately Taxable: CESTAT

M/s Shyam Construction vs Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 502

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that charges collected towards club building as part of a residential construction project constitute a bundled service under construction and are not separately taxable under the category of “Club or Association Service.”

Challenging the order, the appellant’s counsel argued that no club existed during the relevant period and the amounts collected were only towards the cost of constructing the club facility, which was part of the overall construction project. They also argued that no membership services or ongoing benefits were provided to customers, and the transaction did not meet the criteria of a “Club or Association Service” under the law.

CESTAT Rules CENVAT Credit Admissible on Business-Related Services such as Rent-a-Cab, Housekeeping, and Promotion

M/s. L&T Arun Excello Reality Pvt. Ltd vs Commissioner of GST and Central Excise CITATION:   2025 TAXSCAN (CESTAT) 503

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit is admissible on services such as rent-a-cab, housekeeping, and business promotion when these services are used in relation to the business.

The tribunal observed that services such as rent-a-cab, housekeeping, and business promotion had been consistently held to be eligible input services when used in the course of business. The tribunal set aside the Order-in-Appeal and held that the appellant’s cross-objections were wrongly dismissed, the demand was time-barred, the CENVAT credit was rightly availed, and no penalty was sustainable. The appeal was allowed in full with consequential relief.

Once Main Noticee Settles Under SVLDRS, Penalty on Co-Noticees Cannot Survive: CESTAT

Banas Enterprises vs Commissioner of CGST & Central Excise CITATION:   2025 TAXSCAN (CESTAT) 504

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that once the main noticee settles the case under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), any penalty imposed on co-noticees for the same matter cannot survive independently.

After hearing both sides, the single-member bench Dr. Ajaya Krishna Vishvesha (Technical Member) observed that the decision in Vipinbhai Kantilal Patel, rendered by a Division Bench, was binding and directly applicable to the facts of the case. The tribunal distinguished the revenue’s reliance on Four R Associates, observing that it was a single-member decision and could not override the binding precedent laid down by a Division Bench.

Statements Recorded during Investigation must Comply with S. 9D of Central Excise Act before Reliance: CESTAT

Abhinav Agrawal vs The Commissioner, Customs & Central Excise CITATION:   2025 TAXSCAN (CESTAT) 505

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that statements recorded during investigation cannot be relied upon to confirm demands unless tested in accordance with Section 9D of the Central Excise Act, 1944.

The two-member bench comprising Justice Ashok Jindal (Judicial Member) and P. Anjani Kumar (Technical Member)found that the allegations of clandestine removal were primarily based on assumptions and unverified documents. The tribunal further explained that the statements relied upon by the department were not validated through Section 9D procedures and could not be treated as admissible evidence.

Service Tax Paid under Mistake of Law: CESTAT Allows Refund with 12% Interest

M/s Meenu Builders vs The Commissioner of Central Excise, Central Goods & Service Tax CITATION:   2025 TAXSCAN (CESTAT) 506

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the refund of service tax paid under mistake of law allowed with 12% interest.

The appellants’ reimbursement claims were first denied. The learned Commissioner (Appeals) granted the refund claims on appeal up to 50% of the service tax paid by the appellant plus 6% interest, but denied the refund claim for 50% of the service tax paid by the service recipient because the appellant had not provided any proof that the service recipient had paid the tax.

Clandestine Removal Charges Without Corroboration of Recovered Documents is Invalid: CESTAT

Abhinav Agrawal vs The Commissioner, Customs & Central Excise CITATION:   2025 TAXSCAN (CESTAT) 507

In a recent case, the Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the charges of clandestine removal without corroboration of recovered documents are not valid.

The department argued that the claims of clandestine removal were supported by the examination and analysis of the recovered documents, that the statements made in accordance with Section 14 of the Central Excise Act are admissible evidence, and that the demand was calculated based on the records discovered during the investigation.

Trademark Ownership Must Be Verified via Registrar, Not Unreliable Websites: CESTAT Confirms Exemption Eligibility for Small Service Provider

Shri Satnam Singh Oberoi vs Commissioner of Service Tax CITATION:   2025 TAXSCAN (CESTAT) 508

The Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) at New Delhi held that trademark ownership must be verified through official registration records maintained by the Registrar of Trademarks and not from unverified online sources, and confirmed the appellant’s entitlement to benefit under the relevant service tax exemption notification.

The appellants’ counsel challenged the findings, submitting certified trademark registration certificates from the Registrar of Trademarks, which clearly named them as co-owners of the brand names “TEXLA” and “TEXLAVISION.” They argued that the Commissioner (Appeals) erred in relying on an unofficial online portal instead of government records. Since they were co-owners of the brand, the restriction under the exemption notification, excluding service providers using someone else’s brand, did not apply.

Customs Broker cannot be penalised u/s 114AA of Customs Act for Mere Failure to Physically Verify Importer’s Premises: CESTAT

HIM Logistics Private Limited vs Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 509

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that a customs broker cannot be penalized under Section 114AA of the Customs Act for simply neglecting to physically inspect the importer’s residence.

The assessee argued that the adjudicating authority had overlooked the fact that even the penalty under Section 112(a) of the Customs Act, 1962, could not have been applied in the absence of an aiding and abetting charge. According to the department, the appellant/assessee, who was licensed and approved under the Custom Broker Licensing Regulation of 2018, had to clear shipments on behalf of his clients, who were importers and exporters, in the way specified.

Cement Cleared in Packaged Form with RSP Qualifies for Concessional Duty under Notification, Irrespective of Buyer: CESTAT

M/s. Jaypee Rewa Plant vs Commissioner of Customs, Central Excise & CGST CITATION:   2025 TAXSCAN (CESTAT) 510

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that cement cleared in packaged form with a declared retail sale price (RSP) qualifies for concessional excise duty under Notification No. 4/2006-CE, irrespective of whether the buyer is a retail consumer or an institutional purchaser.

The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) observed that the only relevant criteria under Notification No. 4/2006-CE, as amended, were whether the cement was cleared in packaged form and whether it bore an RSP, not the nature of the buyer. The tribunal observed that the Weights and Measures Rules do not prohibit affixing an RSP on goods sold to institutions, and there is no statutory bar to treating such sales differently if the goods are otherwise retail-packaged.

Interest on Delayed Refund Post-Provisional Assessment: CESTAT Orders Payment to HPCL u/s 11BB of CEA

M/s. Hindustan Paper Corporation Limited vs Commr. of CGST & Central Excise, Shillong CITATION:   2025 TAXSCAN (CESTAT) 512

The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) ordered the payment of interest under Section 11BB of the Central Excise Act ,1944 to Hindustan Paper Corporation Limited (HPCL) on a delayed refund claim post-provisional assessment.

The refund claim filed by the assessee was initially rejected in 2010. However, the Commissioner (Appeals), in an order dated 30 November 2011, held that the refund was valid and directed that it be paid with interest under Section 11BB. This order was accepted by the department, and no further appeal was filed.

Mere Mismatch in Gold Content in Dore Bar Imports Not Sufficient to Prove Customs Duty Evasion: CESTAT

Mr. Naresh Vijayvargiya vs Principal Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 511

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a mismatch in gold content in imported dore bars is a normal industry occurrence and not sufficient on its own to establish customs duty evasion.

The appellant also referred to a related decision in the case of MMTC-PAMP India Pvt. Ltd., where CESTAT had accepted the company’s explanation that the gold content may vary and had already led to both additional duty payments and refunds depending on the final assay results. The tribunal found that there was no evidence of willful misstatement or suppression of facts that could justify invoking the extended limitation period or penal provisions.

Penalty on Co-Noticee Not Maintainable if Main Noticee Settles Tax Dues nder SVLDRS, 2019: CESTAT

Brijeshkumar Pravin Bhai Patel vs Commissioner of Central Excise CITATION:   2025 TAXSCAN (CESTAT) 513

The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) penalty on a co-noticee is not maintainable if the main noticee settles tax dues under Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS), 2019.

A single member bench of Dr.Ajaya Krishna Vishvesha(Judicial Member) heard both sides and examined the records. It noted that in similar cases, once the main noticee’s service tax demand was settled under SVLDRS, 2019, the penalty on the co-noticee did not hold. Referring to its earlier decision in M/s. Phenix Construction Technologies, the CESTAT held that the penalty of Rs. one lakh imposed on the assessee under was not sustainable and set it aside.

Relief for Hindustan Zinc Ltd: CESTAT Rules Structural Steel Used for Chimney Support Qualifies as Capital Goods, Eligible for Credit

M/s. Hindustan Zinc Ltd vs The Commissioner, Central Excise CGST CITATION:   2025 TAXSCAN (CESTAT) 514

The Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled in favour of Hindustan Zinc Ltd., holding that structural steel items used for supporting a chimney qualify as capital goods and are eligible for CENVAT credit.

The tribunal also held that the matter involved interpretational issues previously decided in favour of the appellant, so, penalty and interest were not justified. The impugned order dated 31 January 2022, passed by the Commissioner, disallowing credit, imposing penalties, and demanding interest, was set aside. All thirteen appeals filed by Hindustan Zinc Ltd. were allowed.

Mere Non-Disclosure without Deliberate Evasion Not Enough: CESTAT Quashes Rs. 2 Crore Penalty on Former Managing Director

Mr. Rajesh Khosla vs Principal Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 516

The Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that mere non-disclosure without a deliberate attempt to evade duty is insufficient to attract a penalty under Section 112(a)(ii) of the Customs Act and quashed a Rs. 2 crore penalty imposed on Rajesh Khosla, the former Managing Director of MMTC-PAMP India Pvt. Ltd.

The tribunal observed that penal provisions must be interpreted strictly and cannot be invoked in the absence of deliberate misconduct. It held that the requirement of a mental element, such as intent, knowledge, or willful omission, was not met in this case. The penalty of Rs. 2 crore imposed on Rajesh Khosla under Section 112(a)(ii) of the Customs Act was set aside. The appeal was allowed.

CVD and SAD Paid Post-GST Eligible for CENVAT Credit Under Earlier Regime: CESTAT Allows Cash Refund u/s 142(3)

M/s Asiatic Drugs & Pharmaceuticals Pvt. Ltd vs Commissioner CITATION:   2025 TAXSCAN (CESTAT) 517

The Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, ruled that CVD and SAD paid after the implementation of GST were originally eligible for CENVAT credit under the pre-GST regime and their refund in cash is permissible under Section 142(3) of the CGST Act.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) held that the claim was rightly covered under Section 142(3) of the CGST Act and that the mere timing of payment post-GST did not disqualify it. The tribunal observed that the CVD and SAD were duties that would have been eligible for credit under the pre-GST regime, and since such credit could not be utilized after July 1, 2017, a refund in cash was both justified and legally permissible.

Metal Lease Charges are Part of Transaction Value, Not Post-Import Interest: CESTAT Upholds Inclusion in Customs Valuation

M/s MMTC Pamp India Pvt. Ltd vs Principal Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 515

The Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that metal lease charges are part of the transaction value and must be included in the assessable value of imported goods.

The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) after examining the agreements and the appellant’s communications with the Reserve Bank of India and State Bank of India, found that the metal lease charges were not in the nature of interest but were directly linked to the transaction itself. The tribunal observed that no interest was disclosed to the RBI, but lease charges were acknowledged as a recurring obligation.

Relief for Sony India: CESTAT Confirms Importers Not Availing Credit Are Eligible for Concessional CVD at 1%

M/s. Sony India Private Limited vs Commissioner of Customs CITATION:   2025 TAXSCAN (CESTAT) 518

The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that Sony India Private Limited is entitled to claim a concessional rate of 1% CVD on mobile phone imports, as the company had not availed input credit and thus satisfied the conditions prescribed under Notification No. 12/2012-CE.

The tribunal rejected the department’s claim that the concessional rate was sought as an afterthought and explained that the appellant’s request was based on a settled legal position that applied to similarly situated importers. It also observed that various customs authorities had granted refunds post-reassessment in similar matters.

Relief for Godrej and Boyce: CESTAT Rules Mere Non-Submission of Re-Warehousing Certificates Not Sufficient to Sustain Duty Demand

M/s Godrej And Boyce Mfg vs Commissioner of CGST CITATION:   2025 TAXSCAN (CESTAT) 519

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that mere non-submission of re-warehousing certificates cannot be the sole basis for confirming central excise duty demand on clearances made to EOUs and SEZs, granting relief to Godrej and Boyce Manufacturing Co. Ltd.

On appeal before the CESTAT, the appellant’s counsel argued that it had already submitted relevant documents during the earlier round of proceedings and that the responsibility for verification of re-warehousing lay with the department, especially given the remand directions and claimed that non-submission of a single type of document, namely the re-warehousing certificate, should not by itself be treated as proof that the goods were not received at the EOUs or SEZs.

Paper Importer Claims Customs Duty Exemption Using Forged Scrips: CESTAT Upholds ₹65.42 Lakh Duty Demand

M/s Raja Ram And Company vs Principal Commissioner of Customs (Import) CITATION:   2025 TAXSCAN (CESTAT) 520

The Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld a demand of Rs. 65.42 lakh in customs duty against Raja Ram and Company, holding that the importer had used forged Duty Free Scrips to claim exemption from customs duty and that such fraud nullifies any benefit, irrespective of the importer’s alleged intent or knowledge.

The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) held that the importer’s ignorance was no defense in the face of clear evidence of forged instruments being used for duty payment. The tribunal cited Supreme Court rulings in Munjal Showa Ltd. and CESTAT decisions in Nidhi Enterprises and Bimal Paper Pvt. Ltd., explaining the legal principle that fraud vitiates everything.

Irregularities in Phytosanitary Certificates Alone Do Not Prove Origin Fraud: CESTAT

M/s Kesar Spices vs Commissioner of Customs-Mundra CITATION:   2025 TAXSCAN (CESTAT) 521

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that irregularities in phytosanitary certificates are not sufficient to establish fraud in the declaration of the country of origin under customs law, and such discrepancies relate only to post-import compliance requirements.

A show cause notice was issued proposing confiscation of the goods, recovery of duty, interest, and imposition of penalties. The appellant argued that a valid COO had been issued by the competent Afghan authority, and its authenticity had been confirmed through official channels. They argued that the presence of tags in three bags was not sufficient to discredit the entire consignment’s origin, especially when the COO remained unrefuted by the issuing government.

Excel Sheet Retrieved from Pen Drive Without Certificate u/s 138C of Customs is Inadmissible Evidence: CESTAT

M/s. Composite Impex vs The Principal Commissioner of Customs (Import) CITATION:   2025 TAXSCAN (CESTAT) 522

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that an Excel sheet retrieved from a pen drive and printed without a certificate under Section 138C of the Customs Act, 1962, is inadmissible as evidence in customs proceedings.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member), observed that under Section 138C of the Customs Act, any electronic record must be accompanied by a valid certificate to be admissible as evidence. The tribunal referred to the Supreme Court judgments in Anvar P.V. v. P.K. Basheer and Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, which mandate strict compliance with the evidentiary rules for electronic documents.

Importer’s Admission on Undervaluation of Goods Does not Absolve Customs from Verification before Redetermining Value: CESTAT

M/s. Krishna Impex International vs Commissioner of Customs (ICD) CITATION:   2025 TAXSCAN (CESTAT) 523

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of New Delhi bench held that mere admission of undervaluation by an importer is not sufficient to re-determine the value of imported goods unless corroborated by independent evidence like by verifying quality, quantity and characteristics of goods.

In addition, it noted several landmark decisions including Eicher Tractors Ltd. v. Commissioner of Customs, Sanjivani Non-Ferrous Trading Pvt. Ltd., and Neeraj Silk Mills, reiterating that the burden of proving undervaluation lies with the department. Without any inquiry into the quality, quantity, or characteristics of the goods, or any proof of contemporaneous imports at higher prices, the Tribunal concluded that the customs authorities had failed to discharge their burden of proof.

Affiliation Fees Collected by University from 2012- 2016 Exempted from Service Tax: CESTAT

Principal Commissioner of CGST & Central Excise, Jabalpur vs M/s. Rani Durgawati Vishwavidyalaya CITATION:   2025 TAXSCAN (CESTAT) 524

The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ), New Delhi, has held that affiliation fees collected by a university from affiliated colleges from 2012 to 2016 are not liable to service tax.

The tribunal, dismissing the Revenue’s appeal, upheld the university’s exemption from service tax for the financial year in dispute.

University Entitled to SSI Exemption on Renting of Immovable Services when Aggregate Income is Below ₹10 Lakh: CESTAT

Principal Commissioner of CGST & Central Excise, Jabalpur vs M/s. Rani Durgawati Vishwavidyalaya CITATION:   2025 TAXSCAN (CESTAT) 524

In a recent decision on the tax exemption entitlements of educational institutions, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) of New Delhi bench held that the university  is eligible for Small Scale Industry ( SSI ) exemption in respect of rental income received from renting of immovable property, as the aggregate income during the relevant financial year remained below the ₹10 lakh threshold.

The bench stated that “On the second issue of service tax on the activity of Renting of Immovable Property Service, we find that both the, Hon’ble High Court of Karnataka in the case of Rajeev Gandhi University of Health Sciences (supra) followed by the Tribunal in the case of M/s. Jiwaji Vishwavidhyalaya (supra) has held that Notification No. 33/2012-ST dated 20.06.2012 prescribes exemption from payment of tax if the amount received in the previous Financial Year is less than the threshold limit of Rs. 10 lakhs. On this principle, the Commissioner (Appeals) have categorically recorded the finding that the aggregate value of such rental services does not exceed Rs. 10 lakhs in a particular one financial year and therefore, the appellant is entitled to the benefit of SSI exemption. Consequently, they are not liable to pay any service tax on such service.”

CENVAT Credit Availed Without Separate Records for Exempted and Dutiable Goods: CESTAT Orders Demand Recomputation

The Andhra Sugars Ltd vs Commissioner of Central Tax CITATION:   2025 TAXSCAN (CESTAT) 525

The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a manufacturer availing CENVAT credit on input services used for both dutiable and exempted goods without maintaining separate records must recompute the credit attributable to exempted goods, and that the extended period of limitation and penalties are not applicable in the absence of suppression or fraud.

The tribunal observed that the issue was interpretative and that extended limitation under Section 11A was not applicable due to the absence of suppression, fraud, or willful misstatement. Accordingly, the penalty under Rule 15(2) and Section 11AC was also set aside.

Freight and Insurance Included in Assessable Value for FOR Destination Sales: CESTAT

Pawan Power & Telecom Ltd vs Commissioner of Central Tax CITATION:   2025 TAXSCAN (CESTAT) 526

The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that in cases of FOR (Free on Road) destination sales, the cost of freight and insurance must be included in the assessable value, as the sale concludes at the buyer’s premises, not the factory gate.

The tribunal ruled that the place of removal was the buyer’s premises and that freight and insurance costs were rightly includable in the assessable value. Finding no infirmity in the Commissioner (Appeals)’s orders, the tribunal upheld the demand and dismissed the appeals.

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